The Contribution and Income Limits of IRA and 401(k) for 2016

The IRS (Internal Revenue Service) announced the cost of living adjustments that would be affecting dollar-limitations for both 401 (K) and Roth IRA retirement plans and other retirement related items for 2016. Every fall the Internal Revenue Service (IRS) presents new contribution & income limits for the coming year which is anxiously anticipated by everyone, and like always, the reaction from the public this year was the same.

However, to lower the curiosity let us tell you that in general, the changes proposed for the year 2016 are minimal. Though the changes are not big but nonetheless it is very important to learn and find out what these changes are. And that’s exactly what we’ll discuss in this post.

Here are the highlights of the limitations that have changed for the year 2016:

1. If you’re an IRA contributor and you’re not covered by your workplace retirement plan, however, if you’re married and your spouse is covered than in such as scenario your deduction will be phased out if the income of you and your spouse as a couple is between US$ 184,000 and US$194,000 up from last year’s US$183,000 and US$193,000. Simply put, income limits bumped up by $1000 for 2016.

2. For single filers who want to contribute to Roth IRA, income threshold begins at $117,000 which is up by US$116,000 and ends at US$133,000 which is up by US$132,000. In this range your contribution is limited.

3. The AGI range for saver’s credit (retirement savings contribution credit) for both low and moderate income workers is up from US$61,000 to $61,500 for couples that are filing jointly.
However, it is US$30,750 if married individuals decide to file separately. The figure is up from US$30,500. The change is not significant.

Highlights of the limitations that have not changed for this year:

1. The contribution limit for employees participating in 401(k) and 403(b) has not changed. It continues to remain at US$18,000.

2. Even the catch up contribution limit has not changed. The catch up limit for employees who are above 50 or over and who participate in 401(k) remain unchanged at US$6,000.

3. The annual contribution limit to IRA (Individual Retirement Arrangement) also remains the same at US$5,500. Simply stated, the amount in total that you can contribute either to your traditional IRA or Roth IRA is US$5,500. However, people who are 50 or above can contribute an addition US$1000 for a total amount of US$ 6,500.

If we analyze the last 6 six years from 2010 to 2016 we can see there have been changes and increase in elective deferrals, annual defined contribution limits, and compensation limit over the years and on annual basis. However, in the last 6 six years, 2016 is the only year when these limits have remained unchanged. The main reason for this is that the cost of living index didn’t meet or hit the statutory thresholds this time round because of which adjustments are made.

Why Should You Go for a Second Charge Mortgage?

When considering your loan options, you’re going to come across a second charge mortgage. Not only does it have an interesting name, it is extremely easy to get one as well. As a means of generating a certain amount of cash through a secured loan, second charge mortgages are rather attractive.

Nonetheless, before you get one, you should consider the following to learn more about them and determine why you should go for one:

Understanding the Mortgage

A second charge mortgage is when you draw another mortgage on any property which is owned by you. The amount you can get and your eligibility of the loan is based on the total equity of the property instead of your credit score history.

While these are taken into account to determine the rate of re-payment and your success in paying off the loan, they don’t play as significant a role as is usually played when you’re getting a regular mortgage. This makes eligibility requirements for the loan very easy and many people have started taking second charge mortgages out as a means of funding other projects.

Borrower Protection

With the new rules and regulations in March 2016, new changes were introduced in the market for lenders, administrators and borrowers of second charge mortgages. While the rules and regulations introduced different requirements for lenders and administrators, borrowers get to enjoy more protection.

Moreover, lenders and administrators are now required to only offer loans based on solid proof that their borrowers can easily make the repayments. Moreover, they have to ensure that they keep an eye on the rate of repayment and the impact the load might have on it over the years. All in all, measures are in place to ensure that the borrower doesn’t end up biting off more than they can chew.

How is it Useful?

Second charge mortgages have turned out to be extremely useful, particularly for home owners who’re running small businesses or are even looking to raise some revenue for home renovations and other endeavours. Most of the time, it is possible to raise amounts as large as £250,000 since people usually have that much equity built up on their houses.

Moreover, anyone with bad credit can also improve their credit history with the help of a second charge mortgage. Some home owners are also opting for second charge mortgages instead of remortgaging in order to bypass the high charges of early repayment on their properties because this option is much cheaper and sustainable for them.

As a secured loan, a second charge mortgage is a better option as compared to unsecured loans. While it is comparatively popular, when applying for a second mortgage should be done with care. Failure in repayment could entail losing your property so it is always important to opt for it after some careful consideration. Moreover most lenders and administrators are more than happy to allow you some time to make a careful decision so there is no need to run head first into it. If you want to learn more about personal loans and the basic, you can read here.

Personal Loans- Going Back to the Basics

Knowing you need a loan and being confident on which one you should opt for are two very different aspects with the latter holding the most power amongst them. With the vast amount of options you have, choosing a loan isn’t an easy task but what most people opt for is choosing personal loans. They’re perfect solutions and help most people out of a messy financial situation. If you have finally made the decision about choosing personal loans then this post is perfect for you! Let’s start from the basics and look into what exactly you’re going for when you talk about personal loans.

What are personal loans

Usually, names are the defining factors of almost everything and it’s the same case with personal loans. Still don’t understand? It’s okay, most people have trouble with it too! Personal loans are basically the loans that can be borrowed from banks for whatever reason. Understanding the need of sudden expenses, personal loans are available so the borrower can benefit from paying off any expenses that might suddenly pop up.

The thing about personal loans is that, they don’t usually require the lender to know what your purpose of loan is. From home improvements to family or educational pay off, you can use them for whatever reason you need. This website has a great simple guide to personal loans

Types of personal loans

If you’ve settled for personal loans then it’s really great news but your work isn’t quite finished yet! There’s a lot more you need to know about personal loans like what are the different types you can get. You can make great benefits from it and here are just a few that you’ll have to choose from:

Secured personal loans

The best part about personal loans is the option of picking out a secured loan. You know what’s so great about secured loans? They don’t need collaterals! But you have to pay close attention to your credit score because you lenders use that as a guarantee to give you a loan in the first place. Since credit scores define your financial maturity, they show your lenders how well you’ve been able to repay your debts in the past and accordingly give you the benefit of gaining loans. But there is one flaw to secured loans, they often have more interest rate applied to it as compared to unsecured loans so you need to make sure your going to be able to repay the debts in the future.

Fixed rate personal loans

These are the best options for getting personal loans. What fixed rate loans do is that they avoid giving you a fluctuating interest rate and an unpredictable plan. That means you can be well prepared and make sure you get the value you’re looking for and whichever is feasible for you. With a fixed loan amount, you are well aware of exactly how much you’ll be receiving and what your repayment plan will be. The only problem with is that you’ll you can avail discounts from variable loan options but since the amount is fixed in the fixed-rate loans, you don’t get to benefit from discounts.

Instalment loans

Instalment loans are something that most people often go for. In these you get to avail the option of making monthly repayments which essentially decreases the burden of paying back the full amount all at once. This type of loan can either be fixed rate or variable and the best thing you can try out is a fixed rate instalment loan. Again, with this type you wouldn’t have to worry about constantly varying interest rate and stick to one, certified repayment plan.

Lines of credit

Lines of credit comes in both secured and unsecured options and it’s technically much similar to credit cards. What you do in this is you get a maximum credit amount which you can use up to pay off the expenses you have. Even if you don’t use the amount of credit given to you, interest will be applied only on the amount that you use. If you have recurring personal expenses, such as medical expenses or tuition fees then lines of credit are termed as the best place to go for your personal loan.

Short term/ payday loans

Short term loans, better known as payday loans, are the types of personal loan that people try to avoid. The thing with this is that it applies high interest rates and the amount you borrow is not as much. It’s a perfect solution for sudden, unpredictable expenses which pop up but you need to be aware of the fact that they often require you to pay back the amount as soon as your next month’s pay check. If you’re opting for an unsecured payday loan then remember this: it will usually require collateral and in the case of payday loans, the collaterals are often vehicles.

Amongst these, it’s best if you consult a professional to see which option would be best for you considering your financial standing and how well your credit score is. Remember, credit scores play a major part in making sure you get the right type of loans and also benefit from the best deals.

Making the right decision

Choosing which loan to opt for is a very important decision to make and you should be well aware of which one you’ll be going for before applying. A loan is not only dependent on the purpose you choose but instead also on your financial standing. Here are a few tips you can follow to make sure you’re making the right decision with your choice of loans:

·       Know your needs, know your budget

The first and foremost thing you need to know, as mentioned above, is why you require a loan. The amount as well as the reason is amongst the first things the lender will ask you and you need to make sure you are confident about it. How much you borrow will be directly relatable to the reason, whether it’s home improvements, personal expenses, occasions, education etc.

Another major factor you need to keep in mind is how much money you already have. That gives the lenders a clear idea of how well you’ll be able to repay the debt. The amount you earn and save will later help you repay the loan very conveniently. Remember, if you borrow an amount that’s a lot more than you can earn as well as save then you’ll be stuck in a very deep end of debt.

·       Know the procession

Finding the right lender and the perfect loan is not as easy as it might seem. You need to be smart and well researched with the decision, and the thing you should pay close attention to is the process. When initially every lender might seem to have a similar process, there will be minor differences. Also, you need to make sure you get the best offer which means you should get different quotes from each lender and then compare them. Remember, some might even have very high procession fees, this is often deducted from the loan amount.

·       Know the time it’ll take

You apply for loans when you are in absolute need of it which means, the lesser time it takes for procession, the better it’ll be for you. When you’re looking at the type of loan to get or the lender you’re opting for, make sure you get an estimate of the time it’ll take. You can easily configure this yourself by knowing what documents they will require. Each type of loan you apply for will have different documentations and the more documentation you’ll be required to provide, the more time it’ll take to process. These documentations are normally just basic ones for the lender to have a clear picture of who they’re dealing with. This would often include your identification, financial history, and pay among other things.

·       Repayment plan

Before you go about deciding which loan you should go for, make sure you have a repayment plan laid out for you. This plan will give your lenders a better idea of how well you’ll be able to pay them back and also which loan would be perfectly corresponding to it. Repayment plans often dictate your financial maturity and how much you’re capable of borrowing. This often gives a clear picture of your requirements and you can move ahead accordingly.

·       Consult a professional

Before making a decision, you should consult a financial expert and trust them to guide you to making the right decision. It’s important that you find someone you can trust because your financials are an important factor to pay attention to and also because there are one too many conmen out there.

One of the defining points of getting a loan is your credit score. The better your score is, the better personal loans you can opt for.

What do credit scores do?

When you’re opting for a personal loan, you should know that they are essentially unsecured which means you don’t need to involve collaterals into it. However, you do need to make sure your credit scores are up to the mark. So, what exactly are credit scores? Well, they’re the scores that determine how well you’re able to handle your debts. They often give the lenders the guarantee they’re looking for and to get an unsecured loan, you need to make sure your score is outstanding. This score will, of course, be dependent on the lender that you deal with. It’s not only about how well you’re able to pay back the loan but also about how soon you do it.

What if you don’t have a good credit score?

Not having a good credit score is a very common problem that most people deal with. The thing with that is, you’ll have to look into getting different types of loans. These often have high interest rate applied to them but that too depends on the type of loan you pick out. If you don’t have a good credit score, you can always pick out secured personal loans but for that, you’ll have to put collateral which is often termed as a riskier option. However, you will benefit from less interest in compensation for the collateral.

You should work on fixing your credit scores since that is something that you can easily work on. It’ll be a great help in the long run. All you need for gaining a good credit score is the right guidance and a great amount of determination and you’ll be good to go. Your lenders need to see that you are capable of making timely repayments and that can only be done by fixing your credit score.  You can fix your credit scores by:

  • Keeping up with your credit reports
  • Paying off all your debts
  • Not closing off the credit accounts
  • Making timely repayments etc.

These are the best ways to help you improve your score and benefit from excellent interest rates and loan amounts. Remember, if you’re adamant enough to fix your credit scores, it can be done quite easily and you wouldn’t even have to worry about any losses.  There are some types of personal loans which wouldn’t require you to show your credit history but others would so you need to be sure of which one you’re applying for.

Should you opt for personal loans?

Personal loans are the perfect solution to your financial crisis and you really can’t go wrong with it. Opting for personal loans is a good decision but it’s best if you consult a professional to make sure you don’t make the wrong choice. Remember, as long as your credit history is good, you have the advantage of choosing whichever loans you want, there’s really not much limitations to it. Personal loans are overall quite beneficial for whoever willing to give it a go, especially if the matter of increasing credit scores are in play. There’s absolutely no way it can go wrong!

Motors

Motorsport! I love it… I mean… what’s not to love? The coming together of man and machine–athletics meets engineering. For me, this is the ultimate in excitement. I like to watch pretty much everything and anything… except things with boats… I don’t really get the appeal there.

Let’s take Nascar for starters. There’s kinda a stigma associated with it for some reason… but I find the racing very interesting. Yes… they do drive round in circles (ovals actually… with two road courses… but who’s checking), but saying that this is like saying baseball is like hitting a ball with a stick. So what do I find appealing about Nascar? I’m glad you asked. In this racing formula, the cars are, as near as makes no difference, equal in capability–they’re stock cars, the clue is in the title. What this means is that the majority of the car’s performance comes down to the driver. What’s more, it’s not about the driver who has the best ability to hustle a car round an oval. The best drivers are skilled at driving, but they are also masters at setting the car up for a race. What this means is, they are skilled and experienced enough to understand every nuance of every track, which includes everything from weather traits to bumps and characteristics. Using this knowledge they can set up a car to perform better than their peers. Going one step further, the very best drivers understand how their environment is changing while in the race. Is the weather getting cooler? Am I going to have enough fuel to finish the race? All these things and more feed into an ever evolving beast that is the race, which the drive must react to in real time.

Formula One in contrast is a very different sport. Despite their similar styling, every car is very different from the next. A relatively (note, relatively) open formula facilities engineering innovation. Therefore, many approaches can be taken to achieve a given solution. In fact, the engineers in F1 are among the best in the world. They’re so good that the sporting regulations are changed yearly in an attempt to slow the cars down! Why would you want to slow the cars down? Well… a modern F1 car can brake at a sustained 5Gs and corner at a sustained 3Gs! Think about that for a moment: An F1 driver will experience similar loads to that of a fighter pilot. In years gone by, the cars could corner even faster, which meany they were cornering at exceptionally high speeds. Accidents at these speeds easily become fatal… therefore, the governing body intentionally slow the cars down.