Category Archives: Articles

An Overview of myRA

A 45-second read by Victoria Cannillo: You have most likely heard of a Roth IRA or a Traditional IRA, but what about myRA? myRA was introduced in 2014 as an option for people who don’t have access to an employer-sponsored retirement savings plan or other retirement savings options. According to the myRA website, you can contribute up to $5,500/year into the account ($6,500/year for those older than 50). Once the account reaches an account balance of $15,000, or when the account is 30 years old, the savings will be transferred or rolled-over into a private-sector Roth IRA.

For 2016, the maximum income allowable to participate in the program was $132,000 for single-tax filers and $193,000 for couples filing together. Read more specifics about the program, here.

Some pros and cons of myRA to consider:

Pros:

  • No cost to open an account and no fees
  • Flexible contribution amounts (a traditional IRA has a $1,000 minimum)
  • Investments are backed by the United States Treasury
  • Tax benefits are similar to a Roth IRA, such as earning interest tax-free

Cons:

  • There is only one investment option – a treasury bond (accounts are invested solely in Government Savings Bonds)
  • Once the account balance reaches $15,000, it stops accumulating interest, so your maximum for savings is limited
  • Doesn’t seem to offer many long-term options at this time

Reach out to your Baron team if you want help in understanding what kind of IRA would be best for you.

College-Saving Options for Florida Residents

A 60-second read by Anthony Benante: The Florida Prepaid College Board offers several options for college savings. The two principal programs are the Prepaid College Plan and the 529 Savings Plan. Below is a brief outline of some of the key differences between these plans, as highlighted by the Florida Prepaid College Board. For more information, click here to read more.

Florida Prepaid College Plan

  • Overview: You “pre-pay” for future college tuition costs and other fees. There are several plans to choose from (1-year/ 4-year Florida University Plan, 2-year/4-year Florida College Plan, etc.). The cost you pay will be based on what the cost of tuition is projected to be the year your child would enroll in college.
  • Enrollment: You can submit your application to enroll your child at any time from birth until junior year of high school. A parent needs to be a resident of Florida for at least 1 year before enrolling.  The actual enrollment period runs from October 15th – February 28th each year.
  • Payment Options: You can pay monthly, over five years, or a lump sum.
  • What the plan covers: Tuition and other fees at a Florida College or State University (The plan can also be applied to other schools nationwide, but you should investigate actual benefits for schools outside the plan).

Continue reading College-Saving Options for Florida Residents

What is the best way to plan for your assets to remain within your bloodlines?

A 60-second read by Nicholas Scheibner:  When planning your estate, it is important to divide all of your accounts into two groups:  accounts with designated beneficiaries and accounts with no designated beneficiaries.  Examples of accounts with designated beneficiaries are 401(k)s, IRAs, transfer of death (TOD) accounts, and other retirement accounts. The designated beneficiary on an account bypasses your will.  For example, if your will states that all of your money is to pass on to your child, but your 401(k) primary beneficiary is an ex-spouse, your ex-spouse will inherit the money from your 401(k).  It is crucial that you review your beneficiaries on your accounts to make sure they agree with your desires.

Continue reading What is the best way to plan for your assets to remain within your bloodlines?

Class of 2017: It Isn’t Too Early to Start Thinking about Your Retirement

A 60-second read by the Baron Team:  Congratulations 2017 college graduates! Throw that mortarboard as high in the air as you can and before it circles back down to earth, start thinking about saving for your retirement. You are most likely going to be responsible for setting yourself up for a successful retirement, so your best bet is to invest early and often.

Invest in yourself first. Most people think investing is the key to wealth, but while certainly important, you have to have some money first to invest. So as soon as you begin your first job out of school, start saving as much as you can for retirement.

Continue reading Class of 2017: It Isn’t Too Early to Start Thinking about Your Retirement

Do Not Call Registry: tips to help avoid phone scams, part II

A 30-second read by the Baron Team: In a previous post, we provided some tips to help avoid phone scams from the FTC. If receiving excessive sales calls is a concern for you, there is an option to help reduce the amount of telemarketing calls you receive by joining the National Do Not Call Registry.

The Do Not Call Registry is a free service where you can register your phone number in order to reduce telemarketing/ sales calls.  According to the Federal Trade Commission (FTC), if a company is legitimate and sees that you are on the list, they should not call you. If a company sees you on the list, but calls you regardless, it is most likely a scam call.

While being on the Do Not Call Registry may not prevent robo-calls, the FTC has several initiatives to try to solve this issue.

If you are interested in putting your number on the registry, go to donotcall.gov or call 1-888-382-1222. They will accept both cell phone and landline numbers.

For more information from the FTC, click here to read more.

For more specific information regarding “Cell Phones and the Do Not Call Registry,” click here.

Feel free to reach out to us for any other questions.

How to File an Extension on Your 2016 Tax Return

A 60-second read by the Baron Team: Need more time to compile information for your tax return? Haven’t received all of the documents you need? It will be in your best interest to file a tax extension. This will extend the due date up until October 16, 2017.

How to file a Paper Tax Extension:

To file an extension, you are going to need to fill out Form 4868 [Application for Automatic Extension of Time to File U.S. Individual Income Tax Return]. You can download the form and instructions from the IRS website.

With the form, you also need to send in at least 90% of your estimated tax liability due for the year.
To pay by check, mail the form with the check together. Make the check out to United States Treasury. On the memo line, write your Social Security Number, Form 4868, and the tax year (2016). This way, they know that you are sending the check as part of your extension.

When mailing in the tax extension, it is highly recommended that you send it via certified mail or another method that provides you with a tracking number. The envelope needs to be postmarked by April 18th. Check the instructions portion of Form 4868 for the correct mailing address (it varies according to what state you reside in).

 To Prevent any Penalties:

  • Carefully read all instructions and follow all directions on Form 4868.
  • Correctly estimate your tax liability for the year and send in 90% of the amount due.

Miscellaneous tips:

  • It is possible to file your extension online. See the IRS website for more details.
  • If you ever feel unsure or concerned about the process, consult a Tax Professional to assist you.

Any other questions, contact the Baron Financial Group Team.

The Pros and Cons of VA Loans

A 30-second read by Nicholas Scheibner: The federal government has provided qualified veteran home buyers with a few mortgage-buying options to help purchase a home.  Below are some of the Pros and Cons for Veterans Affairs (VA) loans.

An important note VA loans are for primary residences only.

To determine if you are eligible for a VA loan, visit http://www.benefits.va.gov/HOMELOANS/purchaseco_eligibility.asp

The first step in getting a VA loan is to obtain a certificate of eligibility from the VA: http://www.benefits.va.gov/homeloans/purchaseco_certificate.asp

Pros:

  • 0% down payment, if desired
  • No Monthly Mortgage Insurance
  • Can generally qualify for a larger mortgage than a Federal Housing Administration (FHA) loan

Cons:

  • The only person that can co-sign is a spouse
  • An additional fee is rolled into the loan. Depending on the situation, first time use of a VA loan could be anywhere from 1.5% – 2.4%.  The next home mortgage could be anywhere from 1.25% – 3.3%.

Baron Financial Group consults with independent mortgage professionals in order to explore options available to clients.  If you are thinking of purchasing a new home, refinancing a mortgage, or consolidating a HELOC (Home Equity Line of Credit), lean on us to help you through the process. Please contact your Baron Team if you have any questions.

What documents are safe to shred? What must I keep?

A 30-second read by Victor Cannillo: Whether you are tired of piles of papers cluttering up your home or are trying to go “paperless,” it is important to know what documents you should keep and which you could shred.

Below we list some of the important documents the Federal Trade Commission (FTC) suggests that you should always keep:

  • Birth certificates/ adoption documents
  • Social Security cards
  • Marriage licenses or divorce decrees
  • Tax returns
  • Passports or citizenship materials
  • Familial death certificates
  • For items like your home and car, you want to hold on to any automobile titles and home deeds for as long as they are in your ownership.
  • To see more, click here.

Shredding Timeline-The FTC recommends that you wait:

  • 7 years before shredding any tax-related receipts and cancelled checks.
  • 1 year before shredding bank statements, medical bills, etc.

Items such as credit card statements can be shredded right away once paid. To help reduce capital gains tax, retain home improvement receipts until your home is sold.

To view the FTC’s safe shredding timeline infographic, click here.

In addition to decluttering your home, shredding documents with personal information can help prevent identity theft.  Just remember to keep the listed documents above for the suggested amount of time.

Feel free to reach out to us for any other questions.

The Pros and Cons of FHA Loans

A 30-second read by Nicholas Scheibner: The federal government has provided home buyers with a few mortgage-buying options to help purchase a home.  Below are some of the Pros and Cons for Federal Housing Administration (FHA) loans.

An important note:  FHA loans are for Primary Residences only.

Pros:

  • Flexible qualification criteria-Minimum down payment is 3.5%. Keep in mind that the less money you put down on a mortgage, the higher the monthly payments will be.
  • Anyone can cosign, if needed, including a friend or parent. However, from a practical perspective, usually the co-signor is a family member.  If a friend co-signs for you, you need to put at least 25% down.  Note: If you are purchasing a multi-family house, even if a family member co-signs, you still need to put at least 25% down. 

Cons:

  • Monthly Mortgage Insurance never goes away for low-down-payment mortgages. If the borrower puts at least 10% down, the mortgage insurance will remain for 11 years. If they put less than 10% down, it will remain for the life of the loan. 
  • An additional fee of 1.75% is required. This can also be paid at closing or rolled into the loan.

Baron Financial Group consults with independent mortgage professionals in order to explore options available to clients.  If you are thinking of purchasing a new home, refinancing a mortgage, or consolidating a HELOC (Home Equity Line of Credit), lean on us to help you through the process. Please contact your Baron Team if you have any questions.

Tips to Avoid Phone Scams

A 30-second read by the Baron Team: It is not uncommon to turn on the news or read an article and hear about a new scam. Lately, you might have heard about the “Can you hear me?” phone scam, as recently reported by CNBC.

Whether such scams wind up being legitimate or just hearsay, here are some helpful tips to keep in mind. Below is a brief snapshot of some of the phone-scam tips provided by the FTC (Federal Trade Commission).  To read the entire FTC article, “10 Things You Can Do to Avoid Fraud,” click here.

  • If you don’t recognize the phone number, don’t pick up your phone.  (If it is in fact a friend, family member or acquaintance trying to reach you, they will probably leave a voice mail.)

  • If you do pick up the phone and suspect it is a telemarketer or if it is a robo-call, hang up the phone. Don’t give out any personal or credit card information.

  • If you received a call that you think might be a scam number, search the number or caller id information, along with the word “scam” on the internet, to see if other people have written any complaints.

  • The FTC offers a free scam alert service that will send tips about scams to your email. Read more at https://www.consumer.ftc.gov/scam-alerts.

Feel free to reach out to us for any other questions.