Better Late Than Never

I apologize for the delay in posting on my blog, but a lot has changed in my life the past few months and so I needed some time to to take care of myself before I shared aspects of my life again.  I was initially going to post my goals in January, but haven’t had the time to sit down and type them all out. To keep things short, I will be sharing my goals that pertain to my name – Three-E- Beverley: Exercise, Eating & Expenses.

Exercise

  1. I’m currently training for my first half marathon.  Unfortunately due to unforeseen circumstances last year I was not able to attend my first race in San Diego.  I was experiencing right knee pain and the doctor highly recommended that I lay off my knee and work on strengthening exercises to build muscles that will help with my running.  I was bummed, but knew I didn’t want to create any further injury to my body.  So these past few months I’ve been working on strengthening my gluteal muscles and with all the hard work I am happily re-training for my first half marathon again.  I’m extremely excited because I was lucky that an opening became available for the Zion Half Marathon two months before the race.  This National Park has been on my travel bucket list for a while now, so I’m extremely excited to explore the Park after my race.  I have less than 3 more weeks till race day – nervous and excited, but my goal is to enjoy the running journey… even if it may take me 3 hours to complete the race.      

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  1. Kayla Itsines Bikini Body Guide aka BBG – I first heard about the guides after a Shape Up Event from my girlfriend Debbie.  I loved seeing all the inspirational transformations on Instagram so in January when Kayla Itsines announced re-starting BBG 1.0 all over again, I figured I give it a go as well.  I’m currently on week 10 and am loving the whole fitness journey.  I’ve been sharing all my sweaty selfies with my fitness friends on my Insta-Snap and it’s been such a good way to keep myself accountable on this fitness program.  I definitely feel my strength growing everyday.  

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( Transformational photo – you can follow my fitness journey on  Threeebeverley on Instagram )

Eating

  1. I love to eat, but who doesn’t?  I’m pretty dedicated to meal prepping, but would love to dedicate one month to Whole 30 or not having any type of Sugar aka Candy for a month … well maybe 2 weeks … ok I take it back … for at least one week…I CAN’T HELP IT…. candy is my stress reliever! What’s yours?  With all that said, breakfast is my favorite meal of the day these past few months.  I’m in love with local organic products and have been incorporating them into my meals in the morning before a hectic 12 hour shift at the hospital.   Whole 30 will be a tough commitment for me to dedicate myself to because I’m in love with eating toast these past few months.   I still have 9 months to decide, right?   Anyone tried whole 30?  Would love to hear your thoughts about the tiger blood- it’s such a mystery to me.

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Expenses

  1. I closed escrow in the month of January.  Crazy eh?  I bought myself a beautiful house.  I can’t believe I took this huge financial step in my life, but I believe it’s an investment that will benefit me financially in the long run.  They say that buying a house, getting married and having kids are the three most stressful events you will experience in your life.  I can definitely account that buying a house was extremely stressful for me.  However it’s been such an amazing experience and I look forward to the hundreds of hiccups that will be heading my way.  I plan to continue to max out my 401k, roth IRA as well as my HSA, but we will see how my finances develop this year …I wake up everyday in awe of my new home.  I still can’t believe I have a house of my own where I can turn up the music, sing, and dance as though no one is listening and watching …because no one is …and it’s been the most liberating feeling.      

Well there it is!  All my goals for 2017 –  Will update you on the whole journey and thank you for following along.

xoxo – Beverley

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Benefits of Your Company’s 401k Plan

(Prudential is throwing a 4.01k race for retirement in Los Angeles on September 17th to raise awareness about retirement – want to join? – Check out their link to register –  www.run401k.com )

  • You save money on a tax-deferred basis – the money you make is taken from your paycheck and deposited directly to your retirement account, meaning Uncle Sam doesn’t get to take any of your money right now.  You won’t pay taxes until you retire and withdraw it from your account.
  • The money you invest will have compounding returns.  Compound What?! Your principal (money you put in) makes interest, your interest makes interest, the interest you makes makes you interest and so forth.  It’s a saving snowball effect.
  • Match Me Up! – Most companies offer a match of 3% or higher.  If your company offers this benefit, please take advantage of it.  It’s basically free money if you contribute to your 401k.  For example if you deposit 3% of your pay in your 401k, the company may offer a match of 3%.  It’s a great incentive to save money for your future retirement.
  • You can save up to $18,000 per year in 2016 or $24,000 if you are 50 years or older.  Contributing to your 401k can bring your taxable income down.  For example, if you made $100,000 per year, instead of being taxed at the 28% percent tax bracket, you will only be taxed at the 25% bracket because you maxed out your 401k account.  This means you will only be taxed on the $82,000 ($100,000 – $18,000 = $82,000).  This allows the government to take only $16,293.35 of your hard earned money.  If you decide not to contribute to your 401k and have Uncle Sam to tax you at $100,000 the government is entitled to take $21,070.57 of your hard earned money in taxes.  Do you really want to give Uncle Sam that extra $4,777.22 or would you prefer to save that money and allow it to grow tax deferred until retirement?  (Please refer to khanacademy.org for basic US tax rate schedule to gain a better understanding of the mathematics)
  • Penalty free access through a loan process.  – While I don’t recommend borrowing against your 401k balance because you may miss out on compounding growth, there are situations where it may be in your interest to borrow against your 401k.  The contract of your loan process depends on each individual’s employer.  The government allows you to borrow up to 50% of your vested account balance to a maximum of $50,000 where you will have 5 years to repay your 401k loan with interest paid back to yourself.  The 4 situations when you are allowed to borrow against your 401k balance are:
    • Education expense for yourself, spouse or child.
    • Preventing eviction from your home.
    • Medical expenses
    • First time home residence.

*The information provided on this blog is intended to help you understand the general issue and does not constitute any tax, investment or legal advice.  Please contact your financial advisor or your company’s benefits for specific rules to your retirement plan.  

“Saving for Your Future Healthcare” – What is a Health Savings Account?

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It’s that time of year again at my hospital where all the nurses are looking at benefits and figuring out what medical plan is best for them.  I’ve been getting a ton of text messages and questions at work on what is a Health Savings Account (HSA) and what medical plan is best for them.  Every medical plan will be unique to everyone’s health situation, so please read the comparisons charts offered at your company to figure out what is best for you and your family.  This article will only give an overview of what is an HSA and hopefully help you evaluate if this type of plan is best suited for your own personal health care needs. 

When I first started working in the States, I didn’t understand much about how health insurance worked.  I came from Canada (yes I’m Canasian) and the fear of dealing with large health insurance bills scared me. Hence I went ahead and did my research to figure out what is the best health care plan for me.  I opted for a High Deductible Health Plan (HDHP) which gave me the option of opening an HSA account.  So what is a Health Savings Account?  An HSA allows you to save pre-tax money into a savings account.  It is similar to your 401k, but it is different because it is ONLY intended to pay for health care expenses today or in the future.  What I personally love about the Health Savings Accounts is the opportunity to save money for future health care dollars.  

Make note that in order to be eligible for an HSA, you need to be enrolled in a HDHP (High Deductible Health Plan) or CDHP (Consumer Directed Health Plan).  Say What?! – These plans offer significantly lower premiums – meaning you pay less per paycheck, but when you need to go see your primary care physician or get a prescription filled, you will need to fulfill a higher deductible before your insurance begins to pay. That is the trade off, you pay lower in premiums, but you need to pay for your own health care until your deductible is met.  The deductible for an individual has to be at least $1300 and for a family it has to be at least $2600.   Now you are asking me, “Why the heck would I want to pay that high of a deductible?” I will list out 7 important points about the HSA to help you determine if enrolling in a HDHP or CDHP may be the best option for yourself and your family.

  1. It pays for you and your dependent’s eligible healthcare expense – including eligible dental, vision charges, and health care supplies, – eligible expenses is included towards your deductible (what you pay before the insurance plan pays benefits)
    1. Eligible Expenses: Dental, vision, health care supplies, copays, coinsurance, office visits, prescription drugs, dental x-rays, fillings, crowns, eyeglasses (you can use your HSA to pay for these eligible healthcare expenses that will be included in your deductible)
    2. Expenses not eligible – premiums, over the counter medications without a prescription, cosmetic medical procedures not medically necessary
  2. Using an HSA is easy – it works like a normal debit card, you can only use funds if they are in your account – just remember to keep your receipts for your tax records – there is no need to send them in to get reimbursement.
  3. You can contribute to the annual IRS contribution limits – Individual is $3,350 and Family is $6,750. – If you contribute the maximum annual, every year, that helps covers your deductible and your out of pocket maximum per year if you need to use it for health care expenses.   
  4. Any unused HSA funds roll over year after year.  For example, if you contribute $3000 per year and for the past 5 years did not need to use any of your HSA funds for health care expenses, that means you would have $15,000 dollars that you could use towards your heath care in the future.  
  5. HSA offers a TRIPLE tax advantage – contributions made to your HSA are tax deductible (lowers your taxable income – meaning more money in your pocket), grows tax free, and withdrawals are tax free for all qualified medical expenses.  This means you don’t have to pay the government any taxes if you use your funds for any medical expense.  
  6. The money in your HSA is yours, every dollar, dime and penny is yours even when you leave the company or retire, its all yours to use for future health care.
  7. Tax advantage way to save for medical care expenses in retirement.  You can use it to pay for medicare parts A, B, and D and medicare HMO premiums. It’s tax free and penalty free. Thus meaning saving today will help you pay for your health expenditures during retirement.

Remember every company offers different health care plans with their HSA.  I advise you to read your company’s information carefully or consult your health care insurance carrier for more information.  Need more information about what is an HSA account? Please refer to http://www.hsacenter.com or if you have any questions please email me at threeebeverley@gmail.com and I would love to help you out with any questions to the best of my ability.

*The information provided on this blog is intended to help you understand the general issue and does not constitute any tax, investment or legal advice.  Please contact your financial advisor or your company’s benefits for specific rules.  

 

 

 

The Beauty of the Roth IRA

Tax season is slowly creeping up and you have until April 18th, 2016 to contribute to your Roth IRA for the year 2015.  This type of retirement account allows investors to put away $5500.  Those who are over 50 years of age can contribute $6500.  So what is a Roth IRA?

Roth IRAs are after taxed money that grows tax free.  Once you reach the age of 59 ½ years old, you can withdraw your money tax free, including the earnings that you may have made over the years.  Uncle Sam can’t touch that money since it’s already been taxed.

Roth IRAs also have the capability to offer great flexibility.  It can serve as your emergency fund if you are ever in a situation.  Meaning that all YOUR contributions can be withdrawn anytime, penalty free, as long as you have had the account for 5 years. For example say you contribute $5000 every  year to your Roth IRA.  At 5 years you will have contributed $25000.  With the Roth IRA you are allowed to take all of the $25000 that you contributed, penalty free.  If your account turned into $30000, you are still allowed to withdraw $25000, however if you withdraw your earnings with your contributions from your account then your money will be taxed at your regular income tax rate including a 10% penalty.  There are some circumstances that the IRS allows if you don’t meet the age or holding period requirement.  For example first time home buyers can withdraw a maximum of $10000 of their earnings for a down payment.  Other circumstances that may allow this type of transactions are death, disability and medical bills that exceed 10% of your adjusted gross income.  This is the beauty of the Roth IRA.

*The information provided on this blog is intended to help you understand the general issue and does not constitute any tax, investment or legal advice.  Please contact your financial advisor for further information.