6 Pieces of Investing Advice for Millennials

Millennials have it tough, financially speaking. The job market is unforgiving, student debt is at an all-time high, and the aftermath of the Great Recession is still fresh in their minds. Seeing their parents and grandparents suffer from the recent economic downturn has scared away many millennials from investing altogether – but it shouldn’t.

These six tried-and-true pieces of advice will take the fear out of investing and put you on the path to financial success later in life…

1. Start as early as possible.

The most common mistake young people make is waiting too long to start investing. You may think that you don’t yet earn enough money to make a significant impact, but you are wrong. The amount of capital you start with is not nearly as important as when you start. Because of factors such as compound interest, every year you push off investing can really hurt you in the long run.

2. Set up automatic deposits.

When it comes to investing, consistency is key. The easiest way to stay consistent with your portfolio is by scheduling automatic deposits into your savings, retirement, and investment accounts. Doing this will ensure your funds are safely secured before you have a chance to spend them on something else.

3. Maximize your match.

401(k) plans are company-sponsored retirement plans which are funded through pre-tax deductions from your paycheck. Many employers even offer a matching program, in which they will contribute on your behalf up to a certain percentage of your salary. Make sure you are contributing enough money to qualify for the maximum match amount; anything less is basically giving away free money.

4. Pay off your high-interest debts.

It’s impossible to save money when you are drowning in debt. That’s why your first priority should be paying off all of your outstanding balances. If you have multiple debt accounts, make the minimum payment on all of your bills, and put any extra money towards the debt with the highest interest rate. This strategy will allow you to pay off your debts as quickly and efficiently as possible.

5. Diversify your portfolio.

Don’t put all of your eggs in one basket. Diversification is a core investment strategy used to mitigate risk by spreading your money across multiple investments. If you experience a significant loss in one of your accounts, your entire portfolio will not suffer as a result.

6. Consult with a financial advisor at American Investment Planners, LLC.

Just because it’s called “personal finance”, it doesn’t mean you have to do it by yourself. Consulting with a professional advisor at American Investment Planners now can put you on the path to financial success later in life.

The financial advisors at American Investment Planners, LLC have decades of experience helping people of all ages plan for life’s biggest moments. Let us help you. To schedule an appointment with one of our consultants, please call (516) 932-5130 or email info@americaninvestmentplanners.com.

5 Things to Know About Life Insurance

Life insurance: simple in theory, complicated in practice. Navigating the world of life insurance can be tricky, but it’s a fundamental component of your personal finances. Here are five things you need to know about life insurance, courtesy of the professionals at American Investment Planners, LLC.

1. If anyone relies on you financially, you need life insurance. Whether it’s a dependent spouse, children, parents, or someone else, if someone relies on you financially, you should have a life insurance policy so they are protected in the event of your untimely death.

2. There are four primary players in every life insurance policy. They are the insurer, the owner, the insured, and the beneficiary. The insurer is the insurance company. The owner is responsible for paying the monthly premium. The insured is the person whose life is being covered by the plan. The beneficiary is the recipient of the payout if the insured passes away.

3. There are two types of life insurance. They are term life insurance and permanent life insurance. Term life insurance covers you for a set length of time, such as 5, 10, or 20 years. Permanent life insurance is broken down into three subcategories: whole life, variable life, and universal life. You can learn more about those here.

4. Life insurance should not be treated as an investment. It is a risk management tool. Some life insurance policies do offer an investment component, but you are better off putting your money into an emergency fund, Roth IRA, 401(k), or paying off your non-mortgage debt.

5. Life insurance plans can be extremely expensive, or relatively cheap. Premiums can vary drastically depending on your policy type, age, health, and other factors. You should discuss your options with a financial advisor at American Investment Planners, LLC to pick the plan that best meets your needs and budget.

Want to learn more about life insurance? The financial professionals at American Investment Planners, LLC are available for consultation. To schedule an appointment with one of our advisors, please please call (516) 932-5130 or email info@americaninvestmentplanners.com.

How to Create a Beneficiary Plan in 5 Simple Steps

When you pass away, you want to make sure your assets are given to those you love and care about. That’s why designating beneficiaries is one of the most important parts of estate planning. Without proper beneficiary designation, your assets could be lost to taxes, probate court, or unintended recipients.

Here’s how to create a comprehensive beneficiary plan in five simple steps:

1. Consult with a financial professional at American Investment Planners. Estate planning has many legal complexities. Our financial professionals are already familiar with these intricacies and can recommend the best course of action for your situation.

2. Review your assets. Next, work with your financial advisor to compile a list of your assets. Don’t forget to include real estate properties, savings accounts, IRAs, employer-sponsored retirement accounts, stocks, and bonds.

3. Designate your primary beneficiaries. For each of your assets, designate a primary beneficiary. This is the first person you wish to receive the asset in the event of your death. You can name multiple people, charities, or organizations as your primary beneficiary, you just need to specify which percentage goes to each party.

4. Designate a contingent beneficiary. If your primary beneficiary predeceases you, there could be legal complications. Unless you name a contingent beneficiary, who will receive your assets in the event of an untimely death to your primary beneficiary.

5. Inform your beneficiaries of your decisions. Once you have named your beneficiaries, let them know. This will not only help them feel better prepared for when the time comes, but it also increases the likelihood they will actually receive what they are entitled to.

Need help creating an estate plan? The financial professionals at American Investment Planners, LLC are here to help. We will sit down with you, listen to your needs, and work together to develop an estate plan that best suits your situation. To schedule an appointment with one of our advisors, please call (516) 932-5130 or email info@americaninvestmentplanners.com.

3 Last Minute Tax Tips for Procrastinators

Time is running out to file your 2017 tax returns. With the April 17th deadline quickly approaching, procrastinators everywhere are scrambling to submit their paperwork on time.

Does this sound like you? Don’t panic. Take a deep breath and follow these three last-minute tax tips from the professionals at American Investment Planners, LLC…

Take your time.

Better safe than sorry. The old adage holds true when submitting your tax return. Even if you are filing last-minute, it’s important to take your time when preparing your paperwork. Rushing through increases your chance of making a mistake, which increases your chance of an audit. Some of the most common last-minute errors include:

• Mathematical mistakes
• Misspelling names
• Entering the wrong social security number(s)
• Failure to sign or date your return

File faster online.

Submitting your taxes online offers tons of benefits. It’s quick, easy, allows for faster refunds, and can even help minimize mistakes and maximize deductions. Last-minute filers will love the ability to submit their returns during the waning hours of Tax Day, after post offices have closed. Not to mention, it’s nearly impossible to schedule a meeting with a professional tax preparer this late in the season.

Consider filing for an extension.

If you feel that there is no way you can get your taxes submitted by the April 17th deadline, you can always apply for an extension, pushing the due date back to October 16th. Beware, if you owe money to the IRS, you will still need to pay your debt before April 18th. An extension on your paperwork is not an extension on your bill. You can learn more about the advantages and disadvantages of applying for a tax extension by clicking here.

American Investment Planners, LLC proudly employs a team of professional tax planners and advisors to help with all of your financial needs. To schedule an appointment with one of our consultants, please call (516) 932-5130 or email info@americaninvestmentplanners.com.

What To Do if You Get Audited by the IRS

If there’s one thing American taxpayers hate more than paying taxes, it’s being audited by the IRS. While your chances of an audit are slim (about 1% if you make less than $200,000), they do happen, so it’s best to be prepared just in case.

The tax professionals at American Investment Planners, LLC have decades of experience dealing with the IRS. Here’s what they say you should do in the event of an audit:

• Take a deep breath. Audits can be intimidating, but most of them are no big deal. Usually, an audit involves answering a few additional questions via mail; it’s rare to meet with an auditor in person.

• Figure out why you are being audited. Often, the IRS will only need additional information about one portion of your tax return, not the entire thing. Once you know why you are being audited, only provide the information the IRS specifically asks for. Supplying anything more risks the chance of broadening the audit scope.

• Gather your documents. Your audit letter should include a list of the documents you need. These may include:
• W-2s
• 1099s
• Bank statements
• Proof of income
• Investment statements
• Receipts and other proof of expenses

• Be polite and responsive. Like dealing with the police, much of the process is at the discretion of the auditor. If you are kind, polite, and accommodating, you will have a more pleasant experience than if you act like a jerk.

• Consider hiring a professional. You don’t have to show up to your audit alone. In fact, you may not have to show up at all. It’s recommended to bring a tax professional with you, or have one go in your place. If you choose the latter, you will need to submit IRS Form 2848.

American Investment Planners, LLC has been helping Americans file their tax returns for decades. To schedule an appointment with one of our tax professionals, please call (516) 932-5130 or email info@americaninvestmentplanners.com.

American Investment Planners does not provide tax or legal advice. Consult with a qualified legal or tax professional regarding your particular situation.

Financial Spring Cleaning Checklist

Spring cleaning isn’t just for your house, it’s also the perfect time to organize and simplify your money matters. Here are nine ways you can tidy up your personal finances, courtesy of the financial advisors at American Investment Planners, LLC:

• Review your credit report. Federal law requires each of the three major credit bureaus – Equifax, Experian, and TransUnion – to provide you with one free credit report per year. Make sure your reports are free of mistakes, and communicate any problems immediately.

• Review your budget. If you created an annual budget at the beginning of the year, now is a good time to review your progress and make any necessary updates.

• Set up auto-pay, or auto-deposit. Missing bill payment deadlines can lead to late fees and damage your credit score. Set up auto-pay on your bills to eliminate the chance of this happening. Conversely, if you are having difficulty saving money, you can set up automatic deposits into your savings account.

• Consolidate accounts. Do you have several bank or investment accounts? Consider consolidating them into one. You will have less accounts to remember to check on, and bigger balances could offer more favorable rates.

• Pay off holiday debt. Are you still paying off debt from the holiday season? This type of debt tends to be high-interest, making it a priority to pay off as soon as possible.

• Go paperless. Enroll in paperless bank, credit card, investment, and insurance statements. This will not only reduce clutter around the home, it might even save you from account maintenance fees.

• Organize/shred old financial documents. Once you’ve gone paperless and eliminated future incoming documents, it’s time to focus on the paperwork which is currently cluttering your home. Tax documents should be kept in hard copy form for seven years, but you can safely shred old bank statements, credit card statements, and most receipts.

• Update beneficiaries. Important life events, such as birth, death, marriage, or divorce, can impact your beneficiaries. It is a good idea to review these every year to make sure everything is how you want it, and set a contingent beneficiary in case something happens to your primary recipient.

• Host a garage sale. When you get around to spring cleaning your home, gather all of your unwanted goods and host a garage sale. Put these extra funds into a savings account, or use them to pay off high-interest debt.

Need help organizing your finances? The professional advisors at American Investment Planners, LLC are here to help. To schedule a face-to-face appointment with one of our consultants, please call (516) 932-5130 or email info@americaninvestmentplanners.com.

Designating Beneficiaries: Do’s & Don’ts

A key component of any estate plan is designating your beneficiaries. While this seems like a relatively straightforward process, one simple mistake could lead to legal and financial troubles down the road.

Keep in mind these do’s and don’ts from American Investment Planners, LLC as you begin your beneficiary designation process…

DO Name Primary and Contingent Beneficiaries

Your primary beneficiary is the person who receives the proceeds in the event of your death. However, if your primary beneficiary predeceases you, it is good to have a backup, or contingent beneficiary in place in order to avoid legal complications.

DON’T Name Your Estate As Your IRA Beneficiary

Doing this causes nonprobate assets to become subject to probate, and eliminates any flexibility your heir may have. For example, being named a direct beneficiary on an IRA account allows the recipient to stretch out distributions and incur less tax. Inheriting the IRA from an estate, on the other hand, comes with a different set of rules, which are much less tax-friendly.

DO Review Beneficiaries Annually

It’s important to review your beneficiaries after major life events such as birth, death, marriage, or divorce. Failure to take this step could result in a transfer of assets to unintended recipients, such as an ex-spouse, or the heirs of your deceased beneficiary.

DON’T Forget to Coordinate With Your Will

Your life insurance policy is just a small portion of your overall estate plan. It is important to understand how these pieces work independently of each other, and together as a whole. For instance, your beneficiary designation trumps what’s in your will, so you want to ensure the proceeds are going to your intended recipient.

DO Consult With a Financial Advisor

Estate planning is a legally complex process with many implications and consequences. A qualified financial advisor should be able to direct you to the most tax-efficient uses of your assets, and help you avoid making critical mistakes along the way.

American Investment Planners, LLC offers professional financial advice and estate planning services to individuals across the country. To schedule a face-to-face appointment with one of our consultants, please call (516) 932-5130 or email info@americaninvestmentplanners.com.

American Investment Planners does not provide tax or legal advice. Consult with a qualified legal or tax professional regarding your particular situation.