We Have Reached 1000 Views World Wide. Wow…

I am so excited, Potencial Millonario the blog has reached an all time 1,000 views in over 30 countries in a very short time. I just want say thank you for your support and we will continue our quest to make you financially free. 

http://www.amazon.com/Potencial-Millonario-Libertad-Financiera-Spanish/dp/1441597379
Note: this is only the Blog Facebook view not included.

How to Save $1 Million Dollars (DailyWorth.com)

By Jocelyn Black Hodes, DailyWorth’s Resident Financial Advisor (Rebloged)

http://www.dailyworth.com

The elusive million dollar milestone…is it reachable? Well, in short, yes. But not without some careful planning and discipline. Time is a key factor, of course. It all depends on your age, when you plan to retire, what kinds of accounts you use, your investment costs, and your risk tolerance. The more you are able to save on a regular basis, the less risk you need to take and the less time it should take to hit that first million.

Start Saving Now

If you are 35 and starting from scratch, for example, you need to save around $735 per month to have $1 million by age 65, assuming an 8% average annual return. If you are 40, you need to save around $1,135 per month. If you were willing to take on more risk with your investments and managed to average a 10% annual return, you would only have to save around $506 per month from age 35, or around $850 each month from age 40. If you were more conservative, you would need to save more. You get the idea. (You can use the SEC’s calculator to plug in your age and determine monthly contributions.)

Keep in mind that these numbers do not take potential investment costs into account like management fees and fund expense ratios, which could decrease your annual returns by more than 2%. This means that you will likely need to contribute more and/or take on more risk to meet your goal. They also don’t take into account inflation and taxes (we’ll get to that in a minute).

Max Out Your Retirement Accounts

So, where is the best place to save this money for retirement? In tax-advantaged retirement accounts, of course! We’re talking about your 401(k), 403(b), traditional IRA and/or Roth IRA. These kinds of accounts allow you to avoid paying taxes on market growth (capital gains), which really makes a big difference in how much you can accumulate over the long run.

If your company has a plan available, the easiest thing to do is to save there through automatic payroll deductions. These types of plans have a 2013 contribution limit of $17,500 or $23,000 if you are over 50. If your company offers a matching contribution (a.k.a free money), you definitely want to put in at least as much as they will match.

If you have maxed out contributions to your company plan and still want to save more, you can put an additional total of $5,500 (or $6,500 if you are over 50) for 2013 in a traditional or Roth IRA. Remember that Roth IRAs — unlike their traditional counterparts — allow you to grow post-tax money that you can potentially pull out totally tax-free in retirement. Some companies even offer a Roth IRA option as well as a 401(k) within their company plan, which means that you could potentially save $23,000 per year of tax-free money (or more, if you’re over 50).

If you do not have a company plan available and are an entrepreneur, or even if you do have a company plan but also freelance part-time, you may be able to open a SEP IRA or Individual 401(k), two other types of traditional IRAs. These plans allow you to save as much as $51,000 (or $56,500 if you are over 50) on a tax-deferred basis, including any other potential savings in other retirement accounts.

Don’t Forget About Taxes and Inflation

It’s also important to remember that, while hitting that 7-figure mark is still a major milestone, $1 million today won’t be worth that much in 25 years. Assuming an average inflation rate of 3%, it would only be worth around $475,000 in 25 years. (Over the last decade, the average annual inflation rate was less than 2.5%, but over the last quarter-century, the average annual inflation rate has been a little over 3%.)

If you want an inflation and tax-adjusted balance of $1 million by age 65, you may need to save upwards of $2,600 per month from age 35, or $3,200 per month from age 40, assuming an 8% return, and not including investment fees or state taxes. (We know: GULP.) Of course, that’s also assuming that you’re starting from scratch and accounting for 3% annual inflation. (You can do your own calculations with Bankrate’s inflation calculator tool.)

We know that may seem daunting; most people aren’t in a position to save $2,600 or more per month. But it does highlight the importance of starting early, or retiring a little later, in order to reach your retirement savings goal. Hopefully, you don’t have to start from scratch and you can build upon some base savings. You will help yourself a lot by saving extra cash (e.g. bonuses, tax refunds, inheritances) in tax-advantaged retirement accounts whenever possible, opening no or low-fee IRAs at a discount brokerage firm, and choosing lower-cost investments like indexed mutual funds and exchange-traded funds. Whatever your goal, the most important step you can take is to start saving anything you can now so your money can start growing and you’ll be that much closer to reaching $1 million, or whatever your personal retirement savings goal may be.

http://www.dailyworth.com

529 vs otros sistemas de ahorro educativo

kiplinger’s
This is an article from Kiplinger which I love to reblog. Thank you Kiplinger.Custodial Accounts vs. 529 Plans 

Which type of account would be best to save for a child’s college fund?

By Kimberly Lankford, From Kiplinger’s Personal Finance, May 2013

My wife and I would like to start college accounts for our grandkids. We had custodial accounts for our kids in the 1980s, but those accounts seem to be out of favor now. What vehicle gives our money the best chance to grow over 20 years while minimizing taxes? We plan to open each account with $1,000 and have $50 automatically deposited each month. Financial aid is not a concern. –Doug and Deb Scharp, Portage, Mich.

Custodial accounts—called UGMAs, after the Uniform Gifts to Minors Act, or UTMAs, after the Uniform Transfers to Minors Act—are a less-attractive way to save for college than they once were. Until a few years ago, these accounts were taxed at the kids’ low rates; now any investment income above $2,000 for children younger than 19 and full-time students younger than 24 is taxed at the parents’ higher rate. The first $1,000 of the child’s investment income in 2013 is tax-free, and the next $1,000 is taxed at the child’s own rate.

Money in a 529 plan, by contrast, grows tax-deferred, and the earnings can be used tax-free for qualified college costs. You may also get a state income tax break for your contributions. To qualify for the state tax break, you generally need to contribute to your own state’s 529 plan (although Arizona, Kansas, Maine, Missouri and Pennsylvania allow a deduction for contributions made to any state’s plan). Some states let anyone take a tax deduction for their contributions; others give the tax break only to the owner of the account. In Virginia, the account owner even gets the break on contributions to the plan from nonowners.

In states where only the owner gets the tax break, it’s a good idea for parents and grandparents to open separate accounts so they can both deduct their contributions. There’s no limit on the number of 529 accounts that can be opened for one child. Seewww.savingforcollege.com

for details.

Got a question? Ask Kim at askkim@kiplinger.com.

Read more at http://www.kiplinger.com/article/college/T002-C001-S003-custodial-accounts-vs-529-plans.html#B5GzLJdcU48xDsuk.99

The Internet Guide to Funding College and Section 529 College Savings Plans. Savingforcollege.com
www.savingforcollege.com
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