Wednesday

Steps to saving more money at the store

As the recession forces all of us to tighten our belts, there are some steps that we can take to save more money at the store. While these steps will not save you hundreds of dollars a week, they will certainly save you hundreds of dollars a year.  Each step you implement will help you save more money at the store.
  • Step 1: Think about bulk purchases - Whenever possible, purchase items in bulk.  In general, bulk purchases will lower your cost per "piece" and can result in significant cost savings. Make sure if you are purchasing in bulk that you carefully check expiration dates - you do not want to have to throw items away when you are trying to save money.
  • Step 2: Look into store specials - Look for in-store specials on items you would normally purchase. You can often find vegetables and meats that have special "managers special" flags on them. These are typically items that are close to expiration date so be certain that you are going to use the items right away for the best possible value.
  • Step 3: Find cents off Coupons - Even if you do not get a local Sunday paper that contains cents off coupons, you can easily locate online cents off coupons.  Websites like Coupon Surfer allow you to browse by category or brand, and can help you save money off items you would purchase anyway.
  • Step 4: Apply for and use your store "Rewards" cards - Most stores today offer some type of a rewards program. These programs not only can help you save money at the store, but many of them also offer additional benefits.  If you do not have a rewards card, do not hesitate to contact a sales associate and ask if they have one that they allow for use by customers.
  • Step 5: Take advantage of rain checks - If you see an item on sale that you would normally purchase and it is out of stock, ask the store for a rain-check. Combining a rain check with cents off coupons and other rewards programs can help you save more money at the store.
These five steps are merely a few of the possible options for saving money at the grocery store. Every consumer is looking for the most cost effective ways to feed their family.  Using one or more of these steps each time you go to the store will help you save more money.  Shoppers should take advantage of every opportunity to save money not only during tough economic times but every day.

Tax deductibility of IRA contributions


As tax time approaches, many people are wondering what to do about their Individual Retirement Accounts. Today, IRAs have become even more important with the decline in safety of Social Security and the lack of traditional pension plans. Because most investors today do not know what the future will hold for either of these plans, IRAs become even more important.

Regardless of other changes, IRA plans will remain important for tax planning purposes. The good news is that some or all contributions may be deductible depending upon what plans are offered by employers. Taking control of retirement savings will mean that nearly everyone will have to consider how to use an IRA for the best return.

IRA contribution growth

A small contribution of $1,200 annually with a six percent return over 20 years would allow an accumulation of nearly $50,000, a $2,000 contribution with a six percent return would allow you to save nearly $78,000. Maximizing IRA contributions could result in retirement savings of almost $200,000 at the same rate of return.

IRA savings should be started as early as possible.  The sooner an IRA is opened, the more significant your savings becomes. There are other ways to increase your retirement savings such as:

Tax deferred savings
IRAs earnings are usually reinvested and because of that they generate additional earnings. At retirement, there may be taxes due, however opting for a ROTH IRA allows for the withdrawal funds tax-free depending on the requirements of the plan that is selected.

Contributions to a 401K plan in conjunction with contributions to an IRA can also boost retirement savings and minimize taxes due. 401K's can be use in many ways for those who face a change in their financial status. They often allow more leverage than simply having an IRA.
Investors who have multiple retirement accounts due to changing employers should consider consolidating them into one account. This helps investors avoid paying multiple annual fees, allows more control and increases the diversity of an investment portfolio.

Non-deductible contributions
Non-deductible contributions made to an IRA can also be used to enhance savings. Depending on the plan, these savings may also grow tax deferred.  Tax deferred savings allow those who are in higher income brackets to save now and withdraw the funds later when their tax burden is usually lower.
Those who are self employed, will want to look into the various types of plans that are available. Many plans offer 'catch-up' options and vehicles like SEP plans may allow for contributions up to 24 percent of compensation (up to a preset limit which is $46,000 for 2011).  It is also important to note that those who are self-employed can also open a 401(k) plan if they desire to do so.

Unless investors have a dire financial need, they should avoid withdrawing money from their IRA account(s) before they actually retire. These withdrawals can be very costly and may also result in penalties and additional taxes. In addition, these withdrawals often put a retirement nest egg at risk in the event that the investor is unable to replace the money they withdrew.

The easiest way to contribute to an IRA account is through automatic deposits. This provides not only convenience for investors, but also forces them to save for retirement without depending on investing monies after they have been paid.  Investors should consider working with a tax adviser to understand what options are available to them for retirement planning and understand the tax deductible nature of their IRA contributions.