Commercial Insurance – Lowering Your Risk Management

commercialinsurancecalgaryWhen you open a business venture, you invest a capital for the purpose of making profits through sales or services you provide.  Any type or form of business involves a lot of risks and that if you fail to evaluate some of these risks may cause you to lose money or worse – the closing down of the business.  Location, prices, market crowd, product or service demand are just some of the few aspects that can result in success or failure of a business venture.

A business can be tricky but also very rewarding, especially when you begin to earn from it.  The problem for businesses at times though is the possibility of financial loss through accidents, property damage, unwanted liability claims, and workers compensation that arises from injury at work.  All of these occurrences results in financial damage on the business’ end.

The risk of business and management is already hard enough for most small-to-medium business owners and this type of risk management is simply something they should not have to worry about.  By getting commercial insurance for your business, you can avoid any financial losses brought about by certain eventualities that lead to the payments of these claims.  If you are running a business, having commercial insurance is an investment that essentially serves as protection from unwelcome business expenses.

Commercial insurance is very wide and covers a vast range of policies.  Certain insurance coverage are very particular and caters to only those that have such risks.  There are also some policies that cover certain types of risks but at very minimal coverage.  If you want to invest in commercial insurance on interest in providing financial protection for your business, you should look into policies that your business is most at risk at.

Getting Rogers commercial insurance should be a priority for business owners(check out their facebook reviews).  You would not want your business to get caught in lawsuit claims over liability or compensation without the protection of insurance.  This is why it is vital that your business has insurance in the soonest time possible.  This helps to avoid the possibility of financial risk within the timeframe that you do not have business insurance protection.  Commercial Insurance Calgary provides commercial insurance for every types of business, whether large-scale or small-scale businesses.  The assortment of coverage they provide means you can get the commercial insurance that is ideal and most-suitable for your business.

Top 5 Retirement Myths

retirement-lanePlanning for retirement is a topic that is not on the minds of many people because, well it is too boring. Some people would rather spend a 1 hour extra of their day in the gym working out or socializing than talking to a financial advisor about their retirement goals. In this article, we explore 5 myths that you should get out from your head in order to practically prepare for a smooth retirement. As life expectancy continues to rise (people are living longer), you have to plan at what age will you realistically be able to retire and how much of a nest egg you will need. Will you need $1 million, $2 million or more? Well it all depends on your lifestyle, your goals, your financial obligations and more.

Myth No. 1 – You can Choose your Retirement Date

It is advisable to pick a tentative date when you would like to retire, and work towards that goal. According to a study done by the Employee Benefit Research Institute in March 2010, 9% of all American workers said they plan to retire before the age of 60 while 31% had already left the workforce before their 50s. About 24% of workers wanted to work past the age of 70 however only 8% managed to do so (keep themselves employed). 41% of all workers said they had to leave the workforce earlier than planned because of health problems, disabilities, layoffs or to care for their aging spouses. The point of this paragraph is to tell you that choosing a retirement age will not always be a choice for you, life events such as the above mentioned will either force you out of work or you just might die early.

Myth No. 2 – A $1 million Nest Egg will get me Comfortable Retirement

While it is always nice to have a $1 million net worth when you retire, $1 million now spread out over 30 – 40 years (before your retirement) will not manage to give you a life of luxury but rather a well off or comfortable life. According to Michael Farr, president of Farr, Miller, & Washington, “If you can’t live on $50,000 a year, then $1 million is not enough. You are probably going to be able to live in retirement, but not particularly well. No one will consider you rich.”

Myth No. 3 – Social Security will Not Fund your Retirement

The existing Social Security trust fund currently holds enough assets to pay out promised social security benefits until 2037 according to a recent report by the Social Security Board of Trustees report. After that, the Board estimates income tax revenues will be sufficient enough to pay out 78% of all schedule benefits leaving for a 22% shortfall. However, by doing minor tweaks & changes to the Social Security system, the U.S. Senate Special Committee on Aging report said social security benefits could be enough to pay out for the next 75 years. Examples of tweaks include tax increases, pushing back the retirement age past 65 or a cut of benefits.

Myth No. 4 – You’re too Old to Start Saving for Retirementcompound-interest

It’s not too late to do anything my friend, so this myth is just out of whack! Most people get discouraged by knowing they have to save up $1 million by the time they are 65 because they just don’t know how! Christine Fahlund, a T. Rowe Price senior financial planner says “When people hear how big their nest egg should be, they think it’s impossible and stop saving altogether or never get started. Focus on the process instead. Contribute up to the maximum amount to your 401(k) and, if you are 50 or older, you are now eligible for catch up contributions.” Would you like to have $537, 761.07 by the time you are 65? Here’s how:

We used the Compound interest calculator located here

Current Principal = $0

Annual Addition = $20,000

Years to Grow = 15

Interest Rate = 7%

Future Value at Retirement = $537, 761.07

As you can see folks, saving for retirement is not as bad as it looks. We assumed the following points when doing this calculation:

i) The retiree is making $80,000 annual salary and saves 25%. Thus $80,000 x 25% = $20,000 a year.

ii) Current principal is $0 meaning at the age of 50, the retiree has $0 saved up.

iii) The number of years he has to grow his savings is 15.

iv) Assuming a market rate of return of 7% (which is achievable in current markets).


IRA Rollovers & Transfers: Similarities, Differences & FAQs

What’s the Difference between an IRA Rollover and IRA Transfer?

An IRA Transfer is when the retirement assets of an individual are transferred from one financial institution (IRA Management & Investment Firms) to another, without the IRA owner taking ownership and risk of the assets. By Transferring their IRA Assets, IRA owners do NOT have to pay tax on these withdrawals and do not risk loss of investments if anything happens along the way. Furthermore, unlike IRA Rollovers, you can carry as many IRA transfers during the taxation year as you’d like, there’s no maximum limit.

An IRA Rollover occurs when a retirement saver rolls over his assets from a Qualified Retirement Plan (example 401k plans) into an Individual Retirement Asset (IRA). Unlike IRA Transfers though, an individual is limited to 1 IRA Rollover every 12 months. There are 3 types of IRA Rollovers, we summarize them below:

1) IRA Rollover

An IRA Rollover occurs when an individual has personally withdrawn money from his IRA Assets for personal use. If this is the case, the individual has 60 days to rollover this distribution to another IRA. If the distribution is not rolled over to another IRA within 60 days, the individual will have to pay the local state & federal taxes as well as a 10% Early Withdrawal Penalty Fee.

2) Qualified Retirement Plan Rollover

A Qualified Retirement Plan Rollover occurs when an individual takes personal possession and responsibility of his IRA assets and does NOT do an IRA Transfer within 60 days. Once the IRA assets are distributed, the plan administrator will withhold 20% of the amount for tax purposes and 80% of the assets will be distributed to the IRA account owner. This complication makes Qualified Retirement Plan Rollovers a less attractive choice.

3) Qualified Retirement Plan Direct Rollover

The Direct Qualified Plan Rollover is probably your best bet. Similar to the IRA Transfer, the IRA Asset owner can rollover his assets directly from one financial institution to another without having to pay any taxes, and the 10% early withdrawal penalty fee. The only exception is that you are allowed to do a Direct IRA Rollover once every 12 months.

Roth IRA Conversions – Eligibility, Types of Conversions and Adjusted Gross Income Limits

The Roth IRA is a better choice than traditional IRA because contributions are made after-tax adding greater tax leverage to your retirement savings allowing you to grow your savings tax-free and withdraw them tax-free! What happens if you already have a traditional IRA and would like to convert it to a Roth IRA? This is where Roth IRA conversions come into play!

Qualified Roth IRA Conversion

In order to successfully convert a traditional IRA to a Roth IRA, the conversion must be ‘qualified.’ Roth IRA conversions are treated as rollovers at all times, regardless of the method used. There are 3 of these methods, discussed below:

i) Rollover – You can take a distribution from a traditional IRA and roll it over to a Roth IRA within 60 days. To meet the 60 day rule, count the day you receive the check and include the day when you deposit the money into your Roth IRA. For example if you get the check on April 1st, 2010, you must have it deposited by May 30th, 2010. There is no extension granted for holidays and weekends.

ii) Trustee-to-trustee transfer – You can instruct the trustee of your traditional IRA to make a direct payment to the trustee of your Roth IRA. This is also considered a qualified rollover.

iii) Same-trustee transfer – If you have only 1 trustee for both your traditional IRA and your Roth IRA, you should instruct the trustee to transfer directly from traditional to Roth IRA.

Adjusted Gross Income Limits

The law states that if your adjusted gross income (AGI) is greater than $100,000, you cannot convert from a traditional IRA to a Roth IRA. This law applies to both singles, married filing joint & head of household filers. Note that if you are filing a married-filing-separate tax return, you are not eligible to convert a traditional IRA to a Roth IRA at all, no matter what your adjusted gross income is.

An interesting question asked is, what if you made a Roth conversion last January and find out that your adjusted gross income will exceed $100,000? If this happens, there is nothing to worry about. You can convert your Roth IRA back to a traditional IRA via a few simple procedures known as IRA Recharacterizations.


John has an AGI of $85,000. He also has a traditional IRA of $55,000 that he would like to convert to a Roth IRA. John’s official adjusted gross limit (AGI) threshold for the year would be $85,000. Note we do not include the $55,000 conversion in the AGI limit because the law forbids that.