Retirement Risks to Consider

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Planning for retirement is tough even in the best of times, and it has become even more challenging in the face of the Covid-19 pandemic. A recent study by Shwab Retirement Plan Services found that 41 percent of 401(k) survey participants have made changes to their 401(k) plans as a direct result of the coronavirus.

The survey’s results also showed that pre- and present retirees perceived retirement risks differ from their actual risks. Research economist Wenliang Hou of the Center for Retirement Research at Boston College analyzed five major sources of risk faced by a typical retiree:

  • Mortality or longevity (living longer than expected and running out of money)
  • Market (bad stock returns or a decline in housing values)
  • Health (unexpected medical expenses and long-term care costs)
  • Family (death of a spouse or unforeseen needs of family members)
  • Policy (such as a Social Security benefit reduction)

Hou’s empirical analysis found the … Read More

Get to Know your General Ledger

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Familiarizing yourself with your company’s general ledger is particularly important in managing your cash flow during these precarious financial times.

According to Gene Marks, CPA and president and CEO of the Marks Group, “Everyone knows that successful managers are driven by data and that the devil’s always in the details.” That’s why he suggests printing and reviewing your company’s general ledger on a monthly basis.

The general ledger provides a record of every financial transaction. It holds all of the account information needed to prepare your company’s financial statements. Transaction data is segregated by type into accounts for assets, liabilities, owners’ equity, revenues, and expenses.

Some of the benefits of reviewing the general ledge include:

  • Better management of expenses. You will know exactly how much you are paying your vendors and what you are paying them for.
  • Ability to catch and correct errors. Reviewing payments made and expenses incurred may
… Read More

Does it Make Sense to Pay Vendors Early?

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According to Gene Marks, CPA and president and CEO of the Marks Group, it does make sense to pay your vendors early. Your vendors are critical partners, and if you treat them this way you will see the payoff in the long run.

One advantage of early payment is discounts many vendors offer for early payment. If you don’t see an early payment discount option on an invoice, don’t hesitate to ask your vendor what they can do for you.

Paying vendors early also helps solidify relationships. You will be someone your vendors want to continue to work with. They will be willing to take your calls, and are more likely to do favors should need something like last minute inventory fast.

Marks also suggests paying vendors twice a month – say on the 10th and the 25th. He says this allows you to avoid seepage of money from an uncontrolled … Read More