4 Ways to Protect Your Retirement Investments From Your Emotions

We like to think that we make rational financial choices, but that isn't always the case when it comes to our money. Our personal financial decisions are frequently influenced by our emotions. Due to our inability to think long term and our fear around losing money, we make bad investing decisions all the time. Luckily, you can take some pretty basic steps to protect yourself from your irrational side when it comes to preparing for retirement.

Automate your investing. First, you should automate your investing whenever possible. Automated investing keeps you stashing away funds even when it seems like money is tight in your everyday life. If also keeps you from frittering away your funds on spending that feels good now before you can save that extra cash.

The first step is to enroll in your employer’s retirement plan, which will automatically deposit a portion of your paychecks in an investment account. If you’re self-employed or your employer doesn't provide a 401(k), you can set up an automated deduction to a retirement or investment account at the beginning of each month.

Also, remember to automate increases in your investing. When you get a raise, direct at least part of the “new” money to your retirement account right away. If you never see it hit your checking account, you’ll be much less tempted to spend it frivolously.

Get acquainted with your risk tolerance. Your risk tolerance basically means how willing you are to lose money in the market. If you have a high tolerance for risk, you might be able to get better returns on your investments, but it also comes with the possibility of losing more of your capital.

Everyone needs to find a balance between the risks and rewards of investing. But you need to determine your own personal level of risk tolerance. Will you lose sleep if your portfolio’s value drops dramatically overnight? Or can you ride out the market downturn knowing that things will turn back up eventually?

While some people like to micro manage their investments, a buy and hold strategy typically works best for most people. This means potentially holding some investments as they lose value while you wait for them to regain value.

If you can’t handle watching your investments rise and fall in value – or if you can’t afford to lose money because you’re nearing retirement – select less risky investments. This is why experts recommend shifting your portfolio from stocks into more bonds as you near retirement age. You can never completely eliminate risk from your portfolio, but you can mitigate it.

Consider target-date investing. One way to remove your emotions from your retirement investments is to let someone else make the decisions. Robo advisors offer services that make decisions based on a risk tolerance quiz when you open your account.

Another option is to choose a target-date retirement fund from a traditional investment brokerage. Target-date funds automatically adjust your portfolio based on how long you have before retirement. The gradual shift from stocks to bonds occurs without any input from the investor, which can help you make solid investment choices while being fairly hands off.

Imagine your future. Finally, take time to imagine your future as a retiree. It’s easy to overspend in the moment rather than saving money for later. One way to combat this is to take time to envision your retirement and what you want it to look like. If you want to fulfill a dream of spending retirement on the beach, then you better start saving today.

Source: https://money.usnews.com/money/blogs/on-retirement/articles/2017-10-25/4-ways-to-protect-your-retirement-investments-from-your-emotions

IRS Warns About Tax Scams Related To Hurricanes, Wildfires and Vegas Shooting

The Internal Revenue Service is warning taxpayers about tax and information-stealing scams that continue to be reported around the country. Phishing, phone scams and identity theft top the list of items normally reported. However, following hurricanes and other disasters, the IRS urged taxpayers to be on the lookout for schemes stemming from these recent events.

“These scams evolve over time and adjust to reflect events in the news, but they all typically are variations on a familiar theme,” said IRS Commissioner John Koskinen. “Recognizing these schemes and taking some simple steps can protect taxpayers against these con artists.”

While individuals and businesses deal with the devastation of Hurricanes Harvey, Irma and Maria and wildland fires in the West, criminals may take advantage of this situation by creating fake charities to get money or personal information from sympathetic taxpayers. They may also attempt to con victims by impersonating a relief agency or charity that will provide relief. Such fraudulent scams and solicitations for donations may involve contact by telephone, social media, e-mail or in person.

Below are some of the more typical scams the IRS has seen:

Email Phishing Scams

The IRS has recently seen email schemes that target tax professionals, payroll professionals and human resources personnel in addition to individual taxpayers.

In email phishing attempts, criminals pose as a person or organization that taxpayers trust and recognize. They may hack an email account and send mass emails under another person’s name. They may pose as a bank, credit card company, tax software provider or government agency. If a person clicks on the link in these emails, it takes them to fake websites created by fraudsters to appear legitimate but contain phony login pages. These criminals hope victims will take the bait and provide money, passwords, Social Security numbers and other information that can lead to identity theft.

Scam emails and websites also can infect computers with malware without the user knowing it. The malware can give the criminal access to the device, enabling them to access sensitive files or track keyboard strokes, exposing logins and other sensitive information.

If a taxpayer receives an unsolicited email that appears to be from either the IRS or a program closely linked to the IRS, such as the Electronic Federal Tax Payment System (EFTPS), report it by sending it to phishing@irs.gov.  Learn more by going to the Report Phishing and Online Scams page.

The IRS generally does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels. The IRS has information online that can help protect taxpayers from email scams.

Phone Scams

The IRS does not call and leave prerecorded, urgent messages asking for a call back. In this tactic, the victim is told if they do not call back, a warrant will be issued for their arrest.

The IRS recently began sending letters to taxpayers whose overdue federal tax accounts are being assigned to one of four private-sector collection agencies. Because of this, taxpayers should be on the lookout for scammers posing as private collection firms. The IRS-authorized firms will only be calling about a tax debt the person has had – and has been aware of – for years. Taxpayers also would have been previously contacted by the IRS about their tax debt.

How to Know It’s Really the IRS Calling or Knocking on Your Door

The IRS initiates most contacts through regular mail delivered by the United States Postal Service.

However, there are special circumstances in which the IRS will call or come to a home or business, such as when a taxpayer has an overdue tax bill, to secure a delinquent tax return or delinquent employment tax payment, or to tour a business as part of an audit or during criminal investigations.

Even then, taxpayers will usually first receive several letters (called “notices”) from the IRS in the mail. For more information, visit “How to know it’s really the IRS calling or knocking on your door” on IRS.gov.

Tax Refund Fraud -- Identity Theft

Tax-related identity theft occurs when someone uses a stolen Social Security number or Individual Taxpayer Identification Number (ITIN) to file a tax return claiming a fraudulent refund.

In 2015, the IRS joined forces with representatives of the software industry, tax preparation firms, payroll and tax financial product processors and state tax administrators to combat identity-theft refund fraud and protect the nation's taxpayers. This group -- the Security Summit -- has held a series of public awareness campaigns directed at taxpayers called "Taxes.Security.Together."  For tax professionals, the “Protect Your Clients; Protect Yourself” and “Don’t Take the Bait” campaigns encourage the tax community to take steps to protect themselves from identity thieves and cybercriminals.

Security Reminders for Taxpayers

The IRS and its Summit partners remind taxpayers they can do their part to help in this effort. Taxpayers and tax professionals should:

• Always use security software with firewall and anti-virus protections. Make sure the security software is always turned on and can automatically update. Encrypt sensitive files such as tax records stored on computers and devices. Use strong passwords.  

Source: http://www.cpapracticeadvisor.com/

The Hottest Executive Coaches These Days? Millennials. Here Are 11 Things You Can Learn From Them

The world of mentorship poses many questions.  Like how do you find the right mentor?  Or how can you be an outstanding mentor? Or even how can you be the kind of mentee that mentors love to work with?

Here's a new one: Who are the hottest coaches and mentors for boomer executives these days?

It's not the $500 per hour kind. It's the kind down the hall from your office with their AirPods in.

Millennials.

Before you spit out your Gen-Y approved fair-trade coffee, hold on a second.

In a delicious turn of events, boomer executives everywhere are scrambling to pair up with twenty-somethings that have plenty of something to offer (including helping them become tech-savvy, understand today's workforce, get into the now, and get out of the Van Halen era). Thus, millennials have become the hottest executive accessory.   

A New York Times report added credence to the trend, citing companies such as MasterCard, Cisco, Target, UnitedHealth Group, and Mars that have implemented reverse mentoring programs that match furrow-browed executives with bushy-tailed counterparts, some that are even fresh out of college. 

It's a low-priced alternative to companies that prey on our fear of what we don't know about those darned kids (companies that can make as much as $20,000 per hour according to the Times). Entrepreneurs and small businesses take note.

Here are 11 reasons to reach out to a Millennial mentor:

1. Get tech savvy.

It's no longer okay that you don't know what Snapchat is or how to use it.  Your younger co-workers use it--it's how they communicate. Your daughter uses it--it's how she fails to communicate. Your target audience uses it--it's how they're evolving to communicate.

It's good to learn new things, and it's good business.

2. Learn new markets and trends, innovate. Repeat.

The marketplace is littered with companies that let the evolving consumer pass them by.  Can't get out to that focus group to learn about the latest wants and needs? Hold one in the conference room. Just make sure it's an open floor plan conference room.

3. Improve retention.

This reason alone makes it worth finding a Millennial mentor.  How can you possibly know what your younger workforce wants if you don't know what your younger workforce wants? Don't read about it. Relate about it.

4. Better identify high-potentials.

Reverse mentorships mean Boomers are exposed to more young talent.  Such exposure increases the odds of an accurate assessment of talent and a building of the right bench for the executive suite.

5. Embrace purpose.

Odds are, when a Boomer meets up with a Millennial, the former gets a lesson in what really matters at work from the latter. It's well documented that Millennials aren't motivated as much by perks or pay; it's about the purpose behind their work. Finding out how they articulate theirs can help you define yours--and infuse more energy and fulfillment into your work days.

6. Fight obsolescence.

There, I said it. 

We have enough to worry about fighting off machines for jobs. Who wants to fight off a Millennial for one? Don't try to beat them, join them. Improve your skills by expanding your horizons.

7. Get hipper and younger.

The Times article reported on one bank managing partner who had "rediscovered his youth" via his Millennial mentor.  I'm not sure such a mentor could help me relive the joy of Happy Days episodes, but surely I'll feel a little more hip because of the relationship. 

8. Build a more connected workplace.

Learning to connect with Millennials means learning to connect with the workforce in general (Millennials are now the largest work cohort). Spending time bridging the generation gap means building a happier workplace for all.

9. Return the favor.

Many Boomers are reluctant to become mentors because of time constraints or a myriad of other reasons. The law of reciprocity says you probably should offer to mentor the Millennial right back. What a wonderful virtuous cycle.

10. Get inspired.

Exposure to different, energetic points of view can inspire all kinds of things.  Research indicates the number one thing that distinguishes entrepreneurial leaders from more conventional ones is an openness to new experiences. So go experience.  

11. Sharpen your listening skills.

That's right. You might not be in a situation quite as often anymore where you're the one taking notes. It's good for you, and for your listening aptitude. 

So Boomers, pick up a Millennial today, they're available in all colors, shapes, and sizes.  But move fast--not because quantities are limited, but because we'll all be looking to Gen Z'ers before you know it.

Fashion can be so cruel.

Source: https://www.inc.com/scott-mautz/hot-accessory-for-executives-isnt-a-mercedes-its-a-millennial-11-reasons-theyre-great-mentors.html