benefits http://www.wisebread.com/taxonomy/term/2730/all en-US How Longevity Insurance Can Keep You From Outliving Your Money http://www.wisebread.com/how-longevity-insurance-can-keep-you-from-outliving-your-money <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-longevity-insurance-can-keep-you-from-outliving-your-money" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/happy_senior_lady.jpg" alt="Happy senior lady" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You want a long and happy life. But what if that life goes on<em> too</em> long? Have you considered the possibility that you haven't stashed enough savings away to support yourself if you live to be 90, or even 100?</p> <p>Longevity insurance might help ease your worries. But this product, also known as an advanced life-deferred annuity, does come with risk: You can purchase it, but, if you don't live as long as you expect, you may never benefit from it.</p> <h2>We're living longer</h2> <p>A study by the World Health Organization and Imperial College London found that by 2030, the average life expectancy for women will be 83.3 years and 79.5 for men. Currently, according to the study, the average life expectancy is 81.2 years for women and 76.5 for men. As people continue to live longer, it's only logical that they'll need more money to support themselves during those years. If you retire at age 67 and live to be 87, you'll need enough money to live for 20 years in retirement. But what if you live to be 100? That's 33 years spent without a regular paycheck. And that's where longevity insurance comes in. (See also: <a href="http://www.wisebread.com/is-long-term-care-insurance-worth-it?ref=seealso" target="_blank">Is Long Term Care Insurance Worth It?</a>)</p> <h2>Longevity insurance basics</h2> <p>Longevity insurance is designed to help retirees cover their expenses if they happen to live for a very long time. The product provides policyholders guaranteed income for life once they reach a certain age, usually 80 or 85. It's designed to provide extra income to supplement retirement savings that might be dwindling.</p> <p>Of course, this protection doesn't come free. You'll have to pay a lump sum to open a policy, something you'll usually do right before you hit retirement age. How much the policy pays out once you hit the trigger age depends on how much you pay for your policy and how old you are at the time you purchase it.</p> <p>MetLife provides a good example of how this works. According to a brochure advertising the company's Longevity Income Guarantee annuity, a man who makes a lump-sum payment of $50,000 at age 55 would receive an annual payout of $17,334 beginning when he turns 80. That same man would receive an annual payout of $30,619 if he waited until 85 to begin receiving his monthly payments.</p> <p>A man who invests $50,000 at age 60 will receive $8,017 a year if he elects to start receiving payouts at age 75, and $21,741 a year if he instead waits until he turns 85.</p> <p>The payouts for women are a bit lower, since women have longer life expectancies. In the example above, a woman who invests $50,000 at age 60 will receive annual payouts of $20,515 if she decides to start taking payments at the age of 85.</p> <h2>The drawbacks</h2> <p>While longevity insurance can provide you with additional protection throughout your retirement, it does come with some drawbacks. First, there's the price. In the MetLife examples, for instance, consumers are investing $50,000 into the product. That's a lot of money. And depending on where that money comes from, it could make a serious dent in what you are saving for retirement.</p> <p>That's why the best candidate for longevity insurance is someone who not only expects to live a long life, but someone who can comfortably afford to part with that large lump-sum payment. You shouldn't spend more than 10 to 20 percent of your nest egg on a longevity insurance payment.</p> <p>There's also inflation. Coverage that you purchase today won't be worth the same amount in, say, 20 years. Some longevity insurance programs offer inflation protection, adding the expected costs of inflation to your future payouts. Investing in inflation protection can be a smart move, but it won't be free. You'll have to pay extra.</p> <p>Then there's an even bigger problem: How do you<em> really</em> predict how long you'll live? Say you elect to start receiving longevity insurance payments at age 85. What if you die at age 80? With basic policies, you'll lose that lump sum you invested 20 or 30 years ago. That's because basic longevity insurance products don't include a death benefit. The money you invested will be lost if you die before your payouts begin.</p> <p>Some insurers offer the option of a death benefit so that your heirs can collect at least a portion of your payout if you die too early. Again, though, you'll have to pay extra for this flexibility. And your annual payout might also be lower as a way for insurers to recoup some of the extra risk <em>they </em>take on by providing you with a death benefit.</p> <p>One last drawback is the lack of flexibility. If you plan to collect payments at age 85, but find you really need the money starting at age 82, you may be out of luck. Some insurers do offer an option allowing policyholders to access their money early, but these policies cost more and typically provide a lower annual payout.</p> <p>Should you invest in longevity insurance? It depends on how much financial peace of mind is worth to you. Because this type of insurance does come with unusual risks, you'll have to determine if the fear of outliving your income is worth the chance of investing in an insurance policy that might never pay out for you.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/how-longevity-insurance-can-keep-you-from-outliving-your-money">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-plan-for-a-forced-early-retirement">How to Plan for a Forced Early Retirement</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/new-job-dont-make-these-7-mistakes-with-your-benefits">New Job? Don&#039;t Make These 7 Mistakes With Your Benefits</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-retirement-struggles-nobody-talks-about-and-how-to-beat-them">5 Retirement Struggles Nobody Talks About — And How to Beat Them</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/is-long-term-care-insurance-worth-it">Is Long Term Care Insurance Worth It?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-benefits-of-carrying-a-mortgage-into-retirement">5 Benefits of Carrying a Mortgage Into Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Insurance Retirement aging benefits deferred annuity inflation living longer longevity insurance lump sum payments Thu, 14 Dec 2017 09:31:09 +0000 Dan Rafter 2069775 at http://www.wisebread.com How to Plan for a Forced Early Retirement http://www.wisebread.com/how-to-plan-for-a-forced-early-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-plan-for-a-forced-early-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/mature_businesswoman_working_in_her_home_office.jpg" alt="Mature Businesswoman Working In Her Home Office" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Every working adult dreams of the day they can retire and take it easy. But for some, retirement is forced upon them sooner than expected. When this happens, a world of financial stress can follow.</p> <p>LIMRA Secure Retirement Institute found that 51 percent of workers retire between ages 61 and 65, while 18 percent retire even earlier than that. It may not have been in your plans to retire so soon, but life doesn't always go accordingly &mdash; things like declining health or caregiving for a loved one can force people to leave the workforce earlier than they anticipated.</p> <p>Retirement experts advise that in the face of this new trend, your retirement plan should include early retirement options and safeguards. Below are six things you can begin doing now to prepare for an unexpected early retirement.</p> <h2>1. Start planning early</h2> <p>Retiring just five years early &mdash; at age 60 versus 65 &mdash; can significantly impact the amount of income you may need to retire comfortably. One common retirement rule of thumb that can help you roughly determine how much you should save is the <em>four percent rule</em>.</p> <p>Financial experts believe you can safely withdraw about $4,000 a year per $100,000 of savings during retirement, and that would last you approximately 33 years. So, if your living expenses are $40,000 a year, you'd need to save $1 million. This simple rule does not account for inflation or other sources of income such as Social Security benefits, but experts believe it&rsquo;s a good baseline for gauging your retirement needs. (See also: <a href="http://www.wisebread.com/4-retirement-rules-of-thumb-that-actually-work?ref=seealso" target="_blank">4 Retirement &quot;Rules of Thumb&quot; That Actually Work</a>)</p> <p>Bumping up what you contribute to your retirement fund, even by just a few dollars a month, along with lowering your cost of living is a great way to prepare yourself and your family in case you have to retire prematurely.</p> <h2>2. Plan for inflation</h2> <p>While the four percent rule is a great place to start, if you know that early retirement is highly likely for you, you need to be more aggressive. Fidelity advises that your goal should be to save at least six times your current annual salary by the time you are 50, and 10 times your income by the time you are 67. If you are not near these targets, it&rsquo;s time to rearrange some things, rein in your spending, and begin aggressively saving.</p> <p>Another pitfall of retirement many people forget to plan for is inflation. Retirement investments have failed to keep pace with our aging population, Social Security cuts, and hedge against the investment risks brought on by the shift from traditional pensions to individual savings.</p> <p>When you retire, the world will be a more expensive place than it was while you were saving. You must understand and plan for the fact that $10 today will not buy the same thing in 2035. (See also: <a href="http://www.wisebread.com/4-ways-to-protect-your-retirement-from-inflation?ref=seealso" target="_blank">4 Ways to Protect Your Retirement From Inflation</a>)</p> <h2>3. Don&rsquo;t take Social Security early</h2> <p>In 2014, LIMRA found that 57 percent of men and 64 percent of women took their Social Security benefits early. But since monthly benefits rise five to eight percent annually between ages 62 and 70, the longer you can wait, the better off you'll be. For example, if your full retirement age is 66, but you begin collecting benefits early at 62, your benefit will be reduced by about 30 percent.</p> <p>In years past, once you hit 65, you were eligible for full Social Security benefits and could retire and receive a monthly check from the government. However, that is no longer the case &mdash; especially for younger workers who must put in more years to reach their full retirement age. Experts agree that you should only take your benefits early if you absolutely need to. Proper planning can prevent this from being your only option. (See also: <a href="http://www.wisebread.com/5-questions-to-ask-before-you-start-claiming-your-social-security-benefits?ref=seealso" target="_blank">5 Questions to Ask Before You Start Claiming Your Social Security Benefits</a>)</p> <h2>4. Consider a partial retirement option</h2> <p>&quot;Partial retirement&quot; simply means keeping a job on a part-time basis as a means to help stretch your retirement savings. By remaining in the workforce for a little while longer, you can defer retirement funds &mdash; such as Social Security, pensions, and even savings &mdash; until you decide to fully retire.</p> <p>Some places, such as government agencies, offer phased retirement plans. These plans allow you to supplement your income by working part time while still contributing to your retirement fund and allowing you to keep a portion of your benefit package. It&rsquo;s important to begin researching these things and understanding your options while you are able bodied. (See also: <a href="http://www.wisebread.com/4-reasons-you-might-have-a-phased-retirement?ref=seealso" target="_blank">4 Reasons You Might Have a &quot;Phased&quot; Retirement</a>)</p> <h2>5. Find a side gig</h2> <p>If your company does not offer a partial or phased retirement option, side gigs are a great way to supplement your income and help tide you over until you reach full retirement age. And while most side gigs don&rsquo;t come with benefits, you do get to set your own hours and work as you are able.</p> <p>Now is the time to look into different side or part time jobs that fit your ability, skill set, and situation. What interests and hobbies do you have that could become profitable? Write them down and research ways you can make money doing those things. You may also want to research jobs you could do from home that are not too physically demanding.</p> <p>Side gigs and part time jobs can also be good for your health. A 2016 Oregon State University study found that those who retire early die sooner than those who work beyond age 65. (See also: <a href="http://www.wisebread.com/9-easy-ways-retirees-can-earn-extra-income?ref=seealso" target="_blank">9 Easy Ways Retirees Can Earn Extra Income</a>)</p> <h2>6. Stick to a budget and pay off debt early</h2> <p>Surviving in retirement is not only dependent on how much you save, but also how much you spend. Most people have to scale back a bit during retirement due to a reduction in income. Scaling back after you retire is a tough thing to do. You have more free time to travel, indulge in hobbies, and spoil the grandkids rotten &mdash; all of which can quickly shrink your nest egg.</p> <p>Start now by creating and sticking to a conservative budget. The extra money you save should go into your retirement fund or toward paying down debt. Scale back on expenses where you can and consider downsizing before it's time to retire for good. Establishing disciplined spending habits now will carry over and benefit you later &mdash; when it really counts.</p> <p>A great way to reduce your overhead and free up some cash is to pay down your debt as quickly as possible and to get rid of your mortgage before you retire. The less debt you have, the more spending money you have. (See also: <a href="http://www.wisebread.com/6-ways-you-can-cut-costs-right-before-you-retire-0?ref=seealso" target="_blank">6 Ways You Can Cut Costs Right Before You Retire</a>)</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/denise-hill">Denise Hill</a> of <a href="http://www.wisebread.com/how-to-plan-for-a-forced-early-retirement">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-reasons-you-might-have-a-phased-retirement">4 Reasons You Might Have a &quot;Phased&quot; Retirement</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-roadblocks-to-retirement-and-how-to-clear-them">7 Roadblocks to Retirement (And How to Clear Them)</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-ways-to-handle-a-forced-early-retirement">5 Ways to Handle a Forced Early Retirement</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-questions-to-ask-before-you-start-claiming-your-social-security-benefits">5 Questions to Ask Before You Start Claiming Your Social Security Benefits</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-actions-women-can-take-right-now-to-get-their-retirement-on-track">5 Actions Women Can Take Right Now to Get Their Retirement On Track</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement benefits budgeting early retirement extra income financial planning forced retirement inflation phased retirement saving money social security Mon, 11 Dec 2017 09:30:10 +0000 Denise Hill 2068119 at http://www.wisebread.com 7 Roadblocks to Retirement (And How to Clear Them) http://www.wisebread.com/7-roadblocks-to-retirement-and-how-to-clear-them <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-roadblocks-to-retirement-and-how-to-clear-them" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/sticky_note_on_notice_board.jpg" alt="Sticky note on notice board" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>How often do you dream about retirement? It's nice to think about the day when you can stop answering to a boss, and instead spend your time relaxing, traveling, and enjoying life to the fullest. Well, if you want that dream to become a reality, you may need to make some significant life changes <em>now</em>. If you're guilty of the following things, you could end up working well past your planned retirement age. (See also: <a href="http://www.wisebread.com/how-much-should-you-have-saved-for-retirement-by-30-40-50?ref=seealso" target="_blank">How Much Should You Have Saved for Retirement by 30? 40? 50?</a>)</p> <h2>1. You simply aren't putting enough money away</h2> <p>Most people vastly underestimate the amount they need to stash away for their golden years. The problem comes from the fact that many financial planners will tell you to put between 10 and 15 percent of your income toward retirement. However, that assumes you started saving in your 20s.</p> <p>If you are now 40, and only started putting money away 10 years ago, you need a higher savings rate in order to make up for those missing years. In fact, you would have to put around 25 percent of your salary away each month and work until you're 70 in order to make up for the shortfall. And as always, compound interest is the real key to saving. By missing out on those years in your 20s, you will have significantly impacted your future nest egg. (See also: <a href="http://www.wisebread.com/how-to-start-saving-for-retirement-at-40?ref=seealso" target="_blank">How to Start Saving for Retirement at 40+</a>)</p> <h2>2. You aren't taking advantage of your employer's 401(k) match</h2> <p>Simply put, any kind of match that your employer gives you is free money, and it would be silly not to take advantage of every cent. The average match out there is 3 percent of your pay, although companies can vary greatly on what they offer. This means that if you only put in 2 percent of your salary, you are leaving 0.7 percent of your income on the table. It may not seem like a lot, but that can really add up over time.</p> <p>If your company offers you 50 percent on the dollar for up to 6 percent of your pay, you should be putting 6 percent away. If it's a dollar amount match, say $2,500 per year, make sure you put in at least that amount. (See also: <a href="http://www.wisebread.com/5-dumb-401k-mistakes-smart-people-make?ref=seealso" target="_blank">5 Dumb 401(k) Mistakes Smart People Make</a>)</p> <h2>3. Your plan is not aggressive enough</h2> <p>Most 401(k) plans have something called a &quot;target date&quot; that is used to figure out what your retirement portfolio will look like. If you have 30 years to go until retirement, you will almost certainly want at least a moderately aggressive portfolio. This will be comprised primarily of stocks, which offer higher gains, but are more volatile and can lose their value quickly. However, the stock market will always recover over time, and if you have that time to spare, this is the plan you should use.</p> <p>If you have less time to go until retirement, your portfolio will have way less stocks in it, opting instead for a larger percentage of bonds. These are much safer, but they don't have the ability to make as much money as stocks. If you came into the retirement savings habit late, you should talk to a professional about how to organize your portfolio. You simply may not have enough time to make money with a conservative plan, but could also risk losing money with a more aggressive one. (See also: <a href="http://www.wisebread.com/start-planning-now-for-when-your-target-date-fund-ends?ref=seealso" target="_blank">Start Planning Now for When Your Target-Date Fund Ends</a>)</p> <h2>4. You're spending too much of your disposable income</h2> <p>A coffee here. A magazine there. Eating out every week. These small expenditures really add up, and instead of saving the money you'll need to survive after you stop working, these frivolous buys are burning holes in your pocket.</p> <p>Yes, life's little luxuries are important for your morale and self-esteem from time to time, but get a handle on those expenses and budget accordingly. You may find that you're spending $40 a month just on coffee. That's $480 a year. Let's say you plan on retiring in 30 years, and you stop getting that morning coffee for one year. A good rate of return on retirement investments is about 8 percent. Thirty years down the road, that $480 will become almost $5,000. If you cut your daily coffee out entirely, it will add over $63,500 to your retirement fund in a 30 year period. Now think about it: Is that &quot;luxury&quot; really worth it? (See also: <a href="http://www.wisebread.com/7-effortless-ways-to-prevent-budget-busting-impulse-buys?ref=seealso" target="_blank">7 Effortless Ways to Prevent Budget-Busting Impulse Buys</a>)</p> <h2>5. Social Security benefits alone will not be enough</h2> <p>It seems unfair that we pay into the system all our working lives, and when it comes time to retire, we get very little back. But, that is simply the result of a population that is living longer, yet retiring at the same age of 65. There just isn't enough money in Social Security to totally support you unless you have almost everything completely bought and paid for by the time you retire, and even then, it will be tough going.</p> <p>Right now, benefits for retired workers average around $1,374 per month, or just over $16,400 annually. When you consider that the federal poverty line is currently $12,060 for a one-person household, that's a little too close for comfort.</p> <p>While it's possible to survive on that, barely, you have to ask yourself: Do you really want to spend the last 20+ years of your life scraping to make ends meet? (See also: <a href="http://www.wisebread.com/6-smart-ways-to-boost-your-social-security-payout-before-retirement?ref=seealso" target="_blank">6 Smart Ways to Boost Your Social Security Payout Before Retirement</a>)</p> <h2>6. You're using your home like a cash machine</h2> <p>It's so tempting to dig into the equity in our homes, especially when the housing market is strong and interest rates are so low. But, every time you refinance your home to take out money, and start another 30-year mortgage, you are seriously impacting the quality of your retirement.</p> <p>Ideally, by the time you retire, you'll want that home to be paid for; no mortgage left, only taxes and maintenance. But if you are 40 years old and just did a 30-year refinance to take out some cash, you've ensured you'll be paying that mortgage until you hit 70. Not only that, but every time you do a cash-out refi, you're spending money on fees.</p> <p>If you must refinance, consider doing a 10 or 15-year fixed rate term instead. Get that mortgage paid off quickly. You'll also pay thousands less in interest over the life of the loan. (See also: <a href="http://www.wisebread.com/3-times-a-refinance-is-the-wrong-move?ref=seealso" target="_blank">3 Times a Refinance Is the Wrong Move</a>)</p> <h2>7. You're not aiming to become a millionaire</h2> <p>When people start tucking away money for retirement, they don't really consider the lump sum they are going to need when they eventually stop working. And ask any average Joe if they will be a millionaire one day, and they will laugh at you and say something like, &quot;Yeah, right!&quot;</p> <p>But, everyone should be doing what they can to become a millionaire in retirement. While it may not be possible to hit that figure exactly, you should still aim as high as you can.</p> <p>It's commonly advised that by the time you hit retirement age, you should have <em>at least</em> 10 times your current salary in your retirement account. With the current median income hovering around the $60K mark, that means that you should have just over half a million dollars in your fund if you retire this year. If you're a higher earner, let's say you earn $120K a year, that figure should be over a million. (See also: <a href="http://www.wisebread.com/heres-how-far-1-million-will-actually-go-in-retirement?ref=seealso" target="_blank">Here's How Far $1 Million Will Actually Go in Retirement</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F7-roadblocks-to-retirement-and-how-to-clear-them&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F7%2520Roadblocks%2520to%2520Retirement%2520%2528And%2520How%2520to%2520Clear%2520Them%2529.jpg&amp;description=7%20Roadblocks%20to%20Retirement%20(And%20How%20to%20Clear%20Them)"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/7%20Roadblocks%20to%20Retirement%20%28And%20How%20to%20Clear%20Them%29.jpg" alt="7 Roadblocks to Retirement (And How to Clear Them)" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/paul-michael">Paul Michael</a> of <a href="http://www.wisebread.com/7-roadblocks-to-retirement-and-how-to-clear-them">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-18"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-plan-for-a-forced-early-retirement">How to Plan for a Forced Early Retirement</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-signs-youre-making-all-the-right-moves-for-retirement">8 Signs You&#039;re Making All the Right Moves for Retirement</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-ways-to-protect-your-retirement-from-inflation">4 Ways to Protect Your Retirement From Inflation</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-signs-its-time-to-retire">8 Signs It&#039;s Time to Retire</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-save-for-retirement-when-you-are-unemployed">How to Save for Retirement When You Are Unemployed</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement 401(k) benefits golden years homeownership nest egg poverty refinance saving money social security stocks Wed, 29 Nov 2017 10:00:06 +0000 Paul Michael 2062578 at http://www.wisebread.com 11 Credit Card Perks That Make Life Easier and Way More Fun http://www.wisebread.com/11-credit-card-perks-that-make-life-easier-and-way-more-fun <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/11-credit-card-perks-that-make-life-easier-and-way-more-fun" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_on_a_vacation_shopping_online_with_credit_card.jpg" alt="Woman on a vacation shopping online with credit card" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>I thought I knew all there was to know about using credit card perks. And then last year, I needed &mdash; and I mean, <em>needed </em>&mdash; tickets to a certain musical theater production. When I got an email invitation to a members-only presale, I realized that the wallet full of credit cards I've accumulated for the miles and points have other great perks that I might not be using.</p> <p>Let's look at some of the timesaving, weekend-improving bennies you might already qualify for based on the cards you hold. (See also: <a href="http://www.wisebread.com/10-awesome-credit-card-perks-you-didnt-know-about?ref=seealso" target="_blank">14 Awesome Credit Card Perks You Didn't Know About</a>)</p> <h2>1. Concierge service</h2> <p>You have a night free in a strange city, and you want to make the most of it. If only you had someone to pick a restaurant and a show for you and charge everything to your credit card...</p> <p>If you have an <a href="http://www.wisebread.com/the-5-best-premium-credit-cards?ref=internal" target="_blank">elite-level credit card</a>, you <em>do</em> have that person in the form of complimentary concierge service. You can ask your credit card concierge to buy tickets to a concert or show that is likely to sell out, so you don't have to drop what you're doing to get online the moment they go on sale. You can ask them to have flowers delivered to your partner or even to have them send a limo to get your kids from school. You pay for the cost of the goods or services &mdash; you can set a limit in advance &mdash; but the concierge's time is free.</p> <p>I have a friend who loves to dine at Michelin-starred restaurants, and reservations can be hard to get. She has used a credit card concierge service to score tables all over the world.</p> <p>&quot;I even had them find me a place in Atlanta for a coworker that has lots of dietary restrictions,&quot; my friend said.</p> <p>You think that's excellent service? Then consider that other clients have successfully had credit card concierges track down obscure or in-demand items and had them delivered to their door. If your kid wants a popular toy this holiday, it might be worth asking a credit card concierge to find it.</p> <p>Personally, I want to take my Broadway-obsessed teen to a show in Chicago over the holidays, but don't know which show to get tickets to. I might just call my credit card concierge for both advice and booking. (See also: <a href="http://www.wisebread.com/what-do-the-concierge-services-from-credit-cards-really-provide?ref=internal?ref=seealso" target="_blank">What Do the Concierge Services From Credit Cards Really Provide?</a>)</p> <h2>2. Members-only spaces and experiences</h2> <p>You're probably aware that some credit cards get you into airport lounges. But did you know there are also members-only lounges with complimentary beverages in some theme parks, including Universal Studios, and at big events such as the Super Bowl? And at Disney World, certain credit card holders have access to exclusive character meet-and-greet sessions.</p> <p>Certain high-end cards even host members-only events, such as private dinners by celebrity chefs. These events aren't free &mdash; in fact, some cost thousands of dollars &mdash; but they are exclusive. (See also: <a href="http://www.wisebread.com/how-to-get-the-most-out-of-airport-lounge-access?ref=seealso" target="_blank">How to Get the Most Out of Airport Lounge Access</a>)</p> <h2>3. Shorter lines</h2> <p>Some theme parks and other attractions have a dedicated line for certain credit card holders. If you visit often, I can see holding a credit card for that benefit alone.</p> <h2>4. A smoother trip through airport security</h2> <p>A number of high-end travel cards <a href="http://www.wisebread.com/best-credit-cards-that-offer-tsa-pre-check-and-global-entry-reimbursement?ref=internal" target="_blank">reimburse users the $100 application charge for Global Entry</a>, which also comes with membership to the Transportation Security Administration's PreCheck program. Membership in both these programs means that you can go through a quicker security line in domestic or international airports, and when you're returning from abroad, you can skip the immigration line and simply scan your passport at a kiosk.</p> <h2>5. Free museums</h2> <p>At least one card-issuing bank partners with museums nationwide to offer cardholders free entry on certain days.</p> <h2>6. Hotel room upgrades</h2> <p>Certain hotel chain credit cards offer cardholders status, which can lead to getting an upgraded room when you check in. It can also get you free Wi-Fi at the hotel, late checkouts, and other perks. Some cards even offer spending credits for certain hotel stays. (See also: <a href="http://www.wisebread.com/the-5-best-credit-cards-with-free-hotel-status-upgrades?ref=seealso" target="_blank">The Best Credit Cards With Free Hotel Status Upgrades</a>)</p> <h2>7. Free rides</h2> <p>At least one credit card offers a monthly credit for a ride sharing service, smoothing everything from business travel to barhopping without a designated driver.</p> <h2>8. Free shipping</h2> <p>Some credit cards offer membership to free shipping programs that work at multiple online stores.</p> <h2>9. Freedom to pack more stuff</h2> <p>This holiday season, my family will be checking suitcases instead of relying on carry-ons, because I hold one of the airline's premium credit cards that gives cardholders one free checked bag. Because we have that privilege, we can tell the grandparents they don't have to limit gifts to digital downloads! (See also: <a href="http://www.wisebread.com/travel-perks-you-didnt-know-your-credit-card-had?ref=seealso" target="_blank">12 Travel Perks You Didn't Know Your Credit Card Had</a>)</p> <h2>10. Free internet</h2> <p>Some credit cards give you membership to wireless plans so that you can get online on participating flights or in other public places.</p> <h2>11. A sweeter ride</h2> <p>Some credit cards give you instant status with car rental programs, which can unlock free upgrades and shorter waits at dedicated booths at the airport. So make the most of your membership to rent that sports car you've always wanted to drive!</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F11-credit-card-perks-that-make-life-easier-and-way-more-fun&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F11%2520Credit%2520Card%2520Perks%2520That%2520Make%2520Life%2520Easier%2520and%2520Way%2520More%2520Fun%2520%25281%2529.jpg&amp;description=11%20Credit%20Card%20Perks%20That%20Make%20Life%20Easier%20and%20Way%20More%20Fun"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/11%20Credit%20Card%20Perks%20That%20Make%20Life%20Easier%20and%20Way%20More%20Fun%20%281%29.jpg" alt="11 Credit Card Perks That Make Life Easier and Way More Fun" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/carrie-kirby">Carrie Kirby</a> of <a href="http://www.wisebread.com/11-credit-card-perks-that-make-life-easier-and-way-more-fun">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/best-credit-cards-that-offer-tsa-pre-check-and-global-entry-reimbursement">Best Credit Cards That Offer TSA Pre-Check and Global Entry Reimbursement</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-tricks-to-making-the-most-of-your-reward-miles">5 Tricks to Making the Most of Your Reward Miles</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-families-can-earn-and-use-travel-rewards">How Families Can Earn and Use Travel Rewards</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-carry-a-balance-heres-why-you-still-need-a-credit-card">Don&#039;t Carry a Balance? Here&#039;s Why You Still Need a Credit Card</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/which-credit-card-should-you-use-to-get-free-hotel-stays">Which Credit Card Should You Use to Get Free Hotel Stays?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards benefits concierge service global entry hotels members only perks tickets travel tsa precheck upgrades Fri, 24 Nov 2017 09:00:07 +0000 Carrie Kirby 2057050 at http://www.wisebread.com 5 Benefits of Carrying a Mortgage Into Retirement http://www.wisebread.com/5-benefits-of-carrying-a-mortgage-into-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-benefits-of-carrying-a-mortgage-into-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/senior_black_couple_standing_outside_a_large_suburban_house.jpg" alt="Senior black couple standing outside a large suburban house" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The goal is a simple one: You want to enter your retirement years without monthly mortgage payments. Unfortunately, not everyone meets this goal. According to Voya Financial, 26 percent of current retirees still have an outstanding mortgage balance.</p> <p>If you're one of these retirees, don't despair. It's not ideal, but leaving the working world with monthly mortgage payments doesn't have to be a financial disaster. There are some benefits of carrying a mortgage into your retirement years. (See also: <a href="http://www.wisebread.com/why-retiring-with-debt-isnt-the-end-of-the-world?ref=seealso" target="_blank">Why Retiring With Debt Isn't the End of the World</a>)</p> <h2>1. It's better than credit card debt</h2> <p>Mortgage debt comes with low interest rates. That makes it much less painful than credit card debt, for example. While your mortgage loan might come with an interest rate of 4 percent or even lower, you'd be lucky if the interest rate on your credit card was only 15 percent.</p> <p>So if you are nearing retirement and you have both mortgage and credit card debt, it makes more sense to devote any extra dollars to <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=internal" target="_blank">paying off your credit cards</a> first. You can start worrying about your mortgage after you've eliminated your debt with the highest interest.</p> <p>Of course, it's best to enter retirement with neither mortgage nor credit card debt. If this isn't possible for you, do the smart thing and tackle those cards first. (See also: <a href="http://www.wisebread.com/what-to-do-if-youre-retiring-with-debt?ref=seealso" target="_blank">What to Do If You're Retiring With Debt</a>)</p> <h2>2. Sometimes it's better to invest</h2> <p>You might be able to pay off that mortgage loan before retirement if you sink enough of your extra dollars into it. But it might make more sense to place those same dollars into the stock market or other investment vehicle.</p> <p>The average annual return for the S&amp;P 500 since it was first launched in 1928 has been about 10 percent. And that's factoring in both great years and terrible years. So instead of pouring more money into your mortgage, you might do better financially by investing your extra dollars and enjoying the higher returns. (See also: <a href="http://www.wisebread.com/7-reasons-to-invest-in-stocks-past-age-50?ref=seealso" target="_blank">7 Reasons to Invest in Stocks Past Age 50</a>)</p> <p>This only holds true, of course, if you can actually afford your mortgage payment once you move into retirement. If you're worried that you won't have enough monthly cash flow to make these payments on time, do everything you can to pay off that mortgage first. (See also: <a href="http://www.wisebread.com/6-ways-you-can-cut-costs-right-before-you-retire-0?ref=seealso" target="_blank">6 Ways You Can Cut Costs Right Before You Retire</a>)</p> <h2>3. Paying rent can be risky</h2> <p>Your retirement plan might involve selling your home, paying off your mortgage, and downsizing to an apartment. But be careful: Renting comes with plenty of risk.</p> <p>If you have a fixed-rate mortgage, your payment will remain mostly constant until you pay it off. If you're renting, though, your landlord can raise your monthly payment every time your current lease agreement comes to an end.</p> <p>When living on a fixed income, certainty is good. The life of a renter doesn't have as much certainty. Again, if you can afford your monthly mortgage payment, you might want to keep it and avoid the uncertainty of rent that could fluctuate from year to year.</p> <h2>4. You won't lose the tax deduction</h2> <p>Homeowners with mortgage payments do receive a tax deduction every year. Each year, they can deduct the amount of interest they pay on their home loans. If you pay off your mortgage loan, you'll lose this deduction. (See also: <a href="http://www.wisebread.com/is-it-safe-to-re-finance-your-home-close-to-retirement?ref=seealso" target="_blank">Is it Safe to Re-Finance Your Home Close to Retirement?</a>)</p> <p>It's important to note, though, that this deduction might not be particularly large by the time you're nearing retirement. That's because you pay far more interest each year during the earliest days of your mortgage. By retirement age, you'll probably be paying far less in interest with each monthly payment.</p> <p>Again, though, if having a mortgage payment fits comfortably in your budget, you might want to keep that deduction. (See also: <a href="http://www.wisebread.com/10-surprising-ways-real-estate-cuts-your-taxes?ref=seealso" target="_blank">10 Surprising Ways Real Estate Cuts Your Taxes</a>)</p> <h2>5. You keep your dream home</h2> <p>Most retirees who need to pay off a mortgage do so by selling their homes. But what if you love your home? What if it's located in the ideal location near family members and friends? You might not want to sell.</p> <p>And what if selling your home won't generate enough income to allow you to move into an assisted-living facility, downtown condo, or smaller suburban home? There's no guarantee that you'll fetch the dollars you need in a home sale.</p> <p>Keeping the mortgage &mdash; if you can afford the payments &mdash; could allow you to stay in a home that already fits your needs.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F5-benefits-of-carrying-a-mortgage-into-retirement&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F5%2520Benefits%2520of%2520Carrying%2520a%2520Mortgage%2520Into%2520Retirement.jpg&amp;description=5%20Benefits%20of%20Carrying%20a%20Mortgage%20Into%20Retirement"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/5%20Benefits%20of%20Carrying%20a%20Mortgage%20Into%20Retirement.jpg" alt="5 Benefits of Carrying a Mortgage Into Retirement" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/5-benefits-of-carrying-a-mortgage-into-retirement">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-money-moves-that-will-ruin-your-mortgage-application">5 Money Moves That Will Ruin Your Mortgage Application</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-you-pay-your-mortgage-off-early">Should You Pay Your Mortgage Off Early?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-build-equity-in-your-home">How to Build Equity in Your Home</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-mortgage-details-you-should-know-before-you-sign">5 Mortgage Details You Should Know Before You Sign</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-surprising-things-lenders-check-besides-your-credit-score">4 Surprising Things Lenders Check Besides Your Credit Score</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing Retirement benefits debt homeownership investing loans low interest rates monthly payments mortgages tax deductions Wed, 25 Oct 2017 08:30:06 +0000 Dan Rafter 2039415 at http://www.wisebread.com Three of the Toughest Decisions You'll Face in Retirement http://www.wisebread.com/three-of-the-toughest-decisions-youll-face-in-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/three-of-the-toughest-decisions-youll-face-in-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/senior_couple_thave_a_breakfast_at_cafe.jpg" alt="Senior couple thave a breakfast at cafe" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>After spending a lifetime saving for retirement, you might think (or hope) the tough financial work is over. But in reality, retirement will bring several <em>new</em> financial challenges. Here are three of the key questions you'll need to address along with some recommendations.</p> <h2>1. When should I take Social Security?</h2> <p>There are many options here, especially when coordinating benefits with a spouse. Understanding the rules around three important age milestones can help you think through the best choice. (See also: <a href="http://www.wisebread.com/5-questions-to-ask-before-you-start-claiming-your-social-security-benefits?ref=seealso" target="_blank">5 Questions to Ask Before You Start Claiming Your Social Security Benefits</a>)</p> <h3>Age 62</h3> <p>This is when you first become eligible to receive Social Security benefits. If you opt to take them this early, you'll get the smallest monthly benefit. While it's true that you may end up collecting benefits for the longest period of time by starting at age 62, if you can afford to do so, it's generally best to wait at least until your full retirement age (FRA). At that point, your monthly benefit will increase by 30 percent.</p> <p>If you're planning to continue working to some degree in your early to mid 60s, this may be another reason to wait. Claiming Social Security benefits before your FRA will trigger an &quot;earnings test.&quot; After you earn a certain amount (about $17,000 in 2017), for every two dollars of income, your Social Security benefits will be reduced by one dollar.</p> <p>You can learn more about the <a href="https://www.ssa.gov/oact/cola/rtea.html" target="_blank">earnings test</a> on the Social Security Administration's website.</p> <h3>Full retirement age</h3> <p>If you were born in 1960 or later, your <a href="https://www.ssa.gov/planners/retire/retirechart.html" target="_blank">full retirement age is 67</a>. That's the age at which you become eligible to receive what the Social Security Administration deems to be your &quot;full&quot; benefit.</p> <p>An important consideration related to your FRA has to do with spousal benefits. If you earned significantly more than your spouse over your careers, his or her spousal benefit (half your full retirement age benefit) may be larger than his or her own benefit. While your spouse could file for spousal benefits as early as age 62, he or she will get the maximum amount only if you <em>both</em> wait until your full retirement ages before claiming benefits.</p> <h3>Age 70</h3> <p>While it may sound as if full retirement age is when you'll qualify for your maximum benefit, waiting until age 70 will actually give you more. When I checked my benefits on the Social Security Administration website, I found that waiting until age 70 would boost my monthly benefit amount by nearly <em>28 percent </em>versus claiming it at my FRA of 67.</p> <p>In addition to qualifying for this higher monthly benefit, another important reason to consider waiting this long has to do with the potential impact on your spouse. Let's say you're the husband and have been the higher earner. When you pass away, your wife will be able to trade her benefit for your larger benefit, which she will receive for the rest of her life. (See also: <a href="http://www.wisebread.com/6-smart-ways-to-boost-your-social-security-payout-before-retirement?ref=seealso" target="_blank">6 Smart Ways to Boost Your Social Security Payout Before Retirement</a>)</p> <h2>2. How much of my nest egg can I withdraw?</h2> <p>A long-standing rule of thumb is that you can safely withdraw 4 percent of your nest egg each year, bumping that amount up by the rate of inflation each year, without having to worry about depleting your savings before you die.</p> <p>However, there are many moving parts to this equation. Your cost of living will probably vary throughout retirement, and so will the stock market's performance.</p> <p>So, instead of adhering to a fixed formula, rerun the numbers each year using what some planners call a <em>dynamic withdrawal strategy</em>: Determine how much to withdraw based on the performance of your portfolio and your spending needs.</p> <h2>3. Which nest egg funds should I tap first?</h2> <p>If you have money in various accounts, such as a taxable account, a tax-deferred account (traditional IRA/401(k)), and a tax-free account (Roth IRA/401(k)), here's a recommended path for greatest tax efficiency.</p> <p>Generally, it's best to use money in your <em>taxable </em>accounts first, which allows funds in tax-advantaged accounts to continue growing on a tax-deferred or tax-free basis.</p> <p>Next, use money from your traditional IRA or 401(k) accounts. In fact, you <em>have to </em>start taking money from these accounts beginning at age 70&frac12;. That's when required minimum distribution (RMD) rules kick in. If you don't withdraw at least a specific minimum amount, you'll owe stiff penalties to the IRS.</p> <p>One factor to keep in mind is that if you have substantial balances in traditional IRA or 401(k) accounts, waiting to tap any of this money until age 70&frac12; may make your RMDs so large that they'll push you into a higher tax bracket. If that's the case, you may want to start taking some withdrawals from these accounts earlier than age 70&frac12;.</p> <p>It's usually best to save your Roth IRA money for last since they are not subject to RMD rules. If you don't need the money, you can let it continue growing tax-free.</p> <h2>Stay in the game</h2> <p>While retirement may be a time when you want to step away from some of the many responsibilities you had during your working years, it's important that you stay proactive with regard to your finances. Making well thought out decisions in the three areas discussed above will go a long way toward helping you enjoy financial peace of mind in your later years.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fthree-of-the-toughest-decisions-youll-face-in-retirement&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FThree%2520of%2520the%2520Toughest%2520Decisions%2520You%2527ll%2520Face%2520in%2520Retirement.jpg&amp;description=Three%20of%20the%20Toughest%20Decisions%20You'll%20Face%20in%20Retirement"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/Three%20of%20the%20Toughest%20Decisions%20You%27ll%20Face%20in%20Retirement.jpg" alt="Three of the Toughest Decisions You'll Face in Retirement" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/matt-bell">Matt Bell</a> of <a href="http://www.wisebread.com/three-of-the-toughest-decisions-youll-face-in-retirement">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-tax-day-is-april-15-and-other-weird-financial-deadlines">Why Tax Day Is April 15 and Other Weird Financial Deadlines</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-age-milestones-that-impact-your-retirement">6 Age Milestones That Impact Your Retirement</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-signs-youre-making-all-the-right-moves-for-retirement">8 Signs You&#039;re Making All the Right Moves for Retirement</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-critical-401k-questions-you-need-to-ask-your-employer">8 Critical 401(k) Questions You Need to Ask Your Employer</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-roadblocks-to-retirement-and-how-to-clear-them">7 Roadblocks to Retirement (And How to Clear Them)</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement 401(k) benefits decisions full retirement age IRA questions required minimum distributions social security withdrawals Wed, 27 Sep 2017 08:00:06 +0000 Matt Bell 2025922 at http://www.wisebread.com Why Now's the Right Time to Jumpstart Your Career http://www.wisebread.com/why-nows-the-right-time-to-jumpstart-your-career <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/why-nows-the-right-time-to-jumpstart-your-career" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-629805626.jpg" alt="now&#039;s the time to improve your career" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Data from the U.S. Bureau of Labor Statistics' has shown an interesting trend in the years since the Great Recession: More Americans are quitting their jobs than ever.</p> <p>The Bureau's Job Openings and Labor Turnover (JOLTS) reports show some surprising numbers. In July 2014, <a href="https://www.bls.gov/news.release/archives/jolts_09092014.pdf" target="_blank">2.5 million Americans</a> voluntarily left their jobs, leaving the national quit rate at 1.8 percent. Compared to 2017, those numbers have increased dramatically: <a href="https://www.bls.gov/news.release/archives/jolts_09122017.pdf" target="_blank">3.2 million people</a> quit their jobs this past July, at a rate of 2.2 percent.</p> <p>You may be wondering why people are leaving their jobs in such droves. It's good news. The trend indicates that workers are finding new, better jobs, and the JOLTS data shows that more job openings and opportunities are available than in years past. How can you take advantage of this employment trend? By bettering your career path. Here's your game plan.</p> <h2>1. Request better workplace benefits</h2> <p>According to Glassdoor, three out of five people report benefits and perks as being among the top deciding factors in accepting a new job. And <a href="http://www.frac.tl/employee-benefits-study/" target="_blank">88 percent of respondents</a> to a 2017 Fractl survey reported that they would even give &quot;some&quot; or &quot;heavy&quot; consideration to a lower-paying job with better health, dental, and vision insurance compared to a higher-paying job with less impressive health benefits.</p> <p>It doesn't end at health insurance, however. Job-seekers are increasingly interested in other benefits such as flexible working hours, student loan repayment, more vacation time, additional fund options in retirement plans, and free day care. As employers are competing more fiercely to attract and retain qualified workers from a shrinking pool of talent, you have a stronger case for asking for additional benefits. Generally, it's cheaper for employers to provide a benefit to an existing employee rather than hiring someone new, so the economics are on your side.</p> <h2>2. Seek education and development options</h2> <p>A college degree can boost your lifetime income by a matter of millions. The problem is that the average graduate from the class of 2016 owed $37,172 in student loans, up 6 percent from the year before. And that number keeps growing. This is why today, we're seeing more and more employers offering student loan repayment as a benefit. (See also: <a href="http://www.wisebread.com/these-17-companies-will-help-you-repay-your-student-loan?ref=seealso" target="_blank">These 17 Companies Will Help You Repay Your Student Loan</a>)</p> <p>Even better, many employers are going one step beyond student debt reduction and are looking to prevent it in the first place:</p> <ul> <li>AT&amp;T pays employees up to $3,500 per year for approved courses.</li> <li>Fidelity Investments reimburses employees 90 percent of qualifying education costs (up to $10,000 per year).</li> <li>Nvidia reimburses employees up to $5,250 each year for qualified job-related educational expenses.</li> <li>Smuckers reimburses up to 100 percent of tuition costs for approved college courses.</li> </ul> <p>Completing a degree on your company's dollar empowers you to improve your career path within your current employer &mdash; and future ones.</p> <h2>3. Work on soft skills</h2> <p>The idea of the ultimate expert working in a dark corner is long gone. Even in the fields of engineering or programming, employers value people who get on well with others and can work as part of a team. Knowing how to get along and communicate with your peers is key for your career growth, wherever that path may take you.</p> <p>Cat got your tongue? Work on your communication, public speaking, and leadership skills with Toastmasters International for about $110 for the first year. And then practice those skills every day on the job. When the next big career opportunity comes knocking, you'll have a leg up on the competition. (See also: <a href="http://www.wisebread.com/10-ways-to-improve-yourself-for-100-or-less" target="_blank">10 Ways to Improve Yourself for $100 or Less</a>)</p> <h2>4. Become a thought leader</h2> <p>Information is power, but so is the ability to deliver that information in a meaningful way. Companies are always looking for subject matter experts who can make presentations, serve on discussion panels, or contribute to industry journals or publications. Depending on your company policies, you may be able to receive additional income for these activities or just the reimbursement of eligible expenses involved with those activities.</p> <p>The true value of becoming the face of your organization is that you're increasing both your value to the company and building your own personal brand. Both of which may come quite handy for the next time that you ask for a raise, receive an offer from another employer, or decide to set up your own shop.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fwhy-nows-the-right-time-to-jumpstart-your-career&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FWhy%2520Now%2527s%2520the%2520Right%2520Time%2520to%2520Jumpstart%2520Your%2520Career.jpg&amp;description=Why%20Now's%20the%20Right%20Time%20to%20Jumpstart%20Your%20Career"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/Why%20Now%27s%20the%20Right%20Time%20to%20Jumpstart%20Your%20Career.jpg" alt="Why Now's the Right Time to Jumpstart Your Career" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/damian-davila">Damian Davila</a> of <a href="http://www.wisebread.com/why-nows-the-right-time-to-jumpstart-your-career">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-questions-you-should-always-ask-in-an-exit-interview">8 Questions You Should Always Ask in an Exit Interview</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-reasons-its-never-too-late-for-a-career-change">6 Reasons It&#039;s Never Too Late for a Career Change</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-15-coolest-silicon-valley-job-perks-you-wish-you-had">The 15 Coolest Silicon Valley Job Perks You Wish You Had</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-perks-you-should-be-demanding-from-your-employer">6 Perks You Should Be Demanding From Your Employer</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-credit-card-perks-that-make-life-easier-and-way-more-fun">11 Credit Card Perks That Make Life Easier and Way More Fun</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Career and Income benefits education job hunting opportunities perks quitting skills unemployment rate Tue, 26 Sep 2017 08:30:11 +0000 Damian Davila 2026862 at http://www.wisebread.com Beyond Silicon Valley: 7 Side Benefits Your Job Could Offer Soon http://www.wisebread.com/beyond-silicon-valley-7-side-benefits-your-job-could-offer-soon <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/beyond-silicon-valley-7-side-benefits-your-job-could-offer-soon" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/creative_business_team_having_meal.jpg" alt="Creative business team having meal" title="" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>Jobs usually come with an array of benefits. Depending on the size and generosity of the company, those benefits can be huge. Corporations know the value of getting and retaining good employees, and attractive benefits are one way to do that.</p> <p>But what will those benefits look like in the near future? Here are some possibilities that may be coming your way sooner than you think.</p> <h2>1. Long-term paid maternity and paternity leave</h2> <p>Sadly, the United States is at the bottom of the class when it comes to maternity and paternity leave. The U.S. has no mandated paid time off for new parents, but that could soon change. Some companies, like Amazon, Google, Starbucks, and Etsy are leading the charge by giving their employees a generous amount of paid time off when welcoming a new baby to the family. Many companies are also expanding these benefits to employees who adopt or use a surrogate. With such big name brands setting the example, we may be seeing these benefits become much more common in the near future.</p> <h2>2. A self-driving company car</h2> <p>Make no mistake, self-driving cars are going to be a mainstay of everyday life. So why wouldn't employers embrace them as benefits? Think about the upsides: For starters, self-driving cars are considered safer and more reliable. They also give you time to work or read to and from the office, which means greater productivity for the company paying your salary. Your insurance rates will go down, which adds an additional benefit that the company doesn't have to pay for. You'll never get a speeding ticket, and your chances of being in a collision go down dramatically. If your future employer wants to attract the best and brightest talent, offering a self-driving company car is a no brainer.</p> <h2>3. Identity theft protection</h2> <p>Identity theft is here, and now. It affects millions of people every year, and costs the economy billions of dollars. It's no surprise that employers around the world are already starting to offer identity theft protection as an employee benefit. When someone is a victim of ID theft, it can turn their life upside-down. There is additional stress and pressure on the employee, and that spells bad business for companies. If your employer can cover you for a small cost, it's in their best interest to do so. It's estimated that around <a href="http://thirdcertainty.com/featured-story/more-employers-offer-identity-theft-protection-as-part-of-benefits-package/" target="_blank">70 percent of employers</a> will offer this benefit by 2018. By 2020, it could be standard, just like health insurance and sick time.</p> <h2>4. Student loan assistance</h2> <p>The average college graduate leaves university carrying over $37,000 in debt. That's a heavy burden for someone just entering the workforce, and it's one that future employers might be willing to take on for the right candidate. Several companies are already helping their employees <a href="http://www.wisebread.com/these-17-companies-will-help-you-repay-your-student-loan?ref=internal" target="_blank">pay down their student loans</a>, including Nvidia ($6,000 annually), PricewaterhouseCoopers ($1,200 annually), and Fidelity Investments ($2,000 annually). As the acquisition of the best and brightest minds heats up, we might see large corporations start to cover the entirety of the student loan burden for qualified employees.</p> <h2>5. Free health care for healthy employees</h2> <p>Few employers would offer completely free health care to every member of staff. But, if the employee could prove they were in the peak of health, free health care would be a generous reward. How could this happen? Well, some companies are already instigating large health care discounts in return for employees taking physicals, getting skin cancer screenings, and reporting weekly exercise routines. A healthy, fit employee is far better for the employer than one who is unhealthy and takes more sick days.</p> <h2>6. A home office</h2> <p>As each year passes, more companies are giving employees the option to telecommute. It makes good financial sense, and also saves time and effort. A long commute wastes gas, leaves the employee feeling frazzled and rushed, and eats up time that could be spent doing other things. So, it will behoove companies of the future to furnish their employees with everything they need to work from home. From a computer and smartphone, to a videoconferencing system and mail station, employees of the future may increasingly be offered an office away from the office &mdash; all at the expense of the company.</p> <h2>7. Catered meals</h2> <p>Good nutrition is the foundation of good health. Companies of tomorrow could encourage this practice by offering free catered meals to every employee. This will, of course, mean that your employer will have a say in what you eat, but having two of your three meals provided free of charge, Monday to Friday, is not only saving the employee money, but the time taken to go out and get meals or prepare them at home. Some companies, like Twitter, already do catered meals for their employees. Expect this trend to catch on as employers look for out-of-the-box ways to entice top talent and encourage healthy living.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fbeyond-silicon-valley-7-side-benefits-your-job-could-offer-soon&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FBeyond%2520Silicon%2520Valley-%25207%2520Side%2520Benefits%2520Your%2520Job%2520Could%2520Offer%2520Soon.jpg&amp;description=Beyond%20Silicon%20Valley%3A%207%20Side%20Benefits%20Your%20Job%20Could%20Offer%20Soon"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/Beyond%20Silicon%20Valley-%207%20Side%20Benefits%20Your%20Job%20Could%20Offer%20Soon.jpg" alt="Beyond Silicon Valley: 7 Side Benefits Your Job Could Offer Soon" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/paul-michael">Paul Michael</a> of <a href="http://www.wisebread.com/beyond-silicon-valley-7-side-benefits-your-job-could-offer-soon">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-5"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-get-laid-off-a-step-by-step-guide">How to Get Laid Off: A Step-By-Step Guide</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-credit-card-perks-that-make-life-easier-and-way-more-fun">11 Credit Card Perks That Make Life Easier and Way More Fun</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-good-reasons-to-become-a-contractor">8 Good Reasons to Become a Contractor</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-work-from-home-jobs-for-people-who-hate-talking-on-the-phone">7 Work-From-Home Jobs for People Who Hate Talking on the Phone</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-companies-with-the-best-employee-discounts">8 Companies With the Best Employee Discounts</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Career Building benefits free health care identity theft protection maternity leave paternity leave perks self driving cars student loan assistance work from home Tue, 12 Sep 2017 08:30:09 +0000 Paul Michael 2017866 at http://www.wisebread.com Don't Carry a Balance? Here's Why You Still Need a Credit Card http://www.wisebread.com/dont-carry-a-balance-heres-why-you-still-need-a-credit-card <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/dont-carry-a-balance-heres-why-you-still-need-a-credit-card" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/i_have_been_shopping_for_all_the_best_deals.jpg" alt="I&#039;ve been shopping for all the best deals" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Anybody can go into debt, quickly. Giving into impulse buys is only a swipe away with plastic in your pocket. It's easy to lose track of how much you're spending, which can spiral out of control before you know it.</p> <p>For these reasons, maybe you avoid credit cards or feel they aren't worth the hassle. That's one way to stay out of trouble, of course, but even if you're committed to limiting your amount of personal debt and you refuse to carry a balance, there's a case to be made for using credit cards. Take a look.</p> <h2>1. You'll build or maintain a good credit score</h2> <p>If you're interested in building a credit history, owning and using a credit card is often necessary. The trick, of course, is managing the account responsibly.</p> <p>The way a credit card impacts your credit score and personal finances has everything to do with the way you handle the account. Just because one person you know had a bad experience with credit doesn't mean you'll have the same experience, especially if you stay on top of things.</p> <p>Paying off your balance every month or making timely minimum payments adds positive activity to your credit report. This is essential to establishing credit. And if you already have a credit history, periodically using a credit card keeps your account active and helps build an even stronger credit score. (See also: <a href="http://www.wisebread.com/how-to-use-credit-cards-to-improve-your-credit-score?ref=seealso" target="_blank">How to Use Credit Cards to Improve Your Credit Score</a>)</p> <h2>2. You can receive rewards based on usage</h2> <p>Another reason to use a credit card is the opportunity to earn rewards for every purchase &mdash; because who doesn't love a good freebie? Your rewards can come in the form of points, miles, or cash back redeemable for a check, statement credit, airline tickets, hotel stays, gift cards, or merchandise. The more you use the card, the more free or discounted stuff you can score.</p> <p>The downside is that reward credit cards tend to have slightly higher interest rates than non-reward cards. But if you're disciplined enough to pay off your balance in full every month, you don't have to feel guilty because there won't be any interest to worry about. (See also: <a href="http://www.wisebread.com/5-best-cash-back-credit-cards?ref=seealso" target="_blank">Best Cash Back Credit Cards</a>)</p> <h2>3. It'll help you survive an emergency</h2> <p>It doesn't matter how responsible you are with money: Most people go through a rough patch at some point in life. If you hit a financial low or deal with a string of unexpected expenses, a credit card can function as a short-term loan providing cash for urgent situations. You'll pay interest on these charges if you carry a balance, but this option is cheaper than a short-term cash advance loan, and you'll maintain your privacy since you won't have to borrow from friends or family. Just make sure to prioritize paying off this balance when your emergency is handled.</p> <h2>4. It's safer than cash</h2> <p>Using a credit card is also safer than cash, especially when traveling. If you lose or have your wallet stolen, you can't replace the cash inside. But if your credit cards are lost or stolen, your bank can issue a replacement card and remove fraudulent charges from your account.</p> <p>Since bank debit cards are linked to your bank account, credit cards are sometimes safer than these cards. If someone uses your debit card fraudulently, this person can drain your bank account, resulting in overdraft fees. Your bank will reimburse your money &mdash; not all is lost &mdash; but it can take up to 10 days to sort through the mess and get your money back. (See also: <a href="http://www.wisebread.com/4-reasons-credit-is-safer-than-debit?ref=seealso" target="_blank">4 Reasons Credit Is Safer Than Debit</a>)</p> <h2>5. It'll help you keep accurate expense records</h2> <p>Credit cards also are useful for keeping track of spending for business and tax purposes, especially if you're not the best at saving receipts. Since credit card statements include a record of your purchases, use your credit card for business-related purchases, and then refer to your statement when recording business expenses. For this to work, keep a close eye on how much you're spending throughout the month to avoid going overboard and getting into long-term debt.</p> <h2>6. It buys extra protection</h2> <p>A credit card isn't only practical during an emergency or when you're looking to earn reward points, it also buys extra protection when used for certain purchases. For example, some credit cards offer rental car coverage at no additional cost, which means you can decline a car rental company's optional coverage when booking your reservation.</p> <p>Some credit cards have an extended warranty policy on select purchases too, giving you an extra year of protection after a manufacturer's warranty expires. Other credit cards may include travel insurance protection which compensates card members for costs incurred due to trip cancellation, lost luggage, travel accidents, etc. (See also: <a href="http://www.wisebread.com/10-awesome-credit-card-perks-you-didnt-know-about?ref=seealso" target="_blank">14 Awesome Credit Card Perks You Didn't Know About</a>)</p> <p>Benefits vary by card, so contact your credit card company for information on member perks.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fdont-carry-a-balance-heres-why-you-still-need-a-credit-card&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FDont%2520Carry%2520a%2520Balance-%2520Heres%2520Why%2520You%2520Still%2520Need%2520a%2520Credit%2520Card.jpg&amp;description=Dont%20Carry%20a%20Balance%3F%20Heres%20Why%20You%20Still%20Need%20a%20Credit%20Card"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/Dont%20Carry%20a%20Balance-%20Heres%20Why%20You%20Still%20Need%20a%20Credit%20Card.jpg" alt="Don't Carry a Balance? Here's Why You Still Need a Credit Card" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/dont-carry-a-balance-heres-why-you-still-need-a-credit-card">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-6"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-times-your-credit-card-has-your-back">12 Times Your Credit Card Has Your Back</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-steps-to-picking-the-best-airline-credit-card-for-the-most-rewards-value">5 Steps to Picking the Best Airline Credit Card for the Most Rewards Value</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-myths-about-credit-cards-that-wont-go-away">5 Myths About Credit Cards That Won&#039;t Go Away</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/are-airline-or-travel-rewards-credit-cards-the-better-deal">Are Airline or Travel Rewards Credit Cards the Better Deal?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-credit-card-perks-that-make-life-easier-and-way-more-fun">11 Credit Card Perks That Make Life Easier and Way More Fun</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards benefits credit history credit score emergencies expenses miles perks records rewards Fri, 25 Aug 2017 08:00:06 +0000 Mikey Rox 2007682 at http://www.wisebread.com Here's How You Should Budget Your Social Security Checks http://www.wisebread.com/heres-how-you-should-budget-your-social-security-checks <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/heres-how-you-should-budget-your-social-security-checks" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/united_states_treasury_government_check.jpg" alt="United States Treasury government check" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The average retired worker earns a monthly Social Security check of $1,360, according to the U.S. Social Security Administration. And for most retirees, Social Security benefits are just one source of income, with many supplementing their checks with money that they've saved in 401(k) plans, IRAs, and other savings vehicles.</p> <p>This doesn't mean, though, that these Social Security dollars aren't important. The administration says that Social Security benefits represent about 34 percent of the income of the elderly. That's why it's so important for retirees to create a budget for their Social Security benefits and determine the best way to spend such a significant portion of their monthly earnings. (See also: <a href="http://www.wisebread.com/6-smart-ways-to-boost-your-social-security-payout-before-retirement?ref=seealso" target="_blank">6 Smart Ways to Boost Your Social Security Payout Before Retirement</a>)</p> <h2>There's always a need for a budget</h2> <p>The first step in determining how to best spend Social Security benefits is to calculate your monthly income from all sources. Then, determine how much of this income comes from Social Security benefits alone. If Social Security accounts for 70 percent of your monthly income, you'll have to be especially careful how you spend it. If it accounts for just 20 percent, you'll have a bit more leeway.</p> <p>Once you determine how important your benefits are to your monthly income stream, it's time to calculate how much of your Social Security check you should devote to each of your main expenses. (See also: <a href="http://www.wisebread.com/6-ways-you-can-cut-costs-right-before-you-retire-0?ref=seealso" target="_blank">6 Ways You Can Cut Costs Right Before You Retire</a>)</p> <h2>Housing</h2> <p>Ideally, you'll enter retirement without a mortgage payment. But that doesn't always happen. You might choose to rent during your retirement years. Or, maybe you'll spend your retirement years in assisted living.</p> <p>Housing often remains a significant expense for retirees, with the Bureau of Labor Statistics reporting in March 2016 that seniors age 55 and older spend an average $16,219 a year on housing. Seniors from the ages of 65 to 74 spend an average $15,838.</p> <p>If you receive the average Social Security check of $1,360 a month, you'll receive $16,320 a year. This means that the average amount that retirees spend on housing would consume most of your Social Security income each year.</p> <p>It might make sense to devote a set percentage of every Social Security check to help cover your housing expenses. How much that percentage is will depend on how much you are spending on housing. If you live in a home with a mortgage that's been paid off, you obviously won't need to spend as much of your checks on housing as you would if you were still paying a mortgage. If housing is a significant expense, though, you might consider devoting 60 percent or more of your Social Security check to covering it. (See also: <a href="http://www.wisebread.com/5-countries-where-you-can-retire-for-1000-a-month?ref=seealso" target="_blank">5 Countries Where You Can Retire for $1,000 a Month</a>)</p> <h2>Food</h2> <p>The Bureau of Labor Statistics reported that seniors from the ages of 65 to 74 spend an average $6,303 a year on food. This makes sense: You have to eat, whether you're working or not. Make sure, then, to reserve part of your Social Security check for groceries and meals out.</p> <p>You do have control over this expense, of course. You can eat out less often and cook at home more, which would reduce your food expenses. But setting aside 20 percent or so of your monthly Social Security check for food should suffice.</p> <h2>Medical expenses</h2> <p>Depending on your health, medical costs could be a significant expense as you age. The numbers from the Bureau of Labor Statistics bear this out. According to the Bureau, adults from the ages of 65 to 74 spend an average $5,956 a year for medical care. The Bureau says that adults 74 and older spend an average $5,708 a year on health care. (See also: <a href="http://www.wisebread.com/how-an-hsa-could-help-your-retirement?ref=seealso" target="_blank">How an HSA Could Help Your Retirement</a>)</p> <p>Health expenses are one cost you have little control over. Sure, you can exercise and eat well. But you might still suffer health setbacks. It's important to reserve at least some of your Social Security check to cover these sometimes unexpected costs.</p> <p>Consider saving an additional 20 percent of your Social Security benefits for medical spending.</p> <h2>Other costs</h2> <p>If you've been keeping track, those three expenses might eat up your entire Social Security check. Again, this depends on how much Social Security income you receive each month and how much you actually spend on housing, health care, and food. (See also: <a href="http://www.wisebread.com/how-much-can-you-afford-to-spend-in-retirement?ref=seealso" target="_blank">How Much Can You Afford to Spend in Retirement?</a>)</p> <p>If you find that these three big expenses do swallow most or all of your expenses, you'll have to dip into your retirement savings and other income vehicles to cover costs such as travel, transportation, entertainment, and any other monthly bills.</p> <p>Budgeting your Social Security check highlights just how important it is to have multiple income sources at your disposal after retirement. As you can see, Social Security doesn't go that far when it comes to covering the basic living expenses of many seniors.</p> <p>You do have options, of course. You can scale back your retirement plans, perhaps choosing to travel less and eat in more often. You can also take on a part-time job. That extra income could come in handy to cover the smaller, unexpected expenses that tend to come up. (See also: <a href="http://www.wisebread.com/9-easy-ways-retirees-can-earn-extra-income?ref=seealso" target="_blank">9 Easy Ways Retirees Can Earn Extra Income</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fheres-how-you-should-budget-your-social-security-checks&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FHeres%2520How%2520You%2520Should%2520Budget%2520Your%2520Social%2520Security%2520Checks.jpg&amp;description=Here's%20How%20You%20Should%20Budget%20Your%20Social%20Security%20Checks"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/Heres%20How%20You%20Should%20Budget%20Your%20Social%20Security%20Checks.jpg" alt="Here's How You Should Budget Your Social Security Checks" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/heres-how-you-should-budget-your-social-security-checks">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-7"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-ways-couples-are-shortchanging-their-retirement-savings">4 Ways Couples Are Shortchanging Their Retirement Savings</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-retirement-struggles-nobody-talks-about-and-how-to-beat-them">5 Retirement Struggles Nobody Talks About — And How to Beat Them</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-how-far-1-million-will-actually-go-in-retirement">Here&#039;s How Far $1 Million Will Actually Go in Retirement</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-american-cities-where-you-can-retire-on-just-social-security">5 American Cities Where You Can Retire On Just Social Security</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-almost-anyone-can-afford-to-retire-in-mexico">How Almost Anyone Can Afford to Retire in Mexico</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting Retirement beneficiaries benefits expenses food costs health care housing income medical costs social security Wed, 23 Aug 2017 08:30:05 +0000 Dan Rafter 2007581 at http://www.wisebread.com How to Make Sure You Don't Run Out of Money in Retirement http://www.wisebread.com/how-to-make-sure-you-dont-run-out-of-money-in-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-make-sure-you-dont-run-out-of-money-in-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/nest_made_of_american_currency_horizontal.jpg" alt="Nest Made of American Currency Horizontal" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>An annuity is a stream of fixed payments that's guaranteed, often for as long as you live. Having an annuity can make retirement more secure, but it's hard to recommend them as investment vehicles, because almost every annuity on the market is a terrible investment. They tend to be sold by salesmen, so they're often loaded with fees. And, because being upfront about the fees would make them hard to sell, these fees are obscure (often outright hidden) and are typically different for every product, making it especially hard to comparison shop. (See also: <a href="http://www.wisebread.com/dont-know-what-annuities-are-you-might-be-missing-out?ref=seealso" target="_blank">Should You Get an Annuity?</a>)</p> <p>But my experience these past few years &mdash; helping older relatives with their finances, and starting to take the little pension I earned as a software engineer &mdash; has given me a new perspective on annuities. Having an annuity is more than just nice: It's wonderful! It's just <em>buying</em> them that's usually terrible.</p> <p>Fortunately, there are a few that are worth buying. You don't hear about them often, because they don't siphon off a big chunk of your investment to pay a salesman, so salesmen don't push them.</p> <h2>Why annuities are great</h2> <p>It used to be that anyone with a good job retired with an annuity in the form of a pension. This is how I've gotten my recent experience with just how great it is to have an annuity: All my older relatives are now receiving pensions.</p> <h3>You never outlive your income</h3> <p>The main thing that's great about an annuity is that having one means you're never going to be broke. Even if you overspend and run down your savings, even if the stock market crashes or you make terrible investment decisions and your investment portfolio takes huge losses, you'll still get that monthly check for as long as you live.</p> <p>You don't <em>need</em> to have an annuity to arrange that &mdash; you can live off capital in a way that makes it last the rest of your life &mdash; but an annuity makes it much easier.</p> <h3>They can raise your income</h3> <p>The other thing that's great about an annuity is that it can, at least potentially, be more money to live on. See, the only safe way to live off capital is to just spend the income from your investments. But that's not much money (especially these days).</p> <p>If you knew how long you were going to live, you could spend down your capital so that you'd die with just enough money to pay off your last month's bills. But since you don't know how long you're going to live, you have to make a conservative estimate, holding back enough capital so that you won't go broke even if you live to 100. (Of course even that might not be enough. What if you live to 114?)</p> <p>The company that provides your annuity has a much easier job. They don't need to know whether you'll live to 97 or kick the bucket at 67. They count on the fact that the average person will live an average life span. They can arrange the terms of the annuities so that the payouts don't exhaust the total pool until the last person dies. The fact that some people die the month after their pension starts means that there's enough money to pay for the people who go on to live for decades.</p> <p>Offset against that is the fact that the company that's providing your annuity needs to make a profit, and it also needs to hold back a reserve against the possibility that it'll get unlucky and a bunch of their customers will live longer than average &mdash; but both of those factors are relatively small.</p> <h2>Annuitize, but how much?</h2> <p>If you accept the idea that you probably ought to have an annuity of some size, the next question is: How big should the annuity be?</p> <p>At one extreme, you could just annuitize all your money &mdash; take all your savings and investments (except your checking account and your emergency fund) and buy an annuity. Then you'd know what your income would be for the rest of your life and you could budget for it.</p> <p>I recommend against that. There are many reasons why it's <a href="http://www.wisebread.com/on-the-importance-of-having-capital" target="_blank">worth having some capital</a>. Your capital earns an investment return and it also provides a measure of safety as a backup to your emergency fund. It makes it possible to fund expenses beyond your bare-bones budget. Perhaps most important, having some capital saves you money in all kinds of different ways &mdash; because you have funds on hand, you can take advantage of deals, you can avoid high-interest borrowing, and you have money to put down a large security deposit in cases where that will save you money.</p> <p>At the other extreme, you could annuitize none of your money and just live off your capital. I've just explained the downsides to that.</p> <p>You want to be somewhere in the middle. With a modest annuity, you're protected from running your income down to zero, and yet you can preserve some amount of capital.</p> <p>My advice is this: You should annuitize <em>enough to cover your rock-bottom expenses</em>, the lowest amount you could live on indefinitely. That way, you're putting yourself in a position where you can be sure you can get by no matter what happens to your investments, while preserving enough of an investment portfolio to fund your other life goals &mdash; travel, making a major purchase, leaving an estate to your heirs, etc.</p> <p>Before you start shopping for annuities, be sure to take into account any annuities you already have. But unless you're old, and even then only if you had a pretty good job at a pretty big company for many years, you probably aren't going to have a great pension. (If you're only kind of old, and worked at a pretty big company for a few years before they all phased out their traditional pensions in the early 2000s, maybe there's a small pension waiting for you. If so, that's great. Even if it's not enough to live on, it's a very positive contribution to your retirement income.)</p> <p>However, most people reading this probably won't get a good pension.</p> <p>Fortunately, there is an annuity you very likely do have.</p> <h2>The annuity you already have</h2> <p>You almost certainly already have an annuity in the form of a national pension scheme, such as Social Security. The amount of Social Security you will get depends on your own employment history. For most people, it will provide a large fraction of the &quot;rock-bottom expenses&quot; I recommend you cover with an annuity, but you can generally expect there to be some gap.</p> <p>If you have an employer-sponsored pension, even a small one, it may well cover the gap. If you don't, I recommend that you cover it with an annuity that you buy.</p> <h2>How to buy an annuity</h2> <p>As I said at the beginning, most of the annuities you can buy are terrible investments, but there are good ones. It is possible to buy an individual annuity and get an OK deal. It's just hard because the companies that sell them make it virtually impossible to compare one annuity to another.</p> <p>This is especially true for the sorts of annuities that are most like a pension: The ones set up so you make a payment every month starting in your 30s or 40s, then get a check every month starting when you're 65.</p> <p>Those are called deferred annuities (because you defer getting your money until age 65), and they're always terrible. They always have what are called &quot;back-end&quot; fees &mdash; money that the salesman gets to keep when you figure out that you've made a terrible deal and want to get (some of) your money back. The rules on back-end fees are always different.</p> <p>To make it even harder, these sorts of annuities are usually bundled with some sort of life insurance (supposedly so that if you die before you retire your estate won't &quot;lose&quot; all the money paid into the annuity) &mdash; and of course the details of those insurance policies are always different as well.</p> <h3>Comparison shopping</h3> <p>It is possible to buy an annuity in a way that does allow you to compare them. Don't buy one with monthly payments. Instead, save and invest the money in the stock market yourself during your working years. Then, when you're ready to retire, buy what's called a &quot;single premium immediate annuity&quot; &mdash; you put up a big chunk of money today, and then start receiving monthly payments immediately that last for the rest of your life. (The monthly payments, of course, should equal the gap you identified between your Social Security and your rock-bottom budget.)</p> <p>That is something that's easy to compare: How much do you have to pay today for a stream of income that starts next month and lasts the rest of your life? You can get a few quotes and pick the best deal.</p> <p>These sorts of annuities usually don't have the life insurance policy that supposedly protects against your dying before you start taking payments, because the payments start immediately. That's good. Bundling in life insurance just makes it harder to compare prices. If you need life insurance, buy a life insurance policy separately.</p> <p>Be very careful of letting them include any sort of survivor benefit, because that can also make the annuities harder to compare (although as long as the rules are exactly the same, it is at least possible). One alternative, if you need a survivor benefit, is to buy a life insurance policy that will pay off enough for your spouse to buy his or her own annuity.</p> <p>As an aside, let me mention that the annuity salesmen among you are going to jump in and point out that you're giving up an important tax advantage if you only consider an immediate annuity. This is technically true, but in fact is pretty unimportant. Let me just say this: If you are maxing out your 401(k), <em>and</em> your IRA, <em>and</em> your Roth IRA, there is an opportunity to tax shelter a bit more money through an annuity contract. In practice, I'm willing to bet that the tax advantage will never equal the fees you're going to end up paying.</p> <p>If you do save your money in a 401(k) or IRA, there are tax rules for using that money to buy your annuity. Follow the rules and you won't owe any taxes when the money is used to buy the annuity. You will, however, pay taxes on the annuity payments when you receive them (just like you would if you'd taken distributions from the tax-deferred plan directly).</p> <h3>Where to buy</h3> <p>Pretty much any life insurance company will sell you an annuity, but I only know of two places to get a good one: Vanguard and TIAA-CREF. (There used to be a third, but Berkshire Hathaway got out of the business a few years ago.)</p> <p>The main problem with buying directly from an insurance company is just that their annuity sales operations are organized around their annuity salesmen, who will immediately start trying to sell you something that's more profitable (to them) than a single premium immediate annuity &mdash; that's the step you avoid by going through Vanguard or TIAA-CREF. (They also have enough buying power to get especially good rates, because they bring in large numbers of customers.)</p> <p>If you're sure you can bear up under the sales pressure, there's no reason not to get quotes directly from the insurance companies. (Just because I don't know of any other good places to buy one doesn't mean there aren't any.) Insurance companies that sell annuities will be very easy to find &mdash; just do an internet search for information about annuities and you'll get a dozen ads for them and for online tools to compare their offerings.</p> <p>You're handing over a large fraction of your wealth and counting on the insurance company to be around for the rest of your life, so you want to have considerable confidence in the financial soundness of the company you pick. I would not consider any company rated less than A by the insurance grading firm A.M. Best, and I'd be happier with one rated A+.</p> <h3>Buy when rates are high</h3> <p>To buy an annuity, you have to put up a pretty sizable chunk of cash. (Vanguard quotes the cost today to a 65-year-old male buying a single premium immediate annuity of $1,000 a month for the rest of his life as being $180,052.)</p> <p>Unless you're rich, the cost of an annuity that covers your rock-bottom expenses is going to be a large fraction of your entire retirement savings &mdash; which is OK, because it's going to be a large chunk of your entire retirement income.</p> <p>The insurance company that sells you your annuity is going to invest that sizable chunk of cash in a portfolio of stocks and (mostly) bonds, and then use the dividends from those stocks and (mostly) the interest payments from those bonds to pay your annuity. Because of this, an annuity is much cheaper when interest rates are high.</p> <p>If you bought an annuity right before the financial crisis, you made out very well. If you wanted to buy one in the past eight or nine years, you probably found that they were incredibly expensive. But in the current era of rising interest rates, annuities are becoming more affordable again.</p> <p>Still, if you're approaching retirement age, understand that there is no rush. Figure out your rock-bottom expenses &mdash; and then live with that budget as an experiment. Maybe you'll find that you'll need more than that in retirement. Maybe you'll actually need less. Do some comparison shopping. Take your time. Then, when you've got a pretty good handle on the expense of your retirement lifestyle, at a time when interest rates are up a bit and you're ready to quit working, go ahead and buy that annuity.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/philip-brewer">Philip Brewer</a> of <a href="http://www.wisebread.com/how-to-make-sure-you-dont-run-out-of-money-in-retirement">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-8"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-be-fooled-by-an-investments-rate-of-return">Don&#039;t Be Fooled by an Investment&#039;s Rate of Return</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-reasons-to-invest-in-stocks-past-age-50">7 Reasons to Invest in Stocks Past Age 50</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/bookmark-this-a-step-by-step-guide-to-choosing-401k-investments">Bookmark This: A Step-by-Step Guide to Choosing 401(k) Investments</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-save-for-retirement-when-you-are-unemployed">How to Save for Retirement When You Are Unemployed</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-you-need-to-know-about-the-easiest-way-to-save-for-retirement">What You Need to Know About the Easiest Way to Save for Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment Retirement annuities benefits bonds fees interest rates investment vehicles life insurance pensions stocks Fri, 26 May 2017 08:30:09 +0000 Philip Brewer 1953940 at http://www.wisebread.com 5 Questions to Ask Before You Start Claiming Your Social Security Benefits http://www.wisebread.com/5-questions-to-ask-before-you-start-claiming-your-social-security-benefits <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-questions-to-ask-before-you-start-claiming-your-social-security-benefits" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-511524588 (1).jpg" alt="Couple asking questions before claiming social security benefits" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>According to a 2016 poll conducted by Gallup, 59 percent of retirees rely on Social Security payments as a major source of income. Odds are that you, too, will need Social Security benefits to cover at least <em>some </em>of your living expenses after you retire. Because of this, you'll want these benefits to be as large as possible when retirement actually arrives.</p> <p>Here are five key questions to ask before you start taking your Social Security benefits.</p> <h2>1. Are you willing to take a smaller monthly benefit for the rest of your life?</h2> <p>Taking Social Security benefits before your full retirement age will cost you in the form of a lower monthly payout. This payout will remain at this lower level for the rest of your life.</p> <p>You can determine how much of a hit you'll take claiming benefits early by visiting the Social Security Administration's <a href="https://www.ssa.gov/planners/retire/retirechart.html" target="_blank">retirement planner site</a>. As the site shows, if you start taking your Social Security payments before you hit your full retirement age, your monthly benefit will be lower.</p> <p>How much lower? If your full retirement age is 67 and you start taking your benefits at 62, your monthly Social Security payment will be reduced by about 30 percent. If you start taking them at 64, they'll be lower by about 20 percent. Even if you start taking them one year earlier at 66, they'll still be lower &mdash; by about 6.7 percent a month. And remember, this is for the rest of your life.</p> <p>As you can see, claiming benefits early can significantly reduce the amount of money you receive each month. Let's say you are slated to receive $1,000 a month in Social Security benefits and your full retirement age is 67. If you started taking your benefits at age 62 &mdash; the earliest you can take them &mdash; your monthly benefit would fall to $700.</p> <h2>2. Can you continue working?</h2> <p>While retiring early reduces your monthly Social Security benefits, working past your full retirement age actually increases them.</p> <p>The Social Security Administration says that if you delay receiving your Social Security benefits until you hit 70, your monthly payment will be 32 percent higher than if you had retired at full retirement age.</p> <p>Say your full retirement age is 66, and you'd receive $1,000 from Social Security every month starting at that age. If you wait to start claiming your benefits until you turn 70, your monthly payment would rise significantly to $1,320. You'd just have to determine whether you could hold off on receiving those payments until your 70th birthday.</p> <h2>3. How much have you saved for retirement?</h2> <p>Most people can't survive on Social Security benefits alone during their retirement years. Instead, they rely on a mix of savings from different sources &mdash; everything from 401(k) plans, to IRAs, to annuities.</p> <p>How much you've saved for retirement will play a key role in how early you should take your Social Security benefits. If you've saved a significant amount of money for retirement, you might not need as large a monthly Social Security payment to meet your retirement goals. But if you haven't saved much, you might need that larger benefit payment. At the same time, working for a few extra years might help you boost your retirement nest egg, at least by a bit.</p> <h2>4. How healthy are you?</h2> <p>While there are financial upsides to waiting to claim your Social Security benefits, there are also times when this doesn't make sense. Often, this depends on your health.</p> <p>If you're not healthy, you might need to retire early for your physical wellbeing. And while it's impossible to predict how long you'll live after retiring, if you're suffering from health problems, your post-retirement life might not last as long. Retiring as early as possible, and claiming those Social Security benefits earlier, might then be the best choice. (See also: <a href="http://www.wisebread.com/3-reasons-to-claim-social-security-before-your-retirement-age?ref=seealso" target="_blank">3 Reasons to Claim Social Security Before Your Retirement Age</a>)</p> <h2>5. What kind of retirement do you want?</h2> <p>How do you plan to spend your retirement years? Are you looking forward to quiet days spent with your grandchildren, reading books, and pursuing a hobby? Or do you want to travel the world?</p> <p>If you're looking for a lower-key, less-costly retirement, taking your benefits early &mdash; and receiving smaller Social Security payments &mdash; might make sense. But if you want a busier, more extravagant retirement, holding off until full retirement age, or later, might be the smarter choice.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/5-questions-to-ask-before-you-start-claiming-your-social-security-benefits">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-9"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-reasons-to-claim-social-security-before-your-retirement-age">3 Reasons to Claim Social Security Before Your Retirement Age</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-plan-for-a-forced-early-retirement">How to Plan for a Forced Early Retirement</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-american-cities-where-you-can-retire-on-just-social-security">5 American Cities Where You Can Retire On Just Social Security</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-smart-ways-to-boost-your-social-security-payout-before-retirement">6 Smart Ways to Boost Your Social Security Payout Before Retirement</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-ways-more-money-in-retirement-might-cost-you">3 Ways More Money in Retirement Might Cost You</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement benefits early retirement full retirement age health Teaser: income social security Mon, 08 May 2017 09:00:08 +0000 Dan Rafter 1940328 at http://www.wisebread.com 10 Work Perks You Can't Get as a Freelancer http://www.wisebread.com/10-work-perks-you-cant-get-as-a-freelancer <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/10-work-perks-you-cant-get-as-a-freelancer" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-511733684.jpg" alt="Woman learning work perks she can&#039;t get as a freelancer" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>In some industries, the number of gig economy workers is growing faster than the number of payroll employees. Working as a freelancer certainly does have its advantages, the biggest of which are flexibility, freedom, and the ability to experience variety in your work.</p> <p>But if you find yourself staring at the walls of your cubicle, daydreaming about escaping the 9-to-5 and finding freedom as a freelancer, don't overlook the perks you could be getting at your regular job, right now. It may not be so easy to leave these things behind.</p> <h2>1. Stable income</h2> <p>One of the biggest benefits of a regular 9-to-5 job is the steady paycheck. As a salaried employee, you can plan your budget based on a stable stream of income. As a freelancer, your income can vary significantly from one month to the next. A few slow weeks can throw your finances into disarray, so you'll need to shift your entire budgeting strategy to make sure this doesn't happen. (See also: <a href="http://www.wisebread.com/the-smart-way-to-budget-on-a-freelance-income?ref=seealso" target="_blank">The Smart Way to Budget on a Freelance Income</a>)</p> <h2>2. 401(k) match</h2> <p>Many traditional employers offer matching contributions to 401(k) plans. In other words, when you make a contribution to your retirement fund out of each paycheck, your employer will also contribute something. This is free money, and can total thousands of dollars each year. In the gig economy, you won't get this kind of assistance building your retirement fund. You'll need to make efforts to save for retirement all on your own, such as with an IRA or solo 401(k). (See also: <a href="http://www.wisebread.com/a-simple-guide-to-retirement-plans-for-the-self-employed?ref=seealso" target="_blank">A Simple Guide to Retirement Plans for the Self-Employed</a>)</p> <h2>3. Retirement counseling</h2> <p>Employers frequently offer training or educational programs to help workers plan their retirement investment strategy. Often, they'll even provide free access to financial planners to answer questions. Freelancers are on their own to figure out the road to retirement, and consulting with financial pros will have to come out of your own pocket.</p> <h2>4. Health Savings Account</h2> <p>A valuable benefit that many people miss out on is participating in a health savings account. Every paycheck, you can contribute pretax dollars to be used for health-related expenses. Some health savings accounts allow the funds to be placed in investments where the money can grow until it is needed. As a freelancer, you may be able to set up your own health savings account, but you will need to do a lot more research than someone who simply signs up for an established program through their 9-to-5. (See also: <a href="http://www.wisebread.com/how-an-hsa-saves-you-money?ref=seealso" target="_blank">How an HSA Saves You Money</a>)</p> <h2>5. Paid vacation and holidays</h2> <p>Paid time off is an undisputed benefit of a regular 9-to-5. As a freelancer, you don't earn a paycheck while on vacation or holiday. If you want time off, you take time off from earning any income, too. This can certainly put a damper on enjoying your down time.</p> <h2>6. Making connections</h2> <p>As a 9-to-5 employee, you'll have opportunity to build relationships with the coworkers and senior-level staff you see every day. These connections can give you a special level of access to approach and meet other influential people in your company. Plus, it never hurts to have a few people to chat with as you pass the day. Freelancers can still find plenty of opportunity to network, but they'll need to go out of their way to make it happen. It won't be as simple as showing up to work.</p> <h2>7. Tech support and replacement</h2> <p>I have thousands of dollars worth of computer equipment sitting on my desk. It gets supported, maintained, and upgraded by my employer. As a freelancer, you are on your own to buy and support your technology needs. Do you need a special monitor? You'll need to shell out for one. Is your computer too old to do the job? The replacement comes out of your pocket. If something breaks? The repairman will be billing you directly.</p> <h2>8. Training, certification, and professional development</h2> <p>Companies often invest in their employees by providing training or certification programs to help them be better workers. Staying up-to-date on skills, technology, and industry trends is incredibly useful to the employees as well, and makes them more valuable in the marketplace. Freelancers will need to find, purchase, and commit to their own training. It can be very easy to rest on your laurels and let your skills become outdated, especially with no boss insisting you keep learning.</p> <h2>9. Awards and recognition opportunities</h2> <p>It looks great on a resume to list awards and other work honors that you have received. Many employers have some form of &quot;employee of the month&quot; or similar recognition. You may not be able to stock your resume with such accolades if you go out on your own. At the very least, you'll have to seek out and apply for awards, where you'll likely be up against a much larger pool of talent.</p> <h2>10. Employee discount programs</h2> <p>Another perk that businesses offer their employees is discounts on products and services. These can range from cellphone plans, to personal computer purchases, to fitness club memberships &mdash; even discounts on concert and amusement park tickets. As a freelancer, you'll miss out on these discounts.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dr-penny-pincher">Dr Penny Pincher</a> of <a href="http://www.wisebread.com/10-work-perks-you-cant-get-as-a-freelancer">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-10"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-questions-you-should-always-ask-in-an-exit-interview">8 Questions You Should Always Ask in an Exit Interview</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-ways-a-side-hustle-can-advance-your-career">8 Ways a Side Hustle Can Advance Your Career</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-ways-employee-perks-are-good-for-business">5 Ways Employee Perks Are Good for Business</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/15-lucrative-side-hustles-for-city-dwellers">15 Lucrative Side Hustles for City Dwellers</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/they-offered-you-a-promotion-and-no-pay-raise-now-what">They Offered You a Promotion and No Pay Raise. Now What?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Career and Income 9-to-5 benefits employment freelancing gig economy pros and cons self employment side jobs work perks Mon, 08 May 2017 08:30:07 +0000 Dr Penny Pincher 1940327 at http://www.wisebread.com 12 Times Your Credit Card Has Your Back http://www.wisebread.com/12-times-your-credit-card-has-your-back <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/12-times-your-credit-card-has-your-back" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-635966572.jpg" alt="Woman learning times her credit card has her back" title="" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>Many of us view credit cards as much more than just a way to pay for things. They can help us accrue miles and status in rewards programs, <a href="http://www.wisebread.com/5-best-credit-cards-with-free-airport-lounge-access?ref=internal" target="_blank">get us into airport lounges</a>, and even help us snag hard-to-get theater reservations.</p> <p>But did you know that calling your credit card company can be like calling your dad when things go wrong? Glitzy perks like <a href="http://www.wisebread.com/what-do-the-concierge-services-from-credit-cards-really-provide?ref=internal" target="_blank">concierge service</a> get most of the attention, but the perks that kick in when things go wrong may actually be the most valuable. Let's look at services some credit cards offer when you're in an accident, have a problem with a purchase, or are facing other dire straits. (See also: <a href="http://www.wisebread.com/10-awesome-credit-card-perks-you-didnt-know-about?ref=seealso" target="_blank">14 Awesome Credit Card Perks You Didn't Know About</a>)</p> <p>(As you might imagine, credit cards place restrictions on all of these benefits, such as per-claim and per-year reimbursement ceilings. If you need access to one of these benefits, consult your card agreement and/or call customer service.)</p> <h2>1. Return protection</h2> <p>You buy a beautiful rug. When you get it home, you realize it's way too big for your room. Now the retailer won't take it back. What do you do?</p> <p>If you're using a <a href="http://www.wisebread.com/how-to-return-items-through-your-credit-card-if-the-store-refuses?ref=internal" target="_blank">card with return protection</a>, you can file a claim and get reimbursed for some or all of the purchase. One typical limitation: no holiday decorations (so don't even think about returning your Christmas tree in January).</p> <h2>2. Extended warranty</h2> <p>You buy a grandfather clock with a one-year warranty. As your luck would have it, 53 weeks later, the thing stops working. If you purchased it with a card that <a href="http://www.wisebread.com/how-free-extended-warranties-work-on-credit-cards?ref=internal" target="_blank">offers extended warranty coverage</a>, any repairs covered under the original warranty may now be paid for by your credit card's extended protection. Make sure to call the card issuer before you pay for any repairs.</p> <h2>3. Purchase security</h2> <p>You buy a new bike, and the next day, it's stolen! Your homeowners insurance won't help, since the cost of a replacement is lower than your deductible. Are you out of luck? Maybe not.</p> <p>If you bought the bike with a <a href="http://www.wisebread.com/how-credit-cards-protect-your-purchases-from-damage-or-theft?ref=internal" target="_blank">card that offers purchase security</a>, and you submit all the required documentation, you could get reimbursed for the stolen bike. Besides theft, purchase security can cover damage due to fires, plumbing leaks, vandalism, and a number of other threats. Most cards require you to file the claim within a certain window &mdash; generally within 90 days of the incident.</p> <h2>4. Price protection</h2> <p>This has got to be one of the most underutilized protections that credit cards offer. Make a mental note to save all of your receipts and try it this year!</p> <p>You splurge on new TV. A month later, you see the same TV advertised for hundreds of dollars less. Instead of throwing the remote at the screen, call up the credit card you used to buy it and ask if they offer <a href="http://www.wisebread.com/how-to-get-a-price-match-through-your-credit-card?ref=internal" target="_blank">price protection</a>, which could get you a full or partial refund of the price difference, subject to per-item and annual limits. One typical restriction is that the lower price must appear in a printed ad, not just online.</p> <h2>5. Travel insurance</h2> <p>You are planning to fly your family to Paris, but your daughter breaks her leg and you have to cancel at the last minute. The tickets are nonrefundable. If you purchased them with a <a href="http://www.wisebread.com/6-types-of-travel-insurance-credit-cards-include-that-you-didnt-know-about?ref=internal" target="_blank">card offering travel insurance</a>, the policy might reimburse you for the flights you can't use.</p> <p>The same policies might also provide a lump-sum payment if you are injured (or killed) on the trip, as well as also cover the expense of buying new clothes or belongings if your bag arrives a few days later than you do. Some policies will even replace baggage that's permanently lost.</p> <p>Restrictions abound. I recently tried to use this coverage when I had to cancel an Airbnb stay due to an Amtrak delay (which was in turn due to flooding). The agent at my credit card company told me their policy would only cover airline tickets or fees, not lodging. However, other cards state that they cover the cost of lost tours and lodging as well as airfare. (See also: <a href="http://www.wisebread.com/the-5-best-premium-credit-cards?ref=seealso" target="_blank">The Best Premium Credit Cards</a>)</p> <h2>6. Roadside assistance</h2> <p>Like with AAA, a card that offers this benefit may dispatch someone to your house to jump start your car, or they may tow you from the side of the highway to the nearest repair shop. Check the fine print; there may be limitations on how far they will tow you or how many times a year you can use the service for free. (See also: <a href="http://www.wisebread.com/best-credit-cards-for-road-trips?ref=seealso" target="_blank">Best Credit Cards for Road Trips</a>)</p> <h2>7. Rental car damage waiver</h2> <p>Many <a href="http://www.wisebread.com/what-does-car-rental-insurance-really-cover-on-your-credit-card?ref=internal" target="_blank">credit cards offer rental car insurance</a>. If you're paying for a rental in full using one of these credit cards, you can decline the damage waiver offered by the rental company.</p> <p>With this perk, your credit card's rental coverage is secondary to your personal auto insurance. For example, let's say you are in such a hurry to get on the road in your rented PT Cruiser that you accidentally drive right through the exit gate, causing thousands of dollars in damage to the car. If you used a card that offers a collision damage waiver, you'll first need to file a claim with your auto insurer. From there, your card may cover the deductible as well as any fees the rental car company charged. Your auto insurance will pay the rest.</p> <p>If you don't have personal auto insurance, any credit card that offers secondary coverage will become primary, and should cover the whole cost of an accident. It's extra important to note restrictions in this case, since the out-of-pocket costs for anything the service doesn't cover could be really high. There may be limits on how long of a rental period this covers, as well as on the kind of vehicle it covers or even the countries you are covered in. Most importantly, these policies don't cover personal injury or liability, so you'll need to purchase some kind of liability coverage as well.</p> <h2>8. Primary rental car insurance</h2> <p>A few cards offer this benefit, which is better than the standard collision damage waiver because it acts as a primary auto insurance policy for your rental car. This means that if you swerve to avoid a wombat on your Australian vacation and accidentally total the Holden Caprice you rented, you don't have to file a claim with your auto insurance. This could save you on rates in the future.</p> <h2>9. Airline fee credits</h2> <p>I've made some very expensive mistakes booking air travel. One time, when calling an airline to ask if I could change a flight because I'd booked the wrong day, I found out that the change fee was more than the cost of the ticket. If I had booked the flight using a card that reimburses me for airline fees, the ticket might have been salvageable. Instead, I had to abandon it and buy a new, more expensive ticket.</p> <p>This benefit typically comes with cards that have higher annual fees, and has an annual limit, such as $200 in fee reimbursements each year. Besides change fees, they're typically good for other costs, such as baggage fees, airline lounge passes, and upgrades to seats with extra legroom. (See also: <a href="http://www.wisebread.com/travel-perks-you-didnt-know-your-credit-card-had?ref=seealso" target="_blank">12 Travel Perks You Didn't Know Your Credit Card Had</a>)</p> <h2>10. Identity theft hotline</h2> <p>If your credit card offers this service, you can call for help if you're ever a victim of this obnoxious crime. Typical services include sending you the form you need to file with the credit bureaus, having the credit bureaus place an alert on your account, and providing you with form letters you can use to cancel checks or other accounts. (See also: <a href="http://www.wisebread.com/the-5-best-credit-cards-that-offer-free-credit-scores?ref=seealso" target="_blank">Best Credit Cards that Offer Free Credit Scores</a>)</p> <h2>11. Assistance in a travel emergency</h2> <p>You're in another country. You don't speak the language. You wake up in the middle of the night with unbearable stomach pains. What do you do?</p> <p>If you hold a card that offers travel assistance, you can call their international hotline, where they may direct you to the nearest appropriate hospital, and get a translator or U.S. doctor on the phone if necessary. They may even arrange for money to be wired to you, or send messages home to your family. If the emergency is of a legal nature, they can connect you to a lawyer &mdash; or a bail bond provider, if necessary. They're not going to pay for your doctor or lawyer or post your bail, but they can make the connection.</p> <h2>12. Trip delay reimbursement</h2> <p>The first leg of your international trip goes fine, but when you arrive at the gate in Taipei, you find out that your flight to Beijing is canceled until tomorrow. The airline offers no hotel vouchers. Where are you supposed to stay, on the terminal floor?</p> <p>Good news: If you booked the trip with a card that offers trip delay coverage, your hotel and meals may be a reimbursable expense.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/carrie-kirby">Carrie Kirby</a> of <a href="http://www.wisebread.com/12-times-your-credit-card-has-your-back">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-11"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-carry-a-balance-heres-why-you-still-need-a-credit-card">Don&#039;t Carry a Balance? Here&#039;s Why You Still Need a Credit Card</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-surprising-reasons-to-always-use-your-credit-card">4 Surprising Reasons to Always Use Your Credit Card</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-steps-to-picking-the-best-airline-credit-card-for-the-most-rewards-value">5 Steps to Picking the Best Airline Credit Card for the Most Rewards Value</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/are-airline-or-travel-rewards-credit-cards-the-better-deal">Are Airline or Travel Rewards Credit Cards the Better Deal?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-credit-card-perks-that-make-life-easier-and-way-more-fun">11 Credit Card Perks That Make Life Easier and Way More Fun</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards benefits extended warranty identity theft miles perks price match protections purchase protection reimbursements rewards travel insurance Fri, 05 May 2017 09:00:09 +0000 Carrie Kirby 1940326 at http://www.wisebread.com 5 Sobering Facts About Social Security You Shouldn't Panic Over http://www.wisebread.com/5-sobering-facts-about-social-security-you-shouldnt-panic-over <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-sobering-facts-about-social-security-you-shouldnt-panic-over" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-639428420.jpg" alt="Learning social security facts you shouldn&#039;t panic over" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Most people tend not to think about Social Security until they are in a position to collect benefits. Unfortunately, letting Social Security be something you worry about &quot;later&quot; can cause costly problems &mdash; both for you as a beneficiary, and for the program as a whole.</p> <p>Here are five sobering facts about Social Security that you should know now so that you will be prepared for potential issues in the future. (See also: <a href="http://www.wisebread.com/6-smart-ways-to-boost-your-social-security-payout-before-retirement?ref=seealso" target="_blank">6 Smart Ways to Boost Your Social Security Payout Before Retirement</a>)</p> <h2>1. The Social Security Trust Fund may be entirely depleted by 2034</h2> <p>Social Security is set up as a direct transfer of funds from current workers to current beneficiaries. However, when the taxes coming in to pay for Social Security exceed the expenses for the program, the surplus is placed in the Social Security Trust Fund, where it earns interest. As of 2010, Social Security expenses have exceeded the tax revenue, and the Social Security Administration has had to dip into the Trust Fund in order to pay out all promised benefits. As of 2013, the Trust Fund began losing value, and it is projected to be <a href="https://www.ssa.gov/oact/trsum/" target="_blank">entirely depleted by the year 2034</a>.</p> <p>When the Trust Fund runs out of money, the projected tax revenue will cover only 79 percent of promised benefits. This means anyone who is entitled to a $1,500 monthly benefit will only receive $1,185.</p> <h3>Why you shouldn't panic</h3> <p>While the coming depletion of the Social Security Trust Fund is troubling, the problem is neither new nor imminent. It's also important to note that the United States is the only country in the world that attempts to predict the 75-year longevity of its social insurance funds, which means we are in a position to do something about the anticipated shortfall. Over the next couple of decades, it is likely that our government will make relatively small changes to the Social Security program in order to make up the 21 percent anticipated shortfall that will occur once the Trust Fund has run dry.</p> <p>However, it is smart for current workers to recognize that Social Security should not be heavily relied upon for a financially secure retirement.</p> <h2>2. The average Social Security retirement benefit is $1,360 per month</h2> <p>As of January, 2017, the average benefit for a retired beneficiary is <a href="https://www.ssa.gov/news/press/factsheets/colafacts2017.pdf" target="_blank">$1,360 per month</a>, which doesn't go very far if that is your only source of income. In addition, beneficiaries who are signed up for Medicare Part B (which is the Medicare medical insurance) will see $134 deducted from their Social Security benefit check for the Part B premium.</p> <p>While very few retirees live solely on their Social Security benefits, these benefits do constitute at least half the income of 71 percent of single seniors and 48 percent of couples. And for a whopping 43 percent of singles and 21 percent of married couples, Social Security benefits represent 90 percent or more of total income.</p> <h3>Why you shouldn't panic</h3> <p>What you need to remember is that you have a great deal of control over how much of your budget your Social Security benefit will represent. If you diligently save for retirement, then receiving an &quot;average&quot; benefit of $1,360 will provide a nice financial cushion on top of your retirement portfolio. While $1,360 is tough to live on by itself, having it available on top of your necessary expenditures would be a wonderful supplement.</p> <h2>3. Cuts to Social Security benefits may be coming</h2> <p>President Trump promised during his campaign that there would be no cuts to current payments for Social Security or Medicare beneficiaries. However, although the White House has made it clear that current beneficiaries' payments are safe, it will not rule out the possibility of making cuts that will affect future beneficiaries. Some of the changes that have been proposed include:</p> <ul> <li>Raise the full retirement age for workers who reach age 62 in 2023, gradually increasing it from the current age of 66 to age 69.<br /> &nbsp;</li> <li>Change the formula for calculating benefits for retirees becoming newly eligible in 2023 in phases over 10 years. The changes would slightly increase benefits for below-average earners and slightly decrease benefits for above-average earners.<br /> &nbsp;</li> <li>Beginning December 2018, change the calculation of the cost-of-living adjustment (COLA) to a chained consumer price index (CPI) calculation, which will reduce the amount of money beneficiaries receive in their annual COLA. The current formula for determining the COLA uses something called the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The CPI-W is a useful index for tracking the inflation of all goods, but it does not take into account the fact that many consumers make substitutions when prices go up. (For instance, if the price of beef rises, many consumers will buy chicken or pork instead.) A chained CPI calculation takes these sorts of substitutions into account, so its inflation rate is calculated at approximately 0.3 percentage points lower than the CPI-W rate.<br /> &nbsp;</li> <li>Eliminate the earnings test beginning in January 2019. This test reduces benefits for beneficiaries who are younger than Social Security's full retirement age (currently age 66), are currently receiving Social Security benefit payments, and have income from wages or self-employment that exceed $16,920 per year in 2017.<br /> &nbsp;</li> <li>Eliminate federal income taxation of Social Security retirement benefits as of 2054 and later, phased in from 2045 to 2053.</li> </ul> <h3>Why you shouldn't panic</h3> <p>Although making cuts to future beneficiaries' payments is hardly something to cheer about, we do need to recognize that it is much more important to protect the benefits of current beneficiaries. Since current beneficiaries generally cannot go back to work or cut expenses, they are much more vulnerable to cuts in payments than current workers are. In fact, the proposed switch to a chained CPI calculation for COLA may be burdensome to current beneficiaries, since it has been proposed for December 2018, thereby affecting those who have already retired.</p> <p>What current workers need to do is plan for their Social Security to be an addition to their retirement savings. Then, if these changes and cuts do come to pass, you will not be worried about losing important income.</p> <h2>4. High earners don't pay as much into Social Security</h2> <p>Social Security is paid for through a payroll tax of 6.2 percent for workers and 6.2 percent for their employers, making the total tax contribution 12.4 percent of gross income. However, workers and their employers do not pay Social Security taxes on earnings above $127,200.</p> <p>While $127,200 is a pretty significant chunk of change, it does mean that very high earners get a break once they are earning that amount. The reasoning behind this earnings cap is to maintain the connection between contributions paid in and benefits received. Since Social Security benefits are paid progressively, lower-income beneficiaries receive a higher percentage of their pre-retirement income in benefits than do high-income beneficiaries. The more money that high-income earners pay into Social Security, the less of a return they see on their contributions.</p> <p>The progressive nature of Social Security benefits is the reason why it is unlikely that there will ever be a complete elimination of this earnings cap, even though the program could certainly use the funds that such a cap elimination would represent. However, even if we were to increase the earnings cap to $229,500 &mdash; which would return taxation to the same level it was in the early 1980s &mdash; we could make a major dent in the coming benefits shortfall.</p> <h3>Why you shouldn't panic</h3> <p>Although raising taxes is never popular, there is some indication that our government is working to bring the earnings cap closer to early 1980s levels. In 2016, the earnings cap was set at $118,500, which was the same as the 2015 earnings cap. Raising it to $127,200 represents a 7 percent increase.</p> <h2>5. 10,000 baby boomers are retiring every day</h2> <p>Social Security works pretty well when the ratio of workers to retirees is balanced. Unfortunately, the extra-big generation known as the baby boomers is putting the program out of whack. The 76 million members of that generation began reaching age 62 (the earliest you may take Social Security benefits) as of 2008, and they are just going to keep retiring &mdash; at a rate of <a href="https://www.washingtonpost.com/news/fact-checker/wp/2014/07/24/do-10000-baby-boomers-retire-every-day/?utm_term=.56b6dff4374c" target="_blank">10,000 per day</a>.</p> <p>This huge retirement boom could potentially put an enormous burden on our Social Security program, especially considering the increased life expectancy of this generation as compared to their parents and grandparents.</p> <h3>Why you shouldn't panic</h3> <p>While it's true that approximately 10,000 baby boomers are going to be retiring every day until 2034 (when the last of the boomers will reach age 70, which is the latest you would want to start taking Social Security benefits), there is more to this story than just their retirement.</p> <p>First, it's important to remember that we've known the boomers would be retiring en masse for quite some time. Policymakers began to plan as early as 1983, when Congress raised the full retirement age.</p> <p>Second, the boomers are the workers who built up the Social Security Trust Fund, so they will be beneficiaries of the money they themselves contributed through taxes.</p> <p>Finally, as of 2015, <a href="http://www.pewresearch.org/fact-tank/2016/04/25/millennials-overtake-baby-boomers/" target="_blank">millennials had overtaken the boomers</a> as the largest living generation in the U.S. With such a large group of young workers in the workforce, we should be able to handle the financial cost of 10,000 boomers retiring each day.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/emily-guy-birken">Emily Guy Birken</a> of <a href="http://www.wisebread.com/5-sobering-facts-about-social-security-you-shouldnt-panic-over">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-12"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-smart-ways-to-boost-your-social-security-payout-before-retirement">6 Smart Ways to Boost Your Social Security Payout Before Retirement</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/stop-falling-for-these-6-social-security-myths">Stop Falling for These 6 Social Security Myths</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-questions-to-ask-before-you-start-claiming-your-social-security-benefits">5 Questions to Ask Before You Start Claiming Your Social Security Benefits</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-reasons-to-claim-social-security-before-your-retirement-age">3 Reasons to Claim Social Security Before Your Retirement Age</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-how-you-should-budget-your-social-security-checks">Here&#039;s How You Should Budget Your Social Security Checks</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement beneficiaries benefits facts full retirement age government social security ssa supplemental income taxes trust fund Thu, 04 May 2017 08:00:08 +0000 Emily Guy Birken 1938308 at http://www.wisebread.com