retirement http://www.wisebread.com/taxonomy/term/416/all en-US 5 Money Mistakes to Stop Making by 50 http://www.wisebread.com/5-money-mistakes-to-stop-making-by-50 <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-money-mistakes-to-stop-making-by-50" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/couple_reviewing_finances_000024989276.jpg" alt="Couple learning which money mistakes to avoid by 50" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you're in your 50s, it's time to fasten your seatbelt and begin making your final descent towards your financial goals. And if you stop making these five <a href="http://www.wisebread.com/8-savings-mistakes-even-smart-people-make">money mistakes</a> now, soon you should be able to put your finances on autopilot.</p> <h2>1. Not Maxing Out Retirement Accounts or Making Catch-Up Contributions</h2> <p>Your retirement accounts offer the biggest tax incentive for your money. Hopefully, you're not only making the maximum allowable contributions, but are also taking advantage of catch-up contributions. In 2015, persons age 50 and older are eligible for yearly catch-up contributions in the amounts of $6,000 for 401(k) accounts and $1,000 for IRAs.</p> <h2>2. Not Paying Off Large Purchase Items</h2> <p>It's time to pay off those big-ticket items. Your mortgage and automobile titles need to be free and clear of encumbrances. Typically, these will be a household's two biggest expenses, and they can easily become burdensome for anyone living on a fixed-income.</p> <h2>3. Not Getting Insurance Policies</h2> <p>Failing to adequately insulate your family from life events will dramatically impact your finances. Make sure your family has enough life insurance, proper health coverage, property insurance, and disability insurance. Also, consider adding long-term care to your insurance policy. Long-term care coverage is expensive, but will save you money in the long run should you or your spouse ever need assisted care. All or a portion of the costs for these services would be covered.</p> <h2>4. Taking on New Debt</h2> <p>By now, I hope you've begun enjoying the peace of mind and freedom that stems from being virtually debt free, because your major debts should be almost paid off. And being a few short years away from retirement is not a good a time to start assuming new debts &mdash; lines of credit, student loans, second mortgages, car loans, etc. One of the biggest debt challenges facing middle-aged Americans today is helping children with student loan debt. The best solution for this is to put as much of the loans in your child's name, assuming only the portion that they can not reasonably afford to pay. When that's not an option, consolidate and pay them off as soon as possible.</p> <h2>5. Not Rebalancing Assets</h2> <p>One of the most important things you can do to help your <a href="http://www.wisebread.com/the-most-important-thing-youre-probably-not-doing-with-your-portfolio">investment portfolio is rebalance</a> it. As you near your target retirement age, you should start shifting your assets towards more conservative investments. Based on your age, and depending on your financial goals, a good asset allocation strategy might look something like, stocks 51%, bonds 13%, and cash 36%.</p> <p>As retirement draws nearer, it's important to get your financial house in order to maximize your remaining working years. Stop making these money mistakes now so that 60 looks even brighter than today.</p> <p><em>Are you making any of these financial mistakes? What are you doing to correct them?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/qiana-chavaia">Qiana Chavaia</a> of <a href="http://www.wisebread.com/5-money-mistakes-to-stop-making-by-50">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/the-5-best-pieces-of-financial-wisdom-from-warren-buffett">The 5 Best Pieces of Financial Wisdom From Warren Buffett</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/the-6-biggest-financial-decisions-in-your-20s">The 6 Biggest Financial Decisions in Your 20s</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-5-best-pieces-of-financial-wisdom-from-suze-orman">The 5 Best Pieces of Financial Wisdom From Suze Orman</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/when-to-use-savings-to-pay-off-debt">When to Use Savings to Pay Off Debt</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-savings-tricks-you-havent-tried-yet">5 Savings Tricks You Haven&#039;t Tried Yet</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance advice debt money mistakes retirement savings Wed, 01 Jul 2015 13:00:19 +0000 Qiana Chavaia 1469493 at http://www.wisebread.com The 6 Biggest Financial Decisions in Your 20s http://www.wisebread.com/the-6-biggest-financial-decisions-in-your-20s <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-6-biggest-financial-decisions-in-your-20s" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/three_friends_coffee_000051230160.jpg" alt="Three friends making big financial decisions in their 20s" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Back in my early 20s, I didn't have a strong interest in personal finance; as long as I had enough money for the bar, I was good to go. Of course I knew the importance of paying my bills on time (and I did), but planning for the future and learning about credit management were the last things on my mind. I wasn't alone, either. Most of my friends were the same way a decade ago, and if you're in your 20s now, you may not give your personal finances much thought.</p> <p>Although you're young and have the rest of your life to be responsible with money, there are reasons to get a head start on positive <a href="http://www.wisebread.com/10-financial-decisions-you-cant-keep-putting-off">personal finance practices</a>. Don't wait until your 30s or 40s to get serious about your money.</p> <h2>1. Start Saving for Retirement</h2> <p>If you're dealing with low wages and high student debt, you may feel you can't afford to save for retirement. However, starting a retirement savings plan while young can have a tremendous impact on your future financial health because you'll maximize your retirement income thanks to the magic of compound interest. No one's saying you have to contribute the maximum each year to your IRA or a 401(k). Do what you can afford. As long as you're contributing something, you're on the right path and doing better than a lot of 20-something adults.</p> <h2>2. Live Within Your Means</h2> <p>After graduating college and getting a job, you might be in a mad rush to achieve the lifestyle you were accustomed to growing up. But realize it took your parents years to acquire what they have, so don't expect the same lifestyle in your first couple of years out of school.</p> <p>If you learn how to live within your means in your 20s, you can carry this good habit throughout your entire adulthood. You're less likely to get into deep credit card debt. And living beneath your means makes it's easier to save for retirement and enjoy other things in life, such as the occasional vacation.</p> <h2>3. Avoid Credit Card Debt</h2> <p>The debt you accumulate in your 20s can haunt you for decades. So before you buy houses, cars, or start a family, tackle your debt. The older we get, the more responsibilities we take on. Lingering debt means additional interest rates, and it becomes harder to wipe out these balances. You might be ready to move out and exert your independence after graduating college. But if you can, stay home for a little while longer and use this time to pay off student loan debt and credit card debt.</p> <h2>4. Get Insured</h2> <p>Just because you're young doesn't mean you're invincible. You can get sick, injured, or die unexpectedly, just like older folks. No one likes to think about bad situations, but you need to prepare for the worst. The best time to buy insurance is while you're young and healthy. This includes health, life, and disability insurance. It's not only a responsible way to protect your finances, but you also might qualify for a better rate because of your age. If you live on your own, make sure you get a renter's insurance policy to cover the replacement cost of personal belongings in the event of a natural disaster, theft, or fire.</p> <h2>5. Build an Emergency Fund</h2> <p>Your 20s is also one of the best times to start building an emergency fund. Talk to any adult in their 30s or 40s with a mortgage or kids and they'll tell you it's harder to save when there's so many financial responsibilities. If you're still living at home, try living off half your income and save the other half until you build a nest egg of at least three to six months' living expenses.</p> <h2>6. Establish Your Credit History</h2> <p>You can't rely on your parents forever. Now's the time to establish credit if you plan to buy a house and be financially independent in the future. Applying for a student loan is a good start, but diversifying your credit can build an even stronger credit score. You can apply for another installment loan, such as an auto loan, or you can apply for one or two credit cards. It isn't enough to apply for credit, you have to use credit responsibly. Don't get in over your head. Only charge what you can afford, and make every effort to pay off your credit card bills in full every month, and on time. Credit building is a slow, gradual process. And regularly monitor your credit report to check for inaccuracies or identity theft, which can drive down your credit rating.</p> <p><em>What other smart decisions should you make in your 20s? Let me know in the comments below.</em></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/the-6-biggest-financial-decisions-in-your-20s">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/7-personal-finance-milestones-every-20-and-30-year-old-should-hit">7 Personal Finance Milestones Every 20 and 30 Year Old Should Hit</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-money-mistakes-to-stop-making-by-50">5 Money Mistakes to Stop Making by 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/conspicuous-spending-fading-to-black">Conspicuous Spending: Fading to Black</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-savings-tricks-you-havent-tried-yet">5 Savings Tricks You Haven&#039;t Tried Yet</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/saving-money-is-easy-if-you-set-the-right-goals">Saving Money Is Easy If You Set the Right Goals</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance 20s credit millennials retirement savings Tue, 16 Jun 2015 21:00:09 +0000 Mikey Rox 1454417 at http://www.wisebread.com 5 Reasons Why Life Insurance Isn't Just for Old People http://www.wisebread.com/5-reasons-why-life-insurance-isnt-just-for-old-people <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-reasons-why-life-insurance-isnt-just-for-old-people" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/newborn_baby_000046762652.jpg" alt="Man getting life insurance to protect his child" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Life insurance isn't your average dinnertime conversation &mdash; no one likes to even talk about it. After all, life insurance is something that you only have to think about when you are old and grey, right?</p> <p>But nothing could be further from the truth. Life takes unexpected turns, and at any age it could be just as important as having a strong emergency fund or funding your retirement.</p> <p>Still need proof? Here are five compelling reasons why <a href="http://www.wisebread.com/universal-life-insurance-and-whole-life-insurance-a-comparison">life insurance</a> isn't just for old people.</p> <h2>1. You're Young and Healthy</h2> <p>Life insurance doesn't pay out until you die, but the best time to buy it is when you are young and healthy, since it's issued on rating scale. The healthier you are, the better the rating. The better the rating, the lower the price.</p> <h2>2. You Want to Boost Your Retirement Funding</h2> <p>401(k), IRA, ROTH, SEP-IRA &mdash; they are all great retirement options. But there are also hefty fees if you want to withdraw early from retirement accounts. Life insurance is the yin to retirement accounts yang. There are two kinds of life insurance: those that expire (term), and those that generate cash value (permanent). If you structure a permanent life insurance policy properly, you can actually use the cash value during your life to help fund your retirement, and even better, the benefits can be tax-free to you.</p> <h2>3. You Got Married</h2> <p>Being single can have many benefits. However, right after you say &quot;I do&quot; is probably the best time to start thinking about life insurance. What if one spouse works, while the other spouse might stay home? Or, maybe one spouse makes a lot more money than the other. However you slice it, life insurance can provide a very valuable asset if something was to happen to the higher-earning partner. You want to make sure you have enough life insurance to cover all your expenses, and then some.</p> <h2>4. You're Having a Baby</h2> <p>If you didn't think getting married was a compelling reason enough, that little bundle of joy should surely spur on the need. Kids bring on a ton more expenses &mdash; day care, education, clothes, food, and not to mention college. Tax-free life insurance benefits can become an important life preserver and ensure your child's well-being.</p> <h2>5. You're Open for Business</h2> <p>So, you've got a rock star business concept and are ready for world domination. If you've got a business partner, then life insurance should be your next step. You share expenses, knowledge, and more. What if something happens to one business partner? You've also got their family, their business interest, and the loss of a partner to think about. Business owners usually opt for <a href="http://www.wisebread.com/business-succession-planning-part-2-how-life-insurance-will-insure-the-life-of-your-business">life insurance on each other</a> in what is a called a &quot;buy-sell agreement.&quot; This agreement drafted by an attorney states who gets what when something happens. The most common form of currency to &quot;fund&quot; a buy-sell agreement&hellip;you guessed it: life insurance.</p> <p><em>Do you own life insurance yet? If so, why or why not?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/shannah-game">Shannah Game</a> of <a href="http://www.wisebread.com/5-reasons-why-life-insurance-isnt-just-for-old-people">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/selling-your-life-insurance-policy-for-cold-hard-cash">Selling Your Life Insurance Policy for Cold, Hard Cash</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-kinds-of-insurance-that-arent-worth-it-and-what-to-do-instead">6 Kinds of Insurance That Aren&#039;t Worth It -- And What to Do Instead</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/should-i-get-life-insurance-through-my-employer">Should I Get Life Insurance Through My Employer?</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/beginning-the-free-life-insurance-quote-process">Beginning the Free Life Insurance Quote Process</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/not-insuring-these-6-things-could-bankrupt-you">Not Insuring These 6 Things Could Bankrupt You</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Insurance business death family life insurance marriage retirement Thu, 11 Jun 2015 17:00:21 +0000 Shannah Game 1447185 at http://www.wisebread.com 5 Financial Pitfalls Stay-at-Home Parents Should Avoid http://www.wisebread.com/5-financial-pitfalls-stay-at-home-parents-should-avoid <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-financial-pitfalls-stay-at-home-parents-should-avoid" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/mother_and_sons_000039504068.jpg" alt="Stay-at-home mother avoiding common financial pitfalls" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Staying at home with my daughter has been one of the best choices I've made in my life. At the same time, there are a number of money concerns I didn't necessarily expect when I handed in my resignation. For those of you who stay home (or who might be considering this big life change), take heed. You can do it the right way &mdash; protecting your financial future &mdash; with a little research and planning.</p> <h2>1. Retirement Planning</h2> <p>Suze Orman's advice is to <a href="http://www.oprah.com/money/Financial-Advice-for-Stay-at-Home-Parents">contribute what you can</a> in preparation for retirement. Spouses can claim Social Security benefits based on their partners, even in the event of divorce. Use the <a href="http://www.aarp.org/work/social-security/social-security-benefits-calculator.html">AARP's Social Security Calculator</a> to estimate your individual take-home benefit. Beyond that, there are Spousal IRA accounts where you can stash away as much as you like, provided the working partner makes enough each year to cover your contribution.</p> <h2>2. Life Insurance</h2> <p>It's an area nobody likes to think about, but securing life insurance is wise for both working and stay-at-home parents, alike. And just because you're not making money doesn't mean you're not contributing to your family. Securing life insurance will help your family with funeral bills, child care, education costs, and more if something ever happens to you.</p> <h2>3. Divorce Dollars</h2> <p>The rate of divorce has more or less stayed the same over the past several decades at around a whopping <a href="http://www.forbes.com/sites/emmajohnson/2014/10/27/are-you-a-stay-at-home-mom-facing-divorce-dont-expect-alimony/">50% of marriages</a>. Stay-at-home parents are in vulnerable financial positions if they find themselves in the courtroom to make the split. Whereas alimony used to be the standard means of support in years past, judges are now <a href="http://www.huffingtonpost.com/beverly-willett/are-stayathome-parents-at_b_907792.html">granting these maintenance dollars</a> much less freely. Of course, health insurance, retirement, court fees, and other money woes are wrapped up in this issue as well.</p> <h2>4. Resume Builder</h2> <p>Thinking ahead, I know I'll someday need to go back to full-time employment. Getting a job with a huge gap in my work history sounded daunting. So, I've been keeping my skills current. As a writer, I've had the amazing opportunity to work from home through freelance writing. Even if your area of expertise isn't so easily honed from home, you can check out different volunteer gigs, side-jobs, education opportunities, professional connections, and other ways of staying fresh in your field. That way, when you do submit a resume years down the line, you'll show you've stayed connected to the job market.</p> <h2>5. Emergency Fund</h2> <p>Even the most financially sound families should save up an emergency fund. We found this area particularly important when I decided to stay home. For example, my daughter ended up having some unforeseen medical issues. Our monthly budget only makes ends meet, so having some extra money set aside helped soften the blow from all the doctor bills. A broken furnace, totaled car, or even your spouse's job loss could spell disaster without some planning. (See also: <a href="http://www.wisebread.com/is-building-an-emergency-fund-always-a-good-idea?ref=seealso">Is Building an Emergency Fund Always a Good Idea?</a>)</p> <p><em>How has staying at home impacted your financial planning?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/ashley-marcin">Ashley Marcin</a> of <a href="http://www.wisebread.com/5-financial-pitfalls-stay-at-home-parents-should-avoid">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/7-unexpected-ways-stay-at-home-parents-save-big">7 Unexpected Ways Stay-at-Home Parents Save Big</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/24-tips-for-having-a-baby-without-going-broke">24 Tips for Having a Baby Without Going Broke</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/10-investing-lessons-you-must-teach-your-kids">10 Investing Lessons You Must Teach Your Kids</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-important-questions-to-ask-before-adding-to-your-family">5 Important Questions to Ask Before Adding to Your Family</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-ways-having-kids-makes-you-more-frugal">8 Ways Having Kids Makes You More Frugal</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting Family Lifestyle kids retirement savings stay-at-home parents Tue, 26 May 2015 09:00:08 +0000 Ashley Marcin 1431028 at http://www.wisebread.com 5 Essential Things Women Should Know About Investing http://www.wisebread.com/5-essential-things-women-should-know-about-investing <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-essential-things-women-should-know-about-investing" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/women_investors_000054398090.jpg" alt="Things women should know about investing" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>When it comes to investment decision-making, women wield greater economic power than ever before. They now comprise nearly half the workforce and half of all household breadwinners &mdash; but their financial literacy levels still trail. Here are five important ways women are still behind &mdash; and how to catch up.</p> <h2>1. Women Earn Less Than Men</h2> <p>A growing number of women are primary breadwinners, yet women earn just 77 cents for every dollar earned by their male colleagues working in the same positions, despite having equal qualifications. The &quot;gender-gap&quot; is even wider for African-Americans, who earn just 64 cents on the dollar, and Latino women earning 56 cents for every dollar earned by men.</p> <p>To tackle this pressing issue, in 2009 President Obama enacted the <a href="http://www.lillyledbetter.com/">Lilly Ledbetter Equal Pay Act</a>. Another initiative taken under the Obama Administration is the <a href="https://www.whitehouse.gov/sites/default/files/equalpay/equal_pay_task_force_progress_report_june_2013_new.pdf">Equal Pay Task Force</a>, which is comprised of several federal agencies, including the U.S. Equal Employment Opportunity Commission, the Department of Justice, the Department of Labor, and the Office of Personnel Management.</p> <h2>2. Women Live Longer and Save Less For Retirement Than Men</h2> <p>The average female life expectancy in the United States is age 81 &mdash; about four years more than men. Yet according to a recent study, women save 40% less for retirement than their male counterparts. &quot;This is especially concerning because women live longer than men, and thus need more retirement savings. In addition to a longer average lifespan, women are more likely to have work disruptions for caregiving that hinder their capacity to save. Therefore, they need to capitalize on savings opportunities while they are working,&quot; says Cecilia Shiner, senior analyst.</p> <h2>3. Women Are Less Likely to Receive Retirement Benefits</h2> <p>Of the 62 million working women, the U.S. Dept. of Labor says only about 45% contribute to a retirement plan, because many are likely working in part-time jobs due to family obligations and do not meet the qualifications to contribute. Women who find themselves in this position should <a href="http://www.wisebread.com/how-to-set-up-an-ira-to-build-wealth">open an Individual Retirement Account</a> (IRA) and max-out the contribution limit for every year they are employed.</p> <h2>4. Women Lack Confidence in Their Ability to Invest</h2> <p>As a 2014&ndash;2015 Prudential Financial research study shows, women have not improved their <a href="http://www.prudential.com/media/managed/wm/media/Pru_Women_Study_2014.pdf?src=Newsroom&amp;pg=WomenStudy2014">understanding of insurance</a> and financial products over the last decade despite the 2008 financial crisis. However, the same study reported that women are becoming more confident in terms of managing their day-to-day finances (i.e. budgeting and saving). This is extremely significant because it's the first step towards having the discretionary income needed to invest.</p> <h2>5. Women Invest Differently and Are More Risk Averse</h2> <p>Women <a href="http://www.wisebread.com/the-4-best-investments-for-lazy-investors">invest more</a> conservatively than men. A Barclays Wealth Insights study found that men were more likely to consider themselves financial risk-takers and were more willing to choose high-risk investments in order to achieve higher returns. Even when other approaches would have achieved higher gains, women pursued a steadier course and had more stable returns.</p> <p><em>What do you wish you knew more about investing?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/qiana-chavaia">Qiana Chavaia</a> of <a href="http://www.wisebread.com/5-essential-things-women-should-know-about-investing">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/7-ways-investing-sucks-and-why-you-should-do-it-anyway">7 Ways Investing Sucks (and Why You Should Do It Anyway)</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-dumb-401k-mistakes-smart-people-make">5 Dumb 401(k) Mistakes Smart People Make</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-dumb-investments-smart-people-make">5 Dumb Investments Smart People Make</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-steps-for-a-womans-financial-self-defense">6 Steps for a Woman&#039;s Financial Self-Defense</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/is-this-hidden-cost-sapping-your-retirement-savings">Is This Hidden Cost Sapping Your Retirement Savings?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment 401(k)s finances retirement women Fri, 22 May 2015 11:00:21 +0000 Qiana Chavaia 1429695 at http://www.wisebread.com 9 Best Free Financial Learning Tools http://www.wisebread.com/9-best-free-financial-learning-tools <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/9-best-free-financial-learning-tools" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/woman_tablet_travel_000063831043.jpg" alt="Woman using free financial tool to manage her money" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Personal finance can be tricky. From mortgages to credit cards, investing and auto loans, there's a lot to get your brain around. The good news is that you don't need to drop hundreds of dollars to learn the <a href="http://www.wisebread.com/10-financial-decisions-you-cant-keep-putting-off">basics of money management</a>. There are plenty of free resources and tools to help you wade through these complicated waters. Here are nine of the best.</p> <h2>1. Your Brokerage's Website</h2> <p>Many of the top discount brokerage firms, including Fidelity, Charles Schwab, and TD Ameritrade, have robust websites that not only offer you the ability to trade, but also to learn about investing and other financial matters. Some even have sections of their websites labeled as &quot;education centers.&quot; There are news and opinion articles, videos and podcasts, plus tutorials, free webinars, and online panel discussions. Granted, these websites will often tout their own investment products, but most of the advice is sound and useful for those getting started with investing.</p> <h2>2. Feed the Pig</h2> <p><a href="http://www.feedthepig.org/">Feed the Pig</a> is presented by the American Institute of CPAs and has a number of resources for those looking for information on saving, budgeting, and retirement planning. There are some helpful budgeting calculators, and step-by-step guides on things like credit cards, mortgages, and student loans. The AICPA says the site is geared toward people aged 24 to 35, and that's evidenced by the lighthearted presentation.</p> <h2>3. CashCourse</h2> <p>Offered by the National Endowment for Financial Education, <a href="http://www.cashcourse.org/">CashCourse</a> has a series of financial tools geared toward young people. There are nearly 900 colleges that have signed up to give their students free access to workshops, and the information is noncommercial and unbiased.</p> <h2>4. Bloomberg 401(k) Calculator</h2> <p>There are many financial calculators out there, but I am partial to this robust <a href="http://www.bloomberg.com/personal-finance/calculators/401k/">401(k) calculator from Bloomberg</a>, which allows you to project 401(k) savings by entering a number of fields including projected salary increases, timeline, and expected investment returns. It also allows you to view a chart showing how an employer match will impact your account balance.</p> <h2>5. Kiplinger Tax Map</h2> <p>Want to see how tax-friendly your state is? This handy <a href="http://www.kiplinger.com/tool/taxes/T055-S001-kiplinger-tax-map/">tax map from Kiplinger</a> offers ratings for each state, plus a detailed state-by-state guide on everything from income to property taxes. There's also similar map geared toward retirees.</p> <h2>6. Better Money Habits</h2> <p><a href="https://www.bettermoneyhabits.com/index.html">Better Money Habits</a> formed as a partnership between Bank of America and Khan Academy. There are tools on budgeting, credit, and home buying. As you use the site, you can obtain points for certain &quot;achievements,&quot; and earn virtual badges.</p> <h2>7. The Options Institute</h2> <p>From the Chicago Board Options Exchange, <a href="http://www.cboe.com/learncenter/options-trading-institute.aspx">The Options Institute</a> allows you to register for free online tutorials on how to use options to expand your investment opportunities. It's designed for more experienced investors, but newcomers can learn a lot as well. Most of the institute's offerings are free, though there are some seminars and classes that come at a cost.</p> <h2>8. MyMoney.gov</h2> <p>The U.S. Treasury Department's Financial Literacy and Education Commission operates <a href="http://www.mymoney.gov/Pages/default.aspx">MyMoney.gov</a>, featuring a series of tools centered on five principles: earn, save and invest, protect, spend, and borrow. There are a variety of different financial calculators, some budgeting worksheets, and checklists.</p> <h2>9. Thrive and Shine</h2> <p>This app for iPhone and Android devices is a game in which players create an avatar and then make financial decisions as they move from their parents' basement to living independently. <a href="http://www.mindblownlabs.com/product/">Thrive and Shine</a> is geared toward teens and teaches budgeting, saving, and debt management.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/9-best-free-financial-learning-tools">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/5-financial-obstacles-that-are-especially-tough-for-women">5 Financial Obstacles That Are Especially Tough for Women</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/15-personal-finance-rules-you-should-be-breaking">15 Personal Finance Rules You Should Be Breaking</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-retirement-latte">The Retirement Latte</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/21-things-that-young-adults-absolutely-need-to-know-about-money">21 Things That Young Adults Absolutely Need to Know About Money</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-money-moves-cpas-say-you-must-make">8 Money Moves CPAs Say You Must Make</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance budgeting investing learning retirement saving stocks Tue, 19 May 2015 11:00:07 +0000 Tim Lemke 1423263 at http://www.wisebread.com 10 Times You Shouldn't Invest in Stocks http://www.wisebread.com/10-times-you-shouldnt-invest-in-stocks <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/10-times-you-shouldnt-invest-in-stocks" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/woman_thinking_stocks_000030689114_0.jpg" alt="Woman considering when she shouldn&#039;t invest in stocks" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Investing in stocks is one of the best ways to build wealth over time, since on average, the stock market returns 9% per year. But there are many instances when buying stocks might not make sense. If you're on the fence about whether to enter the stock market, ask yourself if any of these apply to you.</p> <h2>1. You're About to Retire</h2> <p>If you are right on the cusp of retirement and need to rely on your savings when you stop working, it's best to avoid riskier stocks and place it in safer investments, such as bonds or cash. Most experts recommend that bonds and safer investments should comprise the same percentage of your portfolio as your age. So, a 65-year-old investor would want about 65% of their portfolio in bonds and lower-risk investments, and only 35% in stocks (which tend to be higher-risk). The last thing you want is for your nest egg to rapidly decline in size right as you plan to dip into it.</p> <h2>2. You Need the Money Right Away</h2> <p>Investing in stocks isn't really for people looking to make a quick buck. Sure, you might make 10% in one month, but you might also lose just as much. If this is cash you need soon for a new car, down payment on a home, or a new child, you're best off keeping it somewhere safer and more liquid.</p> <h2>3. You Haven't Researched the Most Tax-Advantaged Ways to Invest</h2> <p>It's relatively easy to buy individual stocks, but have you explored buying these via tax-advantaged accounts, such as a Roth IRAs and 401(k)s? If not, you may find yourself owning stocks in regular brokerage accounts, meaning you'll be on the hook right away for any taxes on dividends and capital gains. Do a little bit of homework on tax-advantaged vehicles before you invest, and you'll end up saving thousands of dollars in the long run.</p> <h2>4. You Don't Have an Emergency Fund</h2> <p>Investing in stocks is a great way to build wealth, but it doesn't really make sense to put money in the markets if you have no cash savings. Before you invest, work to ensure that you have enough liquid savings to cover at least three months of expenses, so that you're not financially crippled by a job loss, major medical expense, or other crisis.</p> <h2>5. You Freak Out Over Market Fluctuations</h2> <p>It's a simple fact that markets go up and down. There may be days you'll lose hundreds &mdash; or even thousands of dollars. Can you stomach this? If you're losing sleep over a single day's losses, perhaps you're not ready for stock investing. Before jumping in, take some time to get acquainted with the movement of markets. Becoming comfortable with the ups and downs will make you a more patient and happier investor.</p> <h2>6. You Can Only Invest a Very Small Amount at a Time</h2> <p>When you buy and sell stocks, you will usually pay a commission on each trade. This costs less than $10 at most discount brokerage firms, but if you only plan to buy a few shares of stock, that could add up to a big chunk of your return. Generally speaking, it's more efficient to buy larger quantities of shares, if you can. (There are some caveats to this. Many brokerage firms offer commission-free trades on many investments, so it's possible to buy small numbers of shares. But your choices are limited.)</p> <h2>7. You Have a Lot of High-Interest Debt</h2> <p>If you have thousands of dollars in credit card debt and are paying 13% in interest, is it wise to place your money in stocks? Sure, there may be stretches of time where investment returns are higher than your interest rates, but most of the time you are better off using money to pay down debt. In the long run, eliminating debt will free up more money to invest, putting you in better financial shape.</p> <h2>8. Stock Valuations Are Completely Insane</h2> <p>I am not a believer that you should always &quot;sell high&quot; and &quot;buy low.&quot; If you are investing for the long haul, it's not worth stressing over whether you're getting into the markets at the right time. Young investors, in particular, are best off just getting started as soon as they can. That being said, there may be instances when there is broad agreement that stocks are overpriced based on a company's earnings, or other factors. In these cases, it might make sense to wait for the market to cool a bit before pouncing. Pay close attention to things like a company's price-to-earnings ratio, and how close a stock price is to a 52-week high.</p> <h2>9. Interest Rates Start Shooting Way Up</h2> <p>Right now, interest rates are still historically quite low, but there have been instances when interest rates were so high that you'd end up with better returns from your savings account than the S&amp;P 500. If economic conditions suggest interest rates might rise dramatically, it might make sense to hold off on investing in stocks. It's worth noting, however, that interest rates have been quite low for many years now, and that past predictions of rate jumps didn't materialize.</p> <h2>10. You Really Have No Idea</h2> <p>It may seem like everyone is telling you to invest. But you just have no idea how to get started or what to do. That's okay! If you're unfamiliar with investing, you're more likely to make a mistake that will cost you money. Ignore outside pressure and take the time to learn about the stock market and the mechanics of investing before putting your money at risk.</p> <p><em>Have there been other occasions in which stocks weren't the right choice for you?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/10-times-you-shouldnt-invest-in-stocks">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/how-to-build-an-investment-portfolio-for-under-5000">How to Build an Investment Portfolio for Under $5000</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-crucial-things-you-should-know-about-bonds">5 Crucial Things You Should Know About Bonds</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-dumb-401k-mistakes-smart-people-make">5 Dumb 401(k) Mistakes Smart People Make</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/9-safe-investments-that-arent-bonds">9 Safe Investments That Aren&#039;t Bonds</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-dumb-investments-smart-people-make">5 Dumb Investments Smart People Make</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment bonds debt emergency funds retirement saving stocks Wed, 22 Apr 2015 15:00:09 +0000 Tim Lemke 1392474 at http://www.wisebread.com The Step-by-Step Guide to Rolling Over Your 401(k) http://www.wisebread.com/the-step-by-step-guide-to-rolling-over-your-401k <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-step-by-step-guide-to-rolling-over-your-401k" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/woman_401k_000020117190.jpg" alt="Woman discussing rolling over her 401(k) with her employer" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you've recently switched jobs, you may be wondering what to do with your retirement accounts. First, congratulations on thinking ahead and planning for your future. Rolling over accounts is an important step toward continuing to build your financial future, and we've created this step-by-step plan to help you navigate the process.</p> <p>That said, before you figure out how to rollover your 401(k), it's first important to know what not to do.</p> <h2>Don't Take a Distribution</h2> <p>It's tempting to let your former employer send you a check to cash out your account, but, unless you're over age 59&frac12;, this can be a huge mistake. Your former employer is required to withhold 20% of the distribution. On top of that, the IRS will charge you an additional 10% penalty if you're younger than 59&frac12;.</p> <p>To break it down in dollars and cents, let's assume there's a $10,000 balance in your 401(k) and you're in a 25% tax bracket.</p> <p>$10,0000 &ndash; $2,000 (20% Withholding) &ndash; $1,000 (10% Tax Penalty) = $7,000</p> <p>You've just taken a $3,000 hit on your portfolio. That's a heavy hit to take. Plus, you'll no longer have that money working in the market for you, which means you're more likely to end up like the majority of Americans who fear their retirement funds are lacking.</p> <p>Some people take distributions because they're not sure how to make ends meet between jobs (a valid fear). But taking a 401(k) distribution is one of the most expensive ways to bridge the gap when you're between jobs.</p> <p>But some distributions happen by accident. If you don't know how to conduct a 401(k) rollover, the paperwork can be confusing and it's easy to check the wrong box or make an inaccurate assumption.</p> <p>If your former company has already sent a check directly to you, there is a remedy, if you act fast. You'll have 60 days to get the funds deposited into an IRA. There is a bit of a hitch, though. You'll be directly responsible for making up the 20% that was withheld by your former employer.</p> <h2>So, What Should You Do?</h2> <p>If you're just starting the 401(k) rollover process, you'll have a few options.</p> <h3>Keep Your Funds In the Current 401(k)</h3> <p>If your 401(k) balance is greater than $5,000, you'll have the option to keep the money right where it is. The upside? No paperwork. The downside? Well, there are a few.</p> <ul> <li>It's easy to lose track of your accounts. The average person holds 11 jobs by age 46. That can add up to a lot of retirement accounts, if they're not being rolled over or combined.<br /> &nbsp;</li> <li>Retirement plan quality varies greatly. Not all 401(k)s are created equal. There are drastically different fee structures and varying levels of investment options. Most separated employees would be better off moving their money into an account with a low-fee provider like Vanguard or Fidelity, each of which offers vast investment options for your IRA.</li> </ul> <p>Some employers automatically distribute 401(k) funds for separated employees if the balance is below the $5,000 mark. If this is you, you'll want to get your rollover going immediately.</p> <h3>Roll Your Funds Into Your New Employer's Retirement Plan</h3> <p>It's not a bad idea to keep your retirement funds in the same place, so that you don't lose track of previous accounts. Not all 401(k) plans accept rollovers, so if you want to go this route, check with your new employer first.</p> <p>If rollovers are accepted, ask your new employer for instructions on where your former employer should send your existing 401(k) funds. Once you have these rollover instructions, call your former employer and ask for the forms you'll need to fill out.</p> <p>Once the paperwork is complete, your former employer should send your account balance directly to your new employer's plan. There shouldn't be any taxes withheld or penalties assessed for a direct rollover. (See also: <a href="http://www.wisebread.com/10-easy-ways-to-supercharge-your-retirement?ref=seealso">10 Easy Ways to Supercharge Your Retirement</a>)</p> <h3>Roll Your Funds Into an IRA</h3> <p>This is my favorite option, because low cost mutual fund giants like Vanguard or Fidelity generally offer more investment options than most employer 401(k) plans, and they're usually cheaper, too.</p> <p>The first step is to open a new IRA account with a high-quality, low-fee investment provider (like <a href="https://personal.vanguard.com/us/openaccount?CompLocation=GlobalHeader&amp;Component=OpenAccount">Vanguard</a> or <a href="https://rewards.fidelity.com/offers/iramatch?imm_pid=1&amp;immid=00994&amp;imm_eid=e41730670&amp;buf=999999&amp;gclid=CjwKEAjwoZ-oBRCAjZqs96qCmzgSJADnWCv8IN3h4jALOK1EtX2J45rce9bLEBvEsPyTK_PJF86VXxoCDLLw_wcB">Fidelity</a>). You can open an account online with most investment providers by simply going to their website, selecting the Open An Account option, and looking for an account option for rolling over employer-sponsored retirement plan account. To open the new account, you'll need the following:</p> <ul> <li>Your personal information, like social security number, birth date, email address, and street address;</li> <li>The current balance in the 401(k) account that you're rolling over;</li> <li>Your former employer's name;</li> <li>The name of the investment (usually a mutual fund of exchange traded fund) in which you plan to invest your funds. If you don't know what to choose, a popular option is a target retirement fund, which automatically rebalances your account as you age and get closer to retirement.</li> </ul> <p>Once the rollover account is open, the next step is to call your former employer and ask for their rollover instructions. They will likely have a form that needs to be completed and will likely ask for the name and address of the investment house where the funds are to be sent. They'll also need your new rollover IRA account number.</p> <p>Make sure the check they send goes directly to the investment house where you've opened the new account. The check should be made out to the new investment house, with your name and new account number notated on the check. Do not have the check sent directly to you.</p> <p>To complete the transaction, some employers will require a letter of acceptance. If yours is one that does, you'll need to go back to the investment house where you opened the IRA and make the request. Not all employers require this, but it's not uncommon, either, meaning getting the form together shouldn't be a big deal for your new account holder.</p> <p>Once all the forms are signed and completed, it usually takes about three weeks for a rollover to be complete. The funds should be sent directly from your old employer to your new account holder and you should receive a confirmation either in the mail or email. Again, there shouldn't be any taxes withheld or penalties assessed for a direct rollover. (See also: <a href="http://www.wisebread.com/how-to-set-up-an-ira-to-build-wealth?ref=seealso">How to Set Up An IRA to Build Wealth</a>)</p> <p>The whole thing should take about 10 minutes in paperwork and three weeks in wait time (while your old employer sends the funds to your new account holder). It's a small price to pay for building a secure retirement.</p> <p><em>Have you rolled over your 401(k) recently? Did you hit any snags or was it smooth sailing? Tell us about it in the comments below.</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/alaina-tweddale">Alaina Tweddale</a> of <a href="http://www.wisebread.com/the-step-by-step-guide-to-rolling-over-your-401k">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/if-you-want-your-401k-to-grow-stop-doing-these-6-things">If You Want Your 401K to Grow, Stop Doing These 6 Things</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/left-a-job-do-a-rollover">Left a job? Do a rollover.</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/this-is-why-you-cant-postpone-planning-for-your-retirement-and-how-to-start">This Is Why You Can&#039;t Postpone Planning for Your Retirement (And How to Start)</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/intimidated-by-retirement-investing-get-professional-help">Intimidated by Retirement Investing? Get Professional Help!</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/12-things-you-didnt-know-about-retirement">12 Things You Didn&#039;t Know About Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement 401(k) IRA life hacks personal finance retirement rollover Wed, 25 Mar 2015 13:00:10 +0000 Alaina Tweddale 1356036 at http://www.wisebread.com 5 Dumb 401(k) Mistakes Smart People Make http://www.wisebread.com/5-dumb-401k-mistakes-smart-people-make <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-dumb-401k-mistakes-smart-people-make" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/retirement_plan_000021099854.jpg" alt="Retirement planning" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>401(k)s are very important to Americans' retirements &mdash; so important, in fact, that they represent nearly 18% of the $24.0 trillion in <a href="http://www.ici.org/policy/retirement/plan/401k/faqs_401k">U.S. retirement assets</a>.</p> <p>But those trillions of dollars aren't reaching their maximum earning potential due to dumb mistakes made by 401(k) owners. (See also: <a href="http://www.wisebread.com/4-ways-to-boost-your-401k-returns?ref=seealso">4 Ways to Boost Your 401(k) Returns</a>)</p> <p>Here are five pitfalls that you should avoid in order to maximize your 401(k) nest egg.</p> <h2>1. Not Exploring Investment Options</h2> <p>401(k) participants spend more time researching options for a new car or vacations than researching their 401(k) investment choices. According to a survey, while 55% of people spend more than five hours conducting research before buying a car, only 11% of those same people spend that much time before <a href="http://aboutschwab.com/images/uploads/inline/deck_2014-Schwab-401(k)-Participant-Survey.pdf">making an investment choice</a> for their 401(k).</p> <p>Part of the problem may be that people don't understand their 401(k) investment options. About half of those people surveyed found 401(k) investment materials more confusing than health care benefits materials. Instead of doing it on your own, consider that over half of retirement plans have <a href="http://www.shrm.org/research/surveyfindings/articles/documents/13-0245%202013_empbenefits_fnl.pdf">individual investment advice</a> offered on a one-on-one basis.</p> <h2>2. Borrowing From a 401(k)</h2> <p>An average of 13,000 people <a href="http://money.usnews.com/money/retirement/articles/2014/06/09/the-risks-of-taking-a-401-k-loan">take a loan each month</a> out of their 401(k)s for a median of about $4,600. Borrowing from your 401(k) is bad idea for several reasons:</p> <ul> <li>Loaned funds miss out on earnings potential, often for many years;<br /> &nbsp;</li> <li>If you lose your job, your full loan balance becomes due;<br /> &nbsp;</li> <li>By failing to make quarterly payments or paying back the full balance within five years, the <a href="http://www.irs.gov/Retirement-Plans/Retirement-Plans-FAQs-regarding-Loans#4">loan becomes taxable income</a>;<br /> &nbsp;</li> <li>401(k) participants under age 59&nbsp;<span style="color: rgb(51, 51, 51); font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 22.1000003814697px;">&frac12;</span>&nbsp;that fail to pay their 401(k) loans are subject to an additional 10% early distribution tax; and<br /> &nbsp;</li> <li>Once a remaining 401(k) loan balance becomes taxable income, that money can't be rolled over into any eligible retirement plan.</li> </ul> <p>There are very few acceptable instances to borrow from a 401(k), and you should leave your retirement account as a last resort option for financing. Taking loans from your 401(k) can quickly turn into a bad habit. In a one-year study of 180,000&nbsp;<a href="http://www.nytimes.com/2013/08/17/your-money/one-dip-into-401-k-savings-often-leads-to-another.html?pagewanted=all&amp;_r=0">borrowers from 401(k) plans</a>, 25% of them took out a third or fourth loan, and 20% of them took out five or more loans. (See also: <a href="http://www.wisebread.com/this-is-when-you-should-borrow-from-your-retirement-account?ref=seealso">This Is When You Should Borrow From Your Retirement Account</a>)</p> <h2>3. Taking Cashouts When Switching Jobs</h2> <p>When you leave your job, you typically have to choose between taking a cash-out or rolling your 401(k) into a qualifying individual retirement account (IRA). While the first option is taxable, the second one is not.</p> <p>Taking cashouts when switching jobs is a dumb mistake for three reasons:</p> <ul> <li> <p>If you're under age 59 &frac12;, you're liable for both income tax and a 10% early distribution tax.</p> </li> <li> <p>You may not get as much as you think. Some 401(k) plans have a vesting period for employer contributions. Pay special attention if your plan has a cliff-vesting schedule for employer contributions, which means that you only become eligible for employer contributions after a specified date.</p> </li> <li> <p>There is a limit to how much you can contribute to your 401(k) every year. In 2015, the <a href="http://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/Retirement-Topics-401k-and-Profit-Sharing-Plan-Contribution-Limits">maximum contribution limit</a> to a 401(k) is $18,000. This means that once you cashout monies, they may never make it back to your nest egg, without forfeiting part of your future contributions.</p> </li> </ul> <p>If you already took a cashout, still have the money, and are within 60 days from the cashout date, you still have time to roll the money over to an IRA. Don't waste time and avoid taxes!</p> <h2>4. Not Taking Advantage of the Retirement Saver's Credit</h2> <p>This is one time that you want to call up the tax man.</p> <p>Even though you may feel that you're not making much money, you're still very diligently contributing to your 401(k) or other qualifying retirement plan. Uncle Sam would like to reward your hard work by providing you a tax break through the <a href="http://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/Retirement-Topics-Retirement-Savings-Contributions-Credit-(Saver&rsquo;s-Credit)">retirement saver's credit</a>.</p> <p>In 2015, the retirement saver's credit provides a tax credit based on your adjusted gross income (AGI). For example, a married couple filing jointly receives a tax credit that is:</p> <ul> <li>50% of 401(k) contributions when AGI is under $36,500;</li> <li>20% of 401(k) contributions when AGI is between $36,501 and $39,500; and</li> <li>10% of 401(k) contributions when AGI is between $36,501 and $61,000.</li> </ul> <p>Married couples filing jointly can receive up to $4,000 ($2,000 for all other filers) in retirement saver's credit. This is one of the many reasons why it is important to start saving for retirement as early as possible. Depending on your AGI, you can take advantage of tax breaks such as this. Plus, you can always defer taxes until retirement, when you're more likely to be in a lower tax bracket.</p> <p>Less taxes, more retirement savings; now that's a great money resolution for any year. (See also: <a href="http://www.wisebread.com/4-money-resolutions-you-should-skip-this-year">4 Money Resolutions You Should Skip This Year</a>)</p> <h2>5. Self-Employed: Not Having a Solo 401(k)</h2> <p>Independent contractors, freelancers, and small business owners may think that they're not eligible to open a 401(k). They'd be wrong. They <em>can</em> open a <a href="http://www.irs.gov/Retirement-Plans/One-Participant-401(k)-Plans">solo 401(k)</a>, also known as an one-participant k or uni-k.</p> <p>Solo 401(k) plans enable the self-employed to save up larger sums for retirement. If you're a sole proprietor and have no employees, you can contribute to your solo 401(k) as employer and employee.</p> <p>For example, let's imagine that you have an S-corporation and earned $40,000 in 2014. You can contribute the maximum $17,500 allowed to your solo 401(k), and your S-corporation can contribute an additional 25% to the plan (an additional $10,000). The total contributions to your nest egg for 2014 would be $27,500.</p> <p>This example shows how a solo 401(k) is a powerful way to catch up in the race for retirement. The IRS allows total contributions to a solo 401(k), not counting catch-up contributions for those age 50 and over, of up to $52,000 for 2014, and $53,000 for 2015. If your spouse earns income from your business, then you can <em>double</em> those contribution limits.</p> <p><em>What are you doing to boost your 401(k) plan? Please share in comments.</em></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/5-dumb-401k-mistakes-smart-people-make">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/you-may-be-putting-your-retirement-money-in-the-wrong-place">You May Be Putting Your Retirement Money in the Wrong Place</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-ways-investing-sucks-and-why-you-should-do-it-anyway">7 Ways Investing Sucks (and Why You Should Do It Anyway)</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-dumb-investments-smart-people-make">5 Dumb Investments Smart People Make</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/this-one-thing-will-get-you-to-1-million-tax-free">This One Thing Will Get You to $1 Million (Tax-Free!)</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/9-silly-reasons-people-dont-invest-but-should">9 Silly Reasons People Don&#039;t Invest (But Should)</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment 401(k) investing retirement saving Thu, 26 Feb 2015 10:00:06 +0000 Damian Davila 1309065 at http://www.wisebread.com 5 Things Successful Savers Do http://www.wisebread.com/5-things-successful-savers-do <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-things-successful-savers-do" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/woman-piggy-bank-saving-Dollarphotoclub_63090784.jpg" alt="woman piggy bank" title="woman piggy bank" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>More than 25% of Americans <a href="http://www.usatoday.com/story/money/personalfinance/2014/06/23/americans-emergency-savings/11085869/">have no emergency savings</a>. More than 75% report <a href="http://money.cnn.com/2013/06/24/pf/emergency-savings/">living paycheck to paycheck</a>. Almost 20% of people heading into retirement soon&nbsp;<a href="http://www.washingtonpost.com/blogs/wonkblog/wp/2014/08/07/almost-20-percent-of-people-near-retirement-age-have-no-retirement-savings/">have saved nothing</a>.</p> <p>If these statistics hit close to home, you might be worried about your financial future. But don't despair. We can learn from the behaviors of good savers to improve our own money situations. Follow their lead, and you, too, can end up with a ton of money in the bank. (See also: <a href="http://www.wisebread.com/16-easy-ways-to-save-100-this-month?ref=seealso">16 Easy Ways to Save $100 This Month</a>)</p> <h2>1. Live as Simply as Possible</h2> <p>&quot;Living simply&quot; means something different to everyone. But, for many of us, it conjures images of deprivation &mdash; of letting go of things that we love. The truth is, though, that you can keep many of the things you love, by living more simply (and cheaply) in other areas of your life.</p> <p>For instance, you may love gourmet food, but not care so much about clothes. You could choose to buy your clothes at a thrift or consignment store, while spending a bit more on food. Still, that doesn't give you license to <em>overspend</em> on food &mdash; and you still need to cut back on shopping or other areas for this method to work.</p> <p>People who save a lot of money do just this: They cut back on the things that aren't important to them, and save that money instead. You might be surprised at how much you spend on things that just don't really matter to you.</p> <h2>2. Remember That Every Little Bit Adds Up</h2> <p>If you only have a few dollars a week to save, it can feel easier to buy a few lattes than to put that money away. However (assuming an 8% return), saving only $15 a week for 20 years will get you $62,183. If you can put away $30, you'll end up with $124,365.</p> <p>Is that enough to retire on? No, but it's also nothing to sneeze at. Imagine giving your child or grandchild that money on their 25th birthday, or using it to buy a new home.</p> <p>People who have a ton of savings have realized that every little bit helps. They might sell things on eBay, do mystery shopping on the side, open bank accounts that offer free money as incentives, or any number of other things. They don't talk themselves out of saving this money, because they've looked at how it multiplies.</p> <h2>3. Grab Free Money</h2> <p>Most employers offer some sort of matching on their retirement accounts, and many also offer things like stock options or other investment incentives. Essentially, this is free money that they are giving you simply because you work for them.</p> <p>The hard part for some people is that most employers require you to contribute a certain percentage of your salary to these investments before you qualify for the match. If you're already feeling like you don't have enough money, it can be hard to talk yourself into seeing less in each paycheck.</p> <p>People with a ton of money saved have almost always taken advantage of these offers, though. They know that free money doesn't come around every day, and they take a long view regarding their own funds. They would rather have more money later than get their hands on that cash now, even if they have to live more simply at present in order to achieve that.</p> <h2>4. Plan How to Spend and Save</h2> <p>If the word &quot;budget&quot; makes you want to run and hide, you are not alone. We tend to think that budgets are restricting and that they'll ruin our fun. Instead, try to think of your budget as a tool for freedom. If you keep to it, you will know exactly how much you can spend and still achieve your long-term savings goals.</p> <p>People who save a ton know where their money is going. They know what their bills and other financial obligations are, and they ensure they can meet those and still put a little away for the future. They also live without financial fear, because they know that they have enough for everything that's important to them.</p> <h2>5. Understand How the Brain Perceives Time</h2> <p>Saving money requires you to be able to overcome the desire to spend money intended for savings on other things. To do that, you have to understand how your brain works. Not only do you need to understand how advertising influences you, but it helps to understand that, sometimes, when a goal is far off, your brain lies to you by making you believe that what happens today is more important.</p> <p>Most people with high levels of savings listen to their reason and look at the numbers before they make financial decisions. They know that the way they perceive things can be flawed, and so they constantly return to logic and data. Some even know that, when working toward a long-term goal, the longer you work, the further away the goal seems.</p> <p>Get to know the intricacies of your own brain. If, for instance, you grew up in poverty, you may be particularly sensitive to any sense of want or lacking and tend to spend more when you feel deprived. Knowing this about yourself will empower your choices, so that you can overcome your gut reaction and make smart financial choices.</p> <p><em>How do you talk yourself out of saving? What will you start doing today to save more?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/sarah-winfrey">Sarah Winfrey</a> of <a href="http://www.wisebread.com/5-things-successful-savers-do">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/4-money-resolutions-you-should-skip-this-year">4 Money Resolutions You Should Skip This Year</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-not-to-freeze-for-nearly-free">How Not To Freeze For Nearly Free</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/windows-phone-7-giveaway">Windows Phone 7 &amp; XBox Live Gold Membership Giveaway From Wise Bread</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/51-uses-for-coca-cola-the-ultimate-list">51 Uses for Coca-Cola – the Ultimate List</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/the-6-biggest-financial-decisions-in-your-20s">The 6 Biggest Financial Decisions in Your 20s</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Frugal Living money goals retirement save Thu, 19 Feb 2015 16:00:09 +0000 Sarah Winfrey 1299653 at http://www.wisebread.com 5 Reasons to Fire Your Financial Adviser Soon http://www.wisebread.com/5-reasons-to-fire-your-financial-adviser-soon <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-reasons-to-fire-your-financial-adviser-soon" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/woman-in-charge.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>As&nbsp;2014 gives way to 2015, you&rsquo;ll likely be reviewing your investment results for the year, and looking ahead to this year and beyond. So here&rsquo;s a question you may want to ask: Should I fire my&nbsp;<a href="http://www.nextavenue.org/article/2012-08/evaluating-your-financial-advisor">financial adviser</a>?<br /> &nbsp;<br /> That may sound like a nutty question, since the stock market has been gangbusters, with a positive year for the sixth year in a row. That performance doesn&rsquo;t necessarily mean your money pro has delivered enough value to justify your keeping him or her, though.<br /> &nbsp;<br /> Below are five questions you&rsquo;ll want to ask to help you determine whether you should give your adviser the heave-ho sooner rather than later. If you answer &ldquo;yes&rdquo; to any of them, it&rsquo;s time to look for a replacement.</p> <p>(<strong>MORE</strong>:&nbsp;<a href="http://www.nextavenue.org/article/2013-10/how-find-financial-advice-you-can-trust">How to Find Financial Advice You Can Trust</a>)<br /> &nbsp;<br /> <strong>Question 1: Did you receive a year-end performance report?&nbsp;</strong><br /> &nbsp;<br /> No report?&nbsp; Fire your adviser.<br /> &nbsp;<br /> Real advisers provide performance reports. Financial&nbsp;<em>salesmen</em>&nbsp;don&rsquo;t. Their sales licenses do not permit them to provide this type of ongoing reporting.<br /> &nbsp;<br /> <strong>Question 2:</strong>&nbsp;&nbsp;<strong>Did your adviser provide a report that disclosed all the expenses deducted from your investment accounts?</strong><br /> &nbsp;<br /> No? Fire your adviser for withholding information from you. You can&rsquo;t trust an adviser who doesn&rsquo;t display full transparency.</p> <p>(<strong>MORE</strong>:&nbsp;<a href="http://www.nextavenue.org/article/2012-08/evaluating-your-financial-advisor">Evaluating Your Financial Adviser</a>)</p> <p><strong>Question 3. At some point, the stock market will have a correction (less than a 15 percent loss and six months of duration) or turn into a bear market (more than a 15 percent loss and six months of duration). Does your adviser have a strategy for minimizing your risk of large losses?</strong><br /> &nbsp;<br /> No plan? Fire the adviser. Select one who can help you preserve your assets during a market that produces negative returns.<br /> &nbsp;<br /> <strong>Question 4: Has your adviser provided a document certifying that he or she is acting in a fiduciary capacity when providing financial advice and services?</strong><br /> &nbsp;<br /> No document? Fire the adviser.</p> <p>(<strong>MORE</strong>:&nbsp;<a href="http://www.nextavenue.org/article/2012-03/when-your-financial-adviser-guessing">When Your Financial Adviser Is Guessing</a>)<br /> &nbsp;<br /> Fiduciaries are held to the highest ethical standards in the financial service industry. They&rsquo;re&nbsp;<em>required</em>&nbsp;to put your financial interests ahead of their own. Non-fiduciaries are salesmen who are held to lower ethical standards that don&rsquo;t require them to put your interests first.<br /> &nbsp;<br /> <strong>Question 5: The financial services industry is riddled with conflicts of interest. Has your adviser provided a written statement saying that his or her advice is free of any potential conflicts of interest that could damage your financial interests?</strong><br /> &nbsp;<br /> Fire any adviser who refuses to provide this statement. You don&rsquo;t have to know what he or she is hiding or why. You just have to know there&rsquo;s the potential to damage you.<br /> &nbsp;<br /> Conflicts of interest are not obvious or easy to detect. In most cases, they&rsquo;re designed to achieve one goal: maximize the revenue of the seller. They are extremely dangerous because Wall Street&rsquo;s marketing experts know how to package toxic products and convince you that they are safe investments. Some banks and insurers sell inferior products with excessive expenses that maximize their revenues, profits, and share prices.<br /> &nbsp;<br /> The most dangerous conflict is from an unscrupulous, but friendly adviser who develops a personal relationship with you. Once trust is established, such advisers can sell customers the financial products that make them and their firms the most money. The most frequent lament from Bernie Madoff&rsquo;s clients was: &ldquo;I thought he was my friend.&rdquo;<br /> &nbsp;<br /> Always remember: the investment of your assets should be based on a&nbsp;<em>business</em>&nbsp;relationship, not a personal relationship. Fire advisers who want to be judged on their relationship skills, not their results and transparency.</p> <div class="field field-type-text field-field-blog-teaser"> <div class="field-items"> <div class="field-item odd"> Many of Bernie Madoff&#039;s clients said &quot;I thought he was my friend.&quot; Find out if your adviser is a friendly, but unscrupulous salesman and not the ethical adviser he should be. </div> </div> </div> <div class="field field-type-text field-field-guestpost-blurb"> <div class="field-label">Guest Post Blurb:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <p><em>Jack Waymire spent 28 years in the financial services industry. He is the founder of </em><a href="http://www.paladinregistry.com/"><em>Paladin Research and Registry</em></a><em>, which provides free tools and information to investors who use financial advisers. Follow him on Twitter </em><a href="https://twitter.com/PaladinRegistry"><em>@PaladinRegistry</em></a><em> or connect with him on </em><a href="https://plus.google.com/+JackWaymire/posts"><em>Google+</em></a><em>.&nbsp;<em style="color: rgb(0, 0, 0); font-family: Arial, Helvetica, sans-serif; font-size: 12.7272720336914px; line-height: 1.5;">Check out more great articles from PBS's </em><a href="http://www.nextavenue.org"><em>Next Avenue</em></a>:</em></p> <ul> <li><a href="http://www.nextavenue.org/article/2014-07/27-ways-trick-yourself-saving-money">27 Ways To Tricking Yourself Into Saving Money</a></li> <li><a href="http://www.nextavenue.org/article/2012-07/biggest-retirement-mistake-boomers-make-and-how-avoid-it">The Biggest Retirement Mistakes Boomers Make</a>&nbsp;</li> <li><a href="http://www.nextavenue.org/article/2014-11/3-retirement-rules-thumb-really-work">3 Retirement Rules of Thumb that Really Work</a></li> </ul> </div> </div> </div> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/next-avenue">Next Avenue</a> of <a href="http://www.wisebread.com/5-reasons-to-fire-your-financial-adviser-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-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/7-occasions-when-you-should-definitely-hire-a-financial-advisor">7 Occasions When You Should Definitely Hire a Financial Advisor</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/is-this-hidden-cost-sapping-your-retirement-savings">Is This Hidden Cost Sapping Your Retirement Savings?</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/dont-know-what-annuities-are-you-might-be-missing-out">Don&#039;t Know What Annuities Are? You Might Be Missing Out</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/intimidated-by-retirement-investing-get-professional-help">Intimidated by Retirement Investing? Get Professional Help!</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-ways-to-boost-your-odds-of-retiring-early">5 Ways to Boost Your Odds of Retiring Early</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment Retirement financial adviser financial planning next avenue retirement Fri, 16 Jan 2015 18:00:08 +0000 Next Avenue 1280353 at http://www.wisebread.com 4 Exciting World Cities You Can Afford to Retire In http://www.wisebread.com/x-exciting-world-cities-you-can-afford-to-retire-in <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/x-exciting-world-cities-you-can-afford-to-retire-in" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/iStock_000046390376_Double.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="145" /></a> </div> </div> </div> <p>Hello pension, goodbye tension!</p> <p>You've worked hard, so it makes perfect sense to reward yourself in your retirement years. For some people, the easiest way to afford a comfortable retirement is to jump on a plane and go abroad. (See also: <a href="http://www.wisebread.com/this-is-the-basic-intro-to-having-a-retirement-fund-that-everyone-needs-to-read?ref=seealso">This Is the Basic Intro to Having a Retirement Fund That Everyone Needs to Read</a>)</p> <p>Living better for less, having access to generous tax breaks, and enjoying beautiful locales and ideal weather conditions are some of the benefits of living abroad. Here are four international cities to consider retiring in.</p> <h2>1. Panama City, Panama</h2> <p><img src="/files/fruganomics/u5170/panama.jpg" width="604" height="350" alt="" /></p> <p>When considering retiring abroad, most people think that they have to travel halfway across the world to find the perfect spot. Panama City proves that this is not always the case. Located just a short two and half hour flight from Miami, Panama City has nonstop flight options from four other U.S. cities, such as Atlanta, Denver, Houston, and Newark. In fact, it's such a hot destination for retirees that the <a href="https://hub.united.com/en-us/news/company-operations/pages/united-nonstop-service-den-pty.aspx">Denver flight</a>&nbsp;started in December 2014 to accommodate more U.S. travelers.</p> <p>Panama allows U.S. retirees with a Social Security pension of at least $1,000 per month to become permanent residents. <a href="http://internationalliving.com/countries/panama/retire/">Benefits from this visa program</a> include 50% off entertainment (such as movies and sporting events), 25% off airline tickets, 15% off hospital bills, and 50% off closing costs for home loans. Once you qualify for Panama's &quot;pensionado&quot; visa program, you never have to renew your status.</p> <h2>2. Cuenca, Ecuador</h2> <p><img width="605" height="340" src="/files/fruganomics/u5123/cuenca%20ecuador.jpg" alt="" /></p> <p>Cuenca offers several advantages to U.S. retirees, including the fact that Ecuador's official currency is the U.S. dollar. This means that you don't have to worry about conversion rates and can have an easier time budgeting expenses.</p> <p>Another major plus is Cuenca's low cost living. English-speaking retired couples in Cuenca report living comfortably for about&nbsp;<a href="http://internationalliving.com/2014/01/the-best-places-to-retire-2014/">$1,500 to $1,800 a month</a>. Some publications report the average monthly rent around $300 to $400. Given the small size of the city, you don't need to buy a car. Traveling by taxi is about $2 to $3 per trip. Plus, retirees can get back the&nbsp;<a href="http://www.josephle.com/blog/how-to-get-your-vat-value-added-tax-refund-in-ecuador-for-foreign-tourists">12% value added tax</a> on qualifying goods and services purchased in Ecuador.</p> <p>The weather is also great. Cuenca is located in the sierra (highlands) region and maintains an average daytime temperature of 75 degrees Fahrenheit. This spring-like climate minimizes your need for air conditioning and heating, effectively reducing your electricity bill.</p> <p>History and culture buffs love that Cuenca is a <a href="http://whc.unesco.org/en/list/863">UNESCO World Heritage Trust site</a>. Surrounded by Spanish colonial architecture, Cuenca offers rich intellectual and artistic experiences year round. Additionally, there are several opportunities for domestic travel. Ecuador has a very diverse geography and offers beaches (such as Salinas and Manglaralto), islands (the famous Galapagos Islands), rainforests, and much more.</p> <h2>3. Malaga, Spain</h2> <p><img src="/files/fruganomics/u5170/malaga.jpg" width="604" height="350" alt="" /></p> <p>The ongoing economic woes of the European Union have made retiring in the Old World suddenly a more feasible prospect for American retirees. Spain stands out from other European nations because it offers affordable real estate that can compete with prices found in Latin America. For example, you can find a one-bedroom apartment in Malaga's historic center <a href="http://internationalliving.com/2014/12/affordable-coastal-living-in-malaga-enjoy-a-high-quality-of-life-for-less-in-one-of-spains-best-value-cities/">starting at $182,000</a>. Or, you can rent a nice place for about&nbsp;<a href="http://www.cbsnews.com/media/worlds-10-best-cities-to-retire-on-a-budget/2/">$950 per month</a>.</p> <p>Besides its attractive real estate market and <a href="http://www.numbeo.com/cost-of-living/city_result.jsp?country=Spain&amp;city=Malaga">low cost of living</a>, Malaga provides retirees a great balance between big city life and laidback charm. The city is chock-full of art installations and exhibitions &mdash; after all, the world-famous artist Picasso was born there. Malaga is also the gateway to the Costa del Sol (literally, the &quot;Coast of the Sun&quot;), which offers several beaches within driving distance.</p> <p>Malaga's cuisine has Spanish, Jewish, and Arabic influences. This eclectic mix makes eating in Malaga a great experience for foodies. On long summer evenings, you can enjoy great food in outdoor restaurants well past midnight.</p> <h2>4. Penang Island, Malaysia</h2> <p><img src="/files/fruganomics/u5170/malaysia.jpg" width="604" height="350" alt="" /></p> <p>If your idea of retiring abroad involves exotic destinations, then Penang Island in Malaysia may be the right choice for you. Just like Panama, Malaysia offers a visa pension program (known as <a href="http://www.mm2h.gov.my">Malaysia My Second Home</a>, renewable every five to 10 years) that offers several benefits, such as help for importing your car and household items for virtually nothing, transporting your pet, and hiring a live-in housekeeper.</p> <p>English is the official second language of Malaysia, facilitating communication. There are plenty of English-speaking locals and the estimated expat population is above 40,000, according to expat organizations such as the <a href="http://www.klamerican.com">American Association of Malaysia</a>.</p> <p>Hospital facilities in Malaysia have such an excellent reputation that &quot;medical tourism&quot; is a driving economic force. Retirees report that many doctors and dentists are trained in the U.S. or UK and that appointments cost as little as $11.</p> <p>Retiring abroad isn't for everyone. It requires a love for adventure and a passion for the lifestyle of your retirement haven. Before making a permanent move overseas, consider spending at least three to six months visiting. If the benefits keep you charmed during that trial period, you can be confident you're making the right decision.</p> <p><em>Are you planning to retire abroad? Where?</em></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/x-exciting-world-cities-you-can-afford-to-retire-in">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/5-incredible-places-to-retire-abroad-that-anyone-can-afford">5 Incredible Places to Retire Abroad That Anyone Can Afford</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/are-you-on-this-list-of-cushiest-retirement-jobs">Are YOU on This List of Cushiest Retirement Jobs?</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/just-saving-isnt-enough-how-cash-flow-allocation-helps-you-retire">Just Saving Isn&#039;t Enough: How Cash Flow Allocation Helps You Retire</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-things-you-might-do-on-your-first-day-of-retirement">6 Things You Might Do on Your First Day of 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/if-you-want-your-401k-to-grow-stop-doing-these-6-things">If You Want Your 401K to Grow, Stop Doing These 6 Things</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Career and Income Retirement retirement retiring abroad travel Fri, 09 Jan 2015 14:00:07 +0000 Damian Davila 1277447 at http://www.wisebread.com 5 Dumb Investments Smart People Make http://www.wisebread.com/5-dumb-investments-smart-people-make <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-dumb-investments-smart-people-make" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/iStock_000032779780_XXXLarge.jpg" alt="stressed businessman" title="stressed businessman" class="imagecache imagecache-250w" width="250" height="145" /></a> </div> </div> </div> <p>Investing is complicated enough. Don't make it harder by making decisions that are just plain dumb. Here are five of the dumbest investing mistakes even smart people make. (See also: <a href="http://www.wisebread.com/5-beginning-investor-mistakes-ive-made-and-you-dont-have-to?ref=seealso">5 Beginning Investor Mistakes I've Made</a>)</p> <h2>1. Investments You Can't Afford</h2> <p>Wise money management is a step-by-step process. Two of the most important steps to take before investing are building an emergency fund stocked with three to six months' worth of essential living expenses and getting <a href="http://www.wisebread.com/taming-your-debt-aggressive-repayment-strategies">out of debt</a> (all debt except a reasonable mortgage, which is one that requires no more than 25% of your monthly gross income for the combination of your mortgage, taxes, and insurance).</p> <p>The only possible exception to the debt-free rule is when you work for a company that provides a match on money you <a href="http://www.wisebread.com/how-to-make-the-most-of-your-401K">contribute to a 401(k) plan</a>. That's such a great deal; it would be a shame to miss out. So, if you can afford to make more than the minimum payments on your debts while at the same time contributing enough to your retirement plan to take advantage of the match, do that. If you can't do both, focus on your debts first.</p> <h2>2. Investments You Don't Understand</h2> <p>Peter Lynch was one of the most famous mutual fund managers ever. He ran Fidelity's Magellan Fund from 1977 to 1990, generating average annual returns of 29%. That's an astonishing achievement.</p> <p>Lynch also had a talent for teaching others the essential to-dos and not-to-dos of investing. In one of his most famous bits of advice, he said if you can't explain an investment you're thinking about making to an 11-year-old, you don't understand it well enough to be putting your hard earned money into it.</p> <p>If you're thinking about investing in an individual stock, you should be able to explain what the company does, who its main competitors are, and why you believe it's worthy of your investment. If you're investing in a mutual fund or exchange-traded fund, you should be able to explain its overarching strategy and underlying investments. And you should be able to do this in language that would make sense to a fifth-grader.</p> <h2>3. Investments That Don't Match Your Time Frame and Temperament</h2> <p>It's best to think of all of the money you have invested as a single portfolio. That means if you have $20,000 in a 401(k) and $10,000 in a Roth IRA, you have a $30,000 portfolio. The types of specific investments you hold across that portfolio should be based on an <a href="http://www.wisebread.com/the-basics-of-asset-allocation">asset allocation</a> that's appropriate for your investment time frame (typically, the amount of time you have until you plan to retire) and your investment temperament (more commonly known as your risk tolerance). There are a number of free asset allocation calculators or other tools available on the Internet for free, including <a href="http://www.mattaboutmoney.com/uploads/AssetAllocationsSummary.pdf">Morningstar's Lifetime Allocation Indexes</a>.</p> <p>Making sure your investments adhere to an asset allocation that's appropriate for you has been proven to be more important to a person's long-term investing success than the specific investments he or she holds.</p> <h2>4. Investments That Sound Too Good to Be True</h2> <p>Mentioning the name Bernie Madoff should be enough to explain what is meant by this type of dumb investment. As well-publicized as Madoff's Ponzi scandal was, a new Ponzi scheme is nevertheless discovered almost every week. Apparently, there's a large audience of people who are easily suckered into too-good-to-be-true investments.</p> <p>Anytime you hear about a &quot;can't miss&quot; investment or one &quot;guaranteed&quot; to go up by a certain percent, you shouldn't just think twice about making such an investment; you should decide right then and there it's not for you.</p> <h2>5. Investments You Think You Can Afford Not to Make</h2> <p>One of the most important ingredients for successful investing is time. While people just starting out in their career typically don't have much money to invest, that's the right time &mdash; at the latest &mdash; to start investing.</p> <p>Time is what enables you to take full advantage of compound interest. In essence, compound interest refers to interest earning interest. For example, if you invest $200 and it generates an annual return of 10%, one year later you will have earned $20 of interest. The next year, if you earn another 10%, you won't just earn another $20; you'll earn $22. That's because the $20 you earned in the first year will also earn interest. No big deal, you say? Let's take a look at an example.</p> <p>Now Ned didn't get his name by procrastinating. He's a go-getter, especially when it comes to investing. He started investing $200 per month at age 20, kept at it for 50 years, and generated an average annual return of 7%. After 10 years, Ned had invested $24,000 and earned $10,617 in interest. Nice, but nothing spectacular.</p> <p>Let's skip ahead. After 50 years, Ned had invested $120,000 &mdash; impressive unto itself. But he earned nearly $970,000 in interest. Wow! His $120,000 turned into over $1 million.</p> <p>That's what happens when compound interest is given time to work. However, if he had decided he couldn't afford to invest at such a young age and waited until he was 30 years old, he would have invested $96,000 &mdash; just $24,000 less &mdash; but his investment account would be worth about $565,000 less! The lesson? To take full advantage of the power of compound interest, start investing as soon as possible.</p> <p>It's easy to think that successful investing is only about playing a great game of offense, capturing all the market up-ticks you can. In reality, it's just as important to play a great game of defense, avoiding major mistakes such as the five highlighted above.</p> <p><em>What else would you add to the list of dumb investment mistakes?</em></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/5-dumb-investments-smart-people-make">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-13"> <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-dumb-401k-mistakes-smart-people-make">5 Dumb 401(k) Mistakes Smart People Make</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/you-may-be-putting-your-retirement-money-in-the-wrong-place">You May Be Putting Your Retirement Money in the Wrong Place</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/is-paying-off-your-mortgage-early-costing-you-money">Is Paying Off Your Mortgage Early Costing You Money?</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-ways-investing-sucks-and-why-you-should-do-it-anyway">7 Ways Investing Sucks (and Why You Should Do It Anyway)</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/4000-8000-or-even-453500-in-5-years-a-low-risk-investment-plan">$4,000, $8,000, or Even $453,500 in 5 Years: A Low-Risk Investment Plan</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment investing investing mistakes money management retirement saving Thu, 08 Jan 2015 14:00:10 +0000 Matt Bell 1277787 at http://www.wisebread.com 5 Financial Obstacles That Are Especially Tough for Women http://www.wisebread.com/5-financial-obstacles-that-are-especially-tough-for-women <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-financial-obstacles-that-are-especially-tough-for-women" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/paying-bills-86530205-small.jpg" alt="woman paying bills" title="woman paying bills" class="imagecache imagecache-250w" width="250" height="145" /></a> </div> </div> </div> <p>I love being a woman.</p> <p>I love how far we've come, all the opportunities we're seeing now, and all the potential in our future. Plus, I love the shoes&hellip; women have a fantastically broad selection of shoes to work with.</p> <p>But when it comes to money, we still seem to struggle.</p> <p>Studies show that of the 62 million of us currently in the workforce, only 45% have a plan for retirement. Even more interesting is the mindset behind that statistic. In a 2013 study by Transamerica Center for Retirement Studies, over half the baby boomer women surveyed said they didn't plan to retire at all, and would continue working after age 65. (See also: <a href="http://www.wisebread.com/why-one-third-of-americans-havent-saved-for-retirement?ref=seealso">Why One-Third of Americans Haven't Saved Enough for Retirement</a>)</p> <p>And for many women, working past retirement is their only option.</p> <p>But why is that? Why do intelligent, savvy women have such a hard time protecting themselves financially? The answer isn't always a simple one, but may well have to do with a number of factors,</p> <h2>1. Women Earn Less</h2> <p>Despite all the political movements, women still earn on average, one-third less than men. This is partially due to the long-standing wage disparities between men and women, and partially due to our own priorities. Women are <a href="http://www.pewsocialtrends.org/2013/12/11/on-pay-gap-millennial-women-near-parity-for-now/sdt-gender-and-work-12-2013-1-05/">more likely to take part-time jobs</a> or less-demanding (and therefore less profitable) positions to give them more flexibility at home.</p> <p>Women are also more likely to take off for maternity leave or to care for an elderly parent, decreasing the amount of time they're in the workforce and actively contributing to a retirement plan. This same family-first mentality also makes it harder to compete for those higher-paid positions, so we have less opportunity to increase our income.</p> <h2>2. Women Are More Financially Conservative</h2> <p>While we might be more open to new experiences than men in other aspects of our lives, we have a tendency to play it safe when it comes to taking financial risk. <a href="http://www.investopedia.com/articles/investing/031313/women-and-investing-its-style-thing.asp">Men play the stock market; we like bonds and mutual funds</a>. And that means we're seeing fewer rewards for our efforts.</p> <p>Maybe we're just wired that way or maybe it's because we're working with less and don't feel we have the luxury of playing &quot;fast and loose&quot; with our retirement. But whatever the reason, the end result is the same&hellip; we're seeing smaller returns on our investments.</p> <h2>3. We Save Less</h2> <p>According to a<a href="http://aon.mediaroom.com/2013-08-14-Aon-Hewitt-Report-Shows-Women-Lag-Behind-Men-in-Saving-for-Retirement"> 2013 Aon Hewitt study</a>, <a href="http://aon.mediaroom.com/2013-08-14-Aon-Hewitt-Report-Shows-Women-Lag-Behind-Men-in-Saving-for-Retirement">women contribute less of their salary to retirement</a> than men do, 6.9% to 7.5% respectively. That means that even when we do invest, we're doing it in smaller increments, further reducing our potential for financial growth.</p> <p>In addition, because we're more likely to take those part-time positions, we're also more likely to be working without receiving any type of employer-sponsored retirement benefits, and that means more women are on their own when it comes to saving for retirement.</p> <h2>4. Women Live Longer</h2> <p>According to the Social Security Administration, a woman turning 65 today can expect to live just past her 86 birthday. And, the CDC says, that lifespan is going to continue to grow. Men, on the other hand, don't live quite as long &mdash; on average, about 7 years less &mdash; meaning that not only do women often have fewer financial resources to work with, but we also have to rely on them for a longer period of time.</p> <h2>5. It Isn't a Priority</h2> <p>For the most part, we've evolved beyond the &quot;my husband handles the finances&quot; mentality, but does that mean that savvy financial planning is always priority number one? Yes, we know the value of saving, and yes, we're concerned about retirement, <a href="http://blogs.wsj.com/juggle/2011/12/05/study-women-multitask-more-than-men/">but those concerns are often lumped in with the gazillion other things we're busy managing</a>. And quite often, those gazillion other things take precedence. So, while we might have plans to learn more about investing or take a closer look at our 401(k) plan, we just haven't gotten around to it. But we will&hellip; really&hellip; right after we get through the holidays, finish with soccer season, bake these 40 cupcakes, help with the math homework&hellip;</p> <p>So tomorrow&hellip; Definitely, maybe tomorrow.</p> <h2>How to Make a Change</h2> <p>Okay, so now that we've painted this dismal picture, what can we do to change it?</p> <h3>Get Healthy Now</h3> <p>Since it's pretty clear that you'll need your money for a longer period of time, take actions now to improve your health and minimize the potential for illness down the road. Granted, sometimes things just &quot;happen,&quot; but there are things you can do to lessen your chances of becoming sick or disabled. Eat better, start a doctor-approved exercise program and do what you can to keep your mind active and alert. (See also: <a href="http://www.wisebread.com/dont-let-poor-health-kill-your-retirement-fund">Don't Let Poor Health Kill Your Retirement Fund</a>)</p> <p>Remember, basic necessities like rent and groceries aren't the only things you'll need to pay for in your golden years; health care expenses are more likely to increase during this time, so doing what you can now to maintain good health later is just smart.</p> <h3>Save, Save, Save</h3> <p>While you can't really give up maternity leave or your role as caregiver (nor should you have to), you can ensure that your savings don't suffer while you're out of the workforce. Opening an IRA is an easy way to continue contributing to your retirement, even if your career is on pause. Granted, that's still a challenge if you're working with less, which brings us to tip #3.</p> <h3>Learn to Negotiate</h3> <p>If your employer doesn't offer you a retirement benefit package, ask. If you think you're being paid less than you should be, start talking about a raise or promotion. Although we've gotten much better at it, women still have a tendency to &quot;take what they can get&quot; instead of negotiating for a better deal.</p> <p>So, how can you become a better negotiator?</p> <p>One of the easiest ways to improve your negotiating skills is to take time to learn what the other side really wants. According to Joyce Russell, President of Adecco Staffing U.S. and negotiations expert, Dr. Victoria Medvec, it's easy to leave money on the table (or fail to reach an agreement altogether) when we don't understand our opponent's objectives.</p> <p>Dr. Medvec suggests using a technique called <a href="http://www.forbes.com/sites/gaygaddis/2013/09/16/the-top-negotiation-trap-that-can-cost-your-business/">Multiple Equivalent Simultaneous Offers (MESO)</a> &mdash; essentially, creating three different, yet equally satisfactory offers &mdash; to gain insight about what's most important to the other side. This technique exhibits your flexibility and opens the door to more productive conversations.</p> <p>But perhaps even more importantly, women need to learn to ask. <a href="http://lenski.com/top-5-negotiation-traps-for-women/">Failing to see the opportunity for negotiation is one of the biggest traps women face</a>, according to conflict resolution expert, Tammy Lenski. Simply learning to assume that everything is negotiable gives you new perspective on your situation and flexibility in deciding how you want to improve your circumstances.</p> <h3>Know Your Finances</h3> <p>You also need to get very clear about how much money you'll actually need to retire and then find a realistic plan to help you reach that number. The idea that you'll just work past retirement to boost your savings is a nice idea, but what if you can't? What if something happens that forces you to retire before you're ready?</p> <p>Increasing the amount you save now is the only real way to counter that possibility, so up your contributions if you can and plan to sock away any windfalls that might cross your path in the future.</p> <h3>Increase Your Investing Confidence</h3> <p>And lastly, do what you can to become comfortable with a little more risk in your investments. For example, experts at Fidelity Investments cite <a href="https://www.fidelity.com/viewpoints/personal-finance/investing-tips-for-women">diversification and education as good strategies to help you overcome the fear of risk</a>. Also remember, it doesn't have to be &quot;a lot&quot; of risk&hellip; just enough to balance things out. The same studies that showed we're more conservative in our investing strategy also revealed that an &quot;all-risk&quot; portfolio isn't the way to go, either.</p> <p>In fact, from a long-term perspective, <a href="http://www.investopedia.com/financial-edge/0812/are-womens-portfolios-better-than-mens.aspx">women's portfolios tend to outperform men's investments</a> because our conservative nature allows us to hold the investment longer. Men on the other hand, tend to panic and dump the stock. This buy-and-hold mentality can pay off big if you learn to balance your &quot;safe&quot; investments with a few that offer a slightly larger payoff. You'll become more confident about investing in the process, and your portfolio will thank you for it.</p> <p><em>How are you preparing for retirement? Please share in comments!</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/kate-luther">Kate Luther</a> of <a href="http://www.wisebread.com/5-financial-obstacles-that-are-especially-tough-for-women">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-14"> <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/9-best-free-financial-learning-tools">9 Best Free Financial Learning Tools</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/21-things-that-young-adults-absolutely-need-to-know-about-money">21 Things That Young Adults Absolutely Need to Know About Money</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-dumb-401k-mistakes-smart-people-make">5 Dumb 401(k) Mistakes Smart People Make</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-personal-finance-tips-for-introverts">8 Personal Finance Tips for Introverts</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/15-personal-finance-rules-you-should-be-breaking">15 Personal Finance Rules You Should Be Breaking</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance gender and money investing retirement saving women and money Tue, 11 Nov 2014 14:00:05 +0000 Kate Luther 1253610 at http://www.wisebread.com 7 Occasions When You Should Definitely Hire a Financial Advisor http://www.wisebread.com/7-occasions-when-you-should-definitely-hire-a-financial-advisor <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-occasions-when-you-should-definitely-hire-a-financial-advisor" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/financial-advisor-153824915-small.jpg" alt="financial advisor" title="financial advisor" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Laying out a few hundred dollars for a financial advisor can seem like money down the drain if everything is going smoothly. (See also: <a href="http://www.wisebread.com/9-signs-you-need-to-fire-your-financial-planner?ref=seealso">9 Signs You Need to Fire Your Financial Planner</a>)</p> <p>Until it isn't. Life's road bumps pop up, and good and bad things that happen can lead to financial problems or opportunities that you weren't prepared for. Here are seven occasions when a financial advisor should be called in to help.</p> <h2>1. Ruinous Debt</h2> <p>We're not talking about having payments for a credit card lapse for a month, but deep debt where you're having difficulty deciding which bills to pay and which to put off each month. This is a case where you don't want to have to pay a financial advisor &mdash; whether it's a one-time fee or percentage of assets that they manage. Instead, go somewhere such as the <a href="https://www.nfcc.org/index.php">National Foundation for Credit Counseling</a> or look for <a href="http://www.usa.gov/topics/money/credit/debt/out-of-control.shtml">local nonprofit agencies for free help</a>. At the very least, get help setting up a budget.</p> <h2>2. Career Change</h2> <p>Hopefully, this is an opportunity to earn more money and therefore put more money aside in a retirement account. A financial advisor can help you pick a retirement account that's right for you.</p> <p>Young people with the potential for increasing their assets who are starting their careers should seek a financial planner, says Eric Roberge, a fee-only certified financial planner in Boston and founder of <a href="http://beyondyourhammock.com/">Beyond Your Hammock</a>. This is especially true for a single person earning at least $75,000 a year or a couple earning $150,000 because they should have more money to invest, Roberge says.</p> <h2>3. Sudden Wealth</h2> <p>An inheritance, insurance payout, lump-sum pension payment, divorce settlement, lottery winning, or any other sudden influx of new money can burn a hole in a pocket, says Mike Sena, a certified financial planner at <a href="http://www.whitestreetadvisors.com/">White Street Advisors</a> in Roswell, GA. It can be tempting to splurge a little &mdash; or a lot. Instead, seek advice on how best to use your windfall now &mdash; and for years to come.</p> <h2>4. Death in the Family</h2> <p>The death of a close relative can be a key time to get financial help. You could face tax implications or need help with estate planning, for example.</p> <p>Roberge had a client who didn't seek his advice after her father died with a $600,000 annuity she inherited, and she took some money out of the annuity. She ended up having to pay a $40,000 tax bill, which Roberge says he could have helped her avoid.</p> <h2>5. Passing on a Family Business</h2> <p>Your parents and grandparents may want you to continue running the family business when they die, but you may not. This is a conversation that a financial advisor can help with early, says <a href="http://charleskochel.com/">Charles Kochel</a>, a wealth advisor for a fee-only Registered Investment Advisor in Arkansas. Kochel specializes in helping farmers transfer the family farm from one generation to the next.</p> <p>&quot;A major concern of a large family farm is legacy planning,&quot; he says. &quot;The issue is usually lack of communication. Multigenerational farmers assume the next generation will want to come back home, after college, and manage the farm or the assumption is that farming may prove too costly.</p> <p>&quot;A series of conversations needs to take place, often emotional and uncomfortable,&quot; Kochel says. &quot;A family meeting and ongoing proactive conversations help monitor the wants and needs of the entire legacy.&quot;</p> <p>The family will likely evolve over the years, and a financial advisor can help systemize the process and create an ongoing conversation that will move the estate planning beyond a one-time event.</p> <h2>6. Big Drop in the Stock Market</h2> <p>If your portfolio includes stocks, a financial advisor can help you come up with a financial plan, and stick to it.</p> <p>&quot;Most people think they can handle their own investments, but when the stock market drops, they start second-guessing their plan,&quot; says Tyler Gray, a financial planner at <a href="http://www.sageoakfinancial.com/">Sage Oak Financial</a> in Tulsa, OK.</p> <p>In 2008-09, for example, &quot;you had a lot of people who pulled out of the market at the worst possible time because they didn't have an advisor to help them stay disciplined,&quot; Gray says. &quot;The worst part is that many of these folks never got back in the market and have missed out on a lot of growth over the last five years.&quot;</p> <h2>7. Growing Family</h2> <p>Whether you're getting married or having children, it's best to have a financial conversation ahead of time, Sena suggests. New couples merging finances or planning for a baby and all of the costs that go into raising a child should have a financial plan.</p> <p>&quot;In general, anyone who is not meeting or exceeding their life and financial goals should work with an advisor,&quot; White says. &quot;Most of us are simply too close to our money to be objective.&quot;</p> <p>For better or worse, major life events can cause people to rethink their lives and plan for the future. Planning for a financial future should be part of many major events in life.</p> <p><em>Have you ever sought advice from a financial planner? What prompted you? Was the advice worthwhile and helpful? Please share in comments!</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/aaron-crowe">Aaron Crowe</a> of <a href="http://www.wisebread.com/7-occasions-when-you-should-definitely-hire-a-financial-advisor">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-15"> <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/intimidated-by-retirement-investing-get-professional-help">Intimidated by Retirement Investing? Get Professional Help!</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/is-this-hidden-cost-sapping-your-retirement-savings">Is This Hidden Cost Sapping Your Retirement Savings?</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-reasons-to-fire-your-financial-adviser-soon">5 Reasons to Fire Your Financial Adviser Soon</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-inspiring-people-who-each-paid-off-over-100000-in-debt">5 Inspiring People Who Each Paid Off Over $100,000 in Debt</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/the-false-allure-of-compound-interest">The False Allure of Compound Interest</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management Investment Retirement debt financial planner financial planning investing retirement Mon, 03 Nov 2014 13:00:04 +0000 Aaron Crowe 1248279 at http://www.wisebread.com