Retirement http://www.wisebread.com/taxonomy/term/417/all en-US 5 Best Websites to Help You Retire Early http://www.wisebread.com/5-best-websites-to-help-you-retire-early <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-best-websites-to-help-you-retire-early" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/woman_busy_at_work_000029166448.jpg" alt="Woman using best websites for retiring early" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You've likely heard dire warnings that many Americans may never be able to retire at their current level of meager savings. But you can beat these odds and even retire early if you structure your life and finances properly. And the sound (though sometimes quirky) suggestions of online <a href="http://www.wisebread.com/6-retirement-rules-you-should-be-breaking">early retirement</a> sensations like Mr. Money Mustache can help you get there.</p> <p>If you're interested in achieving financial freedom and independent wealth at an early age, check out his website and these four other early retirement blog favorites.</p> <h2>1. Mr. Money Mustache</h2> <p>An aggressive saver and index-fund investor, Pete, aka <a href="http://www.mrmoneymustache.com/">Mr. Money Mustache</a>, and his wife retired in 2005 while in their <em>30s</em>. Frustrated with questions about his money-saving techniques, he decided to share his knowledge through his website.</p> <p>Mr. Money Mustache dissects the rationale and habits of early retirees, fights against hyper-consumption, and advances the early retirement lifestyle. He doesn't mind being viewed as different or even controversial as evidenced by articles such as &quot;What Does Your Work Truck Say About You?,&quot; &quot;Chasing Electrical Demons to Cut Your Power Bill by 80%,&quot; and &quot;Great News: You're Allowed to Have Only One Kid!&quot;</p> <p>As a (tongue-in-cheek) cult leader, he has assembled a significant number of members who bond to his fanaticism for achieving &quot;Financial Freedom Through Badassity.&quot; Learn from fellow &quot;mustachians&quot; by posing questions and exploring collective wisdom in his forum, one of the most valuable sections of this website.</p> <h2>2. FinancialMentor</h2> <p>Former hedge fund investment manager turned financial coach Todd R. Tresidder offers a wealth of resources for aspiring early retirees at <a href="http://financialmentor.com/">FinancialMentor</a>. Todd lived simply and invested smartly in his youth while working in the financial services industry, achieving millionaire status and retiring at age 35.</p> <p>Today, Todd enjoys financial freedom while mentoring others along a path of accumulating wealth, developing multiple streams of income, and experiencing the personal transformation that happens as a result of financial independence. His website contains free resources, which include retirement calculators, articles like &quot;12 Tips to Build Wealth for Early Retirement,&quot; and podcasts with financial and retirement experts, such as <a href="http://financialmentor.com/podcast/automatic-income/10653">Wade Pfau</a>, PhD, CFA, and Professor of Retirement Income with the American College of Financial Services.</p> <p>You can also discover paid resources through the site, such as Todd's 60 Minute Financial Solutions book series that includes <a href="http://www.amazon.com/gp/product/B0093CPJ9S/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=390957&amp;creativeASIN=B0093CPJ9S&amp;linkCode=as2&amp;tag=wisbre03-20&amp;linkId=DKZ5EHDTZ3MG2YLL">How Much Do I Need to Retire?</a></p> <p>Todd breaks down and simplifies complex financial topics, and, when appropriate, disavows conventional wisdom. Further, he provides you with actionable steps to achieve financial freedom focused largely on securities investing.</p> <h2>3. The Military Guide</h2> <p>Retired veteran and the author of <a href="http://www.amazon.com/gp/product/1570233195/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=390957&amp;creativeASIN=1570233195&amp;linkCode=as2&amp;tag=wisbre03-20&amp;linkId=H2GDKWHKW2AHVODI">The Military Guide to Financial Independence and Retirement</a>, Doug Nordman offers finance-related insights for the unique needs of the military community at&nbsp;<a href="http://the-military-guide.com/">The Military Guide</a> website. Doug opted for early retirement after 20 years of active service, passing up the opportunity for a bridge career involving transition to the civilian workforce.</p> <p>In his blog, Doug confesses that he made lots of mistakes in his personal financial life. Nevertheless, diligent and consistent savings, along with a military pension, allowed him to retire early. Today, he spends time surfing in Hawaii, traveling, writing, and promoting his book (royalties benefit military charities).</p> <p>His engaging and self-deprecating style allows you to learn from his experiences, as evidenced in &quot;How to Get Kicked Out of Tricare&quot; (military health care program). You can also gain knowledge to make informed decisions by considering pros and cons of various retirement-related paths through articles such as &quot;Stay for 30 or Retire at 27?&quot; which references years of service, not years of living.</p> <h2>4. Afford Anything</h2> <p>In the midst of a successful but unfulfilling career in journalism, Paula Pant decided to pursue personal and professional interests on her own terms. She became financially independent at age 30 by parlaying profits from a writing and marketing firm into $1 million worth of real estate investments, which generate passive income that sustains her lifestyle.</p> <p>At the&nbsp;<a href="http://affordanything.com/">Afford Anything</a> website, Paula writes about her business ventures and life adventures. She encourages readers to develop sources of passive income based on their strengths and interests. However, she focuses on her experiences in real estate. You can read about entering the vacation rental business as an AirBnB host, plus find guidance on buying and managing rental properties through articles such as determining if a house is a good investment.</p> <p>At her website, affording anything (though not everything) is emphasized, not necessarily early retirement. However, those who are interested in retiring before 65 should find both inspiration and instruction to become financially free as early as possible.</p> <h2>5. Go Curry Cracker</h2> <p>Supersavers and married couple Winnie and Jeremy explore the world while educating readers on the financial and location independent lifestyle through their blog, <a href="http://www.gocurrycracker.com/">Go Curry Cracker</a>. They saved more than 70% of their income for 10 years while working in traditional jobs. During this time, they built an investment portfolio that generates income for their expenses.</p> <p>At the website, you'll find tips on optimizing your tax situation (including techniques for harvesting capital gains in order to increase the cost basis of your holdings, positioning you for lower taxes in the future) and limiting your fixed expenses through techniques such as car-free living. Mainly, though, you'll get inspiration for aggressively and wisely managing your financial situation so you can enjoy your days in early retirement.</p> <p>Retiring early may be within your reach. Visit these websites to learn how to live and spend intentionally, invest wisely, avoid wealth-robbing pitfalls, and enjoy life before and during retirement.</p> <p><em>Which other early retirement online resources do you read and recommend?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/julie-rains">Julie Rains</a> of <a href="http://www.wisebread.com/5-best-websites-to-help-you-retire-early">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/i-am-doing-well-financially-now-what">I Am Doing Well Financially. Now What?</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-one-woman-retired-at-60-and-traveled-the-world">How One Woman Retired at 60 and Traveled the World</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/12-surprising-things-women-should-know-about-retirement-planning">12 Surprising Things Women Should Know About Retirement Planning</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/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-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> Retirement advice blogs finance retiring early savings websites Fri, 26 Jun 2015 11:00:10 +0000 Julie Rains 1463020 at http://www.wisebread.com 7 States With the Lowest Taxes for Retirees http://www.wisebread.com/7-states-with-the-lowest-taxes-for-retirees <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-states-with-the-lowest-taxes-for-retirees" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/island_beach_000022850516.jpg" alt="States with lowest taxes for retirees" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>For retirees living on fixed incomes, taxes can be burdensome and impact quality of life during retirement. Many <a href="http://www.wisebread.com/6-retirement-rules-you-should-be-breaking">financially savvy retirees</a> move to states like Florida, not just for the sunshine, but to reap the economic benefits of low taxation. Florida is one of seven no-income tax states and makes the list of states with a marginal federal and state tax rate of under 25%.</p> <p>Consider these seven states with the lowest retirement tax burden.</p> <h2>1. Alaska</h2> <p><img src="/files/fruganomics/u5171/bear_alaska_000034056692.jpg" width="605" height="340" alt="" /></p> <p>Sure, Alaska is a little lacking in the sun and warm weather many retirees seem to favor, but the state's lenient tax policies might make you want to pick up and move there, anyhow. State residents are exempt from retirement income tax, and only 24 of its 164 municipalities levy a property tax. And it gets better: Those 65 years and older residing within one of these 24 communities are exempt from property taxes on the first $150,000 of their home's assessed value. To top it all off, there is either no or low sales tax. Of the 107 municipalities reporting sales tax, the rate ranges from a low 1%&ndash;7% (typically 2%&ndash;5%).</p> <h2>2. Florida</h2> <p><img src="/files/fruganomics/u5171/miami_beach_florida_000037761516.jpg" width="605" height="340" alt="" /></p> <p>While Florida residents enjoy no tax on retirement income, they can't escape the burden of property taxes. Florida ranks 23 out of 50 of states with the highest property tax rates. Miami Dade County, with it's sprawling luxury oceanfront condos that attract wealthy foreign investors, ranks highest with an average 1.02% of median home value, while property taxes in densely populated Dixie County (population: 16,422) are the lowest at .51% of median home value. Residents 65 years and older qualify for a $50,000 property tax exemption on their properties. Sales taxes in Florida aren't astronomical &mdash; at 6% since 1988, but they can swing as high as 7.5%.</p> <h2>3. Nevada</h2> <p><img src="/files/fruganomics/u5171/nevada_000025827739.jpg" width="605" height="340" alt="" /></p> <p>Far removed in spirit from the glitz and glamor of the Las Vegas Strip, many retirees set their sights on the city's quieter suburbs. The state's tax burden ranks second-lowest in the nation. Nevada has no income or inheritance tax and the cost of living is relatively low compared to neighboring states. Plus, the Nevada housing market has not fully rebounded from the 2008 crisis, which means home buyers can still get a good deals.</p> <h2>4. South Dakota</h2> <p><img src="/files/fruganomics/u5171/south_dakota_000012547520.jpg" width="605" height="340" alt="" /></p> <p>The tax structure in the Midwestern state of South Dakota is one of the most favorable in the country. South Dakota does not levy a tax on retirement income, inheritances, and estates. Sales taxes are relatively low compared to other areas in the region at 4%, but it can swing as high as 6% in some municipalities. The median home price is roughly $126,000. The only downside to retiring in South Dakota is it's inclement winter weather, but it's great in the summer, especially if you love the outdoors.</p> <h2>5. Texas</h2> <p><img src="/files/fruganomics/u5171/texas_scenery_000038884690.jpg" width="605" height="340" alt="" /></p> <p>Good ole' Texas, the Lone Star State &mdash; and my hometown state. Texas is a great place to live for a number of reasons. But the number one is that there's no tax on personal income. The sales and use tax is a bit on the high-end at roughly 8.25%. Property taxes vary by county and range from $0.24 to $0.50 per $100 valuation with median home prices at $160,000 in Dallas and $158,000 in Houston. Persons 65 and older qualify for a $10,000 homestead exemption for school taxes, in addition to a $15,000 exemption for all homeowners.</p> <h2>6. Washington</h2> <p><img src="/files/fruganomics/u11/washington_000006960866.jpg" width="605" height="341" alt="" /></p> <p>Washington, with its vast terrain and beautiful landscapes, has no income tax. The sales tax rate is 6.5% &mdash; as high as 9.5% in some areas. Property taxes vary by county with King County residents paying the most &mdash; around $4,507 per year and Lewis County residents paying the least &mdash;around $474 per year. The median home value is $270,400. If you decide to make Washington your primary residence, as a person 65 and up, you could qualify for <a href="http://www.dor.wa.gov/Content/FindTaxesAndRates/PropertyTax/IncentivePrograms.aspx">additional property tax exemptions</a>.&nbsp;</p> <h2>7. Wyoming</h2> <p><img src="/files/fruganomics/u11/wyoming_000026149821.jpg" width="605" height="340" alt="" /></p> <p>Wyoming ranks first on the Tax Foundation's 2015 Business Tax Climate Index because of no tax on personal or corporate income, low sales tax of 4%, and low property tax. Median home prices are $103,000. And though the cost of living is already low, the state of Wyoming has no excise tax, which means you won't pay an additional levy on items like food and gasoline.</p> <p>Two other states worth considering are New Hampshire and Tennessee. The state of New Hampshire has no income tax and 0% sales tax, but there's a 5% tax on dividend and interest income and property taxes are the third highest in the nation. Tennessee does not impose income tax but has what's called a &quot;hall tax&quot; of 6% on dividend and interest income. And its sales tax of 7%, as high as 9.75% in some municipalities, ranks highest in the nation due to the complexity of local and special purpose taxes that are levied in addition to the sales and use tax.</p> <p><em>What low-tax retirement destinations are you considering?</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/7-states-with-the-lowest-taxes-for-retirees">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/8-reasons-why-your-retirement-cost-calculations-may-be-wrong">8 Reasons Why Your Retirement Cost Calculations May Be Wrong</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/12-things-you-didnt-know-about-retirement">12 Things You Didn&#039;t Know About Retirement</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-retirement-rules-you-should-be-breaking">6 Retirement Rules You Should Be Breaking</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-enjoy-retirement-if-you-havent-saved-enough">How to Enjoy Retirement If You Haven&#039;t Saved Enough</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/follow-these-5-steps-to-full-health-care-coverage-in-retirement">Follow These 5 Steps to Full Health Care Coverage in Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement 401(k) cost of living fixed incomes moving social security taxes Tue, 23 Jun 2015 13:00:18 +0000 Qiana Chavaia 1460740 at http://www.wisebread.com How One Woman Retired at 60 and Traveled the World http://www.wisebread.com/how-one-woman-retired-at-60-and-traveled-the-world <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-one-woman-retired-at-60-and-traveled-the-world" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/woman_hiking_000038203432.jpg" alt="Woman retired at 60 and traveled the world" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>More than half of Americans are worried they won't have <a href="http://www.wisebread.com/6-retirement-rules-you-should-be-breaking">enough money to retire</a>, according to a recent Gallup poll. Despite the dismal statistics, there are retirees today who live comfortably on their savings and live lifestyles that many would envy.</p> <p>Take Joe Stewart, for example, who retired early at age 60 and, in the last year alone, has used her newfound freedom to travel to Machu Picchu, the Galapagos Islands, and Puerto Vallarta. (She has a few more trips on her horizon, too!) According to Stewart, she never had a terribly high income. She started working when she was 16 and, at the height of her income earning years, brought in $60,000 per year. To get where she is today, she started saving early, made frugal life choices, and made the most of what she had.</p> <p>How did Stewart get to this sweet spot in life and, more importantly, how can the rest of us emulate her success?</p> <h2>Work Hard, Invest Early</h2> <p>Stewart started working when she was 16 years old and put herself through college with the help of a small scholarship. &quot;I never had a lot of money,&quot; she says, when discussing that she never felt the need to live an extravagant lifestyle. &quot;I don't spend money on expensive shoes. I shop at Ross and TJ Maxx. I always look great but I don't spend a lot of money on junk.&quot;</p> <p>Instead of splurging on high-end goods, Stewart instead focused from an early age on long-term investing and saving strategies. For those looking to build a solid retirement foundation, her footprint may be one worth following. (See also:&nbsp;<a href="http://www.wisebread.com/9-things-people-who-retire-early-do?ref=seealso">9 Things People Who Retire Early Do</a>)</p> <h2>Open an IRA and Buy a House (And Pay it Off)</h2> <p>In the early 1980s, Stewart and her now ex-husband started funding their individual retirement accounts and consistently maxed out their annual contribution limits. (See also:&nbsp;<a href="http://www.wisebread.com/10-easy-ways-to-supercharge-your-retirement?ref=seealso">10 Easy Ways to Supercharge Your Retirement</a>)</p> <p>Stewart and her ex-husband bought their first house in 1983. &quot;We didn't spend a lot of money,&quot; she says. &quot;Instead we put money into our house.&quot; They paid off the original house, bought a bigger home, and gradually increased their monthly payments.</p> <p>&quot;We paid off a $100,000 loan in six years,&quot; she says, &quot;even though we didn't make a lot of money.&quot; Stewart describes their careers as administrative in nature. In their two peak earning years, they reached the six figure mark collectively, but they spent many years below that level. (See also:&nbsp;<a href="http://www.wisebread.com/6-great-reasons-for-paying-off-the-mortgage-on-your-home?ref=seealso">6 Great Reasons for Paying Off the Mortgage on Your Home</a>)</p> <h2>Invest</h2> <p>Stewart was fortunate to receive corporate stock through a former employer, The Limited (L Brands). &quot;I'll admit I didn't have the foresight to buy the stock when I was working there,&quot; she says, explaining that it was offered as a benefit through her corporate retirement plan.</p> <p>&quot;In 1984 I owned $40,000 worth of the stock. That was a lot of money!&quot; she admits. &quot;In 1985, it was the best performing stock on the market. With that money I paid off our first house, paid for two college degrees, bought all our cars, took two trips to Europe, and remodeled our bathroom.&quot;</p> <p>&quot;I still have [some of] the stock,&quot; she says. &quot;That's the power of investing over time.&quot; Although, Stewart admits she was lucky it was such a strong performing stock. &quot;Friends will tell me they're afraid to lose money in the stock market. I say they're losing money by not being in the stock market! I lost $100,000 one year,&quot; she says, but even so, her investment is still going strong. (See also: <a href="http://www.wisebread.com/8-cheap-easy-and-not-so-obvious-ways-to-invest-in-a-companys-stock?ref=seealso">8 Cheap, Easy, and Not-So-Obvious Ways to Invest in a Company's Stock</a>)</p> <p>Although widely popular today, 401(k) plans weren't readily available to many employees until the early 1990s. In 1992, Stewart opened a plan through her employer, contributed 10% of her income, and gradually increased her contribution amount from there. (See also:&nbsp;<a href="http://www.wisebread.com/5-dumb-401k-mistakes-smart-people-make?ref=seealso">5 Dumb 401(k) Mistakes Smart People Make</a>)</p> <h2>Fund a Health Savings Account (HSA)</h2> <p>Stewart opened an HSA about two years ago and has been fully funding it ever since. She can use her HSA funds to help mitigate health care expenses as she ages.</p> <h2>Keep Expenses Low</h2> <p>Before she retired, Stewart earned about $60,000 per year. Of that, she saved about $800 per month plus her 401(k) and HSA contributions. Today her spending is at the same level as it was pre-retirement, but she's no longer saving.</p> <p>Stewart knows there's a certain freedom that comes when you're not beholden to your debts. &quot;My car is paid for, my home is paid for. My only expenses are utilities, living expenses, condo fees, and travel,&quot; she says. (See also:&nbsp;<a href="http://www.wisebread.com/73-easy-ways-to-save-money-today?ref=seealso">73 Easy Ways to Save Money Today</a>)</p> <h2>Don't Sweat Life's Road Blocks</h2> <p>Despite careful planning, life doesn't always unfold as planned. Stewart and her husband divorced in 2004. Conventional wisdom maintains that divorce can cause financial mayhem. Stewart is proof that it doesn't have to. &quot;We split our finances 50/50,&quot; she says. &quot;I took the equity from our paid off house and put it down on a condo and then paid that off within four years. The key for me was to be debt free.&quot;</p> <p>Stewart also didn't ask for alimony, even though her ex-husband's income was higher. &quot;Freedom has always been more important to me than money,&quot; she says.</p> <h2>Finally, Do What You Love</h2> <p>Stewart is so adept at keeping expenses low that her only real budget buster is travel. To compensate for the expense, she launched a small side freelance writing business. She earns about $10,000 per year, which is enough to cover the costs of her trips.</p> <p>&quot;My priority is to travel,&quot; she says. &quot;I pick up writing jobs here and there but I turn down administrative work and long-term projects.&quot; Maintaining flexibility and freedom are more important to Stewart than bringing home a higher income. (See also:&nbsp;<a href="http://www.wisebread.com/11-things-scientists-say-will-boost-your-happiness-today?ref=seealso">11 Things Scientists Say Will Boost Your Happiness Today</a>)</p> <p>As Stewart shows, one doesn't have to be financially wealthy to build a happy retirement. Plan early, make wise choices, and be consistent: those are the keys to her retirement success.</p> <p><em>What are you doing to prepare for retirement?</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/how-one-woman-retired-at-60-and-traveled-the-world">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/money-resolutions-6-ways-to-take-control-in-2013">Money Resolutions: 6 Ways to Take Control in 2013</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/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-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-much-should-you-have-saved-for-retirement-by-30-40-50">How Much Should You Have Saved for Retirement by 30? 40? 50?</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-best-websites-to-help-you-retire-early">5 Best Websites to Help You Retire Early</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-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> </ul> </div> </div> </div> </div><br/></br> Retirement early retirement investing money savings traveling Mon, 22 Jun 2015 17:00:13 +0000 Alaina Tweddale 1462827 at http://www.wisebread.com 6 Retirement Rules You Should Be Breaking http://www.wisebread.com/6-retirement-rules-you-should-be-breaking <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-retirement-rules-you-should-be-breaking" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/woman_gardening_000022104123.jpg" alt="Woman breaking common retirement rules" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Are there right and wrong ways to retire? While that's a relative question, there are retirement rules that are in your best interest to follow &mdash; and those you might want to break. Consider these six <a href="http://www.wisebread.com/8-reasons-why-your-retirement-cost-calculations-may-be-wrong">retirement rules</a> you might be better off ignoring.</p> <h2>1. Depending on a Pension or Social Security</h2> <p>Counting on a pension or Social Security to help you ride out your retirement years? That's probably not the best strategy to have, considering that very few companies still offer pensions (though you'd know if yours does) and Social Security is still in crisis (so much so that it might be bankrupt and not even exist by the time you retire). That's not to mention that inflation is likely to outpace your per-month payouts in the off chance that you do receive these income sources.</p> <p>You may need to think of other ways to fund your retirement &mdash; and it's in your best interest to start planning for it now (or better yet, <em>yesterday</em>).</p> <p>Brent Cumberford, founder of the personal-finance blog&nbsp;<a href="http://www.vosa.com">VOSA</a>, offers a few suggestions.</p> <p>&quot;Start your own retirement accounts; invest in business to generate a second &mdash; and third and fourth &mdash; stream of income; and hustle to make some extra money on the side to kick start your retirement savings,&quot; he says.</p> <p>Putting in the extra time and effort early on to pad your retirement account for later means you might actually be able to enjoy those golden years.</p> <h2>2. Withdrawing From Your Retirement Fund or Social Security Right Away</h2> <p>Even if you have plenty of money in your retirement fund (or think you do, as is the likelier scenario), that doesn't mean you should start withdrawing from it the day after your retirement party. Proceed with caution in this case and remember that you still have a long life ahead of you.</p> <p>&quot;One retirement rule that no longer makes sense is the one that suggests a 4% annual withdrawal rate on your retirement portfolio,&quot; observes personal finance expert David Bakke of MoneyCrashers. &quot;Americans are living longer these days, and if you go by that rule you might outlive your money. Your best bet is to withdraw as little as possible in the beginning and adjust your strategy as you see how things are progressing as you get acclimated to living off of your retirement money.&quot;</p> <p>Bakke says that waiting to withdrawal money from Social Security has its benefits too, as you may receive a larger annual Social Security benefit when you wait.</p> <h2>3. Going Full Retirement Because You Think You Have To</h2> <p>Just because the government says you can retire at age 65 doesn't mean that you have to resign the rest of your life to whiling away the hours. Instead &mdash; if you're still willing and able &mdash; consider semi-retirement. It's the best of both worlds really: You can still contribute to society as a part-time member of the workforce, and you can enjoy more leisure time as a result of your shorter work schedule.</p> <p>More and more older Americans are opting for semi-retirement, in fact. Some are even opting for a new career path altogether. Continuing to work at least part-time past retirement age will not only help you feel like you still have something to offer the world, but it also helps you to continue to actively build your retirement fund &mdash; or at least maintain it at its current level.</p> <p>Elle Kaplan, CEO and founder of an asset management firm, touches a bit more on the financial benefits of semi-retirement.</p> <p>&quot;How would a semi-retirement change your financial reality?&quot; she asks. &quot;Take two months and track the money coming in and going out. Keep track of what you spend and all your bills. This will give you a clear sense of where you stand. Next, figure out what your Social Security payment is going to be each month in retirement. The Social Security Administration will provide this information and tell you how much you'll get based on what age you retire. Working even a few more years can have a huge impact.&quot;</p> <h2>4. Waiting Until You're 65 to Retire</h2> <p>Retirement age is typically specified at 65 years old in the United States. But to heck with that! Wouldn't you like to retire earlier?</p> <p>Of course, you'll probably need to strike it rich &mdash; or live <em>very</em> meagerly &mdash; in order to hang up your work boots in advance of the government-issued go-ahead. But maybe not. Have you ever thought about short-term mini-retirements? Ever even heard of the concept?</p> <p>&quot;Obviously it would be awesome if everyone could earn a fortune, retire young, and travel the world, but it's not going to happen for everyone,&quot; Cumberford says. &quot;What can happen for almost everyone is short-term mini-retirements, a concept spoken about in greater detail by Tim Ferriss in&nbsp;<a href="http://www.amazon.com/gp/product/0307465357/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=390957&amp;creativeASIN=0307465357&amp;linkCode=as2&amp;tag=wisbre03-20&amp;linkId=YIR4QCCLJFO4ATW3">The 4-Hour Workweek</a>. Saving money specifically for a short sabbatical, or even just an extended vacation while keeping your current employment can typically be negotiated. Think five weeks in Southeast Asia, or a summer backpacking across Europe. With the virtually endless amount of airline and hotel points that can be earned through travel hacking, even far away places can be very affordable.&quot;</p> <p>As someone who has hosted lots of Australian guests who are allotted at least six weeks vacation every year, I'm not only envious, but also in favor of the idea of short-term mini-retirements. While they're working to live, we Americans are living to work (well into our golden years), and that's an outlook that could use some rethinking. Shouldn't we enjoy a high-quality lifestyle throughout our lifetime instead of when we're darn near dead?</p> <h2>5. Clinging to the Family Home</h2> <p>For many of us, our homes hold a lot of memories that make it hard to part with the house &mdash; even after the kids are grown and gone. But as you enter retirement, it's not a great idea to hang on to a large space with high utilities or even a mortgage that will become more and more difficult to manage as you age. The alternative is to downsize, of course, such as a smaller house or apartment, or even alternative-living situations that may suit you even more &mdash; like an RV, for instance.</p> <p>Janet Groene, author of&nbsp;<a href="http://www.amazon.com/gp/product/007178473X/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=390957&amp;creativeASIN=007178473X&amp;linkCode=as2&amp;tag=wisbre03-20&amp;linkId=P2WLK6WDV5V7MKUB">Living Aboard Your RV, 4th Edition</a>, lived in an RV for 10 years before settling in Florida, and she's a staunch advocate for the nomad lifestyle.</p> <p>&quot;By selling out and moving into an RV, retirees fulfill their dreams of travel and at the same time live comfortably in a fully equipped home on wheels while scouting for the right place to settle down in retirement,&quot; she encourages.</p> <h2>6. Heading South for the Winter</h2> <p>Snowbirding &mdash; the practice of northerners spending the winter in warmer climates and summers at home &mdash; is common among retirees. But isn't that just a little too passé for today's generation of leisure seekers? Mark Koep, founder of CampgroundViews.com, thinks so. Like Groene, he wants retirees to think about their living options and arrangements more in depth so they don't automatically relegate themselves to a lifestyle that isn't necessarily fulfilling.</p> <p>&quot;The old idea of snowbirding ignores the freedom and adventure that modern retirees seek,&quot; he says. &quot;Instead retirees should consider boondocking &mdash; camping in Bureau of Land Management and Forest Service lands for free &mdash; and discount membership clubs to travel and explore more destinations.&quot;</p> <p><em>Do you have other retirement rules we should be breaking? Let us 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/6-retirement-rules-you-should-be-breaking">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/5-ways-to-boost-your-odds-of-retiring-early">5 Ways to Boost Your Odds of Retiring Early</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-reasons-why-your-retirement-cost-calculations-may-be-wrong">8 Reasons Why Your Retirement Cost Calculations May Be Wrong</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/12-surprising-things-women-should-know-about-retirement-planning">12 Surprising Things Women Should Know About Retirement Planning</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-states-with-the-lowest-taxes-for-retirees">7 States With the Lowest Taxes for Retirees</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) pensions rules savings social security Wed, 17 Jun 2015 11:00:11 +0000 Mikey Rox 1454606 at http://www.wisebread.com 8 Reasons Why Your Retirement Cost Calculations May Be Wrong http://www.wisebread.com/8-reasons-why-your-retirement-cost-calculations-may-be-wrong <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-reasons-why-your-retirement-cost-calculations-may-be-wrong" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/retirement_piggy_bank_000018686866.jpg" alt="retirement cost calculations that might be wrong" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Saving for retirement is tricky, in part because you don't really have a clear idea of how much money you'll need when you stop working. There are many variables to consider, and a lot of our assumptions about the <a href="http://www.wisebread.com/12-surprising-things-women-should-know-about-retirement-planning">cost of retired life</a> may also be incorrect.</p> <p>The best way to deal with this uncertainty is to simply save and invest as early and as much as you can. But in the meantime, be aware of these reasons why your retirement cost calculations may be off.</p> <h2>1. Your Overall Expenses May Be Less Than You Think</h2> <p>There's a common assumption that people should save enough to &quot;maintain their current lifestyle.&quot; But the reality is that most people start to spend less as they get older. The Bureau of Labor Statistics reports that a <a href="http://www.bls.gov/cex/22014/midyear/age.pdf">person's expenses</a> peak between ages 45 and 54 at about $62,000 annually. Then, expenses start to decline. Those older than 65 spend about $42,000 a year, on average. And those older than 75 spend just $35,000 annually.</p> <h2>2. Your Might Pay Off Your Mortgage</h2> <p>When calculating your future living expenses, are you assuming that you'll eventually own your home free and clear? BLS statistics show that while only 19% of homeowners between ages 45 and 54 live mortgage-free, that figure jumps to 35% among people aged 55 to 64. Meanwhile, two-thirds of all homeowners over 75 are living free of house debt.</p> <h2>3. You Eat Less as You Age</h2> <p>While it's nice to assume that you'll be dining on lobster tail and caviar in retirement, the truth is that older Americans decrease their food expenditure as they age. A typical person at age 50 spends roughly $8,000 annually on food, according to BLS, dropping to $5,400 by age 65. Older people also dine out less. An average 50-year old will spend $3,279 on food away from home. That will drop to just over $1,300 by age 75.</p> <h2>4. You'll Drive Less</h2> <p>Think you'll be going on a plethora of road trips in retirement? Statistics show that older people actually drive less over time and spend far less on car purchases and automotive maintenance. An American's average expenditure on transportation peaks between ages 35&ndash;44 at just under $11,000 annually. That drops to $6,700 by age 65 and $4,800 by age 75.</p> <h2>5. You're Calculating Your Social Security Payments Incorrectly</h2> <p>When you use the Social Security calculator provided by the Social Security Administration's website, you will usually receive three numbers. The first is based on age 62, or early retirement. Another is based on age 66 (full retirement), and a third number is based on age 70 (maximum benefit.) To calculate your payments correctly, you must be honest about when you think you'll need to begin collecting. It's also worth noting that some observers don't even <a href="http://www.forbes.com/sites/johnwasik/2014/06/11/why-you-shouldnt-trust-social-securitys-lowball-estimate/">trust the government's calculations</a> in the first place.</p> <h2>6. Social Security Payments May Be Adjusted in the Future</h2> <p>Younger Americans may be faced with the reality that Social Security benefits may change by the time they reach retirement age. The government openly states that by 2033, payroll taxes will only cover 77 cents for every dollar of scheduled benefits. Rest assured that whatever we <em>think</em> we'll be getting in benefits by the time we retire, the reality will change between now and then.</p> <h2>7. Your Investment Returns Won't Be as High as You Assume</h2> <p>Younger investors tend to assume that the stock market will grow at an average of about 9% per year, but may forget that investment returns could be less in later years as they move to more conservative investments. As you approach retirement age, it makes sense to put more of your money in bonds, cash, and other stable vehicles. But it's important to remember that this may impact the total amount you save.</p> <h2>8. You Are Not Calculating the Correct Length of Retirement</h2> <p>There's a rule of thumb that assumes each person should plan for a 30-year retirement. But this number is based on an average, not each individual. If you have many family members that lived into their late 90s, you may need to save more to make your money last. It's also important to extend the length of your retirement if you retire at a relatively young age. Someone who retires at age 50, for instance, could see a retirement of 40 years or more.</p> <p><em>How are you calculating your retirement needs?</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/8-reasons-why-your-retirement-cost-calculations-may-be-wrong">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/6-retirement-rules-you-should-be-breaking">6 Retirement Rules You Should Be Breaking</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/dont-despair-over-small-retirement-savings">Don&#039;t Despair Over Small 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/12-surprising-things-women-should-know-about-retirement-planning">12 Surprising Things Women Should Know About Retirement Planning</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-states-with-the-lowest-taxes-for-retirees">7 States With the Lowest Taxes for Retirees</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> Retirement 401(k) expenses savings social security Mon, 08 Jun 2015 11:00:12 +0000 Tim Lemke 1444656 at http://www.wisebread.com Ask the Readers: When Do You Want to Retire? http://www.wisebread.com/ask-the-readers-when-do-you-want-to-retire <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/ask-the-readers-when-do-you-want-to-retire" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/retired_couple_000051590688.jpg" alt="Couple deciding when they want to retire" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p><em>Editor's Note: Congratulations to <a href="http://www.wisebread.com/ask-the-readers-when-do-you-want-to-retire#comment-775342">tricia</a>, Gina, and Natalie for winning this week's contest!</em></p> <p>For most people, retirement is a goal to work towards. A good number of Americans want to wait until they can receive full social security benefits, but many would prefer to enjoy retirement much sooner. And there are those who want to keep working and don't want to fully retire at all!</p> <p><strong>When do you want to retire?</strong> Are you on track for reaching your retirement goals by then? What do you want to do after you have retired?</p> <p>Tell us at what age you want to retire and we'll enter you in a drawing to win a $20 Amazon Gift Card!</p> <h2>Win 1 of 3 $20 Amazon Gift Cards</h2> <p>We're doing three giveaways &mdash; here's how you can win!</p> <h3>Mandatory Entry:</h3> <ul> <li>Post your answer in the comments below. One commenter will be randomly selected to win a $20 Amazon Gift Card!</li> </ul> <h3>For Extra Entries:</h3> <ul> <li>You can tweet about our giveaway for an extra entry. Also, our Facebook fans can get an extra entry too! Use our Rafflecopter widget for your chance to win one of the other two Amazon Gift Cards:</li> </ul> <p><a class="rcptr" rel="nofollow" data-raflid="79857dfa190" data-theme="classic" data-template="" id="rcwidget_lft2setz" href="http://www.rafflecopter.com/rafl/display/79857dfa190/">a Rafflecopter giveaway</a> </p> <script src="//widget-prime.rafflecopter.com/launch.js"></script></p> <p>If you're inspired to write a whole blog post OR you have a photo on flickr to share, please link to it in the comments or tweet it.</p> <h4>Giveaway Rules:</h4> <ul> <li>Contest ends Monday, June 8th at 11:59 p.m. Pacific. Winners will be announced after June 8th on the original post. Winners will also be contacted via email.<br /> &nbsp;</li> <li>You can enter all three drawings &mdash; once by leaving a comment, once by liking our Facebook update, and once by tweeting.<br /> &nbsp;</li> <li>This promotion is in no way sponsored, endorsed or administered, or associated with Facebook.<br /> &nbsp;</li> <li>You must be 18 and US resident to enter. Void where prohibited.</li> </ul> <p><strong>Good Luck!</strong>&nbsp;</p> <div class="field field-type-text field-field-blog-teaser"> <div class="field-items"> <div class="field-item odd"> Tell us at what age you want to retire and we&#039;ll enter you in a drawing to win a $20 Amazon Gift Card! </div> </div> </div> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/ashley-jacobs">Ashley Jacobs</a> of <a href="http://www.wisebread.com/ask-the-readers-when-do-you-want-to-retire">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/ask-the-readers-do-you-do-black-friday">Ask the Readers: Do You Do Black Friday?</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/ask-the-readers-do-you-return-gifts-chance-to-win-10">Ask the Readers: Do you Return Gifts? (Chance to Win $10!)</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/ask-the-readers-what-is-your-dream-job-0">Ask the Readers: What is Your Dream Job?</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/ask-the-readers-200-giveaway-what-does-corporate-social-responsibility-mean-to-you">Ask the Readers $200 Giveaway: What Does Corporate Social Responsibility Mean to You?</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/ask-the-readers-how-did-you-spend-your-first-paycheck">Ask the Readers: How Did You Spend Your First Paycheck?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Giveaways Retirement Ask the Readers retirement age Tue, 02 Jun 2015 15:00:11 +0000 Ashley Jacobs 1441006 at http://www.wisebread.com 5 Facts Millennials Should Know About Retirement Planning http://www.wisebread.com/5-facts-millennials-should-know-about-retirement-planning <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-facts-millennials-should-know-about-retirement-planning" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/young_group_employees_000064329039.jpg" alt="Millennials that should know facts about retirement planning" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Millennials never seem to get a break.</p> <ul> <li>14% of 25 to 34-year-olds are still living at home with their parents.<br /> &nbsp;</li> <li>In 2013, the median annual income was $30,000 and $35,000 for full-time Millennial women and Millennial men, respectively.<br /> &nbsp;</li> <li>Just 36% of Americans under the age of 35 own a home, according to the Census Bureau.</li> </ul> <p>Don't kill the messenger, but the retirement outlook for Millennials is looking a bit tougher than earlier generations'. There are clear signs that what our retirement looks like and how we save for it is much different from our grandparents' (or even parents') experience. Here are five warning signs that Millennials need to take note of.</p> <h2>1. High Student Loan Debt</h2> <p>Back in 2012, college seniors graduated with an average debt of <a href="http://ticas.org/content/pub/student-debt-and-class-2012">$29,400 per borrower</a>. That number is almost $4,000 higher for the Class of 2014. In 2014, a college graduate owes an average of <a href="http://blogs.wsj.com/numbers/congatulations-to-class-of-2014-the-most-indebted-ever-1368/">$33,000 in student loans</a>.</p> <p>To put those statistics in perspective: Only 45% of Class of 1993 graduates had debt, and their average debt was $15,000 in inflation-adjusted dollars.</p> <p>More and more Millennials are borrowing to pay for college. In 2000, 60% of graduating students had schools loans. Last year, that percentage grew to over 70%. The problem with high student loan balances is that they effectively diminish your potential to save for retirement.</p> <p>Let's assume that you graduate with a standard 10-year loan and pay $2,400 for each of those 10 years. If you were to have invested those dollars in an index fund with a 5% return compounded annually, you would have ended with $30,998.14 available in your nest egg at the end of 10 years.</p> <p>Remember that your twenties and thirties are your most important years for retirement saving because those years offer the longest timeframe to earn compounded returns. Keep those student loan balances in check.</p> <h2>2. Low Financial Literacy</h2> <p>Only 24% of Millennials are able to answer correctly four or five questions on a five-question <a href="https://www.finra.org/sites/default/files/14_0100%201_IEF_Research%20Report_CEA_3%206%2014%20%28FINAL%29_0_0.pdf">financial literacy</a> quiz. On the other hand, 48% of Baby Boomers and 55% of members of the Silent Generation are able to do that.</p> <p>While more Millennials are attending college, they are less financially literate than older generations. This low level of financial literacy makes Millennials ill-prepared to make critical financial decisions:</p> <ul> <li>Only 7% of employers offer traditional pensions plans. Forced to rely more on 401(k) plans to save for retirement, Millennials need to make many decisions, such as what funds to invest in and how much to contribute.<br /> &nbsp;</li> <li>43% of Millennials use expensive forms of borrowing, such as pawnshops and payday lenders. Only 21% of Boomers and 8% of the Silent Generation use those lending options.<br /> &nbsp;</li> <li>According to a 2012 National Financial Capability Study, 34% of Millennials engage in three or more costly credit card behaviors over a 12-month period. In contrast, only 24% of Boomers and 13% of the Silent Generation engage in such behaviors.</li> </ul> <p>Grandpa is taking you to (finance) school. Take action: Set up a meeting with a certified financial planner to develop a retirement plan, and talk with your employer about your company's retirement accounts.</p> <h2>3. Low Savings Level</h2> <p>Only 61% of Millennials label themselves &quot;savers,&quot; according to a 2013 Wells Fargo survey.</p> <p>When you're not saving for retirement, you're getting further and further away from your nest egg's goal. A common rule of thumb from financial advisors is that you should have a $1 million target for retirement.</p> <p>Consider these two scenarios:</p> <ul> <li>If you were to start putting away $361 every month at age 20 in an index fund with a 6% return, you would be about $100 short of $1 million by retirement age 65.<br /> &nbsp;</li> <li>If you were to start 20 years later at age 40 and still would like to retire by age 65 with a $1 million nest egg, you would need to put away $1,430 per month on that same retirement account.</li> </ul> <p>However, grandpa's rule of thumb of $1 million may no longer be enough. More and more registered investment advisors recommend Millennials to set a <a href="http://money.usnews.com/money/retirement/articles/2011/09/15/gen-ys-2-million-retirement-price-tag"><em>$2 million retirement goal</em></a>. The main reason is that Americans are living longer.</p> <p>The Social Security Administration projects that about 10% of 65-year-olds will even <a href="http://www.ssa.gov/planners/lifeexpectancy.html">live beyond 95</a>. Life expectancy is likely to be even higher for Millennials once they reach age 65. Assuming a 4% annual withdrawal rate, a $1 million nest egg would run out in 25 years.</p> <p>So, start maximizing your contributions to your 401(k) and take advantage of your employer's matching program, if available. In 2015, the IRS allows you to put away up to $18,000 for retirement. Once you turn age 50, you can start making catch-up contributions to get closer to your retirement goal.</p> <h2>4. Lower Starting Salary</h2> <p>More than 60% of Millennials <a href="http://time.com/?post_type=money_article&amp;p=3855869?xid=tcoshare">don't negotiate salary</a> when receiving their first job offers.</p> <p>Every single generation has heard that &quot;this is the worst possible year to graduate.&quot; At least I did when I got my Bachelor of Commerce back in 2002, then again when I received my Masters in Educational Technology in 2007, and yet again when I completed my MBA in 2009. (Disclaimer: I graduated debt free all three times!)</p> <p>Don't think that negotiating your first salary puts you at a disadvantage with other applicants:</p> <ul> <li>80% of students and grads who <a href="http://www.nerdwallet.com/blog/recent-grad/negotiating-salary-study/">negotiate a higher salary</a> are at least partially successful.<br /> &nbsp;</li> <li>90% of employers have never retracted an offer because entry-level applicant tried to negotiate salary.<br /> &nbsp;</li> <li>Only 34% of female grads negotiate salaries, while 44% of male ones do. However, both genders have the same 80% rate of success.<br /> &nbsp;</li> <li>75% of employers could raise a starting salary by 5% to 10%.</li> </ul> <p>Don't leave money on the table when negotiating salary for your first job. You'll regret it just a few years later and again during retirement.</p> <h2>5. Missing Out on Company Matches</h2> <p>Millennials are getting hit with a double whammy.</p> <ul> <li>42% of workers earning less than $40,000 per year don't take full advantage of their employer match.<br /> &nbsp;</li> <li>35% of workers age 25 and 30% of workers age 30 don't maximize their employer match.</li> </ul> <p>The average U.S. worker foregoes $1,336 per year or an extra 2.4% in retirement savings. This means, that about $24 billion in matching contributions are left on the table every year. The combination of lower income level and younger age makes Millennials more prone to miss out on contributions to their retirement accounts.</p> <p>No matter your employer's match level, it's free retirement money. If you find it difficult to meet the <a href="http://time.com/money/2791164/how-much-income-to-save-for-retirement/">10%&ndash;15% suggested contribution</a> to your retirement account, then contribute enough so that your employer match fills the gap.</p> <h2>The Bottom Line</h2> <p>Meeting your retirement goal may feel overwhelming at times. These statistics should be a well-needed wake up call to realize that saving for retirement is not like it used to be. They're just a diagnostic &mdash; not a prognostic.</p> <p>Still, Millennials should be happy that we have more time to save for retirement than older generations. Let's take advantage of this edge and take corrective steps now.</p> <p><em>Millennials, what are you doing to save for retirement?</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-facts-millennials-should-know-about-retirement-planning">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/12-surprising-things-women-should-know-about-retirement-planning">12 Surprising Things Women Should Know About Retirement Planning</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-ways-to-boost-your-odds-of-retiring-early">5 Ways to Boost Your Odds of Retiring Early</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-reasons-why-your-retirement-cost-calculations-may-be-wrong">8 Reasons Why Your Retirement Cost Calculations May Be Wrong</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-retirement-rules-you-should-be-breaking">6 Retirement Rules You Should Be Breaking</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-start-saving-for-retirement-at-40">How to Start Saving for Retirement at 40+</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement 401(k) debt financial literacy millennials savings Thu, 28 May 2015 21:00:08 +0000 Damian Davila 1438459 at http://www.wisebread.com Follow These 5 Steps to Full Health Care Coverage in Retirement http://www.wisebread.com/follow-these-5-steps-to-full-health-care-coverage-in-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/follow-these-5-steps-to-full-health-care-coverage-in-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/money_medicine_000044118320.jpg" alt="How to avoid healthcare shortage in retirement" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Are you sure you'll be able to afford healthcare in retirement? Positive?</p> <p>Consider this: A recent report analyzing the rising <a href="http://www.hvsfinancial.com/PublicFiles/Data_Release.pdf">out-of-pocket Medicare costs</a> estimated that people retiring 10 years from now will spend $9 of every $10 they receive from Social Security on health care, in the form of copays, supplemental insurance premiums, prescription drugs, and things not covered by Medicare such as visits to the dentist.</p> <p>This means that the cost of medical care is something everyone should factor into their <a href="http://www.wisebread.com/12-surprising-things-women-should-know-about-retirement-planning">retirement saving plan</a>. But this is no ordinary expense &mdash; there are specific strategies for saving for health care that can put you in a much better position in your golden years.</p> <h2>1. Maximize Your Social Security Benefits</h2> <p>&quot;The number one thing people should do &mdash; most people aren't aware of this &mdash; is optimize Social Security,&quot; says Ron Mastrogiovanni, founder of HealthView Services, which issued the alarming report.</p> <p>The main way to maximize benefits is to wait as long as possible to start receiving Social Security. A couple retiring 10 years from now at age 65 will receive $142,000 less in lifetime benefits than they would if they worked until age 67, he said.</p> <p>&quot;If you're capable of working, why would you throw away $142,000?&quot; Mastrogiovanni says.</p> <h2>2. Start a Roth IRA</h2> <p>&quot;Under Medicare, they have something called means testing; the more you earn, the more you pay,&quot; Mastrogiovanni says. &quot;Here's the kicker: Those income brackets are not indexed to inflation.&quot; That means that if the government doesn't adjust the income at which retirees are considered affluent, many middle earners of today will end up paying more once they retire.</p> <p>But not all retirement income is counted in this calculation. Money drawn from a traditional 401(k) counts, but money drawn from a Roth IRA or a Roth 401(k) doesn't. So if your regular 401(k) is building up towards a high income in retirement, you might want to divert some of your contributions to a Roth, or convert the account to a Roth, to keep your income below the level where you'll be considered an affluent retiree.</p> <h2>3. Consider a Health Savings Account</h2> <p>Health savings accounts are not generally considered a retirement savings vehicle &mdash; they are meant to help people pay high medical care deductibles with certain insurance plans. But Medicare expert Katy Votava advocates saving excess contributions to HSAs for retirement health care needs.</p> <p>&quot;You can put in significant money and it grows tax free. Most people don't need to spend their full health savings account every year to meet their full health insurance needs,&quot; Votava says.</p> <h2>4. Consider Long-Term Care Insurance</h2> <p>The high out-of-pocket costs outlined in the HealthView report do not include the cost of nursing homes or other long-term care, but those are obviously a major concern when looking at lifetime health care costs. Some advisors recommend purchasing insurance that would protect your savings if you go to a nursing home, while others warn against it. This Wall Street Journal report explores both sides of the <a href="http://www.wsj.com/articles/SB10001424052702303425504577352031401783756">long-term care insurance issue</a>.</p> <h2>5. Purchase the Right Supplemental Plan</h2> <p>Your parents or grandparents may not have had to pay anything out of pocket once they qualified for Medicare, but people retiring now and in the future need <a href="http://www.medicare.gov/supplement-other-insurance/medigap/whats-medigap.html">supplemental insurance</a> to cover the copayments, coinsurance, and deductibles that Medicare doesn't cover. You'll also have to pay for a <a href="http://www.medicare.gov/supplement-other-insurance/medigap/medigap-and-part-d/medigap-plans-and-part-d.html">prescription drug plan</a>. Choosing the right plan can be so complicated that many people turn to consultants like Votava to help them figure out which to pick. Before signing up for a plan, make sure it covers your doctors and your medications, because not all plans cover everything, Votava warns.</p> <p><em>What are you doing to ensure sufficient health care coverage in retirement?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/carrie-kirby">Carrie Kirby</a> of <a href="http://www.wisebread.com/follow-these-5-steps-to-full-health-care-coverage-in-retirement">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-8"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-states-with-the-lowest-taxes-for-retirees">7 States With the Lowest Taxes for Retirees</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-reasons-why-your-retirement-cost-calculations-may-be-wrong">8 Reasons Why Your Retirement Cost Calculations May Be Wrong</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/12-things-you-didnt-know-about-retirement">12 Things You Didn&#039;t Know About Retirement</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-enjoy-retirement-if-you-havent-saved-enough">How to Enjoy Retirement If You Haven&#039;t Saved Enough</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/6-retirement-rules-you-should-be-breaking">6 Retirement Rules You Should Be Breaking</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Insurance Retirement 401(k) healthcare HSA medical social security Thu, 14 May 2015 15:00:09 +0000 Carrie Kirby 1416618 at http://www.wisebread.com How to Enjoy Retirement If You Haven't Saved Enough http://www.wisebread.com/how-to-enjoy-retirement-if-you-havent-saved-enough <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-enjoy-retirement-if-you-havent-saved-enough" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/retired_couple_vacation_000038250840.jpg" alt="Retired couple taking cheap vacation" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Are you ready to retire, but haven't managed to save enough yet?</p> <p>In fact, the U.S. Census Bureau of Labor Statistics says that although the average retirement age is 62, many seniors are retiring at age 65 or older, and a large percentage &mdash; roughly 80% &mdash; still will not have saved enough by then. Of them, about a third will depend entirely on Social Security benefits. If you're within five years of calling it quits but haven't saved enough to retire, here are a few steps that may bring retirement closer within reach.</p> <h2>1. Wait Until You're 65</h2> <p>Wait until you're age 65 or older before you start collecting Social Security benefits, as the longer you wait, the larger your benefit. Use Bankrate's Social Security <a href="http://www.bankrate.com/calculators/retirement/social-security-benefits-calculator.aspx">benefit calculator</a> to estimate your future payments.</p> <h2>2. Don't Wait to Downsize</h2> <p>Consider selling your home and investing the profits. Downsize to a lower-cost senior living community or condominium in an area where your property taxes will be affordable. You can also inquire about school parcel tax exemptions that allow seniors to apply for tax exemption from taxes imposed by local school districts.</p> <h2>3. Move to a No Tax State</h2> <p>Move to a state with no income tax on pension, Social Security, or dividend income. Florida, Nevada, New Hampshire, Pennsylvania, Washington, and Wyoming are among the states that do not tax that income.</p> <h2>4. Accept Government-Sponsored Medical Insurance</h2> <p>Medicare provides adequate health insurance coverage for doctor's visits, emergency care, assisted living, etc., but does not cover prescription drugs, dental, or vision care. For this, you will need add-on coverage like those offered by Medicare Advantage and Supplemental Insurance (Medigap). Consult with your insurance provider prior to retirement to ensure you can afford proper health insurance coverage. If you can't, inquire about government subsidies or senior plans offered by the likes of <a href="http://www.aarp.org/">AARP</a>.</p> <h2>5. Max-Out Retirement Accounts</h2> <p>By now you should be fully funding all of your retirement accounts and making any catch-up contributions. The 2015 catch-up contributions for IRAs total an additional $1,000 ($6,500) and $6,000 ($24,000) for your 401(k). As they are the most tax advantageous, make sure you are fully funding these accounts over the next few years preceding your retirement.</p> <h2>6. Diversify Using Bonds and ETFs</h2> <p>As you are nearing retirement age, you will want to gradually rebalance your portfolio so that it has less of volatile investments like stocks, and more of safer investments such as bonds and exchange-traded funds, or ETFs.</p> <h2>7. Join AARP</h2> <p>The benefits of joining AARP are endless. For those unfamiliar, AARP is the popular senior citizens advocacy group. The annual membership fee is only $16 and is discounted even further when years are bought in bulk. Members receive invaluable discounts on dining, travel, roadside assistance, auto insurance, health benefits, and more. This is a program that's definitely well worth signing up for.</p> <p><em>Are you prepared for retirement? What are you doing to get ready?</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/how-to-enjoy-retirement-if-you-havent-saved-enough">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/7-states-with-the-lowest-taxes-for-retirees">7 States With the Lowest Taxes for Retirees</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-reasons-why-your-retirement-cost-calculations-may-be-wrong">8 Reasons Why Your Retirement Cost Calculations May Be Wrong</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/12-things-you-didnt-know-about-retirement">12 Things You Didn&#039;t Know About Retirement</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-retirement-rules-you-should-be-breaking">6 Retirement Rules You Should Be Breaking</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/follow-these-5-steps-to-full-health-care-coverage-in-retirement">Follow These 5 Steps to Full Health Care Coverage in Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement 401(k) aarp investments IRAs saving money social security Fri, 01 May 2015 15:00:25 +0000 Qiana Chavaia 1400950 at http://www.wisebread.com How to Start Saving for Retirement at 40+ http://www.wisebread.com/how-to-start-saving-for-retirement-at-40 <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-start-saving-for-retirement-at-40" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/retirement_fund_jar_000020745280.jpg" alt="Retirement fund you should start adding to over 40" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Perhaps you missed the memo urging you to start saving for retirement in your 20s or 30s. Or, if your situation is anything like mine, you started a family early or didn't find your passion in life until you were in your 30s.</p> <p>Fortunately, it's not too late to start saving for retirement, because you're likely earning more today than you did a decade ago. You should be able to start saving now and still retire with a hefty nest egg. But first, you must take some essential steps.</p> <h2>1. Evaluate Your Savings Potential</h2> <p>Be realistic. Sure, we all wish we could save $5,000 per month, but can you <em>actually </em>achieve this based on your earnings and expenses? Remember, no savings amount is so small that it won't positively impact your goals. Save what you can, even if it's only a few hundred dollars per month. There are always ways to push your savings goals further by <a href="http://www.wisebread.com/the-first-step-to-budgeting">establishing a budget</a>, <a href="http://www.wisebread.com/10-great-home-based-side-business-ideas">creating a side business</a>, <a href="http://www.wisebread.com/this-is-how-you-downsize-your-home-and-start-living-a-better-life">downsizing your life</a>, or all of the above.</p> <h2>2. Set a Financial Goal</h2> <p>How much do you need to retire? Start by taking an assessment of where you are financially and where you need to be. How much money do you need to live comfortably in retirement? Do you anticipate a need for $25,000, $50,000 per year, or maybe more? It may be that you have to postpone your retirement by a few years while you make a few adjustments and implement a quick-fix plan to catch up with your goals.</p> <h2>3. Create a Plan</h2> <p>Any good financial plan should begin with an honest assessment of your goals and the steps you'll take to get there. Try using a <a href="http://www.aarp.org/work/retirement-planning/retirement_calculator.html">retirement calculator</a> to determine how much you'll need to save each month in order to retire by your desired date.</p> <p>You may be surprised by how much money you'll need to save, but don't fear the challenge. Consider working longer, finding a second income, or downsizing your lifestyle to enable progress toward your savings goals.</p> <h2>4. Bias Your Portfolio Towards Stocks</h2> <p>Because stocks offer higher returns than other, less aggressive investments, and you're playing a bit of catch-up, you will want to take on more risk by favoring these over bonds or other more conservative investments. As you grow nearer to retirement, you can take a more conservative investment approach.</p> <h2>5. Max-Out Retirement Accounts and Catch-Up Contributions</h2> <p>Max out your retirement accounts. Take full advantage of employer-sponsored accounts whether your employer offers match contributions, or not. If you don't already have one, open an Individual Retirement Account (IRA) and make the maximum contribution of $5,500. At retirement, given your account has been open at least five years, you can make withdrawals absolutely tax-free.</p> <p>If you're over the age of 50, the government allows you to make <a href="http://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/Retirement-Topics-Catch-Up-Contributions">catch-up contributions</a> to your 401(k) or IRA plans, thus enabling you to save even more tax-deferred money for retirement.</p> <h2>6. Take Your Retirement Savings to New Heights</h2> <p>If you need to boost your savings in order to meet your goals, consider falling back on your business consulting skills, or any other skill you've developed throughout your career, and using it to create a second income. Freelancers, independent contractors, and small business owners can deduct many of their expenses.</p> <p>There's also a retirement savings incentive for being self-employed. The self-employed can set-up retirement accounts that allow both employer and employee contributions. For 2015, annual plan contributions for a SEP-IRA is up to $52,000, SIMPLE IRA is up to $12,500 plus an employer contribution of 3% of income, and the Solo 401(k) is up to $53,000.</p> <p>The IRS allows the self-employed to make contributions to both an IRA and 401(k). That's a lot of savings towards retirement.</p> <p><em>What steps are you taking toward retirement savings after age 40?</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/how-to-start-saving-for-retirement-at-40">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/retirement-accounts-and-money-to-spend">Retirement accounts and money to spend</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/12-surprising-things-women-should-know-about-retirement-planning">12 Surprising Things Women Should Know About Retirement Planning</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-ways-to-boost-your-odds-of-retiring-early">5 Ways to Boost Your Odds of Retiring Early</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-reasons-why-your-retirement-cost-calculations-may-be-wrong">8 Reasons Why Your Retirement Cost Calculations May Be Wrong</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/6-retirement-rules-you-should-be-breaking">6 Retirement Rules You Should Be Breaking</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement 401(k) budgeting downsizing financial planning IRAs savings stocks Tue, 28 Apr 2015 11:00:29 +0000 Qiana Chavaia 1397574 at http://www.wisebread.com 4 More Exciting, Affordable American Cities to Retire In http://www.wisebread.com/4-more-exciting-affordable-american-cities-to-retire-in <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-more-exciting-affordable-american-cities-to-retire-in" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/retired_couple_beach_000038686710.jpg" alt="Happy retired couple settling in affordable American city" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>As of February 2015, the average <a href="http://www.ssa.gov/policy/docs/quickfacts/stat_snapshot/#table2">monthly Social Security benefit</a> of a retired American worker was $1,331.44.</p> <p>This means that a couple of retirees would have about $31,954 available in annual Social Security benefits. While some people have additional savings, 26% of Americans are planning to <a href="https://www.transamericacenter.org/docs/default-source/resources/center-research/tcrs2014_sr_15th_annual_compendium.pdf">rely on Social Security</a> as their primary source of income during retirement.</p> <p>Savvy folks know that they need to plan ahead and find affordable cities to make the most out of their nest eggs. Here are four more exciting, affordable U.S. cities to retire in. (See also: <a href="http://www.wisebread.com/4-exciting-affordable-american-cities-to-retire-in?ref=seealso">4 Exciting Affordable American Cities to Retire In</a>)</p> <h2>1. Pittsburgh, Pennsylvania</h2> <p>Financial advice website Nerdwallet put Pittsburgh at the top of its 2013 list of best places for baby boomers. Since over 25% of the city's population is between the ages of 50 and 70, and 13.8% is 65 years or older, retirees can enjoy an active social life.</p> <p>Senior citizens can find affordable housing options in Pittsburgh, as the <a href="http://money.usnews.com/money/retirement/slideshows/10-best-places-to-retire-on-social-security-alone/8">median monthly mortgage payment</a> is $1,023 and the median monthly rent is $614. Getting around the city by bus, light rail (The T), or Mon Incline is free at all times for senior citizens age 65 or over that present a Pennsylvania Senior Citizen ID Card or a Medicare card at the time of fare payment.</p> <p>Pittsburgh is a great retirement destination for sports fans, because the city is home to the Pittsburgh Panthers (college athletics), Pittsburgh Penguins (hockey), and Pittsburgh Pirates (baseball), and of course, the Pittsburgh Steelers. If sports isn't your thing, you still have the 14-block Cultural District, which offers opera, theater, ballet, and live music events.</p> <h2>2. Tucson, Arizona</h2> <p>If you're part of the 26% of U.S. retirees planning to rely primarily on your Social Security check, then take a good look at the state of Arizona. The Grand Canyon State doesn't tax Social Security income.</p> <p>And it gets even better. Up to $2,500 total of military, civil-service, and Arizona state and local government pensions are also <a href="http://www.kiplinger.com/tool/retirement/T055-S001-state-by-state-guide-to-taxes-on-retirees/index.php?map=&amp;state_id=3&amp;state=Arizona">exempt from taxes</a>. Plus, Arizona has no inheritance or estate taxes. Combine these tax breaks with the fact that Tucson's <a href="http://www.forbes.com/pictures/mjf45hfje/tucson-az/">cost of living</a> is 4% below the national average and you can quickly see how Tucson is one of the most affordable American cities to retire in.</p> <p>But it isn't just about the tax savings, since there's also plenty of local fun year-round. Since 1986, this city has been home to the Tucson Folk Festival, which attracts more than 10,000 folk music lovers every year with more than 20 hours of free, live bluegrass, Irish, and old country and western music. Other popular annual events are the Tucson Rodeo (a 90-year old rodeo, also known as La Fiesta de los Vaqueros), the Tucson Meet Yourself (a celebration of folk and ethnic communities of the multinational Arizona-Sonora region), and the 4th Avenue Street Fair (taking place twice a year).</p> <p>But I think it's all about the <a href="http://www.nytimes.com/2009/08/26/dining/26unit.html?_r=0">Sonoran hot dog</a>, which people believe to have been invented in Tucson.</p> <h2>3. St. Louis, Missouri</h2> <p>In St. Louis, retirees with an annual adjusted gross income of less than $85,000 (less than $100,000 for married couples) enjoy a <a href="http://www.kiplinger.com/tool/retirement/T055-S001-state-by-state-guide-to-taxes-on-retirees/index.php?map=&amp;state_id=26&amp;state=Missouri">tax exemption</a> on their Social Security benefits. For tax purposes, residential property is assessed at 19% of fair market value, and some retirees may qualify for a property tax credit. There is no inheritance tax or estate tax.</p> <p>Baby boomers comprise about 28% of the St. Louis population for three reasons. First, the city has a low cost of living &mdash; about 16.30% lower than that of the U.S. average. Second, <a href="http://money.usnews.com/money/retirement/articles/2012/10/15/best-places-to-retire-for-under-40000?page=2">housing costs for retirees</a> are affordable, at a median of $1,186 per month for those with a mortgage, $442 for seniors with a paid-off house, and $657 monthly for senior renters. Third, St. Louis is home to the Barnes-Jewish Hospital/Washington University, a <a href="http://health.usnews.com/best-hospitals/area/mo/barnes-jewish-hospitalwashington-university-6630930">nationally-ranked hospital</a> by U.S. News in several specialities.</p> <p>But St. Louis is an exciting city for several other reasons:</p> <ul> <li>Bud Selig, baseball's outgoing commish, proclaimed St. Louis as the <a href="http://sports.yahoo.com/blogs/mlb-big-league-stew/bud-selig-proclaims-st--louis--the-best-baseball-city-193010313.html">best baseball city</a> in 2015.<br /> &nbsp;</li> <li>With the highest concentration of sports bars in the country, St. Louis stands at #6 in the list of <a href="http://www.bestplaces.net/docs/studies/manliest_cities.aspx">manliest U.S. cities</a>.<br /> &nbsp;</li> <li>St. Louis ranks #4 in a list of America's <a href="http://www.bestplaces.net/docs/studies/blockparties.aspx">best places for block parties</a>.<br /> &nbsp;</li> <li>The city operates more than 100 parks, including the Citygarden, the Tower Grove Park, and the Carondelet Park.<br /> &nbsp;</li> <li>The city is within driving distance of more than 100 wineries and more than 6,000 caves.</li> </ul> <h2>4. Cleveland, Ohio</h2> <p>Located in the Buckeye State, Cleveland provides four tax breaks to retirees:</p> <ul> <li>No state taxes on Social Security benefits;</li> <li>No inheritance tax or estate tax;</li> <li>Four tax credits for retirees; and</li> <li>Homestead exemption for qualifying homeowners at least 65 years old.</li> </ul> <p>A big draw for Cleveland retirees is the state-of-the-art Cleveland Clinic, which ranks within the <a href="http://health.usnews.com/best-hospitals/area/oh/cleveland-clinic-6410670">top 10 U.S. hospitals</a> for several specialties, including geriatrics, cardiology, rheumatology, and urology. According to the latest U.S. Census, Cleveland has 476 physicians per 100,000 residents, a number much higher than the national average.</p> <p>Playhouse Square Center is the second largest performing arts center in the country, housing four theaters and attracting over one million guests every year to its more than 1,000 annual events. The Cleveland Orchestra is considered among the &quot;Big Five&quot; symphony orchestras leading the field in musical excellence and calibre of musicianship.</p> <p>Due to all these reasons (and more), Cleveland often ranks among one of the best <a href="http://www.cleveland.com/business/index.ssf/2013/06/cleveland_ranks_no_2_as_one_of.html">U.S. cities to retire in</a>.</p> <p>Planning for retirement is a two-step process. Not only do you have to maximize your nest egg, but also you have to minimize your living expenses during your golden years. In order to achieve both objectives, consider these four American cities when you're looking at retirement destinations. (See also: <a href="http://www.wisebread.com/5-simple-ways-to-boost-an-underperforming-401k?ref=seealso">5 Simple Ways to Boost an Underperforming 401(k)</a>)</p> <p><em>In what U.S. city are you planning to retire &mdash; and why?</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/4-more-exciting-affordable-american-cities-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-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/social-security-is-not-a-ponzi-scheme">Social Security Is Not a Ponzi Scheme</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/tiny-nestegg-retire-abroad">Tiny Nestegg? Retire abroad!</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/7-states-with-the-lowest-taxes-for-retirees">7 States With the Lowest Taxes for Retirees</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-reasons-why-your-retirement-cost-calculations-may-be-wrong">8 Reasons Why Your Retirement Cost Calculations May Be Wrong</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 affordable living baby boomers social security tax exemptions u.s. cities Mon, 20 Apr 2015 13:00:09 +0000 Damian Davila 1392146 at http://www.wisebread.com 5 Ways to Boost Your Odds of Retiring Early http://www.wisebread.com/5-ways-to-boost-your-odds-of-retiring-early <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-ways-to-boost-your-odds-of-retiring-early" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/guy_computer_000025658945.jpg" alt="Man trying to boost his odds of retiring early" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The <a href="http://crr.bc.edu/briefs/the-average-retirement-age-an-update/">average age of retirement</a> stands today at 62 for women and 64 for men. But if you're like many Americans, you'd probably much prefer to have your feet in the sand and a piña colada in hand well before you reach your 60s. No matter your age, it'll be pretty hard to pay for that oceanfront real estate and tiki bar tab if you haven't set aside enough savings.</p> <p>Fortunately, your dreams of a comfortable, early retirement can still come true &mdash; so long as you're willing to do some heavy duty planning, smart saving, and savvy investing. Read on for our roundup of the best tips and tricks for retiring early &mdash; without winning the lottery.</p> <h2>1. Set a Savings Goal</h2> <p>First thing's first: You need to calculate how much money you'll need to stockpile before you can quit your day job. Be forewarned &mdash; it'll likely be a number that will make your jaw drop. But even if it seems totally unattainable, rest assured that it's not. Let's say you'd like to retire at 48 &mdash; a plum 15 years earlier than the average American. Take your pre-retirement income and multiply it by the number of expected years of life you'll have in retirement; in this case, we'll say it's 48 x 31 (this assumes you're going to live to be 79, the average life expectancy for an American).</p> <p>For example, if you're living off a $70,000 salary now, you'll need to save $2.2 million before you can ditch your nine-to-five. On average, retirees spend between 65% and 95% of their<a href="http://www.forbes.com/sites/fidelity/2015/03/23/are-you-on-track-for-the-retirement-you-want-infographic/?sr_source=lift_polar"> pre-retirement income</a>, so this calculation shoots a little high. But since you very well may live a decade or two longer than the average Joe, it's better to have a bigger cushion than no cushion at all.</p> <h2>2. Live Frugally</h2> <p>If you want to achieve a comfortable, early retirement, one way of getting there is by living frugally. That means forgoing name brand clothing, coupon-less meals at restaurants, salon visits, and airplane travel. Buying used cars only &mdash; or giving up cars, altogether and instead riding a bike or public transit. (See also: <a href="http://www.wisebread.com/the-two-biggest-mistakes-people-make-when-starting-to-live-frugally?ref=seealso">The Two Biggest Mistakes People Make When Starting to Live Frugally</a>).</p> <p>If this sort of lifestyle sounds foreign to you, you may want to begin by crafting a carefully detailed budget that will set you up to achieve your long-term retirement savings goal. If all of this sounds exactly like the way you don't want to live out your younger years, frugal living as a road to early retirement quite simply may not be for you.</p> <h2>3. Start a Business &mdash; Then Let Someone Else Run It for You</h2> <p>If you've got an entrepreneurial bone in your body, you might want to explore launching your own business as a means of achieving early retirement. Whether it's a food truck or a marketing and consulting firm, the idea is to launch the business and work it until it's profitable enough that you can hire someone else to run the day-to-day operations while you kick back in that beach chair and watch the money pour in. Alternatively, the sale of your business could fund your retirement. Nearly 40% of small business owners say they are <a href="http://www.guardianlife.com/glife11pp/groups/camp_internet/@stellent_camp_websites/documents/document/sbo-retirement-readiness.pdf">poised to retire earlier</a> than they had anticipated. (See also: <a href="http://www.wisebread.com/starting-your-dream-business-is-easier-than-you-think-heres-how?ref=seealso">Starting Your Dream Business Is Easier Than You Think &mdash; Here's How</a>)</p> <h2>4. Get Yourself a Pension</h2> <p>The beauty of the pension plan: It's sort of like earning a salary, only without having to put in the work. And although many industries are phasing out these plans, about one in four large employers still offer some sort of <a href="http://www.towerswatson.com/en/Insights/Newsletters/Americas/Insider/2014/retirement-in-transition-for-the-fortune-500-1998-to-2013">pension to new hires</a>, according to a recent study. At the top of the list are companies in the insurance, utilities, energy, transportation, and food and beverage industries. Government is another sector where pensions are alive and well. Many municipalities still offer firefighters, police officers, and public works employees pensions that include overtime and saved vacation in the final calculation. The result is that some workers can retire with a pension that's <a href="http://www.ctpost.com/local/article/Crushed-by-town-pensions-1413396.php">higher than their former salary</a>. Imagine that.</p> <p>Alternatively, Apple, Google, Microsoft, and other big-name employers in the <a href="http://money.usnews.com/money/retirement/slideshows/10-industries-with-the-best-retirement-benefits/10">information industry</a> offer workers an average retirement benefit contribution of $2.76 per hour worked. That's huge. Also, these tend to be pretty high-paying jobs, which means employees have more flexibility to make larger contributions to their own retirement savings, in addition to what the company chips in.</p> <h2>5. Make Smart Investments</h2> <p>The best time to start investing is now. Case in point: If you start maxing out your IRA contributions at age 25, you will have saved $1.6 million by the time you're 70. But if you were to start at 35, you'd save about half that sum. Clearly, a few years can make a huge difference. Now, if you're not investment savvy, there are tons of tools available to help you figure out where to put your money.</p> <p>One of the best and easiest is an automated investment advisor, such as FutureAdvisor, that specializes in retirement planning. With <a href="https://www.futureadvisor.com/">FutureAdvisor</a>, you can get your 401(k), IRA, and other accounts analyzed, plus receive recommendations on how to improve your existing investments &mdash; absolutely free of charge. Then, if you're impressed with the results and want to hire FutureAdvisor as your investment manager, there's a monthly fee of either $9 or $19, depending on the value of your assets. Rest assured, all of FutureAdvisor's investment recommendations are made with the goal of setting you up for the most comfortable retirement years possible.</p> <p><em>What other steps are you taking to ensure an early retirement?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/brittany-lyte">Brittany Lyte</a> of <a href="http://www.wisebread.com/5-ways-to-boost-your-odds-of-retiring-early">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-12"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-retirement-rules-you-should-be-breaking">6 Retirement Rules You Should Be Breaking</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/12-surprising-things-women-should-know-about-retirement-planning">12 Surprising Things Women Should Know About Retirement Planning</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-reasons-why-your-retirement-cost-calculations-may-be-wrong">8 Reasons Why Your Retirement Cost Calculations May Be Wrong</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-facts-millennials-should-know-about-retirement-planning">5 Facts Millennials Should Know About Retirement Planning</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-times-raiding-your-retirement-accounts-early-is-okay">4 Times Raiding Your Retirement Accounts Early Is Okay</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Entrepreneurship Investment Retirement 401(k) pensions savings Tue, 14 Apr 2015 09:00:42 +0000 Brittany Lyte 1379696 at http://www.wisebread.com 5 Best Online Brokerages for Your IRA http://www.wisebread.com/5-best-online-brokerages-for-your-ira <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-best-online-brokerages-for-your-ira" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/woman_laptop_000029434486.jpg" alt="Woman managing her online IRA accounts" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Are you ready to save for retirement, but aren't sure where to start? I've created a short list of the five best brokerages for your <a href="http://www.irs.gov/Retirement-Plans/Individual-Retirement-Arrangements-(IRAs)-1">Individual Retirement Account (IRA)</a>. To develop my recommendations, I began by considering account minimums and investment fees.</p> <p>I also examined the ease of managing the IRA, identifying firms that have excellent offerings for a wide range of investors, whether you're hands-off or deeply engaged. Specifically, I evaluated the breadth of investment choices, value of commission-free and no-transaction fee selections, simplicity and costs associated with putting the account on auto-pilot, and any investment educational content provided.</p> <p>Here are my top picks.</p> <h2>1. TD Ameritrade</h2> <p><a href="https://www.tdameritrade.com/offer-home.page?s_tnt=54494:8:0">TD Ameritrade</a> is an online brokerage well-suited to the novice investor. There are no account minimums, so you can get started with a modest amount of cash. Plus, there are no maintenance or inactivity fees, so you don't have to worry about these nibbling away at your retirement account balance.</p> <p>This brokerage boasts more than 100 commission-free exchange-traded funds (ETFs), and nearly 2,000 no-load, no-transaction fee mutual funds (plus funds with loads that are waived for TD Ameritrade investors). If you choose to buy individual stocks and transaction fee funds, the commissions for stock and ETF trades are $9.99, while no-load mutual funds cost $49.99 per transaction.</p> <p>There are vast educational resources that include videos on basic investing principles for new investors and tools to screen and evaluate investments.</p> <h2>2. Charles Schwab</h2> <p><a href="https://www.schwab.com/">Charles Schwab</a>, the first brokerage firm to <a href="http://www.sfgate.com/business/article/The-genesis-of-discount-brokerage-1975-SEC-2637815.php">discount its commissions</a>, continues to be a good deal. The company has developed its own proprietary line of ETFs and mutual funds, and created the OneSource listing of funds that are available free of trading fees. You'll find nearly 200 commission-free ETFs and more than 3,000 no-load, no-transaction fee mutual funds, including a good selection of market index funds.</p> <p>You'll typically need $1,000 or more to establish an IRA with Schwab. However, this account minimum is waived if you deposit $100 or more on a monthly basis. And, you can find mutual funds with initial investments as low as $100 and ETFs priced between $40 and $100+ available free of transaction charges.</p> <p>Stock and ETF trades are $8.95 per transaction when you buy individual stocks or non-commission-free ETFs. Transaction fee, no-load mutual funds will cost $76 when you purchase shares; however, selling shares is free.</p> <p>There are no account management or inactivity fees, making Schwab a good choice for those who may have low balances or little activity associated with their accounts. Furthermore, Schwab has educational content and tools to help you plan and invest for retirement. These include articles, workshops, webcasts, and sessions both for do-it-yourself investors and those who wish to receive guidance on a periodic or ongoing basis.</p> <h2>3. E*Trade</h2> <p><a href="https://us.etrade.com/">E*Trade</a> is an online brokerage with investment choices that include stocks, mutual funds, ETFs, and bonds. Among its offerings are more than 100 commission-free ETFs and 1,300 no-load, no-transaction fee mutual funds.</p> <p>If you choose individual stocks and most ETFs, you will pay $9.99 per trade; and $19.99 on no-load mutual fund purchases and redemptions.</p> <p>At E*Trade, there are no account minimums or annual fees charged on IRAs. If you're eager to learn about investing and retirement planning, you'll find plenty of educational content. And E*Trade's free retirement planning calculator generates an action plan based on your retirement savings to date, current income level and anticipated needs in retirement, and more. You can also gain access to courses and webinars that provide instruction on topics such as researching a stock.</p> <h2>4. Vanguard</h2> <p><a href="http://www.vanguard.com/">Vanguard</a> is best known for its low cost, commission-free, market-index mutual funds; they were the first to develop and market these for individual investors, thanks to visionary founder John Bogle.</p> <p>Among the options available are Vanguard mutual funds and Vanguard ETFs linked to major stock and bond indexes, along with specialty funds representing various industry segments, investing styles (e.g., small cap growth or large cap value), and global regions. Most funds do not carry a transaction fee and their operating expenses are among the lowest in the industry.</p> <p>There is no minimum to open a mutual fund account with Vanguard. However, mutual funds carry initial investment minimums, beginning at $1,000 for target date retirement funds. You'll need $3,000 to establish a brokerage account, but you can then purchase Vanguard ETFs commission-free.</p> <p>If you decide to buy and sell non-Vanguard securities, you'll pay $7 for trades of individual stocks and ETFs, and $35 for transaction fee mutual funds. There are no account maintenance fees if you elect to receive electronic statements. You'll find solid educational content on the site geared toward long-term planning and construction of diversified portfolios.</p> <h2>5. TradeKing</h2> <p><a href="https://www.tradeking.com/">TradeKing</a> is an online brokerage firm that is inexpensive and accessible to the new investor. There is no account minimum and fees are low compared to other brokers. The firm does not offer commission-free ETFs or no-load, no-transaction fee mutual funds. However, you'll pay just $4.95 for stock and ETF trades, and $9.95 for no-load mutual funds, so your transaction costs can be readily contained.</p> <p>There are no account fees, but you'll need to make at least one trade per year or keep at least $2,500 in your combined TradeKing accounts to avoid an inactivity charge. New investors will find plenty of educational resources to learn about stocks, mutual funds, ETFs, and more.</p> <p>If you are looking for low minimums, low investment fees, a full range of investment choices, relative ease of managing the account, and education to guide your decisions, an IRA with one of these brokerages should fit your needs for retirement savings.</p> <p><em>Which online brokerage do you use for your IRA </em><em>&mdash;</em><em> and why?</em><em><br /> </em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/julie-rains">Julie Rains</a> of <a href="http://www.wisebread.com/5-best-online-brokerages-for-your-ira">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/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/7-ways-to-invest-in-biotech-without-getting-burned">7 Ways to Invest in Biotech Without Getting Burned</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-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-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-sneaky-investment-fees-to-watch-for">4 Sneaky Investment Fees to Watch For</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-much-should-you-have-saved-for-retirement-by-30-40-50">How Much Should You Have Saved for Retirement by 30? 40? 50?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement ETFs investing ira accounts mutual funds online brokerages stocks Thu, 09 Apr 2015 11:00:06 +0000 Julie Rains 1376575 at http://www.wisebread.com 4 Things Millennials Should Do Today to Prepare for Retirement http://www.wisebread.com/4-things-millennials-should-do-today-to-prepare-for-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-things-millennials-should-do-today-to-prepare-for-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/woman_work_000015424612.jpg" alt="Millennial woman at work preparing for retirement" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The Millennial generation &mdash; those born between 1980 and 1995 &mdash; have it pretty tough. After starting their careers in the worst economic downturn in a century, they're now being blamed for everything from <a href="http://time.com/money/3585877/millennials-thanksgiving-shopping/">shopping on Thanksgiving</a> to their own <a href="http://jobs.aol.com/articles/2012/11/12/generation-y-fails-to-prepare-for-job-market-survey-finds/">unemployment rates</a>. (If it makes you feel any better, you should know that they used to blame everything on us Generation X kids, too.)</p> <p>And they face a tough road to retirement, too. Various economists and experts have crunched the numbers and decided that at best, Millennials won't be able to retire until age 73, before keeling over at 84. The reasons are obvious: Student loan debt is at an all-time high of $1.2 trillion overall, with the average college graduate finishing school nearly $30,000 in debt as of 2013. Employment has been tough to come by for this generation, and even those lucky enough to have a job earn less than their parents did at the same age (adjusted for inflation).</p> <p>But this is also an extremely resilient generation that has learned to get ahead in tough times. Here are four things that Millennials (not to mention Gen-Xers and Boomers) can do today to prepare for retirement:</p> <h2>1. Open an IRA</h2> <p>For the most part, Millennials who are given the opportunity to invest in their company's 401(k) do so. According to polls, 70% of Millennials are already saving for retirement, which is a huge accomplishment.</p> <p>Where things get tougher are when young workers do not have access to a retirement vehicle at work. That's why it's a great idea to open an IRA (whether your employer offers a 401(k) or not). No matter the vagaries of your career, having an IRA will always provide you with a retirement vehicle that you can invest in.</p> <p>What kind of IRA should you get? Look for one that offers no-load mutual funds. No-load means you are not paying a commission on your investments, so you keep more of your money.</p> <h2>2. Automatically Transfer $10 Per Week</h2> <p>This kind of advice sounds like something your grandmother would tell you to do, but Nana has the right idea. Automating your savings is the best way to get into the habit of setting money aside, since you don't have to think about it. Starting with a low amount that you are unlikely to miss is an excellent way to build your retirement account.</p> <p>This small action can make a huge difference. After 35 years, your weekly $10 contribution can grow to $76,915.00, assuming an 8% rate of return. If you increase your automatic transfer rate each year to reflect your raises, that growth will be even more impressive. And all from an amount of money you probably won't even notice is missing.</p> <h2>3. Embrace the Side Hustle</h2> <p>More than their parents or grandparents, Millennials recognize that there is no such thing as a dream job &mdash; that is, the one true job that will provide fulfillment and compensation beyond one's wildest wishes. That's partially because many members of this generation have had to cobble together employment from multiple opportunities just to keep the lights on.</p> <p>But getting in the habit of working for several employers is not just good for your current bottom line &mdash; it's potentially good for your career and your retirement prospects, too.</p> <p>That's because your side hustle can help you with networking and time management, which will help your main career. In addition, maintaining multiple gigs can help you weather any financial or career setbacks. (See also: <a href="http://www.wisebread.com/find-a-side-gig-at-these-4-best-micro-jobs-sites?ref=seealso">The 4 Best Micro Job Sites</a>)</p> <p>But most importantly, working a side hustle can help you to redefine work &mdash; which will be helpful in the future when retirement is less likely to look like the blank space between the end of your career and death, and more likely to be a different chapter in an interesting life. No matter what you do with the money from your side hustle (hint: invest it!), embrace the idea that there are many things you can do to make money and feel productive.</p> <h2>4. Split Your Windfalls</h2> <p>Many of us have a tendency to spend <a href="http://www.wisebread.com/mental-accounting-why-you-blow-your-tax-refund-but-not-your-raise">unexpected windfall money</a> on fun purchases. But start getting in the habit of splitting your windfall money between your splurges and your retirement accounts. The splurge-to-retirement account ratio is up to you (although 50/50 is generally a good idea), but starting to think of windfalls as a gift to both present and future you is a great way to enjoy that money twice &mdash; which is even better than spending it all on a shopping spree today.</p> <h2>The Kids Are Alright</h2> <p>It's human nature for every generation to give the next one a hard time. And the pundits who warn of the sky falling for Millennial finances aren't making things up. But they are ignoring all of the things that Millennials have going for them: The experience of watching their parents lose money during the 2008 downturn, a sense of personal responsibility for retirement, and plenty of time.</p> <p>There will come a time when financially secure Millennials will be the ones worrying about the whippersnappers who come after them. Let's just hope the Millennials will be able to keep the hysterical rhetoric to a minimum when it's their turn.</p> <p><em>What are you doing now to prepare for retirement?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/emily-guy-birken">Emily Guy Birken</a> of <a href="http://www.wisebread.com/4-things-millennials-should-do-today-to-prepare-for-retirement">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-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/how-to-enjoy-retirement-if-you-havent-saved-enough">How to Enjoy Retirement If You Haven&#039;t Saved Enough</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-facts-millennials-should-know-about-retirement-planning">5 Facts Millennials Should Know About Retirement Planning</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/canada-and-us-retirement-showdown-which-offers-more-for-retirees">Canada and U.S. Retirement Showdown: Which Offers More for Retirees?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-start-saving-for-retirement-at-40">How to Start Saving for Retirement at 40+</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-ways-to-max-out-your-ira-contributions-by-april-15th">7 Ways to Max Out Your IRA Contributions by April 15th</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement Economy generation y IRAs millennials saving money Mon, 06 Apr 2015 17:00:08 +0000 Emily Guy Birken 1368069 at http://www.wisebread.com 12 Surprising Things Women Should Know About Retirement Planning http://www.wisebread.com/12-surprising-things-women-should-know-about-retirement-planning <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/12-surprising-things-women-should-know-about-retirement-planning" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/retirement_000014649650.jpg" alt="Woman considering her retirement as homeless person" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>One of my longstanding fears is that my retirement will see me living on the street, homeless and destitute. As it turns out, my fear is far from unique. In fact, it even has a name: Bag Lady Syndrome. According to a poll by Allianz Life Insurance, 49% of American women fear <a href="https://www.allianzlife.com/retirement-and-planning-tools/women-money-and-power/bag-lady">ending up a bag lady</a>, even those who make six figure salaries. In fact, according to a recent survey of workers by the Transamerica Center for Retirement Studies, only 14% of women are very confident in their ability to retire comfortably.</p> <p>Yes. I have heard the news: Women continue to make huge strides in school and in the workplace. But I also know the reality. Women are at a much greater risk of financial insecurity in later life than men for a number of reasons.</p> <h2>1. Longevity Does Not Work in Women's Favor</h2> <p>The women in my family generally live to be close to 100. While most people are impressed by my genetics, I find longevity to be an expensive double-edged sword. How am I going to pay for a 30-year retirement? The average American woman lives six years longer than the average man, which is why 70% of Social Security beneficiaries over age 85 are women. There are <a href="https://www.americanprogress.org/issues/women/report/2008/10/08/5103/the-straight-facts-on-women-in-poverty/">50% more elderly women</a> living in poverty than men.</p> <h2>2. 54% of Women Don't Plan to Retire, Ever</h2> <p>Like Mrs. Hughes on Downton Abbey, over half of all American women plan on working until they drop dead.</p> <h2>3. Almost Half of All Women Plan to Work Through Retirement</h2> <p>Shuffleboard and sensible shoes are not everyone's dream retirement. Roughly 49% of women plan on continuing to work during retirement. While work is pleasurable for many women, and delaying retirement is a great way to shore up savings, the job market for 70- year-olds isn't great. Planning to simply not retire is not a viable retirement strategy.</p> <h2>4. Baby Boomers Are Still Living the Dream</h2> <p>Like every other gen X-er on the planet, I figured out in college that I would spend my life paying for someone else's social security, since it's a benefit that I doubt I will ever enjoy. However, this bitter worldview is generational. To wit: 26% of baby boomers (born 1946-1964) don't have a backup plan if they are <a href="http://money.usnews.com/money/personal-finance/mutual-funds/articles/2013/10/08/boomers-forced-to-retire-face-unexpected-challenges">forced into retirement</a> sooner than expected due to health problems or job loss.</p> <h2>5. Time Off for Caregiving Negatively Impacts Retirement</h2> <p>Millennials, get ready to be poor when you are old. Even if your baby boomer parents put away enough money for retirement, you might still have to supplement their care. A recently published study by the Employment Benefit Research Institute calculates that female baby boomers on the verge of retirement have a <a href="http://www.ebri.org/publications/ib/index.cfm?fa=ibDisp&amp;content_id=5487">savings shortfall</a> of nearly $63,000, while male boomers have a deficit of $34,000.</p> <p>What's worse, 58% of women don't plan to take time out of the workforce to act as a caregiver for a child or an aging parent, which is odd considering that 80% of American women give birth at some point during their child bearing years. In fact, the average woman spends <a href="http://boston.cbslocal.com/2014/09/29/bag-lady-syndrome/">17 years raising children</a> and 18 years caring for aging relatives (including her spouse).</p> <p>Of the 22% of the female population who <em>aren't </em>living in denial of the time suck that is parenting or childcare, 67% believe that taking time off work to care for children or aging parents will hurt their ability to save for retirement. (See also: <a href="http://www.wisebread.com/the-9-people-in-your-life-who-are-keeping-you-poor?ref=seealso">9 People in Your Life Who Are Keeping You Poor</a>)</p> <p>While women who take off time to be caregivers lose out on matching funds and cannot contribute to a 401(k), a survey by the asset management firm BlackRock shows that women can <a href="http://www.cnbc.com/id/102473846#.">close the savings gap</a> when they return to the workforce. However, they miss out on the magic that is compound interest during years spent being caretakers.</p> <h2>6. The Majority of Women Expect to Self-Fund Retirement</h2> <p>Only 5% of women expect a company-funded pension to be the primary source of retirement, because less than a third of women will receive any kind of pension at all. Roughly 27% expect to rely on social security, while 59% of women expect to self-fund their retirement through a 401(k) or other savings and investments.</p> <h2>7. Part-Time Work Is Women's Work</h2> <p>Due to childcare responsibilities, women are much more likely than men to <a href="http://www.nytimes.com/2014/08/21/upshot/how-a-part-time-pay-penalty-hits-working-mothers.html?abt=0002&amp;abg=0">work part-time</a>. Not only does this translate into a much smaller paycheck, most part-time jobs do not include benefits such as health care.</p> <h2>8. Women Are Less Likely to Be Offered a Retirement Plan</h2> <p>Also, because part-time workers of either gender are less likely to be included in 401(k)-style retirement plans through work, fewer women are offered retirement benefits.</p> <p>This is compounded by the fact that women who take time out from their careers to raise children or care for aging relatives are not eligible for retirement plans and miss out on matching contributions.</p> <h2>9. Women's Annual Contributions to 401(k)-Style Plans Lag Behind Men</h2> <p>This falls into the &quot;No Duh&quot; category of financial factoids. Women's annual contributions to retirement plans lag behind men's because women make less money on average, and have to take off more time for childcare.</p> <h2>10. Fewer Women Take Advantage of Retirement Plans Than Men</h2> <p>What is preposterous, however, is that even when women are <a href="https://www.transamericacenter.org/docs/default-source/resources/women-and-retirement/tcrs2015_sr_womens_retirement_outlook.pdf">offered retirement plans</a>, only 77% participate, compared to 82% of men!</p> <h2>11. Women Think They Will Only Need $800,000 to Retire Comfortably</h2> <p>Statistically, women live longer than men, and therefore have a longer retirement. This should correspond with higher estimates for retirement savings needs. However, it does not. The median estimated retirement savings need for women is $800,000, compared to the $1,000,000 median men need to feel financially secure in retirement. Why is there this discrepancy?</p> <h2>12. Women Are Guessing Their Retirement Savings Needs</h2> <p>Alas, the main reason that women are low-balling their savings is because 57% are just <a href="http://womenmoneyandsuccessmag.com/resources/statistics">guessing their retirement needs</a>. Only 8% of women in the Transamerica Study used a calculator to run numbers.</p> <p>While this is depressing news, women of every age can take steps to improve their retirement readiness.</p> <h3>Develop a Retirement Strategy and Put It on Paper</h3> <p>Use a retirement calculator to figure out how much you will need to save each year &mdash; including both employer-sponsored plans and outside savings.</p> <h3>Plan Your Parenthood</h3> <p>Can you actually afford to have children? If you already have children, carefully consider any and all options to help mitigate the impact on your long-term financial security. Can you move in with family to help save on childcare costs?</p> <h3>Seek Retirement Benefits</h3> <p>If you employer doesn't offer you a retirement plan, it doesn't hurt to ask for one or seek out an employer who does.</p> <h3>Participate in Company Plans</h3> <p>Regardless of how little money is left over from each paycheck, workers with 401(k) plans should try to maximize the amount of money they put away, especially if the employer matches funds. Women (and men) who don't participate in matching 401(k) plans are literally refusing free money.</p> <h3>Educate Yourself About Retirement Investing</h3> <p>If you can, seek professional guidance. Learn about ways to stretch savings, including when to withdraw money from retirement accounts with minimal penalties.</p> <h3>Have a Backup Plan</h3> <p>Do you have disability insurance or life insurance? Identify possible cost-cutting or money-making lifestyle changes such as moving into a smaller home or living with roommates.</p> <h3>Actually Do the Math</h3> <p>Use a retirement calculator to estimate your retirement savings needs and do everything in your power to achieve that goal.</p> <h3>Share Your Knowledge and Plans</h3> <p>Talk to your family and close friends about your retirement plans. Managing financial and time expectations should be part of everyone's retirement strategy.</p> <p><em>Are you afraid of becoming a bag lady? What is your strategy to keep this paranoid fantasy from becoming a reality? </em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/max-wong">Max Wong</a> of <a href="http://www.wisebread.com/12-surprising-things-women-should-know-about-retirement-planning">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/5-ways-to-boost-your-odds-of-retiring-early">5 Ways to Boost Your Odds of Retiring Early</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-reasons-why-your-retirement-cost-calculations-may-be-wrong">8 Reasons Why Your Retirement Cost Calculations May Be Wrong</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/6-retirement-rules-you-should-be-breaking">6 Retirement Rules You Should Be Breaking</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-facts-millennials-should-know-about-retirement-planning">5 Facts Millennials Should Know About Retirement Planning</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-start-saving-for-retirement-at-40">How to Start Saving for Retirement at 40+</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement 401(k) bag lady syndrome poverty savings women Mon, 30 Mar 2015 11:00:08 +0000 Max Wong 1359519 at http://www.wisebread.com