Retirement http://www.wisebread.com/taxonomy/term/417/all en-US 8 Signs Your Retirement Is on Track http://www.wisebread.com/8-signs-your-retirement-is-on-track <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-signs-your-retirement-is-on-track" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/couple_retirement_accounts_78210119.jpg" alt="Couple finding signs their retirement is on track" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You feel like you're a diligent saver, and are doing all you can to ensure you have a comfortable retirement. But how do you know if you're doing things right? It's hard to predict how much money you'll need, and it seems impossible to know if you're on the right track when retirement is years or even decades away.</p> <p>Thankfully, there are some easy ways to tell if your retirement planning is sound. If your portfolio has most or all of these characteristics, keep up the good work and don't fret!</p> <h2>1. Most of the Funds Are in Tax-Advantaged Accounts</h2> <p>When saving for retirement, it's important to place your money in accounts that shield you from paying unnecessary taxes. A 401K is a common plan offered by employers that allows you to contribute and invest in a variety of different mutual funds. Any money you contribute will be deducted from your taxable income. It's also possible to invest in a Roth IRA, which allows you to invest and avoid paying taxes on any gains. If all or most of your money is in these accounts, you'll be saving thousands of dollars and will have a much higher net return on your investments.</p> <h2>2. You've Been Contributing Heavily</h2> <p>It's hard to know exactly how much you should put into your retirement accounts, but &quot;as much as you can&quot; is usually good advice. If you're maxing out your allowable contributions to 401K or IRA plans (or both), you're probably doing quite well. For 401K plans, you can contribute up to $18,000 annually. IRA plans can accept $5,500 in contributions each year. Even if you're not maxing out these accounts, contributing enough to take advantage of your employer's match of 401K contributions is one good threshold to hit. As much as people like to talk about stock market gains helping them get rich, the truth is that your portfolio's value is helped a lot more by the amount you're contributing in the first place.</p> <h2>3. You've Seen Steady Growth Over Time</h2> <p>Take a look at your portfolio's performance on a line chart. Are you generally seeing an upward trend, without a lot of wild ups and downs? Does it seem like your savings is steadily growing over time, even during periods when the stock market is not doing well? A good retirement portfolio should generally be free of volatility, and see steady gains as time goes on.</p> <h2>4. Your Projections Look Good</h2> <p>No one knows how the stock market will perform in the future, but you can make some reasonable assumptions based on historical market returns. The S&amp;P 500 has seen average annual growth of about 7% since 2006, and annual average gains are even higher the farther you go back. If your portfolio's performance has been in line with these annual averages, you're probably in good shape, as long as you're contributing a significant amount.</p> <p>It may be possible to project how much money you'll have in retirement by taking the amount you have now, then adding your contributions and the annual average return through your retirement year.</p> <h2>5. Your Investments Are Focused on Growth</h2> <p>Unless you are close to retirement, your portfolio should be heavy on investments that promise growth over the long term. This means a big dose of stocks, rather than bonds or cash. Small cap and value stocks should be a driver of most retirement portfolios, as they often promise the most growth potential.</p> <p>It's tempting to want to be conservative with your investments, because stocks can be risky, and no one likes to feel vulnerable to a bad day in the stock market. But building a large retirement next egg requires you to overcome your fears and recognize the positive historical returns of stocks.</p> <h2>6. Your Portfolio Is Well-Balanced</h2> <p>It's always a good exercise to examine your investments to see if you are too heavily invested in any one sector or asset class. Sometimes, your portfolio can get out of whack, and will require rebalancing of your assets. If you are working hard to keep your investments nicely balanced, you'll likely be shielded from any major swings in the market and should see solid growth over time. There is one caveat here, which is that buying and selling during rebalancing could have tax implications, so you'll want to weigh the costs and benefits each time you're considering it.</p> <h2>7. You're Not Paying Too Much in Fees</h2> <p>A robust retirement portfolio should probably contain some mutual funds and/or exchange traded funds (ETFs). But these investments often come with management fees, commissions, transaction fees and other costs. A typical investor pays about 1.5% in fees, according to Rebalance IRA. That could add up to thousands of dollars over time. To avoid losing money to fees, look for investments with very low expense ratios, and those that trade without a commission. Low-cost investments often outperform those with higher expense ratios anyway. So if the costs in <a href="http://www.wisebread.com/stabilize-your-portfolio-with-these-5-bond-funds" target="_blank">your retirement portfolio</a>&nbsp;are low, that's one more thing you're doing well.</p> <h2>8. You Haven't Spent Any of It</h2> <p>There may be times in your life when you'll be tempted to withdraw money from your retirement accounts to pay for other expenses. There's a cost to doing this; any money taken early from these accounts is subject to being taxed, and you'll have to pay a 10% early withdrawal penalty if you take money early from a 401K. And of course, on top of these penalties and taxes, you'll lose out on any future growth this money might have accrued. If you've been diligent about not touching your retirement savings early, you'll be in much better financial shape than if you had raided these funds.</p> <p><em>How's your retirement looking?</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-signs-your-retirement-is-on-track">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/5-best-online-brokerages-for-your-ira">5 Best Online Brokerages for Your IRA</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-only-8-rules-of-investing-you-need-to-know">The Only 8 Rules of Investing You Need to Know</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/are-you-choosing-the-right-fund-for-your-portfolio">Are You Choosing the Right Fund for Your Portfolio?</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/11-pearls-of-financial-wisdom-from-jim-cramer">11 Pearls of Financial Wisdom From Jim Cramer</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-retire-rich">How to Retire Rich</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement contributions ETFs growth index funds investing on track portfolio stocks tax advantaged Thu, 28 Jul 2016 09:00:11 +0000 Tim Lemke 1760749 at http://www.wisebread.com Retire for Half the Cost in These 5 Countries http://www.wisebread.com/retire-for-half-the-cost-in-these-5-countries <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/retire-for-half-the-cost-in-these-5-countries" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/tropical_destination_travel_54008208.jpg" alt="Finding countries where you can retire for half the price" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you're getting close to retirement, but you're planning on working an extra couple of years because you just &quot;don't have the money,&quot; think again. Retiring in North America is expensive! Why not live somewhere tropical and exotic for at least half the year and cut your expenses down considerably? In this article I'm going to list five destinations where you can do just that. (See also: <a href="http://www.wisebread.com/5-incredible-places-to-retire-abroad-that-anyone-can-afford?ref=seealso">5 Incredible Places to Retire Abroad</a>)</p> <p>Note: Costs of food, housing, transportation, and entertainment are compared to New York City using <a href="https://www.expatistan.com/cost-of-living/">Expatistan's</a> cost of living index.</p> <h2>1. Mexico</h2> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5171/mexico_travel_8998281.jpg" width="605" height="340" alt="" /></p> <ul> <li>Food = 64% cheaper</li> <li>Housing = 83% cheaper</li> <li>Transportation = 72% cheaper</li> <li>Entertainment = 64% cheaper</li> <li>One-bedroom apartment = $300-$500 per month</li> <li>Total cost of living = $1,200+ per month</li> </ul> <p>If you hear &quot;Mexico&quot; and your mind automatically wanders to an American-owned resort in Cancun with a bartender on the beach and jet skis on rent, you'd be forgiven for thinking that Mexico isn't half the price of home.</p> <p>But this isn't Mexico! The real Mexico's not only extremely affordable, but it's rich in culture, history, and natural beauty. You can rent beautiful apartments in retirement havens like San Pancho, Sayulita, and Oaxaca for under $500 a month.</p> <p>A dinner out at a nice restaurant with a bottle of wine won't likely cost you more than $10 per person and your grocery bills will be cut in half. Mexico is the perfect place to retire, which is why so many snowbirds head there for half of the year.</p> <h2>2. Thailand</h2> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5171/thailand_beach_travel_87109807.jpg" width="605" height="340" alt="" /></p> <ul> <li>Food = 48% cheaper</li> <li>Housing = 68% cheaper</li> <li>Transportation = 54% cheaper</li> <li>Entertainment = 55% cheaper</li> <li>One-bedroom apartment = $300-$500 per month</li> <li>Total cost of living = $1,000+ per month</li> </ul> <p>Who doesn't want to spend their golden years in the land of smiles? Thailand is the ultimate budget friendly destination for people looking for a change of scenery in retirement. The above cost of living indexes are compared to Bangkok, Thailand's capital and most expensive city.</p> <p>If you choose to live on one of the country's beautiful islands, you could cut these costs down considerably. A nice one or two-bedroom bungalow with a kitchenette, a few blocks from the sea, won't cost you more than $500 and you'd have a hard time paying more than $7 for a local meal.</p> <p>Big beers at 7-11 only cost a couple of dollars and you can rent a motorbike here for around $3 a day (less if you rent monthly).</p> <p>Thailand is wonderfully exotic, but it still has a lot of the amenities that you'd hope for from home. Good grocery stores, 7-11s, great restaurants, gyms, malls, and excellent accommodation options. Pair this with some of the best beaches in the world, friendly people, and incredibly low prices, and you've got one of the world's top retirement hot spots.</p> <p>One downside of Thailand may be that there are a lot of young people and on some of the islands, monthly parties can get out of hand. But aside from the Full Moon Party on Koh Phangan and the water festival in Bangkok, most of Thailand still has a slow-paced tropical charm. Who knows, maybe you're looking for a party during retirement?</p> <h2>3. Albania</h2> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5171/tropical_destination_travel_54008208.jpg" width="605" height="340" alt="" /></p> <ul> <li>Food = 66% cheaper</li> <li>Housing = 84% cheaper</li> <li>Transportation = 67% cheaper</li> <li>Entertainment = 64% cheaper</li> <li>One-bedroom apartment = $300-$500 per month</li> <li>Total cost of living = $1,250+ per month</li> </ul> <p>Maybe one of the last places you thought you'd visit, let alone live in, Albania has had a turbulent history. Cut off from the world by a brutal communist dictator for nearly a half-century, the country lost much of its reputation as a vacation spot during that time. But today, Albania is moving forward and the people are extremely welcoming.</p> <p>Again, the cost of living indexes are comparing New York City to Tirana, Albania's capital, but Tirana is the country's most expensive place to live. Instead, head down to the Albanian Riviera along the Adriatic coast and check out towns like Himara, Vlora, and Saranda. You won't find anywhere else in Europe where you can rent an apartment for $400 per month with a stunning view over the Adriatic sea.</p> <p>In Saranda, there's a huge selection of accommodations in skyscraper-style apartment blocks all along the water's edge, while in quieter Vlora and Himara, you won't find as much variety but you can still find well-priced places to stay.</p> <p>The Albanian Riviera is known for beautiful beaches, sunny weather, and delicious seafood. You can get a fish dinner at a restaurant overlooking the water for around $10-$15. Albania is definitely affordable and it has a lot of amenities as well.</p> <p>Note: Driving in Albania can be frustrating and dangerous. If you do decide to buy or rent a car, however, don't miss the drive between Vlora and Saranda along the coast. It is one of Europe's most scenic road trips.</p> <h2>4. Malta</h2> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5171/malta_beach_city_60448332.jpg" width="605" height="340" alt="" /></p> <ul> <li>Food = 32% cheaper</li> <li>Housing = 66% cheaper</li> <li>Transportation = 47% cheaper</li> <li>Entertainment = 43% cheaper</li> <li>One-bedroom apartment = $685-$1,000 per month</li> <li>Total cost of living = $1,750+ per month</li> </ul> <p>The Brits already know that Malta is the perfect place to retire, but few Americans can even place this tiny Mediterranean island on the map. Located just below Sicily and about 62 miles north of Africa, Malta is the most fascinating country you've never heard of.</p> <p>Steeped in a rich history, blessed with azure waters and natural beauty, and inhabited by some of the friendliest people in Europe, Malta might just be the most charming place on this list. It's a bit of a stretch to say that it's half the price of most U.S. cities, but you can get a nice one-bedroom apartment here for around &euro;600 ($685). Food in restaurants is considerably cheaper than in the U.S., as is the local produce and alcohol in grocery stores.</p> <p>There are three islands in Malta that are inhabited, but you'll likely choose between Gozo and the main island of Malta. The main island has many more amenities and more areas to explore, but is a lot more built up than the quieter, more natural island of Gozo.</p> <p>Whichever island you choose, all are connected by an excellent network of buses and ferries, so you're never more than a couple of hours from anywhere. There are also ferries to nearby Sicily and Malta is well connected to Europe via flights with Air Malta.</p> <p>Did I mention that Malta is considered to have the best year-round climate in the world?</p> <h2>5. Croatia</h2> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5171/croatia_beach_scene_59256040.jpg" width="605" height="340" alt="" /></p> <ul> <li>Food = 46% cheaper</li> <li>Housing = 75% cheaper</li> <li>Transportation = 41% cheaper</li> <li>Entertainment = 52% cheaper</li> <li>One-bedroom Apartment = $500-$700 per month</li> <li>Total cost of living = $1,550+ per month</li> </ul> <p>Another Mediterranean hot spot, Croatia has a few cities that are great for retirement, but in my opinion, Split is the best. The old town has history, a beautiful setting along the Adriatic Sea and great dining options.</p> <p>The temperature here never gets below 45&deg;F and in the summer, you have your choice of some of the region's best beaches.</p> <p>For history buffs, Diocletian's Palace is one of the best examples of Roman architecture anywhere in Europe and there are numerous old churches, cathedrals, and basilicas to explore.</p> <p>Split also has an excellent expat community and there seems to be something going on every week. Whether it's hiking, a music festival, concerts, plays, or beach parties, you'll never get bored in Split. This seaside town pretty much has it all, and you can get it for less than half the price of most cities in the U.S.</p> <h2>Visit First and Check With the Tax Authorities</h2> <p>There's a lot more to consider than just the cost of living when choosing the best place for retirement. You want to make sure that your chosen destination has enough amenities and activities to keep you satisfied.</p> <p>You'll also want to look into the tax situation to ensure that you don't get into any trouble with the IRS. But this stuff is easier than it sounds. Once you choose the perfect place, head down there for a month or two and see if you enjoy it while staying longer-term.</p> <p>There are so many places around the world to choose from and luckily for Americans, many of them are much cheaper than home.</p> <p><em>What's your favorite vacation spot? Could you retire there? Tell us why in the comments below.</em></p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <p>&nbsp;</p> <p style="text-align: center;"><a href="//www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fretire-for-half-the-cost-in-these-5-countries&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FRetire%20for%20Half%20the%20Cost%20in%20These%205%20Countries%20(1).jpg&amp;description=Retire%20for%20Half%20the%20Cost%20in%20These%205%20Countries" data-pin-do="buttonPin" data-pin-config="above" data-pin-color="red" data-pin-height="28"><img src="//assets.pinterest.com/images/pidgets/pinit_fg_en_rect_red_28.png" alt="" /></a> </p> <!-- Please call pinit.js only once per page --><!-- Please call pinit.js only once per page --><script type="text/javascript" async defer src="//assets.pinterest.com/js/pinit.js"></script></p> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/Retire%20for%20Half%20the%20Cost%20in%20These%205%20Countries%20%281%29.jpg" width="250" height="374" alt="" /></p> <script type="text/javascript" async defer src="//assets.pinterest.com/js/pinit.js"></script></p> <p style="text-align: center;">&nbsp;</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/nick-wharton">Nick Wharton</a> of <a href="http://www.wisebread.com/retire-for-half-the-cost-in-these-5-countries">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/7-lessons-i-learned-about-money-after-living-in-mexico">7 Lessons I Learned About Money After Living in Mexico</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-5-best-mid-sized-cities-for-millennials">The 5 Best Mid-Sized Cities for Millennials</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-let-these-expenses-spoil-your-retirement-abroad">Don&#039;t Let These Expenses Spoil Your Retirement Abroad</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-incredible-places-to-retire-abroad-that-anyone-can-afford">5 Incredible Places to Retire Abroad That Anyone Can Afford</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/free-and-cheap-things-to-do-in-champaign-urbana">Free and cheap things to do in Champaign-Urbana</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement Travel cities cost of living expats foreign countries living abroad things to do Wed, 13 Jul 2016 09:00:19 +0000 Nick Wharton 1740461 at http://www.wisebread.com Ask the Readers: Where Would You Like to Retire? http://www.wisebread.com/ask-the-readers-where-would-you-like-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-where-would-you-like-to-retire" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/couple_walking_beach_73944157.jpg" alt="Couple deciding where they&#039;d like 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-where-would-you-like-to-retire#comment-793594">Matt</a>, Kristin, and Mary for winning this week's contest!</em></p> <p>A big part of retirement planning is deciding where you will live. Some areas offer greater benefits to retirees, including more affordable housing, lower taxes, and better health care. But for some people, living near family or in an area that you've always loved is more important.</p> <p><strong>Where would you like to retire?</strong> What makes this location so appealing? What is the most important factor when you consider retirement destinations?</p> <p>Tell us where you would like 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" href="http://www.rafflecopter.com/rafl/display/79857dfa253/" rel="nofollow" data-raflid="79857dfa253" data-theme="classic" data-template="" id="rcwidget_cm9gxoub">a Rafflecopter giveaway</a> </p> <script src="https://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, July 18th at 11:59 p.m. Pacific. Winners will be announced after July 18th 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></p> <div class="field field-type-text field-field-blog-teaser"> <div class="field-items"> <div class="field-item odd"> Tell us where you would like 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-where-would-you-like-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-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-incredible-places-to-retire-abroad-that-anyone-can-afford">5 Incredible Places to Retire Abroad That Anyone Can Afford</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/ask-the-readers-what-is-your-new-years-resolution">Ask the Readers: What Is Your New Year&#039;s Resolution?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/this-is-why-you-cant-postpone-planning-for-your-retirement-and-how-to-start">This Is Why You Can&#039;t Postpone Planning for Your Retirement (And How to Start)</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-occasions-when-you-should-definitely-hire-a-financial-advisor">7 Occasions When You Should Definitely Hire a Financial Advisor</a></span> </div> </li> <li class="views-row views-row-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-would-you-relocate-for-the-perfect-job-chance-to-win">Ask the Readers: Would You Relocate for the Perfect Job? (Chance to win!)</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Giveaways Retirement Ask the Readers retirement Tue, 12 Jul 2016 10:00:08 +0000 Ashley Jacobs 1747307 at http://www.wisebread.com 401K or IRA? You Need Both http://www.wisebread.com/401k-or-ira-you-need-both <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/401k-or-ira-you-need-both" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/IRA_cash_401k_27036895.jpg" alt="Here&#039;s why you need a 401K and a Roth IRA" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>There are two primary tax-advantaged ways to save for retirement. You could contribute to a workplace retirement plan, such as a 401K plan, or open an Individual Retirement Account (IRA).</p> <p>But which one should you use? In some cases, the answer may be &quot;both.&quot; Here are three considerations as you decide which plan(s) works for you:</p> <h2>1. Does Your Employer Provide Matching Money?</h2> <p>If your employer offers a 401K plan and matches some of the money you contribute, start your retirement savings there. That's the easiest money you'll ever make.</p> <p>Under a typical arrangement, your employer may contribute 50 cents to one dollar for every dollar you contribute, up to 6% of your salary. Even at the low end, that's a guaranteed 50% return on your money. So, at very least, contribute the full amount that's eligible to be matched.</p> <p>At that point, you'll probably have an important decision to make. You very likely need to contribute more than 6% of your salary in order to save enough for retirement. (Do you know <a href="http://www.wisebread.com/one-smart-thing-you-can-do-for-your-retirement-today">how much <em>you </em>should save</a>?)</p> <p>If so, should you simply contribute more to your workplace plan? Or, would you be better off investing those additional dollars through an IRA? Questions two and three will help you decide.</p> <h2>2. Does Your Plan Have What You Need?</h2> <p>Does your workplace plan offer the right investment choices in order for you to follow your strategy of choice? This is especially important if your employer doesn't match contributions, since it means selecting low-cost investments likely to generate strong returns is even more important.</p> <p>If you're keeping it simple by using a target-date fund, it <em>may</em> be fine to use your 401K exclusively for your retirement savings.</p> <p>But what if you're following a more involved strategy &mdash; one that includes the use of a gold fund, for example &mdash; but your 401K plan doesn't offer the necessary investment choices?</p> <p>This would be one good reason make use of an IRA, where you'll have access to a wide range of investment options.</p> <h2>3. How Much Do the Investments in Your Plan Cost?</h2> <p>Even if you're keeping things simple by using a target-date fund offered through your 401K, check on that fund's fees. In particular, find out what its <em>expense ratio</em> is. That's the percentage of the fund's assets deducted each year to cover fund expenses, such as management and administrative costs. If your fund has an expense ratio of .5%, that means for every $1,000 you have invested, $5 is going toward these expenses.</p> <p>Expense ratios vary quite a bit from fund to fund. For example, Vanguard's target-date fund for people planning to retire in 2050 charges just .16%, whereas American Funds' 2050 target-date fund charges .76%.</p> <p>That may not sound like a big deal, but let's say you now have $25,000 in your 401K plan, contribute $500 per month, and earn an average annual return of 7% before expenses, no matter which fund you choose.</p> <p>After 35 years, if you had used the fund charging .16%, you'd end up with more than $1,080,000. If you had used the fund charging .76%, you'd end up with about $150,000 less.</p> <p>So, if the type of fund you'd like to invest in is available for a lower cost outside your 401K plan, that would be another reason to consider an IRA.</p> <h2>Final Factors</h2> <p>Keep in mind that IRA annual contribution limits are much lower than 401K plan limits &mdash; $5,500 vs. $18,000 (or $6,500 versus $24,000 for people age 50 and older). If you contribute 6% of your salary to your 401K in order to take full advantage of your employer's match and then max out an IRA, it's possible you'll still need to invest more. So, head back to your 401K plan and finish out your retirement plan investing there.</p> <p>Also, while a high income will not make you ineligible for your employer's 401K plan, there <em>are&nbsp;</em><a href="https://www.irs.gov/uac/newsroom/irs-announces-2016-pension-plan-limitations-401-k-contribution-limit-remains-unchanged-at-18-000-for-2016">income-based eligibility restrictions for IRAs</a>.</p> <p>There's much to be said for simplicity, but depending on how you answered the questions above, using your workplace plan <em>and </em>an IRA may turn out to be more profitable. Yes, it'll involve a little more work than investing in your workplace plan alone. But being able to follow your strategy of choice and avail yourself of investments with lower fees could pay significant dividends down the road.</p> <p><em>So, which is it for you? 401K or IRA?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/matt-bell">Matt Bell</a> of <a href="http://www.wisebread.com/401k-or-ira-you-need-both">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-important-things-to-know-about-your-401k-and-ira-in-2016">5 Important Things to Know About Your 401K and IRA in 2016</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-reasons-why-a-roth-ira-may-be-better-than-your-401k">4 Reasons Why a Roth IRA May be Better Than Your 401(k)</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/403b-vs-401k-how-are-they-different">403B vs. 401K: How Are They Different?</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/should-you-choose-a-roth-401k-or-a-regular-401k">Should You Choose a Roth 401k or a Regular 401k?</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/three-easy-steps-to-take-for-a-better-401k">3 Easy Steps to Take for a Better 401k</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment Retirement 401k contributions employer matching individual retirement account IRA Thu, 07 Jul 2016 09:01:07 +0000 Matt Bell 1746129 at http://www.wisebread.com Don't Let These Expenses Spoil Your Retirement Abroad http://www.wisebread.com/dont-let-these-expenses-spoil-your-retirement-abroad <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/dont-let-these-expenses-spoil-your-retirement-abroad" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/globe_world_coins_80768379.jpg" alt="Learning how to keep expenses from spoiling retirement abroad" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The relatively low cost of living in countries like Mexico, Thailand, and Spain makes them <a href="http://www.wisebread.com/5-incredible-places-to-retire-abroad-that-anyone-can-afford">popular destinations for retirement</a>. Your fixed retirement income goes further here, affording the possibility of a little luxury, as well as adventure in your later years.</p> <p>Standard of living, climate, and culture are all massive draws, but retiring abroad can also come with unexpected bills. Take, for example, medical costs, taxes, inheritance restrictions, and house buying fees which are completely different to home. While the everyday cost of living might be favorable, these &quot;one off' costs can stack up.</p> <p>Here are some specific (and perhaps unexpected) bills to watch out for.</p> <h2>Assets and Visas</h2> <p>In order to get a visa as a retiree, you will need to demonstrate that you have the income or assets to support your lifestyle. Because it is assumed you will not work (you're retired, after all), the visa type may prohibit you from taking on employment to supplement your income &mdash; making your pension or other assets absolutely crucial.</p> <p>The amount required to get a visa varies from location to location. For example, to retire to Thailand you must prove you have a monthly income of around $2,000. Although this might seem low to those of us living in Western Europe or North America, this income is double that of the average Thai.</p> <p>If retirement in Mexico floats your boat, you will need to prove you can afford it. A temporary visa which lasts for up to four years requires you to have an income of just over $1,500 a month, or just over $25,000 in the bank. A permanent visa, on the other hand, means you need over four times that in the bank, or a monthly income of over $2,500.</p> <h2>Exchange Rate Woes</h2> <p>Wherever you're headed, if you draw income or pension in one currency, and are planning on spending in another, then you need to understand and make allowances for exchange rate fluctuations. If not, you might find yourself with a hefty bill to pay.</p> <p>For example, if you are planning on buying a house in your new retirement location, and will have a mortgage outstanding on it in a local currency, your payment might change significantly because of the exchange rate. Add in the potential fluctuations in mortgage payments due to interest rate changes, and you might struggle to predict exactly what your housing bills will look like on an ongoing basis.</p> <p>If you own property in your home country, one option is to mortgage that property, and use the cash to buy outright in your adopted country. This means that the mortgage you will be paying is in the same currency that you draw income in, removing one source of worry.</p> <h2>The Cost of Good Health</h2> <p>For something that is truly priceless, keeping in great health can be pretty costly. Because a trip to the hospital can be relatively cheap in many popular retirement destinations, many expat retirees prefer to pay out of pocket for their health care as they need it.</p> <p>Paying for health care is a personal decision, and depends largely on your ease of access to funds, and your attitude to risk. Be warned, though, that in some countries such as Thailand, hospitals have been known to turn away people who cannot prove their ability to pay, either with ready cash or valid insurance. Carry a credit card on you if you choose not to invest in an insurance policy here!</p> <h2>Home Sweet Home</h2> <p>Buying a new home is seldom stress free &mdash; and doing it abroad is likely to create some unexpected bills and charges. Make sure you're very clear on the costs involved.</p> <p>Across Europe, for example, house buying comes with a whole range of fees which vary from country to country, and quickly mount up. Throw in the additional costs of having documents checked by a notary, or translated by an official translator, and buying somewhere to live can be especially pricey.</p> <p>It is well worth keeping up with the local news in the country you move to, as your liabilities don't necessarily end once the purchase is complete. Homebuyers in Spain have been pursued for tax the authorities deemed payable on property bought up to a decade ago, because of the high numbers of overseas buyers taking advantage of the massive slump in prices. You might not be able to change unexpected bills like these, but at least you can be forewarned.</p> <p>Part of what makes life overseas exciting is the opportunity to gather new experiences along the way. However, some of these differences can make life that little bit more challenging, too. Many of the costs associated with retiring abroad are unavoidable &mdash; but by being aware in advance, you can better manage the bills as they come in.</p> <p>There's no substitute for your own research. If you're thinking of building a life abroad for your retirement years, then get your finances prepared, so you can enjoy peace of mind.</p> <p><em>Are you planning to retire abroad? What do you think &mdash; does the lower cost of living outweigh the risk of financial surprises?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/claire-millard">Claire Millard</a> of <a href="http://www.wisebread.com/dont-let-these-expenses-spoil-your-retirement-abroad">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/11-ways-to-avoid-bank-fees-while-traveling">11 Ways to Avoid Bank Fees While Traveling</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/retire-for-half-the-cost-in-these-5-countries">Retire for Half the Cost in These 5 Countries</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-get-taken-how-to-evaluate-an-exchange-rate">Don&#039;t Get Taken: How to Evaluate an Exchange Rate</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-amazing-honeymoons-that-only-seem-expensive">5 Amazing Honeymoons That Only Seem Expensive</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-protect-yourself-from-theft-while-traveling">7 Ways to Protect Yourself From Theft While Traveling</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement Travel abroad exchange rates expats health care overseas retirees second homes unexpected bills visas Wed, 06 Jul 2016 09:00:11 +0000 Claire Millard 1745832 at http://www.wisebread.com 5 Questions to Ask Before Buying a Second Home in Retirement http://www.wisebread.com/5-questions-to-ask-before-buying-a-second-home-in-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-questions-to-ask-before-buying-a-second-home-in-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/couple_house_retirement_21246021.jpg" alt="Couple asking questions before buying second retirement home" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>It's nice image: You, your children, and your grandchildren gathering every summer at the lake house you bought after you retired from the workforce. Or maybe you instead picture these same children bringing their grandchildren for long weekends at the downtown city condo you purchased immediately after heading into retirement.</p> <p><a href="http://www.wisebread.com/how-to-retire-rich" target="_blank">Buying a second home after retirement</a> can be a reward for years of hard work. It might also be a good investment if you buy the right property; real estate, after all, has historically increased in value.</p> <p>But buying a second home in your retirement years can also be a financial misstep. These potential pitfalls are why you need to ask five key questions before you invest in that second home after you retire.</p> <h2>1. How Will You Pay for It?</h2> <p>Buying a second home is fairly simple if you plan to use cash from your savings. You still have to be careful, though, to make sure that such a big expenditure won't eventually make it more of a struggle to meet your other retirement goals. It might not be easy to take that long-awaited cruise if you've spent too much of your savings on a second home.</p> <p>If you need to finance the purchase of a second home with a mortgage, you might face an even bigger challenge. Under federal law, lenders can't reject you for a mortgage loan because of your age. They can, though, reject your application if they think you don't have enough income to afford your monthly mortgage payments.</p> <p>Lenders rely partly on your debt-to-income ratio when making mortgage decisions. Lenders want your total monthly debts, including your new mortgage payment, to equal no more than 43% of your gross monthly income. Income, of course, isn't just money you receive from a salary. You can also count Social Security payments, pension payments, monthly rent checks, money from legal settlements, and any other recurring source of monthly income. But if your income is so low that your debt-to-income ratio sails over that 43% mark, you'll struggle to get the mortgage you need to buy a second home.</p> <h2>2. Can You Afford It?</h2> <p>This, of course, is the big question: Even if you can buy a second home, can you afford the monthly expenses that go with it now that you can no longer rely on your regular paycheck?</p> <p>If you are financing the second home with a mortgage, can you afford to add those monthly payments to your existing expenses? And even if you are not taking out a mortgage, you'll have to face the normal expenses associated with owning a home: Furnaces go out, water heaters leak, and utility bills add up. If you buy a condo as a second home, are you okay with paying association dues each month?</p> <p>In short, can you afford the financial burden of owning that second home?</p> <h2>3. Who Will Maintain It?</h2> <p>Homes require regular maintenance. Someone has to mow the lawn, shovel the walks, sweep the floors, and replace fading paint jobs. Is this something you are willing to do, even as you get older? You might think your children will be happy to spend a few hours pulling weeds and mowing the lawn. But are they really okay with that?</p> <p>You might need to hire a service to handle the regular maintenance of your second home. That will ease your burden. But these companies don't come cheap. Can you afford the additional expense of hiring someone to maintain your second home?</p> <h2>4. How Often Will You Use It?</h2> <p>You might dream of spending months at your vacation home surrounded by visiting family members. But that dream might not be realistic. Your children and grandchildren have lives of their own. They might visit far less than you expect.</p> <p>And what about you? You might think now that you'd like to spend every summer at the lake house in that quaint, touristy town. But after three or four summers, you might get tired of that restaurant you've eaten at every visit or you might no longer have the appetite for all those fudge shops and antique stores. Yes, you might get bored with your second home, too.</p> <p>Instead of vacationing in the same spot, you might instead want to travel to new places each year. If so, a permanent second home might not be the best choice.</p> <h2>5. What Happens After You Die?</h2> <p>We don't like to think about dying. But when you buy a second home in your retirement, you need to consider it. What will happen to that second home after you pass on?</p> <p>You might want to leave it to one of your children. You'll have to decide, though, who gets it, without causing strife among them. What if none of your children want the home? They'll then have to go through the hassle of selling the property after you die. You'll need to determine before your death, just how the proceeds of that sale &mdash; if there are proceeds &mdash; will be divvied up.</p> <p><em>Have you considered buying a second home?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/5-questions-to-ask-before-buying-a-second-home-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-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/frayed-relationships-damaged-credit-and-costly-additions-what-a-multi-generational-home-might-cost-y">Frayed Relationships, Damaged Credit, and Costly Additions — What a Multi-Generational Home Might Cost You</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/is-it-safe-to-re-finance-your-home-close-to-retirement">Is it Safe to Re-Finance Your Home Close to 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/the-7-most-important-financial-moments-of-your-life">The 7 Most Important Financial Moments of Your Life</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/when-it-makes-sense-to-apply-for-a-mortgage-loan-without-your-spouse">When It Makes Sense to Apply for a Mortgage Loan Without Your Spouse</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-things-you-need-to-know-when-renting-to-own-a-home">5 Things You Need to Know When Renting-to-Own a Home</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing Retirement condos family maintenance mortgages second homes vacation homes Fri, 24 Jun 2016 09:00:03 +0000 Dan Rafter 1737542 at http://www.wisebread.com Using Your Roth IRA as an Emergency Fund — Ever a Good Idea? http://www.wisebread.com/using-your-roth-ira-as-an-emergency-fund-ever-a-good-idea <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/using-your-roth-ira-as-an-emergency-fund-ever-a-good-idea" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_piggy_bank_73354919.jpg" alt="Woman using Roth IRA as emergency fund" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You know you need an emergency fund, that pool of savings that you can dip into to cover the costs of replacing everything from a burst water heater to your car's blown transmission. But does it ever make sense to use a Roth IRA as that emergency fund?</p> <p>The short answer? It might. If you're careful about your withdrawals.</p> <p>You usually think about Roth IRAs as retirement vehicles. But with a Roth IRA, you can also withdraw from your <em>contributions </em>at any time without penalty, even if you are younger than 59 &frac12;. That's because you've already paid taxes on your contributions.</p> <h2>No Penalties From Contribution Withdrawals</h2> <p>Because of this quirk, a <a href="http://www.wisebread.com/4-reasons-why-a-roth-ira-may-be-better-than-your-401k" target="_blank">Roth IRA can work as an emergency fund</a> <em>and</em> retirement fund at the same time. You make your yearly deposits &mdash; for 2016, you can contribute a maximum of $5,500 every year into a Roth IRA (unless you are 50 or older, in which case you can contribute a maximum of $6,500 a year) &mdash; and watch that money grow as you near retirement. But if an expensive emergency comes up, you can withdraw the funds you need, as long as what you are withdrawing is coming from the money you contributed to your Roth IRA, and not from the dollars that those contributions have earned.</p> <h2>You'll Pay for Earnings Withdrawals</h2> <p>In other words, withdrawing your contributions is never penalized. Withdrawing from your Roth IRA's earnings, though, will leave you with a penalty and a tax hit. If you withdraw the money that your Roth IRA has earned before you hit the age of 59 &frac12; &mdash; aside from a few special circumstances &mdash; you'll not only pay taxes on those dollars, you'll also have to pay a penalty of 10% of whatever you withdraw.</p> <p>Say you withdraw $2,000 worth of earnings on your Roth IRA before you turn 59 &frac12;. Not only will you have to pay taxes on that money, you'll also have to pay a penalty of $200.</p> <p>Fortunately, it's not easy to withdraw your earnings too early. You'll have to request the withdrawal from your brokerage, mutual fund, or bank. These financial institutions will know if your withdrawal request is high enough to cut into your earnings. If this does happen, it's best to find an alternative source of funds, unless you are not bothered by the idea of paying extra taxes or an additional penalty.</p> <h2>The Annual Cap Means You Can't Pay It Back</h2> <p>There is another disadvantage to using a Roth IRA as an emergency fund. Say you withdraw $2,500 to buy a new furnace. You can still only contribute your maximum to your Roth IRA each year.</p> <p>If you can only contribute $5,500 each year, you can't make up for that $2,500 withdrawal by contributing $7,000 instead. This could slow the pace of your retirement savings.</p> <p>You'll also need to be careful with your investments if you plan on using your Roth IRA as an emergency fund. You should place your money in safer, more conservative investment vehicles such as CDs and bonds. That way, the odds are greater that more of your money will be available in case of a financial emergency.</p> <p>Whether you use a Roth IRA, a traditional savings account, or some other savings vehicle as your emergency fund, one factor doesn't change: You need to build and maintain that fund. How much money you need in your emergency fund varies, but most financial experts recommend that you have at least six months of daily living expenses saved up. More, of course, is even better.</p> <p><em>Have you ever pulled money from a Roth IRA to cover an emergency? Would You?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/using-your-roth-ira-as-an-emergency-fund-ever-a-good-idea">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/6-emergency-fund-myths-you-should-stop-believing">6 Emergency Fund Myths You Should Stop Believing</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/is-your-emergency-fund-big-enough-to-keep-you-afloat">Is Your Emergency Fund Big Enough to Keep You Afloat?</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-steps-to-starting-a-retirement-plan-in-your-30s">8 Steps to Starting a Retirement Plan in Your 30s</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-ways-to-strengthen-your-finances-before-retirement">5 Ways to Strengthen Your Finances Before Retirement</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-opportunity-funds-are-the-new-emergency-funds">Why &quot;Opportunity&quot; Funds Are the New Emergency Funds</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Retirement borrowing contributions emergency funds Roth IRA savings withdrawals Thu, 16 Jun 2016 09:30:21 +0000 Dan Rafter 1731947 at http://www.wisebread.com 5 Ways to Handle a Forced Early Retirement http://www.wisebread.com/5-ways-to-handle-a-forced-early-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-ways-to-handle-a-forced-early-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_taking_notes_73540307.jpg" alt="Woman finding ways to handle early retirement" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You had a plan: You would work until 67, contributing the maximum amount of each paycheck into your company's 401K plan. You would then <a href="http://www.wisebread.com/how-to-plan-for-retirement-when-you-re-ready-to-retire">enjoy a retirement</a> of traveling the world and spending time with your grandchildren.</p> <p>But then your company changed your plans. They let you go you at age 55 or 60. Finding a new job at this age isn't easy. According to an AARP study released in 2015, 45% of job hunters aged 55 or older were members of the long-term unemployed, those who were out of work for 27 weeks or longer. And when these older job seekers did find new jobs, they tended to earn less money. The same AARP survey found that almost 48% of people 55 or older were earning less on their new jobs than they did at their old ones.</p> <p>Those are intimidating numbers. But they don't mean that a forced early exit from the workforce will dash your retirement dreams. Here are five steps that you can take after you've been laid off or fired to make your earlier-than-planned retirement a successful one.</p> <h2>1. Assess Your Financial Reality</h2> <p>It's easy to panic when you've lost a job. But your financial situation might not be as dire as you think. To find out, it's time to perform a quick financial assessment.</p> <p>First, list your monthly expenses. These might be lower if you are no longer paying a mortgage each month. Then list the income you have coming into your household. Maybe your spouse's income means that you can still save enough money each month for a happy retirement. Maybe you'll need an extra income boost from somewhere to still hit those goals.</p> <p>Depending on how close you are to your official retirement age, you might decide to start receiving your monthly Social Security payments. You'll get less each month if you haven't reached full retirement age, but if you can't hold off on the extra monthly income, receiving your benefits a few years early might be a sound move.</p> <p>If you were laid off or fired, you probably qualify, too, for unemployment insurance. Make sure to take advantage of this. That extra monthly income could help you stay on track for your retirement goals.</p> <h2>2. Get Realistic About Your Retirement Goals</h2> <p>You might have to scale back your retirement goals should you be forced to exit the workplace earlier than planned. Maybe you planned to take a long trip every year. If you're forced out of work five years early, you might have to scale that back to just three big trips spread out over your entire retirement.</p> <p>This doesn't mean that your retirement is ruined. But you might have to refocus. Maybe instead of joining that high-priced country club, you'll be taking your golf clubs to public courses throughout your city.</p> <h2>3. Make Sure You Have a Plan for Insurance</h2> <p>You'll need health insurance even after you lose your job. You might qualify for Medicare or Medicaid, though you might not qualify for these government programs depending on your age and income levels.</p> <p>If you need insurance not offered through the government, you can search for a low-cost plan through the insurance exchange created under the Affordable Care Act.</p> <p>Letting your health insurance lapse can be a costly mistake.</p> <h2>4. Find Part-Time Work to Fill in the Income Gaps</h2> <p>If you need some extra income each month, consider taking a part-time job. This work, even if it doesn't come with the benefits of a traditional full-time job, could provide you with the extra bit of cash that will keep your retirement dreams alive.</p> <p>Depending on your field, you might find a part-time job as a consultant. But even if you can't, you can still find enjoyment, and some extra financial security, by taking on a position in a new field.</p> <h2>5. Meet With a Professional</h2> <p>Retirement planning is complicated when everything goes according to plan. When those plans are suddenly changed? It's even more of a challenge to make sure that you have enough dollars saved for your after-work years.</p> <p>That's why it's important to meet with a financial adviser who can help you determine what financial steps you need to take now. Depending on your income and community, you might even qualify for free financial advice.</p> <p>A financial planner can help you create a new budget and a new financial plan that fits with your new money reality.</p> <p><em>Have you faced early retirement? What steps have you taken?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/5-ways-to-handle-a-forced-early-retirement">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-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/4-moves-that-guarantee-a-great-retirement">4 Moves That Guarantee a Great Retirement</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/401k-or-ira-you-need-both">401K or IRA? You Need Both</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-reasons-why-a-roth-ira-may-be-better-than-your-401k">4 Reasons Why a Roth IRA May be Better Than Your 401(k)</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/which-retirement-account-is-right-for-you">Which Retirement Account Is Right for 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/how-to-plan-for-retirement-when-you-re-ready-to-retire">How to Plan for Retirement When You’re Ready to Retire</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement 401k early retirement extra income forced retirement insurance job loss medicaid medicare part-time jobs unemployed Tue, 07 Jun 2016 09:30:33 +0000 Dan Rafter 1725699 at http://www.wisebread.com 10 Signs You Aren't Saving Enough for Retirement http://www.wisebread.com/10-signs-you-arent-saving-enough-for-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/10-signs-you-arent-saving-enough-for-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_frown_broke_000026428663.jpg" alt="Man learning signs he&#039;s not saving enough for retirement" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Are you concerned that you aren't saving enough for retirement? Well, you're not alone. In fact, more than one third of Americans haven't started investing for retirement yet. About 75% of Americans over the age of 40 are also behind on their retirement savings, so it's time to break the statistic. We've come up with some common warning signs that you may not be saving enough and need to increase what you're investing.</p> <h2>1. You Don't Have Specific Goals in Mind</h2> <p>First, you need to figure out what the minimum is that you'll need to retire. This will allow you to properly plan your retirement and ensure you are meeting your benchmark goals. Work on determining a target retirement age and goal amount so that you can develop a savings plan on your own or with a skilled professional.</p> <p>It's also important that you know what you'll get from Social Security so that you can plan what you need to save above that. Lastly, work on an estimated monthly financial plan so that you have some idea what you'll be spending on monthly bills and debt payments.</p> <h2>2. You Don't Know How Much to Save</h2> <p>Most professionals recommend saving at least 10% of your gross salary, if you've been saving since your 20s. However, if you don't start saving until your 30s, Schwab recommends upping that contribution to 15%&ndash;25%. If you start in your 40s or later, you would want to save 35% of your income, which is a rather hefty amount. This is all thanks to the power of compounding interest, so it's never too early to start saving.</p> <h2>3. You Aren't Matching Your Employer's Contribution</h2> <p>If your employer is matching your 401K contribution, that is basically free money invested in your future. That's why it's crucial to at least match your employer's contribution, so that they can help you prepare for your retirement as much as possible.</p> <h2>4. You've Borrowed From Your 401K</h2> <p>Borrowing against your 401K is never a good idea. It may help in the short-run, but in the long-run, it can affect your savings goals and financial health during retirement. You would also need to save more aggressively going forward just to catch up with your original savings goals.</p> <h2>5. You Aren't Prioritizing Your Future</h2> <p>One of the first things you should always think about is building savings for yourself so you have the money you need in case of an emergency or unexpected expense. Short of that savings account, you shouldn't be prioritizing anything over your retirement savings. Your retirement and your future should be your first priority, even over your children's education, because nobody will be saving for your retirement except for you.</p> <h2>6. You're Only Investing in a 401K</h2> <p>Contributing to a 401K is a great start to your retirement savings, but it usually isn't enough. Your best bet is to diversify your portfolio, investing in both a 401K and an IRA or Roth IRA. This will ensure you are well prepared for your golden years. (See also: <a href="http://www.wisebread.com/which-retirement-account-is-right-for-you?ref=seealso">Which Retirement Account Is Right for You?</a>)</p> <h2>7. You Aren't Accounting for Inflation</h2> <p>On average, inflation rates linger around 3%, which means that your expenses will double in less than 25 years. You will need to account for this, as it's one of the biggest retirement planning mistakes anyone makes.</p> <h2>8. You Haven't Sought Advice</h2> <p>You may not necessarily need a financial planner, but that doesn't mean that you shouldn't seek advice on your retirement portfolio from time to time. For instance, have you diversified properly? Are you investing in the right types of investment products? Have you adjusted your portfolio to match the appropriate level of risk and reward for your age range and lifestyle? These are some of the many questions you need to ask yourself (and/or a professional) to ensure you are saving and planning correctly. (See also: <a href="http://www.wisebread.com/do-you-need-a-financial-planner?ref=seealso">Do You Need a Financial Planner?</a>)</p> <h2>9. You Haven't Started Saving Yet</h2> <p>The sooner you start investing in your future, the more you'll have by retirement, thanks to compound interest. This also means that the sooner you start saving, the less you'll need to save every month to have enough in your retirement years. (See also: <a href="http://www.wisebread.com/stop-making-these-10-bogus-retirement-savings-excuses?ref=seealso">Stop Making These 10 Bogus Retirement Savings Excuses</a>)</p> <h2>10. You're Worried About Retirement</h2> <p>Possibly the most obvious sign that you aren't saving enough is that you feel very nervous about retirement. If you don't think you're saving enough, then you probably aren't.</p> <p><em>Do you know of other signs that a person isn't saving enough for retirement? Please share your thoughts in the comments!</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/andrea-cannon">Andrea Cannon</a> of <a href="http://www.wisebread.com/10-signs-you-arent-saving-enough-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-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/4-moves-that-guarantee-a-great-retirement">4 Moves That Guarantee a Great Retirement</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-warning-signs-youre-sabotaging-your-nest-egg">6 Warning Signs You&#039;re Sabotaging Your Nest Egg</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/stop-making-these-10-bogus-retirement-savings-excuses">Stop Making These 10 Bogus Retirement Savings Excuses</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/one-smart-thing-you-can-do-for-your-retirement-today">One Smart Thing You Can Do for Your Retirement Today</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/401k-or-ira-you-need-both">401K or IRA? You Need Both</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement 401k compound interest goals golden years IRA nest egg not saving enough Thu, 02 Jun 2016 10:30:03 +0000 Andrea Cannon 1721735 at http://www.wisebread.com 4 Moves That Guarantee a Great Retirement http://www.wisebread.com/4-moves-that-guarantee-a-great-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-moves-that-guarantee-a-great-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/couple_sun_roadtrip_000087905209.jpg" alt="Couple making moves to guarantee a great retirement" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Times have changed. Retirement is no exception.</p> <p>Back in 1998, 60.5% of Americans said they were <a href="https://www.ebri.org/pdf/PR1160.Ret-Sat.26Apr16.pdf">very satisfied with their retirement</a> in a study conducted by the Employee Benefit Research Institute. Fast forward 14 years later, that percentage dropped to 48.6%. Even worse, the percentage of Americans not satisfied at all with their retirement situation went up from 7.9% to 10.5%.</p> <p>But you can avoid that fate. Here are four ways to turn this period into the best time of your life.</p> <h2>1. Semi-Retire</h2> <p>An old retirement adage goes, &quot;When you retire, think and act as if you were still working; when you're still working, think and act a bit as if you were already retired.&quot; There are three good reasons why this is true.</p> <p>First, putting off retirement may help stave off certain maladies of aging, such as Alzheimer's disease. According to French researchers, there is a correlation between higher retirement age and <a href="http://health.usnews.com/health-news/news/articles/2013/07/15/putting-off-retirement-may-help-stave-off-alzheimers">lower dementia risk</a>.</p> <p>Second, later retirement allows you to make the most out of your nest egg:</p> <ul> <li>While you can start receiving Social Security retirement benefits at age 62, you can wait until full retirement age to receive <a href="https://www.ssa.gov/planners/retire/delayret.html">delayed retirement credits</a>.<br /> &nbsp;</li> <li>Roll over a former employer's 401K plan after you turn 70 1/2 into another plan with a current employer, and you aren't required to take required minimum distributions (RMDs) starting the second year after the rollover.<br /> &nbsp;</li> <li>By continuing to work part-time, you can continue to contribute to a Roth IRA (up to $6,500 in 2016) after you reach <a href="http://www.irs.gov/retirement-plans/roth-iras">age 70 1/2</a>.</li> </ul> <p>Third, 83% of U.S. retirees cited &quot;<a href="https://www.ebri.org/pdf/briefspdf/EBRI_IB_397_Mar14.RCS.pdf">enjoying working</a>&quot; as a major reason to work for pay after retirement. Among current workers who expect to work in retirement, 79% of them cite &quot;wanting to stay active and involved&quot; as a major reason to work for pay in retirement.</p> <h2>2. Take Advantage of Catch-Up Contributions</h2> <p>Starting age 50, you can make additional contributions on top of the regular limit to eligible plans.</p> <ul> <li>Catch-up contributions of <a href="https://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/Retirement-Topics-Catch-Up-Contributions">up to $6,000</a>: 401K (other than a SIMPLE 401K), 403(b), SARSEP, and governmental 457(b).<br /> &nbsp;</li> <li>Catch-up contributions of up to $3,000: SIMPLE IRA and SIMPLE 401K.<br /> &nbsp;</li> <li>Catch-up contributions of up to $1,000: Traditional or Roth IRA.</li> </ul> <p>Let's take a look at the power of catch-up contributions: Let's imagine that you have a 401K and you make $6,000 in catch-up contributions for 15 years. Here is how much more you would have at the end of 15 years, assuming different rates of return, in your 401K:</p> <ul> <li>3% return compounded annually: $113,398.69</li> <li>4% return compounded annually: $122,728.99</li> <li>5% return compounded annually: $132,951.76</li> <li>6% return compounded annually: $144,154.23</li> <li>7% return compounded annually: $156,431.90</li> </ul> <h2>3. Research Adequate Health Coverage and Disability Insurance</h2> <p>Despite the best-laid plans, chances are circumstances will require you to make some changes along the way. Nearly one out of two Americans reported retiring earlier than expected. While some individuals have good reasons, such as accumulating sufficient financial resources or wanting to do something else, many had negative reasons. Of those that retire early, 61% of cited health reasons or disabilities, and 18% cited the need to care for a spouse or family member.</p> <p>This is why getting the right health coverage and disability insurance now for your spouse and yourself is a key way to make retirement enjoyable. Plan ahead so that you don't become part of the 24% of Americans who aren't confident about paying for medical expenses in retirement. Disability insurance is essential for the main breadwinner of the household. (See also: <a href="http://www.wisebread.com/make-these-7-money-moves-now-or-youll-regret-it-in-20-years?ref=seealso">Make These 7 Money Moves Now or You'll Regret It in 20 Years</a>)</p> <p>If you have to retire early due to health problems, the Social Security Administration suggests applying for <a href="http://www.ssa.gov/pubs/EN-05-10035.pdf">Social Security disability benefits</a>, which are full, unreduced retirement benefits.</p> <h2>4. Consider Retiring Abroad</h2> <p>According to a study from a Transamerica Center for Retirement Studies, 71% of Americans say travel has <a href="http://www.transamericacenter.org/docs/default-source/resources/travel-survey/tcrs2013_op_travel_and_aging_executive_summary.pdf">helped them enjoy retired life</a>. That's why one way to turn retirement into the best time of your life is to move abroad. Additionally, living abroad can enable you to reduce your living expenses during retirement, without forsaking quality of life. Several cities around the world offer visa pension programs, such as Malaysia's <em>My Second Home</em> and Panama's &quot;pensionado&quot; program, that offer U.S. retirees generous tax breaks and high-quality medical services at reduced costs. Of course, beautiful locales and ideal weather conditions don't hurt either! (See also: <a href="http://www.wisebread.com/x-exciting-world-cities-you-can-afford-to-retire-in?ref=seealso">4 Exciting World Cities You Can Afford to Retire In</a>)</p> <p><em>How do you plan turn retirement into the best time of your life?</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-moves-that-guarantee-a-great-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-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/10-signs-you-arent-saving-enough-for-retirement">10 Signs You Aren&#039;t Saving Enough for Retirement</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-warning-signs-youre-sabotaging-your-nest-egg">6 Warning Signs You&#039;re Sabotaging Your Nest Egg</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/401k-or-ira-you-need-both">401K or IRA? You Need Both</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-reasons-why-a-roth-ira-may-be-better-than-your-401k">4 Reasons Why a Roth IRA May be Better Than Your 401(k)</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-handle-a-forced-early-retirement">5 Ways to Handle a Forced Early Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement 401k disability golden years healthcare insurance IRA moving abroad nest egg work in retirement Fri, 27 May 2016 10:00:12 +0000 Damian Davila 1717321 at http://www.wisebread.com How to Retire Rich http://www.wisebread.com/how-to-retire-rich <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-retire-rich" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/rich_man_money_000026485996.jpg" alt="Man learning how to retire rich" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Here at Wise Bread, we've told you a lot about how to <a href="http://www.wisebread.com/one-smart-thing-you-can-do-for-your-retirement-today" target="_blank">grow a retirement fund</a> that will allow you to live comfortably after you stop working. Usually, this means saving enough to be able to maintain your current lifestyle and prepare for your long-term care.</p> <p>But what if you want to really live it up in retirement? How can you accumulate enough wealth to be considered among the truly rich? There's no magic bean to help you get super-wealthy. But smart and disciplined investors <em>can </em>amass retirement accounts in the tens of millions of dollars, simply by earning a bit more, investing more aggressively, and for a longer period of time.</p> <p>Let's take a look at these strategies for building serious wealth in retirement.</p> <h2>Earn More</h2> <p>While it's certainly possible to build a very nice retirement fund even if you earn a modest salary, the path to top-tier wealth usually comes from having a high income. So get to work!</p> <p>Those with very large retirement accounts often have the ability to max out their 401K plans each year ($18,000 annually) and likely a Roth IRA, as well ($5,500 per year). Earning more money also helps you avoid debt, and it expands your ability to move into other great investments, such as real estate. Even an extra few thousand dollars a year will give you the ability to invest more aggressively in order to accumulate more over the long haul.</p> <p>&quot;I think people would be surprised to learn how hard the 1% work,&quot; said David Schneider of Schneider Wealth Strategies in New York. &quot;You've got to work long and you've got to work hard.&quot;</p> <h2>Start Investing Early and Stay in the Game</h2> <p>One of the most important tools for building wealth is time. We've written a lot about the power of compound interest, and time is arguably more important than the rate of investment return and contributions.</p> <p>Let's say you start with $50,000 and contribute another $5,500 each year. Assuming a 7% annual return, you'll have $280,000 in 20 years. In 30 years, you'll have $631,000. In 40 years, you'll have $1.3 million. In 50 years, it's $2.6 million. So you can imagine how important it is to begin saving for retirement right when you begin earning money.</p> <h2>Own Your Own Company</h2> <p>It's nice to own shares of companies and see their value grow over time. But if you want to get super rich, you will want to own the whole business. If you work for a company and take a salary, there's a ceiling to how much you can earn and invest.</p> <p>Most of the wealthiest people on Earth are people who started their own companies and watched them grow into huge enterprises.</p> <p>&quot;By building something, that's where you see the biggest successes,&quot; said Andrew Rafal of Bayntree Wealth Advisors in Scottsdale, AZ.</p> <h2>Don't Do Stupid Stuff</h2> <p>While all investing comes with risk, there are certain things that every person should avoid if they plan to retire rich. Financial advisers say it's imperative that investors avoid major mistakes that wipe out large portions of their savings. This means staying away from more complicated and risky things like options, or trading on margin (which Rafal called &quot;a recipe for disaster&quot;).</p> <p>Don't place all of your money with one investment, and stay away from get-rich-quick schemes or products that claim to be able to time the market.</p> <p>&quot;You have to sort of put a garbage detector on,&quot; Schneider said.</p> <h2>Invest in Small Cap and Value Stocks</h2> <p>Conventional investment wisdom suggests that people invest in a mix of equities from varying industries, often weighted toward stable, large-cap stocks. This is good advice, but those who are willing to take on a little more risk may be able to supercharge their returns.</p> <p>Investing more heavily in smaller companies and looking for undervalued stocks will help lead to longer returns over time, financial advisers said.</p> <p>Schneider noted that between 1972 and 2015, small cap value stocks generated an average return of 12.9%, compared to 10% for large cap. That 3% gap may not seem like much, but if you started with $10,000, it was the difference between $600,000 and nearly $2 million.</p> <p>&quot;Over time, smaller companies do better than large stocks, and if you combine that with value stocks, you get more bang for your buck,&quot; Schneider said.</p> <p>He acknowledged that there is more volatility with small cap stocks, but said the higher returns were &quot;compensation for taking the bigger risk.&quot;</p> <h2>Live Within Your Means</h2> <p>In order to retire rich, you will need to live modestly in your younger years. Maxing out retirement accounts requires the discipline to put money aside rather than spend it. It means avoiding debt, especially high-interest debt from credit cards.</p> <p>Financial advisers said that some of their best and most successful clients were those that lived humble, non-flashy lives, but ended up with massive retirement funds because of their disciplined spending habits.</p> <h2>Be Born Into It</h2> <p>There are plenty of stories of wealthy people who started with nothing and grew their fortune on their own. But the truth is that many of the world's ultra-rich started off with a certain level of financial comfort, thanks to the success of the generations who came before them. Presidential candidate Donald Trump likes to boast of his wealth, but his father was a successful businessman and loaned him money early on in his career. While he's become a successful businessman in his own right, it didn't hurt to have early loans from wealthy family. Billionaires like the Koch brothers, members of the Walton family, and Lilliane Betancourt all inherited much of their wealth.</p> <p>A 2013 report researchers at the University of California and London School of economics concluded that entrepreneurs are more likely to be born into privilege. And Global Entrepreneurship Monitor reports that 80% of funding for new businesses comes from savings or from friends and family.</p> <h2>Use Debt Intelligently</h2> <p>Most financial advisers will say that staying out of debt is a key part of building wealth. After all, you can't put money into the stock market if you're too busy paying off high-interest credit cards or auto loans. But there are several instances in which borrowing money may help you build wealth over the long term.</p> <p>Rafal said using leverage to acquire real estate can be a sound wealth-building strategy, especially with interest rates at historic lows. He also said that if interest rates are lower than stock market returns, most people will be better off in the long run investing their money than paying off debt early.</p> <p><em>How do you plan to retire rich?</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/how-to-retire-rich">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/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-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/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-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-signs-your-retirement-is-on-track">8 Signs Your Retirement Is on Track</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-money-moves-to-make-the-moment-you-win-the-lotto">4 Money Moves to Make the Moment You Win the Lotto</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement getting rich investing millionaires one percent savings wealth Wed, 25 May 2016 10:00:06 +0000 Tim Lemke 1715215 at http://www.wisebread.com A Simple Guide to Rolling Over All of Your 401Ks and IRAs http://www.wisebread.com/a-simple-guide-to-rolling-over-all-of-your-401ks-and-iras <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/a-simple-guide-to-rolling-over-all-of-your-401ks-and-iras" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/retirement_fund_jar_000061741674.jpg" alt="How to roll over all of your 401ks and IRAs" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The median number of years that U.S. workers <a href="http://www.bls.gov/news.release/archives/tenure_09182014.htm">stick with their current employer</a> is 4.6 years, according to U.S. Department of Labor. This means that sooner or later you're bound to quit, get fired, or get laid off from your current job. To avoid steep transaction fees, early distribution taxes, or losing retirement account contributions, you need to be ready to roll over your hard-earned nest egg when the time comes.</p> <h2>Establish How Much You Really Have</h2> <p>The first step is to determine the current balance of your 401K or IRA. While you'll eventually receive a separation from employment notice from your previous employer stating your total vested account balance, you can save time by researching your vested balance, net of any 401K loan balances you may owe.</p> <h3>Take Care of Any Outstanding Loans From Your 401K</h3> <p>Unlike IRAs, many 401K plans offer the option to take loans from your retirement account. As long as you keep up with your payment schedule, you generally have up to five years to pay back your loan in full. However, when you change jobs, the unpaid loan balance becomes due within 60 days.</p> <p>Any unpaid loan monies by the deadline or transaction date of your rollover are subject to federal income tax, a 10% early distribution penalty for those age 59 1/2 and under, and state income tax or penalty, if applicable. You can't roll over unpaid 401K loans.</p> <h3>Know the Vesting Schedule</h3> <p>Your own contributions to your 401K or IRA are always fully vested. However, contributions from your employer to your retirement account may be subject to a vesting schedule. Trying to retain top talent as long as possible, employers may require a minimum period of employment before employees gain full control on part of their retirement accounts. The two most common vesting schedules are <em>cliff vesting</em> (100% vesting is only provided after a set number of years) and <em>graded vesting</em> (a vested percentage is provided every year).</p> <p>When you separate from your employer, you forgo any non-vested contributions to your retirement account.</p> <p>Once you know your outstanding loan balance and vesting schedule, you have a clear idea of how much you can rollover.</p> <h2>Choose Rollover Options</h2> <p>Under most scenarios, you have six options for your total vested account balance:</p> <ol> <li>Keep your account;</li> <li>Rollover account into a new or existing IRA;</li> <li>Rollover account into a new or existing qualified plan;</li> <li>Do an indirect rollover;</li> <li>Request a full cash-out of your account; or</li> <li>Do a mix of the above five options.</li> </ol> <p>Let's analyze each one of these scenarios, because some of them may trigger taxes.</p> <h3>1. Keep Your Account</h3> <p>All retirement accounts stipulate a minimum amount required to remain in your old employer's plan, usually ranging from $1,000 to $5,000. If you're happy with your current financial provider, you can choose to keep the account.</p> <p>Make sure to read the fine print because some providers may strip away some services (such as certain investment options or coverage of fees) and gain the right to convert your 401K into an IRA without your input. According to a Plan Sponsor Council of America survey of 613 plans with eight million participants, 57% of 401K plans transfer balances between $1,000 and $5,000 to an IRA when the participant leaves the employer.</p> <p>While such forced-transfer IRAs don't trigger early withdrawal penalties or income taxes, they are often subject to high fees and low investment returns. A November 2014 report from the U.S. Government Accountability Office (GAO) found that forced-transfer IRAs <a href="http://www.gao.gov/assets/670/667151.pdf">have administrative fees</a>, ranging from $0 to $100 or more to open the account, and $0 to $115 annually to retain the account.</p> <h3>2. Rollover Account Into a New or Existing IRA</h3> <p>Whether you have a 401K or IRA, your current provider will provide you the option to request a rollover to an existing IRA, or open a new one through any of their partner institutions. Either option triggers no income taxes or distribution penalties. Under this scenario, keep in mind that you're not bound to the offerings from your old employer's financial institution and have the option to shop around for a new IRA with other financial institutions, as well.</p> <p>There are two types of IRAs: traditional IRA and Roth IRA. The main difference between them is that you pay taxes up front with the Roth IRA, and that you pay taxes at withdrawal with the traditional IRA. One of the advantages of owning an IRA is that there are many penalty-free ways to withdraw money from your retirement account before age 59 1/2. (See also: <a href="http://www.wisebread.com/7-penalty-free-ways-to-withdraw-money-from-your-retirement-account?ref=seealso">7 Penalty-Free Ways to Withdraw Money From Your Retirement Account</a>)</p> <h3>3. Rollover Account Into a New or Existing Qualified Plan</h3> <p>Besides an IRA, you can also rollover your retirement account into a 401K, 403(b), 457, Federal Thrift Savings Plan, or employer qualified plan, as long as the target plan allows those funds. Rollovers into new or existing qualified plans trigger no income taxes or early distribution fees.</p> <p>The IRS provides a useful <a href="https://www.irs.gov/pub/irs-tege/rollover_chart.pdf">rollover chart</a> to determine to which accounts you can rollover retirement contributions. However, the most surefire way to find out is by contacting your plan's customer service center.</p> <h3>4. Do an Indirect Rollover</h3> <p>Direct rollovers are only possible if you already have a retirement account with a previous or new employer or are able to open a new plan on your own. In the event that you think that you can find a new job offering a retirement account within 60 days, then you could try to do an indirect rollover.</p> <p>Your old employer would cut you a check, withholding the necessary 20% for income tax purposes. Once you have a qualified plan with your new employer, you would deposit the check in full and add the 20% withholding out of pocket. The IRS will return you the 20% withholding when you file your tax return. Make sure to deposit the full amount because any gap is subject to applicable income taxes and penalties for those age 59 1/2 and under.</p> <h3>5. Request a Full Cash-Out of Your Account</h3> <p>This is the least desirable of all options because not only do you pay incomes taxes and trigger early distribution fees, but also forgo investment returns. At age 20, a $600 balance on a 401K may not seem like much. However, assuming an investment return of 6% compounded annually and a target retirement age of 65, you would be saying goodbye to an extra $8,258.77 for your nest egg.</p> <p>Every year you have a ceiling on how you much contribute to your 401K or IRA. By cashing out that past contribution, you'll never be able to make it up.</p> <h3>6. Do a Mix of the Previous Options</h3> <p>Depending on your unique situation and set of rules from your old and new retirement accounts, you could use portions of your old account for different purposes. For example, you could cash out 10% of your vested account balance, subject to income taxes and early distribution penalties when age 59 1/2 and under, and rollover 90% of vested account balance to an IRA.</p> <p>Doing a mix of rollover options requires careful planning and plenty of legwork, but it may provide the solution that is better suited to your financial goals.</p> <h2>The Bottom Line</h2> <p>Knowing how to rollover your 401K or IRA is a skill that you'll use many times throughout your work years. The process is relatively simple but requires many steps. Before rolling over funds, make sure to plan ahead by minimizing loans from your 401K and maximizing total vested balance. Contact your old and new plan managers so that you are aware of all applicable rules and can make an informed decision. Keep an eye on the deadline for a rollover so that you're not forced to take a cash-out or forced to transfer to a high-fee IRA.</p> <p><em>Have you ever rolled over your 401K or IRA? How did you do it?</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/a-simple-guide-to-rolling-over-all-of-your-401ks-and-iras">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/4-reasons-why-a-roth-ira-may-be-better-than-your-401k">4 Reasons Why a Roth IRA May be Better Than Your 401(k)</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-warning-signs-youre-sabotaging-your-nest-egg">6 Warning Signs You&#039;re Sabotaging Your Nest Egg</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/401k-or-ira-you-need-both">401K or IRA? You Need Both</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/which-retirement-account-is-right-for-you">Which Retirement Account Is Right for 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/4-reasons-why-you-must-open-a-roth-ira-before-april-15">4 Reasons Why You Must Open a Roth IRA Before April 15</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement 401k cash out employers IRA outstanding loans rolling over Roth IRA vesting schedule Wed, 18 May 2016 09:00:08 +0000 Damian Davila 1709866 at http://www.wisebread.com Ask the Readers: Have You Started Saving for Retirement? http://www.wisebread.com/ask-the-readers-have-you-started-saving-for-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/ask-the-readers-have-you-started-saving-for-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_piggy_bank_000088088071.jpg" alt="Woman starting to save for retirement" 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-have-you-started-saving-for-retirement#comment-792024">Kat</a>, John, and Natasha for winning this week's contest!</em></p> <p>We need money for a lot of things, like day-to-day expenses, paying bills or debt, or even saving up an emergency fund. It's easy to put off saving for your retirement when it seems to be a long way off. But it's important to take advantage of the years to have to save...and the interest you'll accrue from a retirement savings account. And if you're almost at retirement age, it's imperative that you begin preparing for your non-earning years.</p> <p><strong>Have you started saving for retirement?</strong> What kinds of accounts (or other methods) do you use? Are you happy with the amount that you're saving so far?</p> <p>Tell us whether you've started saving for retirement 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 id="rcwidget_1pjr5ydh" data-template="" data-theme="classic" data-raflid="79857dfa245" rel="nofollow" href="http://www.rafflecopter.com/rafl/display/79857dfa245/" class="rcptr">a Rafflecopter giveaway</a> </p> <script src="https://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, May 23rd at 11:59 p.m. Pacific. Winners will be announced after May 23rd 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 whether you&#039;ve started saving for retirement 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-have-you-started-saving-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-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-incredible-places-to-retire-abroad-that-anyone-can-afford">5 Incredible Places to Retire Abroad That Anyone Can Afford</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/ask-the-readers-what-is-your-new-years-resolution">Ask the Readers: What Is Your New Year&#039;s Resolution?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/this-is-why-you-cant-postpone-planning-for-your-retirement-and-how-to-start">This Is Why You Can&#039;t Postpone Planning for Your Retirement (And How to Start)</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-occasions-when-you-should-definitely-hire-a-financial-advisor">7 Occasions When You Should Definitely Hire a Financial Advisor</a></span> </div> </li> <li class="views-row views-row-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-would-you-relocate-for-the-perfect-job-chance-to-win">Ask the Readers: Would You Relocate for the Perfect Job? (Chance to win!)</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Giveaways Retirement Ask the Readers retirement Tue, 17 May 2016 10:00:08 +0000 Ashley Jacobs 1708928 at http://www.wisebread.com Best Money Tips: How to Retire By 55 http://www.wisebread.com/best-money-tips-how-to-retire-by-55 <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-money-tips-how-to-retire-by-55" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_happy_hammock_000068947321.jpg" alt="Woman learning how to retire by 55" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Welcome to Wise Bread's <a href="http://www.wisebread.com/topic/best-money-tips">Best Money Tips</a> Roundup! Today we found a strategy for early retirement, questions that will help you declutter, and the details on Hulu&rsquo;s new cable TV service.</p> <h2>Top 5 Articles</h2> <p><a href="http://www.bluntmoney.com/how-to-be-able-to-retire-at-55/">How to Be Able to Retire at 55</a> &mdash; Early retirement is a dream for many of us&hellip; but you can make it a reality balancing your sources of income and expenditure. [Blunt Money]</p> <p><a href="http://parentingsquad.com/6-amazing-books-on-motherhood-you-should-read-immediately">8 Questions to Ask Yourself to Help You Declutter</a> &mdash; Do you have a concrete plan to use this item? If not, toss it. [PopSugar Smart Living]</p> <p><a href="http://www.csmonitor.com/Business/Saving-Money/2016/0513/Cord-cutters-rejoice!-Hulu-is-planning-an-online-cable-style-TV-service">Cord-cutters rejoice! Hulu is planning an online cable-style TV service</a> &mdash; Hulu recently announced that they will offer an online streaming package that would include broadcast and cable channels. [The Monitor]</p> <p><a href="http://www.experian.com/blogs/news/about/build-emergency-fund/">Surefire Ways to Boost Your Emergency Fund</a> &mdash; Life is full of surprises &mdash; some good, some bad, and some very expensive! Join Experian's #CreditChat tomorrow at 3 p.m. ET to learn how to boost your emergency fund for life's very expensive surprises. [Experian]</p> <p><a href="http://flippingincome.com/items-you-can-resell-from-dollar-stores/">5 Items You Can Resell From Dollar Stores</a> &mdash; Who knew you could make a profit from these dollar store items? [Flipping Income]</p> <h2>Other Essential Reading</h2> <p><a href="http://www.northerncheapskate.com/12-cheap-quick-and-easy-stress-relievers/">12 Cheap, Quick, and Easy Stress Relievers</a> &mdash; Crank up the music and dance like you mean it! It'll only take a few minutes for you to start feeling better. [Northern Cheapskate]</p> <p><a href="http://flippingincome.com/items-you-can-resell-from-dollar-stores/">4 ideas for spring landscaping on a budget</a> &mdash; Check out check out yard sales, thrift shops, and dollar stores for things like containers, décor, and gloves. [Bargaineering]</p> <p><a href="http://www.everybodylovesyourmoney.com/2016/05/16/12-ways-for-teenagers-to-earn-money-this-summer.html">12 Ways for Teenagers to Earn Money This Summer</a> &mdash; Many companies hire teens for seasonal part-time jobs. Check out your local bowling alley, movie theater, and mall for openings. [Everybody Loves Your Money]</p> <p><a href="http://www.bluntmoney.com/how-to-be-able-to-retire-at-55/">How to Compare Two Job Offers</a> &mdash; When choosing between two (or more!) job offers, you need to consider compensation and benefits, of course, as well as the commute and company culture. [Mint Life]</p> <p><a href="http://parentingsquad.com/6-amazing-books-on-motherhood-you-should-read-immediately">6 Amazing Books on Motherhood You Should Read Immediately</a> &mdash; These books offer serious food for thought for mothers everywhere. [Parenting Squad]</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/amy-lu">Amy Lu</a> of <a href="http://www.wisebread.com/best-money-tips-how-to-retire-by-55">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/5-ways-to-handle-a-forced-early-retirement">5 Ways to Handle a Forced Early Retirement</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dream-job-or-day-job">Dream Job or Day Job?</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/14-ways-to-retire-early">14 Ways to Retire 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/book-review-early-retirement-extreme">Book Review: Early Retirement Extreme</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-one-woman-retired-at-60-and-traveled-the-world">How One Woman Retired at 60 and Traveled the World</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement best money tips early retirement Tue, 17 May 2016 09:30:23 +0000 Amy Lu 1711443 at http://www.wisebread.com One Smart Thing You Can Do for Your Retirement Today http://www.wisebread.com/one-smart-thing-you-can-do-for-your-retirement-today <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/one-smart-thing-you-can-do-for-your-retirement-today" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/000020745280.jpg" alt="Learning one thing you can do for retirement today" title="" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>Retirement planning sounds like a daunting and confusing task. But there's one practical and surprisingly simple step you can take today to greatly improve your retirement preparedness &mdash; run some numbers to estimate how much money you'll probably need. You'll be happy to see how quickly you can do this, and how beneficial it will be.</p> <h2>A Quick Calculation</h2> <p>It's never been easier to estimate your retirement needs, with numerous free online calculators readily available. One of the simplest is <a href="http://personal.fidelity.com/planning/retirement/content/myPlan/index.shtml">Fidelity's myPlan Snapshot</a>. You just need to enter five bits of information (your age, income, how much you have saved so far, the monthly amount you're now contributing to a retirement plan, and your investment style). Then it will give you a quick read on how much you may need to have in your nest egg by the time you retire, and how much you should be setting aside each month right now in a 401K plan or IRA.</p> <p>For example, according to the calculator, a 25-year-old who makes $50,000 per year, has $15,000 saved so far, contributes $300 per month to their retirement plan, and invests aggressively, will need to have about $2.8 million saved by the time they're 65. If the market performs poorly, the calculator says they'll end up with about $880,000 at age 65; if it performs on average, they'll end up with about $2.3 million.</p> <p>The calculator enables you to easily change various inputs to see what you could do to get more on track. For example, what if they changed their investment style to &quot;most aggressive&quot; (100% stock-based investments), changed the amount they save each month to $500, and moved their assumed retirement age to 67? Now the calculator says if the market performs poorly, they'll end up with about $1.5 million. If it performs on average, they'll end up with a portfolio totaling nearly $4.8 million.</p> <p>After running the quick calculation, Fidelity gives you the option to run a more detailed analysis by clicking &quot;Create a Plan.&quot;</p> <h2>An Unpopular, Yet Helpful Chore</h2> <p>Despite how easy it is to run the numbers on retirement, relatively few people have done so. According to the Employee Benefit Research Institute, just 48% of all current workers have calculated their needs. Among workers age 25-34 &mdash; those who have the most time to take advantage of <a href="http://www.wisebread.com/2-investing-concepts-everyone-should-know">compound interest</a> &mdash; just 38% have run some numbers.</p> <p>Those that have calculated their needs report higher savings goals than those that haven't and greater confidence in their ability to one day retire comfortably. Apparently, crunching the numbers on retirement motivates people to act on what they learn.</p> <h2>From Insight to Action</h2> <p>Of course, that's what makes a needs assessment beneficial &mdash; taking action on what you learn by making any needed changes to the amount you're setting aside for retirement each month.</p> <p>Don't be discouraged if there's a large gap between how much the calculator says you need to save and the amount you're now saving. Just do what you can to start narrowing that gap. Using a budget is one of the best ways to free up monthly cash flow that could be put toward increased retirement savings. Another is committing in advance to use at least a portion of any future pay increases to boost retirement savings.</p> <p>It's a good idea to run a new retirement needs assessment once a year. Circumstances change. Running new numbers annually &mdash; and making any needed adjustments to how much you're saving for retirement &mdash; will help make sure your retirement plan stays on track.</p> <p><em>Have you taken this step? Have you put a plan in place to begin acting on your insight?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/matt-bell">Matt Bell</a> of <a href="http://www.wisebread.com/one-smart-thing-you-can-do-for-your-retirement-today">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/10-signs-you-arent-saving-enough-for-retirement">10 Signs You Aren&#039;t Saving Enough for Retirement</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-warning-signs-youre-sabotaging-your-nest-egg">6 Warning Signs You&#039;re Sabotaging Your Nest Egg</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-false-allure-of-compound-interest">The False Allure of Compound Interest</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/are-you-wasting-300000-on-lunch">Are You Wasting $300,000 on Lunch?</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/this-one-thing-will-get-you-to-1-million-tax-free">This One Thing Will Get You to $1 Million (Tax-Free!)</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement compound interest investing nest egg retirement calculators saving money Mon, 16 May 2016 10:00:03 +0000 Matt Bell 1703113 at http://www.wisebread.com