Retirement http://www.wisebread.com/taxonomy/term/417/all en-US Best Money Tips: How to Make Your Retirement More Successful http://www.wisebread.com/best-money-tips-how-to-make-your-retirement-more-successful <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-make-your-retirement-more-successful" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/retired_couple_happy_000014401417.jpg" alt="Couple learning how to make their retirement more successful" 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 helpful articles on ways to make your retirement more successful, tips to save money at big box stores, and the best college degrees for job security.</p> <h2>Top 5 Articles</h2> <p><a href="http://www.cashthechecks.com/7-ways-make-retirement-successful-employment-period/">7 Ways to Make Your Retirement More Successful</a> &mdash; Don't wait to downsize! The money you make from selling a too-large house or a luxury car could then be invested. [Cash The Checks]</p> <p><a href="http://www.frugalvillage.com/2016/04/26/six-secret-ways-to-save-money-at-big-box-stores/">Six Secret Ways to Save Money at Big Box Stores</a> &mdash; Shopping for furniture, electronics, and seasonal items? Ask the store for a discount on floor models. [Frugal Village]</p> <p><a href="https://ptmoney.com/best-degrees-to-get-that-promise-job-security/">The 8 Best College Degrees for Job Security</a> &mdash; People with physician assistant and nursing degrees will not have too much trouble finding jobs; both professions are expected to grow over the next decade. [PT Money]</p> <p><a href="http://funhappyhome.com/2016/04/9-farmers-market-shopping-tips-that-will-help-you-save-big-and-get-the-best-produce/">9 Farmer&rsquo;s Market Shopping Tips That Will Help You Save Big and Get The Best Produce</a> &mdash; The selection at a farmer's market can vary from week to week, so if you find something you like, jump on it! It might not be available the next time you visit. [Fun Happy Home]</p> <p><a href="http://www.popsugar.com/smart-living/Bathroom-Cleaning-DIYs-40684545#photo-40684545">These 15 Budget-Friendly DIYs Will Make Your Bathroom Sparkle</a> &mdash; Combat bad odors in the bathroom with an orange peel air freshener. [PopSugar Smart Living]</p> <h2>Other Essential Reading</h2> <p><a href="http://www.mattaboutmoney.com/2016/04/26/are-you-financially-healthy-rate-yourself-on-this-9-point-scale/">Are You Financially Healthy? Rate Yourself Using These 9 Qualifications</a> &mdash; Do you have adequate insurance? This includes life insurance, homeowner's or renter's insurance, health insurance, and possibly disability insurance. [Matt About Money]</p> <p><a href="http://everythingfinanceblog.com/17402/5-first-time-homebuyer-mistakes.html">5 First-Time Homebuyer Mistakes: What We&rsquo;ll Do Different Next Time</a> &mdash; Pay attention to the details and crunch the numbers to make sure the repairs you'll have to make are really worth it. Little projects can really add up! [Everything Finance]</p> <p><a href="https://timemanagementninja.com/2016/04/10-productive-tasks-you-can-do-on-your-phone/">10 Productive Tasks You Can Do on Your Phone</a> &mdash; Don't just read emails on your phone &mdash; process them! [Time Management Ninja]</p> <p><a href="http://www.currentoncurrency.com/5-ways-laughter-save-you-money/">5 Ways That a Little Bit of Laughter Can Save You Money</a> &mdash; It makes sense that you do better at your job when you enjoy it. Bringing some humor into your workplace will help nurture your work relationships and improve the atmosphere for everyone. [Current on Currency]</p> <p><a href="http://www.thesimpledollar.com/25-free-things-to-do-to-make-today-feel-awesome/">25 Free Things to Do to Make Today Feel Awesome</a> &mdash; Write out a list of everything you have floating in your head &mdash; and immediately do two or three of those things. [The Simple Dollar]</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-make-your-retirement-more-successful">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-great-retirement-jobs">6 Great Retirement Jobs</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/you-dont-need-a-retirement-plan-you-need-a-financial-independence-plan">You Don&#039;t Need a Retirement Plan — You Need a Financial Independence Plan</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/which-retirement-account-is-right-for-you">Which Retirement Account Is Right for You?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-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-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-strengthen-your-finances-before-retirement">5 Ways to Strengthen Your Finances Before Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement best money tips successful retirement Thu, 28 Apr 2016 10:01:03 +0000 Amy Lu 1699080 at http://www.wisebread.com You Don't Need a Retirement Plan — You Need a Financial Independence Plan http://www.wisebread.com/you-dont-need-a-retirement-plan-you-need-a-financial-independence-plan <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/you-dont-need-a-retirement-plan-you-need-a-financial-independence-plan" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/saving_retirement_fund_000088359337.jpg" alt="Learning the alternative to retirement" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>In the golden age of a &quot;job for life,&quot; and when defined benefit pensions were the standard, all you had to do was tough it out to hit the jackpot. A mere 40 years of employment, and you struck lucky in your golden years.</p> <p>Whether the idea of working in the same place for a lifetime fills you with nostalgia or horror, the reality is that those days are long gone.</p> <p>Without a steady employer doing the hard work for us, traditional notions of retirement planning do not work. The alternative, it seems, is the ostrich approach, with 48% of working age Americans saying they have never even tried to calculate the amount of savings they might need for a comfortable retirement. Ignorance might be bliss in the moment, but it's no genius long term plan. So what's the better option?</p> <h2>What Went Wrong With Retirement?</h2> <p>The Employee Benefit Research Institute (EBRI) found, in their 2016 survey measuring retirement confidence, that nearly one in five American workers (19%) were <a href="https://www.ebri.org/pdf/surveys/rcs/2016/PR1157.RCS.22Mar16.pdf">not at all confident</a> in their ability to finance a comfortable retirement. For these workers, options are limited &mdash; spend less now, work for longer, and be prepared to compromise more on the lifestyle they expect in later years. Not a happy picture.</p> <p>To add insult to injury, working longer is not actually a viable option for many of us. The EBRI reported a large gap between expectations and outcome, with a massive 37% of people saying they expect to work past the age of 65, compared to the more modest reality of only 15% of retirees in 2016 who were older than 65. This is often because options to continue working later in life become limited, with layoffs and declining physical health ending working lives without regard to the size of one's pension pot.</p> <p>So with working until you drop off the agenda, what can we do to improve the prospects of having a happy, and financially secure retirement?</p> <h2>Start Thinking Personal Financial Independence</h2> <p>Ironically, part of the solution might actually be to stop thinking about retirement, and replace that thought with one of &quot;personal financial independence.&quot;</p> <p>Retirement today has changed as much as working life has, meaning there is no longer a cookie cutter approach to retirement planning that can be relied upon. The answer instead is to get educated about your household finances, with a focus on achieving personal financial independence &mdash; for life, not just for your later years. Getting clued up about your money is the only way to do that.</p> <h2>Start Creating It</h2> <p>Pull your head out of the sand, and get a realistic grip on what savings you have &mdash; and what you will need to finance your retirement.</p> <h3>Do the Math</h3> <p>Work out what you will want to <a href="http://www.wisebread.com/how-much-can-you-afford-to-spend-in-retirement">spend in retirement</a>. Tools are out there to help, like this <a href="http://www.doughroller.net/personal-finance/financial-freedom-calculator/">financial freedom calculator</a>, which helps you calculate what you might need to save to achieve a desired financial return in future. If you don't have an idea of your goal, then planning is a whole lot more difficult.</p> <h3>Optimize What You Have</h3> <p>If you have money in 401K plans, then you're in a strong position already. But don't just assume that it's being managed in your best interests. <a href="http://americasbest401k.com/fee-checker/">Check out the fees</a>, which vary wildly and through a compounding effect can whittle away your savings at an alarming speed. Once you can safely withdraw from your 401K without incurring penalties, you will be able to choose to take a lump sum if you wish, to help you achieve the magic 4% number described below.</p> <h3>Understand the 4% Rule</h3> <p>A common premise of modern retirement planning calculations is the &quot;4% rule&quot; which assumes that you can live happily on the growth of a savings pot, without significantly denting the principle, so long as you withdraw no more than 4% per year. This principle, put forward by Bill Bengen in 1994, has <a href="http://www.forbes.com/sites/robertberger/2015/05/20/how-much-do-you-really-need-to-retire/#90464644939a">come under some scrutiny</a> due to our current turbulent times &mdash; but as a starting point is still considered a sound measure.</p> <p>Here's how it works.</p> <p>Start with the amount of money you think you will need to finance your retirement lifestyle. Multiply this by 25 to get the amount of savings you need to have to make that number a reality if the 4% rule is applied.</p> <p>Then sit down, because in all likelihood that number is going to be scary.</p> <p>If you calculated that you would like a household income of $40,000, then the sums say you need a pot of a cool million. How hard this really is to achieve depends on your current position. If you're just setting out and don't plan to retire for 40 years, you will need to save something like $640 a month (shared out among the earning members of the household &mdash; so half that if you're in a couple), assuming a <em>modest </em>5% return on your investment. If you plan to retire a lot sooner, or do not not have existing savings or 401K plans, this number might be more daunting.</p> <p>If the savings you need to achieve financial independence feel unrealistic, then it's time to start thinking of the levers you have to close the gap. Earn and save more, or plan to spend less, perhaps through lifestyle adjustments or by <a href="http://www.wisebread.com/best-money-tips-the-best-and-worst-states-to-retire">taking advantage of geographic differences</a> in things like cost and quality of living. Or, plan to manage your retirement as a gradual wind down, continuing to be economically active after your usual retirement age, but in a flexible role. Considering these options now, rather than being pushed into them at the point you wish to quit working, is far more likely to have a happy ending.</p> <p>The new world of planning for later life brings with it more choices, but also more questions to mull over and decisions to make. Instead of facing these questions, too many of us are ignoring the issue. Experience shows that working longer (or windfalls, or a fairy godmother) is unlikely to be the answer. Getting clued up about your money <em>now</em> is the only way to give yourself a shot at the golden years you deserve.</p> <p><em>What do you think? What is the optimum way to plan for your retirement now?</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/you-dont-need-a-retirement-plan-you-need-a-financial-independence-plan">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/6-great-retirement-jobs">6 Great Retirement Jobs</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/which-retirement-account-is-right-for-you">Which Retirement Account Is Right for You?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-make-your-sluggish-workday-go-a-lot-faster">How to Make Your Sluggish Workday Go (a Lot) Faster</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/12-times-youre-better-off-without-a-promotion">12 Times You&#039;re Better Off Without a Promotion</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/are-you-wasting-300000-on-lunch">Are You Wasting $300,000 on Lunch?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement calculator careers financial independence jobs saving money working Mon, 25 Apr 2016 09:30:29 +0000 Claire Millard 1693265 at http://www.wisebread.com 6 Great Retirement Jobs http://www.wisebread.com/6-great-retirement-jobs <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-great-retirement-jobs" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_000084253925_Large.jpg" alt="looking for a great job in retirement" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>With the cost of living always on the rise, retirees are looking for creative ways to supplement their incomes. And for those living on fixed incomes, finding part-time work can be tricky and sometimes challenging, because they cannot exceed the SSI annual earnings threshold of $15,720, and $41,880 for those in their first full year of retirement. But, if you're looking for ways to supplement your income, here are five great part-time retirement job ideas.</p> <h2>1. Local Tour Guide</h2> <p>The sharing economy is making all sorts of short-term side jobs available, and if you've got a lot of local knowledge, consider setting yourself up as a tour guide on a service like <a href="https://www.vayable.com/">Vayable</a>. Rates range from $50&ndash;$85 per person, per tour. If apps and computers are not your thing, check with local tour operators or local tourist attractions about picking up a shift or two. You'll put your wisdom and experience to work &mdash; and you'll meet lots of great people, besides.</p> <h2>2. Tutor or Teach</h2> <p>You don't need a background as a teacher in order to help others learn. If you're good at math, English, or any other subjects, consider tutoring or teaching part-time. You can set your own rates, and signing up with a tutoring website like <a href="http://www.varsitytutors.com/">VarsityTutors</a> will pair you with students. And there are so many opportunities to teach, because it goes beyond the classroom these days, as many people prefer the convenience of online courses.</p> <h2>3. Babysitter</h2> <p>Do you have an interest in working with kids? If so, it could be a valuable skill-set. Part-time babysitters can earn as much as $25 per hour, and they work on their own terms. Plus, if you already have experience working with kids, and a flexible schedule, you'll probably find lots of job opportunities.</p> <h2>4. Postpartum Doula</h2> <p>Jackie Prescott, founder of <a href="http://www.firstbumpthenbaby.com/">First Bump Then Baby</a>, says becoming a modern-day baby nurse is a great way for older women (and men!) to earn money, because it's essentially about mothering new mothers and helping new parents to quickly feel at ease.</p> <h2>5. Tax Preparer</h2> <p>Some people think of tax preparation services as a seasonal job, but the truth is, many self-employed individuals and businesses deal with tax issues year-round. If this is a skill-set that you possess, it can earn you a sizable penny. But, because it is so lucrative, be careful not to cross the annual earnings threshold if you're receiving SSI.</p> <h2>6. Become an Uber or Lyft Driver</h2> <p>The Uber and Lyft car sharing programs have grown to reach every city, and they're looking for drivers everywhere. Anyone with a valid driver's license and clean criminal record is eligible to become a driver. Drivers are of all ages and professional backgrounds. Many are stay-at-home moms and current and former professionals seeking a way to earn extra income. (See also: <a href="http://www.wisebread.com/how-to-earn-extra-money-driving-for-uber-or-lyft?ref=seealso">How to Earn Extra Money Driving for Uber or Lyft</a>)</p> <p><em>What are some other great side jobs for retirees? Share with us 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/qiana-chavaia">Qiana Chavaia</a> of <a href="http://www.wisebread.com/6-great-retirement-jobs">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/6-great-side-jobs-for-book-lovers">6 Great Side Jobs for Book Lovers</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/30-great-side-jobs">30 Great Side Jobs</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-employer-benefits-that-can-leave-more-spending-money-in-your-pockets">7 Employer Benefits That Can Leave More Spending Money in Your Pockets</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/earn-extra-income-with-these-15-creative-side-gigs">Earn Extra Income With These 15 Creative Side Gigs</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/10-great-jobs-for-college-students">10 Great Jobs for College Students</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Career and Income Extra Income Retirement extra money jobs part-time jobs retirement jobs side jobs Fri, 22 Apr 2016 09:00:09 +0000 Qiana Chavaia 1695168 at http://www.wisebread.com Which Retirement Account Is Right for You? http://www.wisebread.com/which-retirement-account-is-right-for-you <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/which-retirement-account-is-right-for-you" 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_money_000085578577.jpg" alt="Learning if an IRA, 401k, or 40k is right for you" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Saving for retirement is one of the most important things you can do for your future self. With so many options to choose from, how can you decide which type of account to invest your money in? There are a number of differences between an IRA, Roth IRA, and 401K. We've covered some of the most important factors below to get you started.</p> <h2>Roth IRA</h2> <p>Any contributions you make to your Roth IRA are with funds you've already paid taxes on, so your money can grow tax-free from then on. If you make more than $132,000, or $194,000 for married couples filing jointly, then you won't be eligible to contribute to a Roth IRA. There are no required minimum distributions and no age limit for contributions.</p> <p>Maximum contribution amount: $5,500 per year, $6,500 if you're age 50 or older.</p> <p>Tax advantages: Earnings grow tax-free with tax-free withdrawals in retirement.</p> <h2>Traditional IRA</h2> <p>Any contributions you make to your IRA are with funds you haven't been taxed on yet. You will be required to take a minimum distribution at age 70-&frac12;.</p> <p>Maximum contribution amount: $5,500 per year, $6,500 if you're age 50 or older; cannot contribute after age 70-&frac12;.</p> <p>Tax advantages: Contributing to your IRA can lower the amount of income you pay taxes on now. Once you retire, your withdrawals will be taxed at your ordinary income tax rate. If you make withdrawals before age 59-&frac12;, there will be an additional 10% early withdrawal penalty fee added. Certain approved purchases can be withdrawn penalty-free, such as a first home purchase and approved college expenses.</p> <h2>401K</h2> <p>A 401K is a retirement savings plan sponsored by an employer. Any contribution you make to your employer-sponsored deferred contribution retirement plan is made with funds you haven't been taxed on yet.</p> <p>Maximum contribution amount: $18,000 per year, $24,000 if you're age 50 or older.</p> <p>Tax advantages: Contributing to a 401K can lower the amount of income you pay taxes on now. Once you retire, your withdrawals will be taxed at your ordinary income tax rate. If you make withdrawals before age 59-&frac12;, there will be an additional 10% early withdrawal penalty fee added.</p> <h2>Which One Is Best?</h2> <p>If you can only open one account, or only have the funds to contribute to one retirement account, which is the one to go for? Suze Orman is a big proponent of the Roth IRA and calls it &quot;the best retirement investment you can make.&quot; There are also a number of benefits to the Roth IRA.</p> <p>For instance, you can withdraw your contributions (but not the earnings) in emergency situations, without worrying about taxes or penalties. While you don't want to ever withdraw from your retirement accounts, it can provide you with peace of mind knowing that the funds are available to you in an unexpected future emergency situation. (See also: <a href="http://www.wisebread.com/7-surprising-facts-about-roth-iras?ref=seealso">7 Surprising Facts About Roth IRAs</a>)</p> <p>If you believe you are in a lower tax bracket now than you will be in retirement (like you are just starting your career), a Roth IRA is usually the way to go. With a Roth IRA, you will be investing after-tax funds now, which means you won't be taxed later when you are in a higher tax bracket. On the other hand, if you are near your peak income now, then you will likely be at a lower tax rate in retirement, which favors a traditional IRA or 401K plan. (See also: <a href="http://www.wisebread.com/why-roth-iras-are-ideal-for-young-professionals?ref=seealso">Why Roth IRAs Are Ideal for Young Professionals</a>)</p> <p>If your employer offers contribution matching, definitely invest towards that account until you hit the company match limit so that you can benefit from the free money. With both an IRA and 401K, whatever you invest can be deducted from consideration this tax year. This means that you will be taxed on a lower amount, resulting in tax savings now.</p> <h3>Employer-Sponsored Plans</h3> <p>If your employer offers retirement benefits (such as contribution matching), then take advantage of this free money; your future self will thank you for it. You'll want to invest at least as much as the company match.</p> <p>Ask about what sort of 401K, 403(b), 457, or pension plans your employer offers. This will allow you to take advantage of as much of the employer's contribution as possible. (See also: <a href="http://www.wisebread.com/8-steps-to-starting-a-retirement-plan-in-your-30s?ref=seealso">8 Steps to Starting a Retirement Plan in Your 30s</a>)</p> <h3>Self-Employed Options</h3> <p>Did you know that 28% of the nearly 15 million self-employed Americans are <a href="http://www.amtd.com/English/newsroom/research-and-story-ideas/Self-Employed-Survey/">not saving for retirement</a> at all? Sure, it can be difficult to set aside money for retirement when you can barely pay your business expenses as it is. However, it is imperative that you save what you can now to take advantage of compound interest and to ensure you are prepared for retirement.</p> <p>Self-employed individuals have <a href="https://www.irs.gov/Retirement-Plans/Retirement-Plans-for-Self-Employed-People">further retirement savings options</a>, such as the SEP-IRA, SIMPLE IRA, and Individual or Solo 401K. These have higher contribution limits so that you can have a more sizable retirement savings. These accounts will allow you to save for retirement, while enjoying an up-front tax break and tax-deferred saving.</p> <h2>When in Doubt, Ask a Pro</h2> <p>If you aren't sure about which retirement account is right for you, it's time to speak with a financial adviser. They can help you make informed decisions based on your financial situation and retirement goals. (See also: <a href="http://www.wisebread.com/do-you-need-a-financial-planner?ref=seealso">Do You Need a Financial Planner?</a>)</p> <p><em>Do you have other tips for choosing the right retirement plan? 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/which-retirement-account-is-right-for-you">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-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-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/the-sep-ira-is-how-the-self-employed-do-retirement-like-a-boss">The SEP-IRA Is How the Self-Employed Do Retirement Like a BOSS</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/does-your-kid-need-an-ira">Does Your Kid Need an IRA?</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/you-dont-need-a-retirement-plan-you-need-a-financial-independence-plan">You Don&#039;t Need a Retirement Plan — You Need a Financial Independence Plan</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement 401k Roth IRA saving money self-employment traditional ira Thu, 21 Apr 2016 09:30:24 +0000 Andrea Cannon 1691583 at http://www.wisebread.com 5 Questions to Ask Before You Borrow From Your Retirement Account http://www.wisebread.com/5-questions-to-ask-before-you-borrow-from-your-retirement-account <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-questions-to-ask-before-you-borrow-from-your-retirement-account" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/money_nest_egg_000026193397.jpg" alt="Asking questions before borrowing money from retirement account" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You need a quick infusion of cash, and there's plenty of it sitting in your IRA or 401K account. Should you withdraw the needed money from these retirement accounts?</p> <p>Not surprisingly, there's no simple answer. Withdrawing from a retirement account might make sense depending on how old you are or what you need the money for. But in other cases, withdrawals from these accounts can derail your plans to save for a happy retirement. They might also leave you with a big financial penalty.</p> <p>Before you make a <a href="http://www.wisebread.com/5-dumb-401k-mistakes-smart-people-make" target="_blank">withdrawal from an IRA or 401K plan</a>, ask yourself these five questions. Your answers will tell you whether the time is right to take money from these accounts.</p> <h2>1. What Do You Need the Money For?</h2> <p>The goal of both 401K accounts and IRAs is to save money for your retirement years. If you withdraw funds before you hit retirement, you'll cut down on the money available to you after you leave the working world. When you're on a fixed income, you might truly miss those dollars. You'll also lose any interest that the money you withdrew would have generated, unless you pay it back quickly. So unless you absolutely need the money, it might be best to hold off on a withdrawal.</p> <h2>2. Can You Get the Money From Other Sources?</h2> <p>Again, you want your retirement accounts to be as full as possible when you leave the workforce. Can you find a different source for the money you're planning to withdraw? Maybe a family member can loan you the funds. Maybe a cash-out refinance on your home or a home equity loan can leave with you the money you need.</p> <h2>3. How Old Are You?</h2> <p>This is one of the bigger questions. If you withdraw money from your traditional IRA or 401K after you reach age 59-and-a-half, you'll do it penalty free, though you will still have to pay taxes on these withdrawals. The same is true for a Roth IRA, though you won't pay any taxes on most withdrawals from this kind of IRA.</p> <p>But if you are under 59-and-a-half, you'll be hit with a 10% penalty on the money you withdraw unless you are using it for specific reasons, such as buying a first home. For traditional IRAs and 401K plans, you'll also have to pay taxes on the money you withdraw, so this move is an especially big hit. The better choice? Wait to withdraw money from your retirement accounts until you hit 59-and-a-half.</p> <h2>4. Will You Face a Penalty If You Don't Make Withdrawals?</h2> <p>You'll get hit with a penalty if you withdraw money from a traditional IRA before 59-and-a-half. But did you know you'll face an even greater penalty if you don't take regular withdrawals from your traditional IRA after you turn 70-and-a-half?</p> <p>That is the age at which the owners of traditional IRAs are required to begin their minimum required distributions. If you fail to make these scheduled withdrawals you will be taxed at a rate of 50% of the distribution you were required to have made. So don't skip these withdrawals.</p> <h2>5. Are You Buying a New Home?</h2> <p>You can withdraw from your traditional IRA and Roth IRA before 59-and-a-half without any penalty if you are using the funds to buy a first home. And the definition of what makes for a first home is quite broad: Yes, a first home can be the first home that you have ever purchased. But you will also qualify for a first-home exemption if you or your buying partner haven't owned a principal residence in the last two years.</p> <p>With a traditional IRA, you can only withdraw up to $10,000 to help cover the purchase of a new home. With a Roth IRA, you might be able to withdraw a bit more because you can always withdraw your contributions to a Roth IRA without facing any taxes or penalties. The $10,000 limit, though, does hold for the earnings you've made on your Roth IRA.</p> <p>If you and your spouse or partner are buying a home together, you can both qualify for the first-time homebuyer exemption and borrow $10,000 each, giving you $20,000 to use toward your home purchase.</p> <p>Remember, though, you are still losing this money from your retirement account. You might enjoy that house you are buying, but you might miss that $10,000 when you hit retirement age.</p> <p>The rules are different for a 401K plan, which has no penalty exemption for withdrawing money before 59-and-a-half for buying a first home. You can take out a loan against your 401K, though, and use that money to help buy a home. But you will have to pay this loan back in installments and with interest.</p> <p><em>Have you ever withdrawn money from a retirement account? What questions did you ask first?</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-you-borrow-from-your-retirement-account">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-penalty-free-ways-to-withdraw-money-from-your-retirement-account">7 Penalty-Free Ways to Withdraw Money From Your Retirement Account</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/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-4 views-row-even"> <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-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-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> </ul> </div> </div> </div> </div><br/></br> Retirement 401k borrowing money buying home IRA penalties withdrawal Wed, 13 Apr 2016 10:00:12 +0000 Dan Rafter 1686647 at http://www.wisebread.com 6 Warning Signs You're Sabotaging Your Nest Egg http://www.wisebread.com/6-warning-signs-youre-sabotaging-your-nest-egg <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-warning-signs-youre-sabotaging-your-nest-egg" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_breaking_piggybank_000048408258.jpg" alt="Man learning signs he&#039;s sabotaging his nest egg" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Depending on how old you are, retirement may seem like a vague, distant goal. Still, <em>even if</em> it's many years off, it's important to pay attention to your retirement savings because the decisions you make now &mdash; whether good or bad &mdash; will be magnified by the power of time. Review the list below to see if you're making any of these mistakes.</p> <h2>1. You Haven't Calculated How Much You Will Need</h2> <p>If you don't know how much you'll need to retire, you probably also don't know how much you'll need to invest right now. There are many simple-to-use, free online retirement planning calculators that can help you calculate these figures easily. Fidelity's <a href="http://personal.fidelity.com/planning/retirement/content/myPlan/index.shtml">myPlan Snapshot</a>, for example, requires just five bits of information to generate a rough estimate of your retirement needs and the monthly contributions needed to achieve your goal.</p> <h2>2. You're Not Saving Enough</h2> <p>If you work for a company that matches some of your 401K plan contributions, you absolutely must take advantage of what basically amounts to free money. (In fact, it's likely the easiest money you'll ever make.) And yet, about 25% of workers who are eligible for a match do not take full advantage of the benefit.</p> <p>Many of today's large employers also use various forms of automation with their retirement plans &mdash; automatic enrollment, automatic investment selection, and more. Having to opt-<em>out </em>if you don't want to participate has proven to generate higher participation levels than opt-<em>in </em>programs. The problem is, those programs tend to use relatively low contributions to start, and most workers never increase that amount.</p> <p>Don't be lulled into a false sense of confidence by automated contributions. Base your contributions on what you feel capable of contributing &mdash; it's likely higher than the automatic contribution amount.</p> <h2>3. You're Not Investing Wisely</h2> <p>The most common investment choice in 401K and similar plans is a target-date retirement fund (TDF). Their popularity is understandable since TDFs take care of some of the most complicated investing decisions for you. Investors simply choose a fund with the year closest to their intended retirement date as part of its name (the Fidelity Freedom 2055 fund, for example, is designed for people who plan to retire between 2053 and 2057). The fund is invested in a way the mutual fund company believes is best for someone with that much time until retirement. Another benefit of target-date funds is that they automatically alter how they invest over time, becoming more conservative as the investor nears retirement age.</p> <p>Still, not all TDFs intended for similar target retirement dates are the same. Some are more aggressive than others. During the financial crisis of 2008&ndash;2009, many people who were invested in 2010 target-date funds, those intended for people right on the cusp of retirement at the time, <a href="https://www.soundmindinvesting.com/articles/view/how-well-do-target-date-funds-perform-in-a-downturn">lost a lot of money</a>. Allocating all of your retirement contributions to a single fund can be risky. At the very least, understand how the target date fund you're considering is designed and make sure you're comfortable with its assumptions.</p> <h2>4. You Haven't Chosen the Right Tax-Advantaged Plan</h2> <p>If you're eligible to participate in a 401K plan, you may have a choice between a traditional or a Roth 401K. If you don't have access to a workplace plan, you probably qualify for an IRA. Again, you'll have your choice between a traditional or a Roth IRA.</p> <p>The key difference has to do with taxes. With a traditional 401K or IRA, the money you contribute is immediately tax-deductible. If you make $50,000 and contribute $5,000, your taxable income becomes $45,000. When you take money out of the account in retirement, you'll owe taxes.</p> <p>With a Roth, it works the other way around. Money you contribute is not tax-deductible. If you make $50,000 and contribute $5,000, your taxable income remains $50,000. However, when you take the money out in retirement, no taxes are due.</p> <p>Choosing the best approach comes down to trying to pay taxes when your income is lowest. So, if you're in the early stages of your career, your income is probably relatively low. Paying taxes on the contributions now by using a Roth would likely make the most sense. If you're at a stage in your career when you are earning a lot, gaining a tax deduction now may make the most sense, pointing you toward a traditional 401K or IRA.</p> <h2>5. You've Taken a Loan, Hardship Withdrawal, or Early Distribution</h2> <p>The main point of building a nest egg is to have to have enough money to live on when you're older. However, IRS rules make it surprisingly easy to take money out of retirement accounts well before retirement.</p> <p>Participants in a 401K plan can typically borrow against their balance or may qualify for a hardship withdrawal. Those using a Roth IRA can withdraw their contributions at any time without penalty, and they can access their earnings if their account has been open for at least five years and the money is used for certain purposes, such as a first-time home purchase or education.</p> <p>However, accessing retirement account money early can be harmful to your financial health. If you have a loan from your 401K and you leave your employer &mdash; whether by your choice or your employer's &mdash; you'll have to repay the full amount of the loan very quickly. And taking money out of any retirement account for any reason other than retirement means that's less money that can avail itself of the <a href="http://www.wisebread.com/2-investing-concepts-everyone-should-know">power of compound interest</a>.</p> <h2>6. You Haven't Named Beneficiaries</h2> <p>Failing to name a beneficiary for your 401K account or IRA means that money will become part of your estate upon your death, costing your heirs needless time and money. Simply naming a beneficiary will get the proceeds where you want them to go without the need for probate. Name your beneficiaries properly and your heirs could even turn your account into <em>a </em><a href="https://www.soundmindinvesting.com/articles/view/stretching-your-iras-benefits"><em>stretch IRA</em></a> or 401K, which can greatly maximize the value of your account while minimizing taxes.</p> <p>Even if you're young and retirement is set somewhere in the distant future, when that day comes, you will be glad to have taken care of these details <em>way back when.</em></p> <p><em>Are you making any of these retirement investing mistakes?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/matt-bell">Matt Bell</a> of <a href="http://www.wisebread.com/6-warning-signs-youre-sabotaging-your-nest-egg">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-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/which-retirement-account-is-right-for-you">Which Retirement Account Is Right for You?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-ways-to-strengthen-your-finances-before-retirement">5 Ways to Strengthen Your Finances Before Retirement</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-questions-to-ask-before-you-borrow-from-your-retirement-account">5 Questions to Ask Before You Borrow From Your Retirement Account</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-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> </ul> </div> </div> </div> </div><br/></br> Retirement 401k IRA nest egg retirement calculators Roth IRA Tue, 08 Mar 2016 11:00:13 +0000 Matt Bell 1666378 at http://www.wisebread.com 403B vs. 401K: How Are They Different? http://www.wisebread.com/403b-vs-401k-how-are-they-different <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/403b-vs-401k-how-are-they-different" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/people_volunteering_charity_000064214269.jpg" alt="Learning how a 401k and 403b are different" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You've just taken a job as an administrator at a nonprofit hospital. Or maybe you've found a solid job at a tax-exempt religious organization. Now you're ready to start saving a portion of every paycheck for your retirement.</p> <p>There's a wrinkle here, though: You won't be able to <a href="http://www.wisebread.com/5-important-things-to-know-about-your-401k-and-ira-in-2016">save in a 401K</a> like employees of for-profit corporations can. Nonprofit, tax-exempt institutions don't offer 401K plans to their workers. Instead, they offer what are known as 403B plans.</p> <p>The good news? These plans work much like 401K plans. And if you do set aside a portion of each of your paychecks for your 403B plan, you'll dramatically increase the odds of a financially stable retirement.</p> <h2>The Big Difference</h2> <p>The main difference between a 401K plan and a 403B plan is who offers them. Traditional for-profit corporations offer 401K plans. These are the retirement savings vehicles with which most U.S. workers are familiar: You set aside a percentage of each paycheck, and that money is deposited in your retirement account.</p> <p>The money in that account can be invested in mutual funds or other investment vehicles. The money grows &mdash; hopefully &mdash; tax-free until employees withdraw their funds. Only then do they pay income taxes on it.</p> <p>A 403B plan works the same way &mdash; only for-profit corporations don't offer them. Instead, these savings vehicles are only offered by institutions that are nonprofit and enjoy tax-exempt status. This usually means hospitals, public education providers, charities, and religious institutions.</p> <h2>Other Differences</h2> <p>There are some smaller differences between the two savings vehicles, too. Usually the biggest, and the most important to employees is that employers offering 401K plans often offer matching incentives.</p> <p>An employer, for instance, might decide to match 50% of the first 6% of the salaries that employees contribute to their 401K plans each year. Say a typical worker with such an employer makes $50,000 a year and that worker has decided to contribute 6% of his or her annual salary to a 401K plan. The employer will match 50% of this worker's contributions, but only up to 3% of the employee's annual salary.</p> <p>So each year, this worker would invest $3,000 to the 401K plan, 6% of this worker's $50,000 salary. The company would invest an additional $1,500 to the 401K plan as a match.</p> <p>Company matches are a good way to boost retirement savings. But companies that offer 403B programs, though not prohibited from doing so, rarely offer matching benefits.</p> <p>Corporations can also offer profit-sharing as part of their 401K programs. Under a profit-sharing arrangement, employers once a year can make a voluntary bonus contribution to their employees' 401K plans. This contribution can vary each year, often going up or down depending on how successful the company was.</p> <p>Institutions offering 403B plans, though, can't offer a profit-sharing bonus. That's because the organizations offering these plans don't generate a profit.</p> <h2>Both Are Worthwhile</h2> <p>There is another big similarity between 401K and 403B programs: For both 401K and 403B plans in 2016, you can contribute a maximum of $18,000 if you have not yet hit your 50th birthday. If you are 50 or older, federal law allows you to contribute even more to these retirement accounts. You can make a yearly catch-up contribution of up to $6,000, meaning that if you are at least 50, you can contribute a total of $24,000 to your 403B or 401K plan.</p> <p><em>Are you invested in a 401K or a 403b?</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/403b-vs-401k-how-are-they-different">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/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-2 views-row-even"> <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-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/5-ways-to-strengthen-your-finances-before-retirement">5 Ways to Strengthen Your Finances Before Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement 401k 403b charity contributions employer matching nest egg nonprofits Tue, 01 Mar 2016 10:30:33 +0000 Dan Rafter 1664146 at http://www.wisebread.com 5 Ways to Strengthen Your Finances Before Retirement http://www.wisebread.com/5-ways-to-strengthen-your-finances-before-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-strengthen-your-finances-before-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/thrifty_woman_money_000033605098.jpg" alt="Woman finding ways to strengthen her finances before retirement" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If retirement is only a few years down the road, hopefully you already have the right <a href="http://www.wisebread.com/how-much-should-you-have-saved-for-retirement-by-30-40-50">retirement savings</a> in place. And nothing can beat a well-funded retirement account that was started early in your career.</p> <p>There <em>are</em> a few more moves you can make before you close the door on your career for good, though. Doing these five things will ensure you have a more comfortable retirement and help stretch your nest egg a little further. (See also: <a href="http://www.wisebread.com/6-retirement-products-that-arent-worth-your-money?ref=seealso">6 Retirement Products That Aren't Worth Your Money</a>)</p> <h2>1. Get Rid of Debt</h2> <p>How much debt do you have right now besides a mortgage? If you have any credit card or other loan debt, now is the time to take serious steps to getting rid of it. Once you move to a fixed income, you do not want your precious savings to fund debt repayment or to be <a href="http://www.wisebread.com/when-to-do-a-balance-transfer-to-pay-off-credit-card-debt">wasted on interest payments</a>.</p> <p>Treat your debt seriously. Taking debt into retirement is like entering a marathon with a broken leg. You will exert too much energy dragging your bad leg around, and might not even cross the finish line.</p> <p>First things first: calculate how much debt you have. Consider transferring your high-interest credit card debt to a promotional credit card that offers 0% APR and <a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards">0% balance transfers</a>. This will allow you to pay more towards your debt without wasting money on interest payments. A word to the wise, however: Only transfer as much debt onto our 0% APR card as you can pay off during the promotional period. Otherwise, you'll find yourself in the same position again once the 0% APR promotional period ends and your rate rises.</p> <h2>2. Rethink Your Mortgage and Home</h2> <p>Take a look at your current home and assess it. How much do you still owe on it &mdash; and is it too much house for your retirement needs? Will this be a good home for you when you are in your 80s and have difficulty going up and down stairs?</p> <p>Before you retire, consider the benefits of downsizing your home and mortgage. A smaller home will be less work to maintain and cost less to live in. Not only do smaller houses generally come with smaller mortgages, but they also cost less to heat and cool.</p> <p>If your home is the right fit for your retirement needs, then focus on the mortgage. Paying off your mortgage before retirement is not a small task, but it will free your budget significantly each month.</p> <h2>3. Build an Emergency Fund</h2> <p>Just because you're retired doesn't mean you don't have a need for an emergency fund any longer. Your Social Security benefits, retirement savings, and/or pension are meant to cover your daily living expenses. But how will you pay for an emergency, such as an unexpected hospital visit or car expense? Even a $1,000 emergency can derail your budget and land you into debt if you aren't careful.</p> <p>While you're still working, start saving money in a separate account for emergencies. This money should be easily accessible for small financial disasters that occur before and after retirement.</p> <h2>4. Boost Your Retirement Savings</h2> <p>If you have five to 10 years left until you retire, you still have the special opportunity to boost your retirement savings. Of course, your retirement savings will have seen the most benefit from investing in your 20s and 30s, but taking advantage of catch-up contributions are also wise.</p> <p>Once you turn 50, you become eligible to make additional catch-up contributions to your retirement plan of up to $6,000 more per year. Take advantage of this opportunity to correct for lackluster retirement savings.</p> <p>Remember, temporary cutbacks now can mean a more comfortable and worry-free retirement. Don't forget that contributing the full $24,000 each year after you turn 50 allows you certain tax benefits that can make the extra contributions less burdensome on your budget.</p> <h2>5. Draw Up a Budget and Do a Trial Run</h2> <p>When you first enter retirement, $1&ndash;$2 million dollars can seem like a luxurious amount. But retirement isn't the time to throw out your budget. In fact, your should stick closely to your budget to ensure you don't outlive your money.</p> <p>Once you draw up a realistic retirement budget, try adhering to that budget before you actually need to. Work out your budget kinks before you retire.</p> <p>While many individuals have established retirement savings funds, many have also underestimated what their financial needs will be during the last 20&ndash;30 years of their life. Applying these principles before entering retirement can ensure that your finances stay strong and healthy.</p> <p><em>What are your plans to better yourself before you retire? </em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/ashley-eneriz">Ashley Eneriz</a> of <a href="http://www.wisebread.com/5-ways-to-strengthen-your-finances-before-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/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-2 views-row-even"> <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-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/retirement-accounts-and-money-to-spend">Retirement accounts and money to spend</a></span> </div> </li> <li class="views-row views-row-4 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-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-questions-to-ask-before-you-borrow-from-your-retirement-account">5 Questions to Ask Before You Borrow From Your Retirement Account</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement 401k budgeting debt emergency funds IRA mortgages savings Fri, 26 Feb 2016 10:00:12 +0000 Ashley Eneriz 1661857 at http://www.wisebread.com 33 Places to Retire If You Love the Rain http://www.wisebread.com/33-places-to-retire-if-you-love-the-rain <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/33-places-to-retire-if-you-love-the-rain" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_rainy_day_000026602504.jpg" alt="Woman finding places to retire because she loves the rain" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>When contemplating places to retire, several things need to get crossed off your list.</p> <p>First, it needs to be affordable, because you'll likely be relying on less income. Next, you have to factor in favorable tax considerations for real property and your sources of income. Finally, you have to want to live there. And while palm tree lined streets may seem ideal, let's face it &mdash; this imagery doesn't spark the same enthusiasm in everyone. It's about time we highlight the best places to retire if you love the rain, along with their cities' average annual rainfall in inches. (See also: <a href="http://www.wisebread.com/7-states-with-the-lowest-taxes-for-retirees?ref=seealso">7 States With the Lowest Taxes for Retirees</a>)</p> <h2>1. Canada</h2> <p>Although Canadian culture closely resembles life in the U.S., few retirees migrate there. In order to retire in Canada, American citizens need permanent status, but the Canadian government has strict economic restrictions for granting status to retirees. However, if applicants can demonstrate an ability to support themselves throughout retirement, investments, or are prominent members of society (like a PhD), they should have no problem. The benefits of moving to Canada include free healthcare and cheap real estate, and of course, lots of rain.</p> <h3>The Rainiest Cities in Canada</h3> <ul> <li>Prince Rupert, British Columbia: 102.11 inches</li> <li>Abbotsford, British Columbia: 60.5 inches</li> <li>St. John's, Newfoundland: 60 inches</li> <li>Halifax, Nova Scotia: 57.8 inches</li> <li>Vancouver, British Columbia: 57.3 inches</li> <li>Terrace, British Columbia: 52 inches</li> <li>Corner Brook, Newfoundland: 50 inches</li> <li>Quebec City, Quebec: 46.6 inches</li> <li>Saguenay, Quebec: 37.43 inches</li> <li>Prince Edward Island: 35.04 inches</li> </ul> <h2>2. Washington</h2> <p>Coastal Washington is among the most precipitous regions in U.S. Some parts of the area can get over 200 inches of rainfall a year, leaving behind exotic ecosystems and picturesque backdrops. Washington state does not impose tax on income and its sales taxes are relatively low, from 6.5% to 9.5%. Tax on property varies by county and persons 65 and older might qualify for <a href="http://www.dor.wa.gov/Content/FindTaxesAndRates/PropertyTax/IncentivePrograms.aspx">additional property tax exemptions</a>.</p> <h3>Rainiest Cities in Washington State</h3> <ul> <li>Aberdeen Reservoir: 130.6 inches</li> <li>Forks: 119.7 inches</li> <li>Humptulips: 115.6 inches</li> <li>Swift Reservoir: 112.7 inches</li> <li>Naselle: 112.0 inches</li> <li>Baring: 106.7 inches</li> <li>Grays River Hatchery: 105.6 inches</li> <li>Seattle: 38 inches</li> </ul> <h2>3. Florida</h2> <p>The Sunshine State is another no-income-tax state that appeals to many retirees. Its modest sales tax rate of 6% has remained stable for almost three decades. However, Florida has one of the highest property tax levies in the nation &mdash; though much lower than many of the other rainy East Coast states. But to combat this, and attract would-be retirees, the state offers residents 65 and older a $50,000 annual property tax exemption. Florida's rainiest months are mid-May through early October.</p> <h3>The Rainiest Cities in Florida</h3> <ul> <li>Fort Lauderdale: 66.5 inches</li> <li>Pensacola: 65 inches</li> <li>West Palm Beach: 62.41 inches</li> <li>Tallahassee: 61 inches</li> <li>Miami: 51.7 to 61.9 inches</li> <li>Tampa: 46.31 inches</li> <li>Key West: 39.75 inches</li> </ul> <h2>4. Texas</h2> <p>The Lone Star State is a retirement favorite because in addition to no tax on income, Texas also doesn't tax capital gains &mdash; meaning your income from SSI and distributions from investments are tax-free. You'd only owe federal tax if interest accrued in a tax-deferred account. (The same is true for Washington and Florida, by the way.) In addition, Texas also offers older residents property tax breaks in the form of a $15,000 property tax credit and a $10,000 homestead exemptions. The state doesn't get all that much rainfall but it's wettest cities are located toward the east and along the Bolivar Peninsula.</p> <h3>The Rainiest Cities in Texas</h3> <ul> <li>Port Arthur: 61 inches</li> <li>Houston: 49.8 inches</li> <li>Beaumont: 48 inches</li> <li>Galveston: 43.85 inch</li> <li>Bolivar Peninsula: 43.84 inches</li> <li>Dallas: 40.55 inch</li> <li>Austin: 32.15 inches</li> <li>San Antonio: 30.51 inches</li> </ul> <p><em>Did we miss any rainy cities? Let us know 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/qiana-chavaia">Qiana Chavaia</a> of <a href="http://www.wisebread.com/33-places-to-retire-if-you-love-the-rain">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/first-time-home-buyer-consider-these-5-cities">First-Time Home Buyer? Consider These 5 Cities</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-more-exciting-affordable-american-cities-to-retire-in">4 More Exciting, Affordable American Cities to Retire In</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-balance-saving-for-retirement-emergency-fund-and-paying-off-debt">How to Balance Saving for Retirement, Emergency Fund, and Paying Off Debt</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/this-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-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/canada-and-us-retirement-showdown-which-offers-more-for-retirees">Canada and U.S. Retirement Showdown: Which Offers More for Retirees?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement affordable living Canada florida Rain retirement texas u.s. cities washington Fri, 26 Feb 2016 10:00:04 +0000 Qiana Chavaia 1661854 at http://www.wisebread.com Are You Wasting $300,000 on Lunch? http://www.wisebread.com/are-you-wasting-300000-on-lunch <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/are-you-wasting-300000-on-lunch" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_lunch_break_000063560539.jpg" alt="Woman wasting $300,000 on lunch every day" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>It seems obvious that a serious handbag habit, or a penchant for champagne might damage your finances. But lunch? Seriously? Afraid so.</p> <p>I know, I know. Lunch is hardly an extravagance. We all need to eat, and picking up something to take out is a far easier option than preparing something at home.</p> <p>But did you ever really consider the long-term costs? Although the small daily outlay on a restaurant or cafeteria lunch (not to mention coffees, sodas, and snacks) may seem insignificant, it adds up over time. If you're like the average American office worker, you could be spending about $3,000 on lunch and coffee this year. Just imagine how that mounts up over a whole working lifetime.</p> <p>Ouch.</p> <p>But turn this on its head, and there is some really good news. <a href="http://www.wisebread.com/15-ways-to-make-brown-bagging-it-better-than-buying-lunch">Bringing in your own lunch</a> to work could save you so much money, you could take a vacation, save for a new car &mdash; or even knock <em>years</em> off your planned retirement date. Put down the double skinny caramel latte, and read on to check out how.</p> <h2>1. Crunching the Numbers</h2> <p>According to survey findings, 82% of working Americans spend at least <a href="http://www.accountingprincipals.com/Documents/downloads/workonomix_spending_habits.pdf">$20 a week on coffee</a>, and no fewer than 89% spend at least $35 every week on lunch. That works out to at least $57.49 per week. So, let's take an average Joe example:</p> <p>Spending $57.49 a week on lunch and coffees, for 50 weeks in a year, means you're handing over $2,874.50 to eat an unsatisfactory (and probably unhealthy) meal at your desk daily. And if you spend more than $11 or so per day on lunch and coffee (as many of us are guilty of doing), that figure increases rapidly.</p> <p>What better use could you be putting that money to?</p> <h2>2. The Beauty of Compound Interest</h2> <p>You're reading a personal finance blog &mdash; so you probably already know that compound interest is your friend. Interest earned on an initial deposit is added into the overall sum held, meaning you get interest paid on interest already accrued. The net result is that small sums of money, over a long period of time, can grow. And grow. And grow. It's a personal finance nerd's dream.</p> <p>This effect is shown even in a relatively conservative &mdash; but slow and steady &mdash; account that will give you a 1% return on your cash (and don't forget that interest rates will fluctuate and are likely to rise at times over the course of your working life). With compound interest, and time, even a small regular deposit can grow to something worth having. The longer you squirrel it away, the bigger it gets &mdash; and remember, in the case of saved lunch money, this was cash you hadn't counted on having. You should not miss it.</p> <p>For example: If, instead of buying lunch &mdash; for this year only &mdash; you invest the $2,874.48 saved in a skimpy 1% interest savings account, it could become a &quot;happy retirement&quot; holiday once you get to the point of ditching work, turning into $3,874.85 over the course of 30 years. Just by sitting there! Putting the same amount of cash aside into a vehicle that mirrors the S&amp;P 500 over 30 years, based on a historic average return of 7%, your savings would turn into $23,409. Of course, additional contributions will lead to even greater gains.</p> <h2>3. How to Retire &mdash; Effortlessly</h2> <p>Okay, 30 years is a long time, and the idea of sacrificing your convenient sandwich for something that far hence might not sound so appealing. But how about if quitting your sandwich habit could actually bring your anticipated retirement forward?</p> <p>Don't shout about it, but it can. Here are the sums:</p> <p>By continuing with your &quot;average&quot; annual savings from ditching takeout lunches over the course of 30 years, your pot, even at a low 1% yield, would become just over $100,000 thanks to the magic of time and compound interest. If you learn enough about investing to achieve that historic average of 7% from the S&amp;P 500 over that period, you could accumulate an astonishing $312,362. Enough to change your retirement plans?</p> <p>By simply squirreling away that tiny amount of lunch money every day, you can either increase your total lifetime retirement savings by hundreds of thousands of dollars, or retire years sooner, altogether.</p> <p><em>Does giving up that sandwich or passing up Chinese takeout still sound like such a sacrifice?</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/are-you-wasting-300000-on-lunch">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-9"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/you-dont-need-a-retirement-plan-you-need-a-financial-independence-plan">You Don&#039;t Need a Retirement Plan — You Need a Financial Independence Plan</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/which-retirement-account-is-right-for-you">Which Retirement Account Is Right for You?</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/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-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-how-rich-youd-be-if-you-stopped-drinking-expensive-coffee">Here&#039;s How Rich You&#039;d Be if You Stopped Drinking Expensive Coffee</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement brown bagging coffee compound interest lunch Office saving money Takeout Wed, 24 Feb 2016 10:30:24 +0000 Claire Millard 1659932 at http://www.wisebread.com Best Money Tips: How to Get Bigger Checks From Social Security http://www.wisebread.com/best-money-tips-how-to-get-bigger-checks-from-social-security <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-get-bigger-checks-from-social-security" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_tablet_happy_000075989773.jpg" alt="Woman learning how to get bigger checks from social security" 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 articles on ways to get bigger checks from Social Security, cheats for waking yourself up during the week, and how to avoid leaving money on the table.</p> <h2>Top 5 Articles</h2> <p><a href="http://www.moneytalksnews.com/slideshows/16-ways-get-bigger-checks-from-social-security/">14 Ways to Get Bigger Checks From Social Security</a> &mdash; You can get a bigger payout from this old-age safety net by waiting until your full retirement age to claim benefits. Even better, wait until you're 70. [Money Talks News]</p> <p><a href="http://www.popsugar.com/smart-living/How-Wake-Up-Early-40240055">17 Cheats For Waking Yourself Up During the Workweek</a> &mdash; Using a loud, jarring sound as your alarm will wake you up in a jiffy! Change it every week so you don't get too used to it. [PopSugar Smart Living]</p> <p><a href="http://www.csmonitor.com/Business/Saving-Money/2016/0217/Ten-ways-you-could-be-leaving-money-on-the-table-and-how-to-avoid-it">Ten ways you could be leaving money on the table - and how to avoid it</a> &mdash; The average American wastes about $529 in food per year. Instead of letting food spoil, freeze your fruits and veggies or blend them into a breakfast smoothie to use them up quickly. [The Monitor]</p> <p><a href="http://www.freemoneywisdom.com/keep-more-money-in-your-pockets-with-9-easy-ways-to-save/">Keep More Money in Your Pockets with 9 Easy Ways to Save</a> &mdash; Shop at stores that offer price matching. Walmart, Target, and Amazon are a few big retailers that do! [Free Money Wisdom]</p> <p><a href="http://www.theorderexpert.com/6-ways-to-stop-losing-things/">6 Ways to Stop Losing Things</a> &mdash; Create a checklist of things you need on a regular basis, then schedule alerts throughout the day to remind you to make sure you have those items. [The Order Expert]</p> <h2>Other Essential Reading</h2> <p><a href="http://www.cheapism.com/blog/4137/finding-a-job-on-a-budget">10 Ways to Save While Finding Your Next Job</a> &mdash; If you would need to travel a good distance for an interview, request a virtual interview instead. [Cheapism]</p> <p><a href="http://makemoneyyourway.com/10-ways-to-ensure-that-you-reduce-your-energy-cost-and-waste/">10 Ways To Ensure That You Reduce Your Energy Cost And Waste</a> &mdash; Install and use dual flush toilets to reduce the amount of water you use. [Make Money Your Way]</p> <p><a href="http://www.lifeoptimizer.org/2016/02/16/traits-of-successful-people/">Lessons from Elon Musk: 4 Proven Traits of Successful People</a> &mdash; A successful person has determination, and to have determination you need to believe in your idea and have a strong &quot;why&quot; for pursuing it. [Life Optimizer]</p> <p><a href="http://www.healthyarea.org/top-10-healthy-veggies-that-you-need-to-know/">Top 10 Healthy Veggies That You Need to Know</a> &mdash; Broccoli has vitamin C, folate and beta carotene that will help strengthen the immune system. Avoid overcooking since this can leech the vitamins and minerals out of the florets. [HealthyArea.org]</p> <p><a href="http://parentingsquad.com/7-things-you-shouldnt-say-to-your-child">7 Things You Shouldn't Say to Your Child</a> &mdash; Encourage your child to work hard, but don't tell them &quot;Practice makes perfect.&quot; Perfect doesn't always happen. [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-get-bigger-checks-from-social-security">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-10"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-much-can-you-afford-to-spend-in-retirement">How Much Can You Afford to Spend in Retirement?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/stop-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-3 views-row-odd"> <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> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-to-guarantee-income-in-retirement">6 Ways to Guarantee Income in 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/12-things-you-didnt-know-about-retirement">12 Things You Didn&#039;t Know About Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement best money tips social security Mon, 22 Feb 2016 11:00:07 +0000 Amy Lu 1659817 at http://www.wisebread.com 5 Dumb IRA Mistakes Even Smart People Make http://www.wisebread.com/5-dumb-ira-mistakes-even-smart-people-make <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-dumb-ira-mistakes-even-smart-people-make" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/000062076804.jpg" alt="Smart people making dumb IRA mistakes" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You know how important it is to save for your retirement. So to help you reach your financial goals, you've set up an IRA.</p> <p>Setting up and contributing to an IRA is a good first step. But even financially savvy people make key mistakes when contributing to IRAs &mdash; mistakes that can cost them plenty of retirement dollars.</p> <p>The good news? It's actually fairly easy to avoid these errors. Craig Howell, vice president of business development at San Francisco's Ubiquity Retirement + Savings, said that consumers can do so with just a bit of education.</p> <p>&quot;It doesn't take much to educate yourself on how IRAs work,&quot; Howell said. &quot;You do have to pay attention to your IRAs. A lot of people set them up and then ignore them. But if you do just a bit of research, you can avoid making mistakes with that money.&quot;</p> <p>Here are the most common mistakes even smart people make when it comes to building the savings in their IRAs. (See also: <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>)</p> <h2>1. Not Contributing Enough</h2> <p>The more money you deposit in your IRA, the more money you'll have to help fund a happy retirement. That seems obvious. But many people, even financially savvy ones, simply use their IRAs as a place to stash money, not as a place to grow it.</p> <p>This is because many people first fund their IRAs from dollars they roll over from an employer-sponsored 401K when they change jobs. They take that money, deposit it in an IRA, and ignore it. Sure, depending on the economy, these dollars will slowly grow. But they won't grow nearly as fast as they would have if their owners were making regular contributions.</p> <p>And this is far from an uncommon mistake.</p> <p>&quot;I believe that the number one mistake that people make is not contributing to their IRAs at all,&quot; said Joe Roseman, managing partner at retirement firm O'Dell, Winkfield, Roseman &amp; Shipp in Charlotte, North Carolina. &quot;That is easily the number one mistake.&quot;</p> <p>A 2015 study by the Employee Benefit Research Institute found that only 7% of investors contributed to their traditional IRA accounts in 2013. Investors who owned Roth IRAs did a bit better, with 26% contributing in 2013.</p> <h2>2. Taking the Silo Approach</h2> <p>Jim Poolman, executive director of the Indexed Annuity Leadership Council and former insurance commissioner of North Dakota, said that too many investors never consider how their IRAs fit into their overall retirement plans.</p> <p>Of course, too many people never calculate how much they'll need to save for their retirements in the first place. So when they invest dollars in an IRA, they do it in a haphazard way, contributing when they are fortunate enough to have some extra money. A better approach is to contribute on a regular schedule that is based on all the savings vehicles you are using to fund your retirement, Poolman said. For example, if you contribute to an employer-sponsored 401K every pay period, consider doing the same for your IRA. Automatic account transfers from savings or checking balances can help you achieve this.</p> <p>&quot;It is important to look at your full retirement plan and how your investment vehicles fit in,&quot; Poolman said. &quot;Evaluate all of your investments together so you have a proper balance to meet your time and investment objectives. Some people look at the different vehicles like an IRA in a silo, and don't consider it in the entire financial or retirement plan.&quot;</p> <h2>3. Forgetting Their Required Minimum Distributions</h2> <p>IRAs come with generous tax breaks &mdash; but don't think you're getting these for free. The federal government requires that when you turn 70-and-a-half you begin taking regular withdrawals from your traditional IRAs, withdrawals on which you will have to pay taxes. (If you have a Roth IRA, you won't have to do this.)</p> <p>How much you'll have to withdraw each year depends on how much money you've saved in your IRA. If you forget to make these withdrawals, or if you don't take ones that are large enough, the government will levy a 50% penalty against you. If you were supposed to withdraw $5,000, not only will you have to catch up with that withdrawal &mdash; paying taxes on it &mdash; you'll also have to pay a penalty of $2,500.</p> <p>&quot;Uncle Sam, being the nice gentleman that he is, at some point if he gives you something, he also takes it away from you,&quot; Roseman said. &quot;If you don't take your required minimum distribution, he is going to hit you with a very nasty penalty.&quot;</p> <h2>4. The Rollover Mistake</h2> <p>Say you want to move the dollars in your current IRA to a new one. Or maybe you've changed jobs and you want to take the money from your old 401K account and deposit it in an IRA. You can roll those funds over.</p> <p>In a rollover, you'll receive a check for the amount of money in the retirement account you are closing. You then use that money to start a new IRA. But there is a catch: If you don't deposit your dollars into a new account within 60 days, the IRS will consider that money as income, which means you'll have to pay taxes on it.</p> <p>And if you are under the age of 59-and-a-half when you do this, you'll also be hit with a 10% penalty. If you withdrew $10,000 and failed to move it into a new IRA within 60 days, you'd have to pay a penalty of $1,000.</p> <p>Also, you can only do one rollover a year. A better choice? Sign up for a direct transfer of your dollars from one retirement savings vehicle to your new one. Doing so will send your money directly to your new IRA without you ever receiving a check first. It's a way to eliminate this extra step and make sure that you don't accidentally trigger the 60-day penalty. You can also make unlimited direct transfers in a year.</p> <h2>5. The Wrong Beneficiary</h2> <p>When you die, you want the money left in your IRA to go to the right beneficiary. But Roseman said that too many investors forget to update their IRA's beneficiaries when their lives change.</p> <p>This most often happens in cases of divorce, he said. Divorced or remarried investors often forget to change their beneficiary forms. Their IRA dollars are still scheduled to go to their ex-spouses, not their current ones, after they die.</p> <p>&quot;You are dead and your current spouse is counting on the $300,000 in your IRA,&quot; Roseman said. &quot;But the beneficiary designation still says that this money goes to the ex. There have been many court cases saying that the beneficiary designation rules. It overrules a trust agreement and it overrules a will. That is a huge mistake that investors make. Any time there is a change in their lives, people need to re-do those beneficiary forms.&quot;</p> <p><em>Are you making any of these common IRA errors?</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-dumb-ira-mistakes-even-smart-people-make">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-11"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/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/7-ways-to-max-out-your-ira-contributions-by-april-15th">7 Ways to Max Out Your IRA Contributions by April 15th</a></span> </div> </li> <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/left-a-job-do-a-rollover">Left a job? Do a rollover.</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/you-dont-need-a-retirement-plan-you-need-a-financial-independence-plan">You Don&#039;t Need a Retirement Plan — You Need a Financial Independence Plan</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/which-retirement-account-is-right-for-you">Which Retirement Account Is Right for You?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement beneficiaries contributions IRA Mistakes rollovers saving money Mon, 15 Feb 2016 11:30:04 +0000 Dan Rafter 1654106 at http://www.wisebread.com Best Money Tips: Cheapest Cities for Retirees http://www.wisebread.com/best-money-tips-cheapest-cities-for-retirees <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-money-tips-cheapest-cities-for-retirees" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/retired_couple_city_000084004751.jpg" alt="Married couple finding cheapest cities for retirees" 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 articles on the cheapest cities for retirees, the best time to visit top vacation destinations for big savings, and affordable but romantic Valentine&rsquo;s Day ideas.</p> <h2>Top 5 Articles</h2> <p><a href="http://www.kiplinger.com/slideshow/retirement/T006-S001-cheapest-places-where-you-ll-want-to-retire/index.html">Cheapest Places Where You'll Want to Retire</a> &mdash; In Hot Springs, Arkansas, housing and health care for retirees are particularly low, at 24.1% and 12.2% below the national average, respectively. [Kiplinger]</p> <p><a href="http://www.cheapism.com/blog/4120/best-time-to-go">When to Hit 10 Top Vacation Destinations for Big Savings</a> &mdash; Vacation rentals in London are cheapest a few weeks before mid-July. [Cheapism]</p> <p><a href="http://parentingsquad.com/13-inexpensive-but-romantic-valentines-day-ideas">13 Inexpensive But Romantic Valentine's Day Ideas</a> &mdash; Hop into your car and take a long drive through a scenic area nearby. [Parenting Squad]</p> <p><a href="http://www.popsugar.com/smart-living/Signs-Hoarding-Tendencies-33911301">11 Signs You Have Hoarding Tendencies</a> &mdash; Do you make piles of things to deal with later&hellip;and let those piles sit for days? [PopSugar Smart Living]</p> <p><a href="http://www.stackthechips.com/7-crazy-things-that-we-do-with-our-money/">7 Crazy Things That We Do With Our Money</a> &mdash; With online rental and streaming services, it doesn't make sense to buy a film that you haven't seen. [Stack The Chips]</p> <h2>Other Essential Reading</h2> <p><a href="http://www.thefrugaltoad.com/household/your-health-how-to-stay-safe-with-medicine">Your Health: Staying Safe with Medicine</a> &mdash; Keep medicine in their original containers and out of reach of children. Make sure they're stored properly! Some meds require refrigeration. [The Frugal Toad]</p> <p><a href="http://adebtfreestressfreelife.com/3-surefire-strategies-to-end-under-earning-and-change-your-financial-circumstances/">3 Surefire Strategies to Value Yourself And Stop Working for Free</a> &mdash; Be honest! Take a hard look at your situation and analyze your justifications, thoughts, and feelings. [A Debt Free Stress Free Life]</p> <p><a href="http://gradmoneymatters.com/money-making-ideas/5-tasks-that-you-can-outsource.html">5 Tasks You Can Outsource</a> &mdash; Spend your time on things that matter. Email management is one of those tasks that you can easily hand off to a virtual assistant. [Grad Money Matters]</p> <p><a href="http://www.biblemoneymatters.com/practice-an-attitude-of-gratitude-to-improve-your-finances/">Practice An Attitude Of Gratitude To Improve Your Finances</a> &mdash; Practicing gratitude allows you to appreciate what you have and stop focusing on what you don't. [Bible Money Matters]</p> <p><a href="http://ptmoney.com/marriage-money/">8 Tips to Secure Your Marriage (and Money) for Years to Come</a> &mdash; Decide ahead of time who will take care of which financial tasks. [PT Money]</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-cheapest-cities-for-retirees">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-12"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/33-places-to-retire-if-you-love-the-rain">33 Places to Retire If You Love the Rain</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-balance-saving-for-retirement-emergency-fund-and-paying-off-debt">How to Balance Saving for Retirement, Emergency Fund, and Paying Off Debt</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/the-step-by-step-guide-to-rolling-over-your-401k">The Step-by-Step Guide to Rolling Over 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/7-occasions-when-you-should-definitely-hire-a-financial-advisor">7 Occasions When You Should Definitely Hire a Financial Advisor</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement best money tips retirement Thu, 11 Feb 2016 20:00:06 +0000 Amy Lu 1654680 at http://www.wisebread.com Best Money Tips: The Best and Worst States to Retire http://www.wisebread.com/best-money-tips-the-best-and-worst-states-to-retire <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-money-tips-the-best-and-worst-states-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/old_couple_bikes_000019588725.jpg" alt="Couple finding best and worst states to retire" 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 articles on the best and worst states to retire, ways to keep your money safe while traveling, and cancer-causing foods you should avoid.</p> <h2>Top 5 Articles</h2> <p><a href="http://www.moneytalksnews.com/these-are-the-10-best-and-worst-states-retire/">These Are the 10 Best (and Worst) States to Retire</a> &mdash; Most retirees choose where to retire based on good weather or where their children live. But children often move, and good weather alone doesn't lead to happiness or contentment. [Money Talks News]</p> <p><a href="http://www.csmonitor.com/Business/Saving-Money/2016/0204/Seven-ways-to-keep-your-money-secure-while-traveling">Seven ways to keep your money secure while traveling</a> &mdash; See if you can get a travel debit card linked to a temporary checking account with your bank. You'll be able to leave your regular debit cards at home, and the funds in your regular account will be safe if a thief gets ahold of your travel debit card. [The Monitor]</p> <p><a href="http://www.lifed.com/cancer-causing-foods-you-should-never-eat">16 Cancer Causing Foods You Should Never Eat</a> &mdash; Processed meats can increase your risk for cancer. Eating the equivalent of four slices of bacon raises the risk of getting colorectal cancer by 18%. [Life'd]</p> <p><a href="http://www.artofmanliness.com/2016/02/04/12-tips-for-getting-the-most-out-of-your-trip-to-a-museum/">12 Tips for Getting the Most Out of Your Trip to a Museum</a> &mdash; You might be able to navigate a museum just fine on your own, but guided tours, programs, and classes can really enhance the experience. [The Art of Manliness]</p> <p><a href="http://www.pickthebrain.com/blog/3-uncommon-ways-to-be-more-positive/">3 Uncommon Ways To Be More Positive</a> &mdash; It's easy to get stuck in the past and focus on the bad experiences. Writing down your goals and dreams helps you shift your focus to the future and reminds you of what you're working towards. [Pick The Brain]</p> <h2>Other Essential Reading</h2> <p><a href="http://www.positivityblog.com/index.php/2016/02/04/how-to-stop-being-so-lazy/">How to Stop Being So Lazy: 10 Simple Habits</a> &mdash; Allow yourself small breaks between blocks of focused work. You'll feel energetic and motivated longer and be able to do better quality work. [The Positivity Blog]</p> <p><a href="http://www.shebudgets.com/life-hacks/hosting-cost-effective-dinner-parties-that-dont-break-the-bank/66308">Hosting Cost-Effective Dinner Parties That Don&rsquo;t Break the Bank</a> &mdash; Grill something! When the weather is nice, everyone (including the chef) can hang out outside and enjoy really inexpensive grilled meat and sides. [SheBudgets]</p> <p><a href="http://www.popsugar.com/smart-living/How-Meditation-Increases-Productivity-40064496">4 Ways Meditation Increases Your Productivity and Wellness</a> &mdash; Doing breathing exercises can help calm your mind and nervous system, allowing you to be in the present. [PopSugar Smart Living]</p> <p><a href="http://adebtfreestressfreelife.com/how-to-clean-your-bathroom-in-just-10-minutes/">How To Quick Clean Your Bathroom In Just 10 Minutes</a> &mdash; Don't wait until your bathroom has collected layers and layers of grime to do a deep scrub. Regular, 10-minute cleanings is all you need to keep this high-traffic space sparkling! [A Debt Free Stress Free Life]</p> <p><a href="http://www.cleverdude.com/content/2-ways-for-couples-to-resolve-spending-conflict/">2 Ways For Couples To Resolve Spending Conflicts</a> &mdash; When you can't agree on how to spend funds, use something to break the tie randomly. The next time you're in the same position, the tie-breaker goes to the other partner. [Clever Dude]</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-the-best-and-worst-states-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-13"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-choose-these-10-cities-if-you-want-to-retire-comfortably">Don&#039;t Choose These 10 Cities If You Want to Retire Comfortably</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-great-retirement-jobs">6 Great Retirement Jobs</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/you-dont-need-a-retirement-plan-you-need-a-financial-independence-plan">You Don&#039;t Need a Retirement Plan — You Need a Financial Independence Plan</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/6-warning-signs-youre-sabotaging-your-nest-egg">6 Warning Signs You&#039;re Sabotaging Your Nest Egg</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement best money tips places to retire Mon, 08 Feb 2016 20:00:03 +0000 Amy Lu 1651694 at http://www.wisebread.com Stop Making These 10 Bogus Retirement Savings Excuses http://www.wisebread.com/stop-making-these-10-bogus-retirement-savings-excuses <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/stop-making-these-10-bogus-retirement-savings-excuses" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/000018814419.jpg" alt="Realizing it&#039;s time to stop making bogus retirement savings excuses" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Saving for retirement can often feel like a drag, and many of us come up with excuses for avoiding it. After all, who wants to think about finances at age 70 when you're decades away and enjoying life <em>now</em>?</p> <p>But no matter what excuse you come up with, there's no denying that putting as much money aside as you can &mdash; as early as you can &mdash; will help you maintain your lifestyle even after you stop working.</p> <p>Here are some of the top excuses people use to avoid saving for retirement, and why they're way off-base. (See also: <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>)</p> <h2>1. &quot;I Have a Pension&quot;</h2> <p>If your company is one of the few remaining organizations that offers a defined benefit plan, that's great. But it should not be a reason to refrain from saving additional money for retirement. Having additional savings on top of your pension can make retirement that much sweeter. And pensions have been under assault in recent years, with companies and governments backing off of promises to retirees due to financial troubles. Protect against this uncertainty by opening an individual retirement account (otherwise known as an IRA).</p> <h2>2.&quot;I'm Self-Employed&quot; or &quot;My Company Doesn't Offer a Retirement Plan&quot;</h2> <p>You may not have access to an employer-sponsored retirement plan, but that does not mean you can't save a lot for retirement. Any individual can open a traditional IRA or Roth IRA and contribute up to $5,500 annually. With a traditional IRA, contributions are made from your pre-tax income. With a Roth IRA, you pay taxes up-front, so that you won't have to pay them when you withdraw the money at retirement age. In addition, the federal government now offers a &quot;<a href="https://myra.gov/">myIRA</a>&quot; plan, which works like a Roth IRA and allows anyone to invest in treasury securities with no startup costs or fees.</p> <h2>3. &quot;I Won't Be at This Company for Very Long&quot;</h2> <p>One of the key advantages to 401K plans offered by employers is that they are portable. This means that any money you contribute to a plan will follow you wherever you go. In some cases, contributions from your company need to &quot;vest&quot; for a certain amount of time before you get to keep the them, but usually only for a year or so. There's no real downside to contributing to a company retirement plan, even if you don't plan to be there for very long.</p> <h2>4. &quot;The Expenses Are High&quot;</h2> <p>It's very true that many investment products, including mutual funds, have high costs tied to them. It's annoying to buy funds and notice an expense ratio of more than 1%, thus reducing your potential profits. But fees are not a good enough reason to avoid investing, altogether. Over the long haul, your investments will easily rise in value and more than offset any costs. And if you direct your investments to low-cost mutual funds and ETFs, you'll likely find the fees aren't so objectionable. Look for mutual funds with expense ratios of less than 0.1%, and for those that trade without a commission.</p> <h2>5. &quot;I Need to Fund My Kids' College Education&quot;</h2> <p>Putting money aside to pay for college is a wonderful idea, but it should not be done at the expense of your own retirement. Your kids can always work to pay for college or even take out loans, if necessary. But you can't borrow for your own retirement, and you don't want to find yourself working into old age because you didn't save for yourself. In an ideal world, you can save for both college and your own retirement, but you should always think of your own retirement first.</p> <h2>6. &quot;My 401K Plan Isn't Very Good&quot; or &quot;My Company Doesn't Match Contributions&quot;</h2> <p>I'll occasionally hear someone say that they won't contribute to their retirement plan because it's a bad one. No employer match, bad investment options, or high fees can kill any motivation to save. But contributing to even a bad 401K is better than not saving at all. And if you're not thrilled with the offered 401K plan, you can take a look at traditional or Roth IRAs, or even stocks and mutual funds in taxable accounts. There are many bad retirement plans out there, but they are almost all better than nothing.</p> <h2>6. &quot;I Don't Understand Investing&quot;</h2> <p>There's no question that investing can be a very intimidating thing. It takes a while to grasp even the basics of how to invest, and the number of investment products can be bewildering. Don't let fear hold you back from achieving your dreams in retirement. These days, there's a lot of great free information about investing that can help you get started. And many discount brokerages, such as Fidelity, offer free advice if you have an account. Certified Financial Planners are also plentiful &mdash; and often reasonably priced &mdash; and can help you establish a plan to save for retirement and keep you on track.</p> <h2>7. &quot;I Don't Earn Enough&quot;</h2> <p>It's definitely hard to think about retirement when you're having trouble making ends meet now. But it's important to recognize setting aside even a modest amount of money each month can help you achieve financial freedom. Consider that even $25 a month into an index fund can grow to tens of thousands of dollars after 30 years.</p> <h2>8. &quot;I'm Young &mdash; I Have Plenty of Time&quot;</h2> <p>If you're not saving for retirement when you're young, you are costing your future self a lot of money. Thanks to the magic of compound interest and earnings, someone who begins saving in their early 20s can really see big gains over time. If you have $10,000 at age 20 and begin setting aside $200 a month until age 65, you'll have nearly a million dollars, based on an average market return. But if you wait until age 35, you'll end up with barely one-third of that.</p> <h2>9. &quot;It's Too Late for Me&quot;</h2> <p>It's true that the earlier you start investing, the more money you'll likely end up with. But hope is not entirely lost for those who are approaching retirement age but have not saved. Even five to 10 years of aggressive saving and the right investments can result in a nice nest egg. Older people can take advantage of higher limits on contributions to retirement plans including IRAs and 401Ks.</p> <h2>10. &quot;I'll Get Social Security&quot;</h2> <p>You've been contributing to Social Security all your life, but that doesn't mean it guarantees a comfortable retirement. A typical Social Security benefit these days is about $1,300 a month. That's enough to keep you from starving, but you won't be able to do much else. Moreover, concerns over federal budget deficits suggest there is no guarantee of Social Security funds being available when you retire. For certain, there is constant talk by lawmakers of entitlement reform, which could mean to lower benefits or other changes.</p> <p><em>What's your excuse for not saving for retirement?</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/stop-making-these-10-bogus-retirement-savings-excuses">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-14"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/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-2 views-row-even"> <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-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-to-guarantee-income-in-retirement">6 Ways to Guarantee Income in Retirement</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/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> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-retirement-rules-you-should-be-breaking">6 Retirement Rules You Should Be Breaking</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement 401k compound interest excuses IRA pensions savings social security Mon, 08 Feb 2016 18:00:05 +0000 Tim Lemke 1649873 at http://www.wisebread.com