Retirement http://www.wisebread.com/taxonomy/term/417/0 en-US 4 Affordable Retirement Spots With World-Class Health Care http://www.wisebread.com/4-affordable-retirement-spots-with-world-class-health-care <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-affordable-retirement-spots-with-world-class-health-care" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/senior_woman_placing_hands_on_the_shoulder_of_senior_man.jpg" alt="Senior woman placing hands on the shoulder of senior man" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Health care is one of the biggest considerations for any retiree planning to settle abroad, and could be a deciding factor when choosing which country to move to. Since Medicare does not cover health care costs for U.S. citizens living overseas, it&rsquo;s important to have a plan in place for how you&rsquo;re going to pay for it. But more than that, it&rsquo;s well advised to select somewhere that has a quality health care system to ensure that you get a good standard of treatment when you require it. (See also: <a href="http://www.wisebread.com/follow-these-5-steps-to-full-health-care-coverage-in-retirement?ref=seealso" target="_blank">Follow These 5 Steps to Full Health Care Coverage in Retirement</a>)</p> <p>As the saying goes, you can&rsquo;t put a price on your health. You can however, reduce how much it will cost for any treatment required. Many countries that are affordable to live in have health care on par with the U.S., so not only will your medical bills go down, but so will your cost of living.</p> <p>Note: All cost of living estimates refer to figures from <a href="http://numbeo.com" target="_blank">Numbeo</a>, the world&rsquo;s largest database of user contributed data about cities and countries worldwide.</p> <h2>Mexico</h2> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5197/san_miguel_de_allende_in_mexico.jpg" width="605" height="340" alt="" /></p> <p>Living costs in Mexico City are nearly 60 percent lower than those in New York City, which is just one of the many reasons the country is a popular destination for retirees. It also has a high number of expats and a selection of communities specifically set up for retired Americans. Whether you want beautiful beaches, quaint colonial towns, or bustling cities with developed infrastructures, Mexico has it all. (See also: <a href="http://www.wisebread.com/how-almost-anyone-can-afford-to-retire-in-mexico?ref=seealso" target="_blank">How Almost Anyone Can Afford to Retire in Mexico</a>)</p> <p>As a foreigner, you won&rsquo;t be entitled to free public health care, but you&rsquo;ll have wide access to facilities because the majority of hospitals in Mexico are private establishments. Perhaps unsurprisingly, many of the best medical facilities in this country are based within the major cities of Mexico City, Guadalajara, and Monterrey. Thanks to the country&rsquo;s proximity to the U.S., many of Mexico&rsquo;s doctors not only speak excellent English, but have also spent time training and studying in the U.S.</p> <p>Dental care is particularly cheap in Mexico, with many U.S. citizens making special trips to enjoy the low prices. The border town of Los Algodones has even been nicknamed the &ldquo;dental capital of the world&rdquo; thanks to the high concentration of dental clinics there. Opticians are also easy to find in Los Algodones and there are a number of national chains and franchises that provide low priced examinations and treatments. (See also: <a href="http://www.wisebread.com/retire-for-half-the-cost-in-these-5-countries?ref=seealso" target="_blank">Retire for Half the Cost in These 5 Countries</a>)</p> <h2>Malaysia</h2> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5197/floating_mosque_reflection_in_penang_malaysia.jpg" width="605" height="340" alt="" /></p> <p>Malaysia is regularly recognized as one of the best countries to retire in thanks to its welcoming culture, warm climate, and extremely low living costs. Life in the capital, Kuala Lumpur, is 54 percent cheaper than in New York City, meaning your dollar goes a lot further. Retirees from across the globe understandably see this as a real attraction, and in the major cities you&rsquo;ll find large expat populations.</p> <p>Medical tourism is big business here, so much so that Malaysia&rsquo;s Ministry of Health has its own Healthcare Travel Council. It was set up by the government to raise the profile of the country as a top destination for world-class health care services and increase both the quality and quantity of medical tourism. It helps provide a standardized level of service by only approving and endorsing top quality medical facilities, which should give you peace of mind when selecting where to get treatment.</p> <p>As a non-Malaysian, you won&rsquo;t have access to free public health care, meaning you&rsquo;ll need to get a good insurance policy. However, these are generally cheaper than in the U.S., and will enable you to receive treatment in either public or private facilities, depending on your preference. (See also: <a href="http://www.wisebread.com/5-incredible-places-to-retire-abroad-that-anyone-can-afford?ref=seealso" target="_blank">5 Incredible Places to Retire Abroad That Anyone Can Afford</a>)</p> <h2>Costa Rica</h2> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5197/national_theatre_of_costa_rica_in_san_jose.jpg" width="605" height="340" alt="" /></p> <p>With stunning Caribbean beaches, lush inland jungles, developed cities, and a warm, sunny climate all year round, Costa Rica really has it all. The cost of living in San Jose is 40 percent below that of New York City, while the standard of living remains extremely high. It&rsquo;s little wonder Costa Rica is so popular among retirees from the U.S.</p> <p>Many U.S. citizens already travel to Costa Rica every year for so-called medical tourism, as the prices are far lower than back home. But for expats living there as legally recognized residents, it gets even better. You have access to both tiers of their health service, private and public. If you need emergency treatment, you are eligible to receive it under the universal Caja system, as well as regular checkups, many prescription drugs, and even some surgeries.</p> <p>In addition to the public health care available, there&rsquo;s also an excellent private system that many retirees pay for, mainly because waiting times on non life-threatening surgeries are much shorter. Both systems are renowned for having up-to-date equipment, facilities, and technologies, which partly explains why the health care is rated so highly. You&rsquo;ll also find that most doctors speak English to a very high standard, which should alleviate any concerns around communication. (See also: <a href="http://www.wisebread.com/5-countries-that-welcome-american-retirees?ref=seealso" target="_blank">5 Countries That Welcome American Retirees</a>)</p> <h2>Portugal</h2> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5197/porto_portugal_cityscape.jpg" width="605" height="340" alt="" /></p> <p>This former world superpower on the southern tip of Europe&rsquo;s Iberian Peninsula once ruled over territories across Latin America, Oceania, Asia, and Africa. These days it&rsquo;s more famous as a major tourist destination, thanks to its incredible beaches, historic architecture, and diverse cuisine. With Lisbon&rsquo;s cost of living 43 percent lower than New York&rsquo;s, many retirees are now viewing this as the perfect place to settle down. The Algarve coast in particular is a retirement hot spot, as it has great weather, beautiful beaches, and a large, established expat community for support.</p> <p>Portugal has always been a well-loved holiday and retirement destination for Europeans, but recently it&rsquo;s become popular among Americans as well. With Portugal&rsquo;s introduction of the Non-Habitual Resident Regime, it&rsquo;s now possible receive your pension tax free here as well as many other sources of income.</p> <p>On top of these benefits, Portugal&rsquo;s health care system is well-known for having excellent facilities and well-trained staff. There is a good public health care system here that foreigners have access to. It&rsquo;s free apart from some nominal patient contributions used to ensure people access the service in the correct way &mdash; for example, not going to the emergency room unless absolutely necessary. Doctors, particularly in the popular areas for retirees, generally speak English.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/nick-wharton">Nick Wharton</a> of <a href="http://www.wisebread.com/4-affordable-retirement-spots-with-world-class-health-care">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/9-retirement-hotspots-that-are-cheaper-now-than-ever-before">9 Retirement Hotspots That Are Cheaper Now Than Ever Before</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/13-financial-steps-to-take-before-retiring-abroad">13 Financial Steps to Take Before Retiring Abroad</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-choose-the-perfect-country-to-retire-in">How to Choose the Perfect Country to Retire In</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-common-medicare-myths-debunked">5 Common Medicare Myths, Debunked</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/dont-let-these-expenses-spoil-your-retirement-abroad">Don&#039;t Let These Expenses Spoil Your Retirement Abroad</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Health and Beauty Retirement Travel health care international travel retire abroad retirement retirement hot spots world-class health care Tue, 21 Nov 2017 09:30:10 +0000 Nick Wharton 2056742 at http://www.wisebread.com 13 Financial Steps to Take Before Retiring Abroad http://www.wisebread.com/13-financial-steps-to-take-before-retiring-abroad <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/13-financial-steps-to-take-before-retiring-abroad" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/happy_couple_enjoying_their_retirement.jpg" alt="Happy couple enjoying their retirement" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If things go well for you, retirement can last for decades. But your retirement savings might not, especially if you live in a high-cost area. Households with a resident aged 65 or older have a median income of just $38,515, according to the U.S. Census Bureau. It's no wonder that the number of Americans retiring abroad grew 17 percent between 2010 and 2015, now numbering some 400,000, according to the Social Security Administration. (See also: <a href="http://www.wisebread.com/5-countries-where-you-can-retire-for-1000-a-month?ref=seealso" target="_blank">5 Countries Where You Can Retire for $1,000 a Month</a>)</p> <p>But retiring abroad isn't as simple as going on vacation. How will you access your savings or benefits from overseas? Can you buy property? What about medical care? All these questions can be addressed with some pre-takeoff financial planning. (See also: <a href="http://www.wisebread.com/9-things-to-know-before-retiring-abroad?Ref=seealso" target="_blank">9 Things to Know Before Retiring Abroad</a>)</p> <h2>1. Find a retiree-friendly destination</h2> <p>Some places have incentives like tax breaks and visa offers to attract American retirees, such as Panama and Costa Rica's <em>pensionado </em>programs. You may also qualify for senior citizen benefits established for locals, such as Ecuador's senior discount program, which offers savings on airfare, utilities, and sporting events.</p> <p>In addition, it's a good idea to consult the <a href="https://travel.state.gov/content/passports/en/country.html" target="_blank">State Department's country-specific information</a> about visa laws, health and safety conditions, and how much money you'd be allowed to bring into the country with you. (See also: <a href="http://www.wisebread.com/5-countries-that-welcome-american-retirees?ref=seealso" target="_blank">5 Countries That Welcome American Retirees</a>)</p> <h2>2. Find out if you can get Social Security payments there</h2> <p>Six in 10 retirees rely on Social Security for at least half their income, according to the Social Security Administration, making this a pretty important consideration. Fortunately, the SSA can send you your check if you move abroad to most countries, with the notable exceptions of Cuba and Cambodia. For certain other countries, including Ukraine, you can get your payments, but only if you meet certain conditions such as appearing at a U.S. embassy or consulate every six months.</p> <p>The Social Security Administration offers the <a href="https://www.ssa.gov/international/payments_outsideUS.html" target="_blank">Payments Abroad Screening Tool</a> to help you figure out if you'll be able to collect payments overseas.</p> <p>If you are a non-U.S. citizen receiving Social Security because you worked in the U.S. or are a dependent of someone who did, the rules on receiving payments overseas are more complicated. Consult the SSA booklet, <a href="https://www.ssa.gov/pubs/EN-05-10137.pdf" target="_blank">Your Payments While You Are Outside the United States</a> for the full story.</p> <p>Many American embassies worldwide have a <a href="https://www.ssa.gov/foreign/foreign.htm" target="_blank">Federal Benefits Unit</a> to help retirees with any Social Security issues.</p> <h2>3. Hire a new financial adviser</h2> <p>The wave of Americans retiring abroad has given rise to a new specialty in the financial industry: Cross-Border Planning. A cross-border specialist will help you understand local income tax laws so you don't risk over- or underpaying. They can also help you safely move spending money from the U.S. to your new home, and guide you through many other issues you might never have considered.</p> <p>It's almost impossible to find someone who knows the laws of every country, so use the <a href="http://crossborderplanning.com/about_us.htm" target="_blank">Cross-Border Financial Planning Alliance</a> to find someone who specializes in your chosen country.</p> <h2>4. Figure out what to do with your bank accounts</h2> <p>You should keep your U.S. bank account open to handle any expenses and bills you have stateside, and open another one in your new home country. Ask your U.S. bank if they charge a fee for making withdrawals from foreign automatic teller machines; if they do, you might want to upgrade your account or change banks before you move.</p> <p>For your foreign account, Expat Info Desk recommends choosing a large, well-known bank and transferring your money using an international currency exchange service. These are companies that transfer large amounts of money to an account in a foreign country, and they may offer a better conversion rate. Another option is to ask your home bank if they operate in your destination country.</p> <p>If you have more than $10,000 worth of assets in foreign accounts, the IRS notes you must report this to the U.S. government every year by filing a Report of Foreign Bank and Financial Accounts (FBAR) or face penalties of up to $100,000.</p> <h2>5. Stay on good terms with the U.S. Department of Treasury</h2> <p>Even though you no longer live in the U.S., if you maintain citizenship, you need to pay taxes. The Internal Revenue Service offers guidance on how and when to <a href="https://www.irs.gov/individuals/international-taxpayers/taxpayers-living-abroad" target="_blank">file a tax return from overseas</a>.</p> <p>Don't imagine that you'll be out of sight, out of mind to the U.S. government. In fact, it's actually more important for you to pay up than it is for citizens living at home, because if you owe more than $50,000 in delinquent payments, you could lose your passport.</p> <h2>6. Get online</h2> <p>Although mail service is unreliable in some parts of the world, internet connections are nearly ubiquitous. Even if you have always used paper statements and written checks before, now is a good time to embrace online banking to avoid delays and the cost of international postage.</p> <h2>7. Rent a home, then learn about buying</h2> <p>The Australian Expat Investor suggests renting at first, unless you have already been visiting your new country for years and are sure you're there to stay. You'll need to learn about the rules for tenancy in your new country. Don't be surprised if you have to pay an entire year's rent in advance. Even if you don't actually sign a lease before you move abroad, you should put aside the money you'll need and find out how to transfer it.</p> <p>Once you're established in your new country, look into whether purchasing a home might be a good financial move. It could cut your costs and serve as an investment if the local property market is on the upswing. (See also: <a href="http://www.wisebread.com/how-to-choose-the-perfect-country-to-retire-in?ref=seealso" target="_blank">How to Choose the Perfect Country to Retire In</a>)</p> <h2>8. Tap your U.S. home for income or capital</h2> <p>If you'll be leaving behind a home you own, you may not want to sell it at first. But you could consider renting out all or part of it. Some retirees use Airbnb to flexibly get income from their U.S. home, while reserving its availability for when they come back to visit. (See also: <a href="http://www.wisebread.com/5-easy-ways-to-make-good-money-from-airbnb?ref=seealso" target="_blank">5 Easy Ways to Make Good Money From Airbnb</a>)</p> <p>If you want to refinance your U.S. property to get money to buy a home overseas, look into doing that before you go. Homeowners who try to refinance from overseas may face a lot more confusing paperwork and hurdles.</p> <h2>9. Make an estate plan</h2> <p>If you have never made a will or considered putting assets in a revocable trust, talk to an estate attorney before you go, and get this taken care of. Find a lawyer who is knowledgeable about handling such things while living abroad, so they can advise you on whether your U.S. will can provide for distributing foreign assets, or if you'll need a second will created in your new home country.</p> <p>If you already have an estate plan, consult an attorney to see if any amendments will need to be made to cover assets located abroad.</p> <h2>10. Make a health care plan</h2> <p>Health care tends to be one of the greatest expenses in retirement. And unlike Social Security, you will not be able to use your Medicare benefits overseas. One decision to make is whether to enroll in Medicare anyway, so that it's still available to you on visits home or if you need to return to the States unexpectedly.</p> <p>Since most people don't have to pay a premium for Medicare Part A, which covers domestic hospitalization, some nursing home care, and hospice care, keeping that is a no brainer. Should you also pay for Medicare Part B, which helps pay for doctor visits and some prescriptions, among other expenses? That depends on how likely it is that you will ever return to the United States. If you don't carry Part B, and you must return because you become disabled and need help from your children, for example, you may have to go without coverage for months while waiting for the annual enrollment period, and you may also face premium penalties.</p> <p>Since Medicare is off the table for any care you need while overseas, you'll need to plan for financing that. Fortunately, health care in other countries is less expensive than it is in the United States. For example, the average per capita medical spending in Mexico is just over $1,000, compared just under $10,000 in the United States, according to the Organization for Economic Cooperation and Development. So paying for health care expenses out of pocket or buying local insurance or a hospital membership plan may be reasonable, with many expats saying they pay under $100 a month.</p> <h2>11. Buy insurance for everything else</h2> <p>Besides your health, you'll also need to insure your property. Understanding what insurance local laws require may be a lot harder in other markets than it is in the United States. It's a good idea to consult your local real estate agent about what insurance policy to get.</p> <h2>12. Get a financial power of attorney</h2> <p>You may need an adult son or daughter, or other representative, to make financial moves in your place while you are overseas. It's a good idea to leave them with a financial power of attorney document so that they can sign for you, for example, while selling property or other investments. (See also: <a href="http://www.wisebread.com/what-is-power-of-attorney?ref=seealso" target="_blank">What Is Power of Attorney?</a>)</p> <h2>13. Make an exit plan</h2> <p>Some retirees plan to enjoy their new home country while their health lasts, then return stateside if they become ill or disabled. If that's you, you'll want domestic long-term care insurance, and/or a nest egg in U.S. accounts to live off when you return. (See also: <a href="http://www.wisebread.com/is-long-term-care-insurance-worth-it?ref=seealso" target="_blank">Is Long Term Care Insurance Worth It?</a>)</p> <p>Even if you plan to live in the new country for the rest of your life, if you want your remains returned to the U.S., you'll need to plan for that. Look into emergency evacuation/repatriation insurance to help with medically equipped flights home or transportation of remains.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F13-financial-steps-to-take-before-retiring-abroad&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F13%2520Financial%2520Steps%2520to%2520Take%2520Before%2520Retiring%2520Abroad.jpg&amp;description=13%20Financial%20Steps%20to%20Take%20Before%20Retiring%20Abroad"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/13%20Financial%20Steps%20to%20Take%20Before%20Retiring%20Abroad.jpg" alt="13 Financial Steps to Take Before Retiring Abroad" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/carrie-kirby">Carrie Kirby</a> of <a href="http://www.wisebread.com/13-financial-steps-to-take-before-retiring-abroad">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-almost-anyone-can-afford-to-retire-in-mexico">How Almost Anyone Can Afford to Retire in Mexico</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/retire-for-half-the-cost-in-these-5-countries">Retire for Half the Cost in These 5 Countries</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-travel-in-retirement-keeps-you-young">6 Ways Travel in Retirement Keeps You Young</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-let-these-expenses-spoil-your-retirement-abroad">Don&#039;t Let These Expenses Spoil Your Retirement Abroad</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-overcome-these-4-common-retirement-fears">How to Overcome These 4 Common Retirement Fears</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement Travel expats foreign countries health care long term care retiring abroad social security Mon, 20 Nov 2017 09:00:07 +0000 Carrie Kirby 2056087 at http://www.wisebread.com 6 Ways to Make a Snowbird Retirement Affordable http://www.wisebread.com/6-ways-to-make-a-snowbird-retirement-affordable <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-ways-to-make-a-snowbird-retirement-affordable" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/the_cost_of_retirement_happiness.jpg" alt="The cost of retirement happiness" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>When the frosts roll in and a chill begins to descend, that&rsquo;s the signal for many retirees to begin their annual escape to warmer climates. This yearly migration that people make to spend the colder months in sun-kissed destinations has led to them being referred to as &quot;snowbirds.&quot;</p> <p>Though joining them might seem like an expensive proposition, you can actually end up financially ahead. Depending on the location you choose and how long you spend there each year, you may be able to reduce your income tax bill. And if you own property, there are ways of using that to your financial advantage, too. Here are six tips for affording the snowbird retirement lifestyle.</p> <h2>1. Head overseas</h2> <p>One traditional snowbird move is to head to a southern state like Florida, Texas, or Arizona in search of warmer weather. But an alternative is to look a bit farther afield and consider easy-to-reach destinations overseas. By spending your winters abroad in countries where your dollar stretches a lot further, it&rsquo;s possible to reduce your costs significantly for the period you&rsquo;re away.</p> <p>Popular retirement hot spots include Mexico, Costa Rica, Nicaragua, Panama, and Ecuador, which generally have good climates year-round. Many also have established retirement and snowbird communities you can join while you&rsquo;re there. (See also: <a href="http://www.wisebread.com/5-countries-where-you-can-retire-for-1000-a-month?ref=seealso" target="_blank">5 Countries Where You Can Retire for $1,000 a Month</a>)</p> <h2>2. Take advantage of any tax opportunities</h2> <p>One of the reasons that some states have become particularly popular with snowbirds is because of their favorable tax regulations. By switching your residency to a no-tax state like Florida or Texas, you could save on state taxes. But you need to inform yourself about the laws surrounding tax residency in both states in which you reside.</p> <p>For example, Florida requires you to spend 183 days a year in-state in order to be considered a resident. But if your other home is in a high-tax state, that state probably doesn&rsquo;t want to lose you as a taxpayer. So you may also need to establish that you&rsquo;ve moved your bank accounts, driver's license, and voting registration to Florida. Or, you may need to prove that your bigger home is in Florida, or that you derive more income from the Sunshine State. All of these are ways of proving that your main domicile is in Florida.</p> <p>If you&rsquo;re audited and tax officials deem you have not been paying the appropriate state taxes, you could be subject to back taxes, plus interest and penalties. It&rsquo;s really not worth the risk, so be sure you&rsquo;re up to speed on residency tax laws.</p> <h2>3. Rent out your property</h2> <p>Many snowbirds opt to buy a property in their winter location and maintain their old property in the place where they will spend their summers. If you own property in either location, it may be possible to make money by renting it out when you&rsquo;re not there.</p> <p>Though a yearlong lease won&rsquo;t be an option for you, there are other ways to rent out your property. You can offer short-term rentals through sites such as <a href="https://track.flexlinkspro.com/a.ashx?foid=1029882.138770910&amp;foc=1&amp;fot=9999&amp;fos=1" target="_blank">Airbnb</a> and <a href="https://track.flexlinkspro.com/a.ashx?foid=1029882.138783233&amp;foc=1&amp;fot=9999&amp;fos=1" target="_blank">HomeAway</a>, and hire a property manager to oversee cleaning and maintenance. Depending on the location and style of your home, you may be able to make a significant amount in rental income.</p> <p>If you&rsquo;re using multiple platforms to rent out your properties, you can use services like <a href="https://www.guesty.com/" target="_blank">Guesty</a> to manage and keep track of the bookings, analytics, and communications. (See also: <a href="http://www.wisebread.com/5-costly-pitfalls-of-hosting-on-airbnb?ref=seealso" target="_blank">5 Costly Pitfalls of Hosting on Airbnb</a>)</p> <h2>4. Pick up a side hustle</h2> <p>Starting a new career when you&rsquo;ve just retired may not be quite what you had in mind, but I&rsquo;m not talking about a full-time job. If you can find something part-time that will supplement your income, it could make a big difference in your quality of life or provide you with any extra funds you may require to make your snowbird dream a reality. (See also: <a href="http://www.wisebread.com/6-great-retirement-jobs?ref=seealso" target="_blank">6 Great Retirement Jobs</a>)</p> <p>One option is seasonal work during the summer and winter holidays. You might even be able to find part-time positions in both locations that are recurring each year, providing you with some stability and a regular income. Bear in mind that any extra income you earn through work will affect your tax bill, so you&rsquo;ll have to figure out whether it&rsquo;s beneficial overall. (See also: <a href="http://www.wisebread.com/9-great-jobs-for-snowbirds?ref=seealso" target="_blank">9 Great Jobs for Snowbirds</a>)</p> <h2>5. Downsize your home</h2> <p>Many retirees still live in homes where they brought up children, and those houses are now far larger than they need. It may be possible to downsize, purchase two smaller properties, one in each location, and perhaps even make a little extra on top.</p> <p>Even if your intention is to rent in one of the locations, downsizing and selling your property may still be an idea worth considering if it would eliminate an outstanding mortgage. A smaller living space could also save you on upkeep and maintenance costs, and mean lower utilities bills as well. (See also: <a href="http://www.wisebread.com/12-money-moves-to-make-the-moment-you-decide-to-retire?ref=seealso" target="_blank">12 Money Moves to Make the Moment You Decide to Retire</a>)</p> <h2>6. Time it right</h2> <p>Many snowbirds drive their cars or recreational vehicles from one location to another. But some fly to their winter destination, especially if it&rsquo;s overseas. If you&rsquo;re flying, it&rsquo;s best to allow yourself some flexibility around exactly when you make the move so that you can save on airfare. Try to avoid flying at peak times like school breaks and religious holidays, and plan ahead as far in advance as possible. (See also: <a href="http://www.wisebread.com/10-flight-booking-hacks-to-save-you-hundreds?ref=seealso" target="_blank">10 Flight Booking Hacks to Save You Hundreds</a>)</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/nick-wharton">Nick Wharton</a> of <a href="http://www.wisebread.com/6-ways-to-make-a-snowbird-retirement-affordable">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/3-exciting-overseas-winter-vacation-destinations">3 Exciting Overseas Winter Vacation Destinations</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/9-retirement-hotspots-that-are-cheaper-now-than-ever-before">9 Retirement Hotspots That Are Cheaper Now Than Ever Before</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/25-secrets-from-the-worlds-most-frugal-frequent-travelers">25 Secrets From the World&#039;s Most Frugal Frequent Travelers</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/13-financial-steps-to-take-before-retiring-abroad">13 Financial Steps to Take Before Retiring Abroad</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-affordable-winter-getaways-for-the-family">9 Affordable Winter Getaways for the Family</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement Travel affordable retirement snowbird snowbird retirement travel tips winter getaways winter travel Thu, 16 Nov 2017 09:30:09 +0000 Nick Wharton 2054957 at http://www.wisebread.com How to Revive an Old Retirement Fund http://www.wisebread.com/how-to-revive-an-old-retirement-fund <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-revive-an-old-retirement-fund" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/rescue_your_401k.jpg" alt="Rescue your 401k" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You know that you should be investing regularly in a 401(k) plan or IRA to build a retirement nest egg. But what if you haven't been contributing enough to your 401(k)? What if that old IRA that you started a decade ago has been sitting untouched ever since?</p> <p>Or, what if you're past 50 and retirement is looming ever nearer?</p> <p>The good news is that it's possible to revive an old or neglected retirement savings plan, even after you've hit the half-century mark. It just takes dedication to devoting more of your income to your IRA or 401(k) plan along with a willingness to take advantage of catch-up contributions that are available to those 50 or older. (See also: <a href="http://www.wisebread.com/7-retirement-planning-steps-late-starters-must-make?ref=seealso" target="_blank">7 Retirement Planning Steps Late Starters Must Make</a>)</p> <h2>Some concerning statistics</h2> <p>According to a 2017 retirement plan wellness &quot;scorecard,&quot; 75 percent of Baby Boomers between ages 50 and 68 are contributing to their 401(k) plans. That sounds great, but Baby Boomers actually had the lowest participation among all age groups in the study.</p> <p>The same study found that 77 percent of Gen Xers (ages 35&ndash;49) contributed to their 401(k) plans while 82 percent of millennials (ages 21&ndash;34) did the same.</p> <p>More worrisome news came from the 2017 PWC Employee Financial Wellness Survey. The survey found that 30 percent of Baby Boomers have just $50,000 or less saved for retirement &mdash; significantly short of the amount needed for a happy and healthy post-work life. (See also: <a href="http://www.wisebread.com/10-signs-you-arent-saving-enough-for-retirement?Ref=seealso" target="_blank">10 Signs You Aren't Saving Enough for Retirement</a>)</p> <h2>Time to play catch-up</h2> <p>If you don't have enough money in your 401(k) plan, or if you have an IRA that you've been mostly neglecting, you can boost the amount of money you save each year if you are age 50 or older.</p> <p>For the 2017 tax year, you are allowed to contribute up to $18,000 in a 401(k) plan. But if you're over 50, you can go past this threshold with what are known as catch-up contributions. Currently, at 50+, you can contribute an extra $6,000 to a 401(k) for a total of $24,000 a year.</p> <p>Traditional and Roth IRAs also have catch-up policies for investors 50 or older. For the 2017 tax year, you can contribute up to $5,500 in either type of IRA. But if you are 50 or older, you can contribute an additional $1,000 for a total of $6,500 this year in your neglected IRA.</p> <p>If you can make these extra contributions happen, do it. The catch-up contributions are designed to help sluggish savers boost their retirement dollars as they get closer to leaving the workforce. They're a good option for providing a boost to a 401(k) plan or a largely ignored IRA.</p> <h2>Increase your regular contributions</h2> <p>When you take out a 401(k), you tell your employer what percentage of your paycheck you want devoted to the savings vehicle. If you're not contributing as much as possible with each paycheck by the age of 50, now is the time to change that. It is absolutely essential, if your retirement savings account is lacking, to boost those regular contributions.</p> <p>You should definitely increase those contributions so that you are saving enough to meet your company's matching program, if it offers one. Many employers offer a matching program. To take advantage of this, you'll have to contribute a set minimum amount of dollars in a given year to your 401(k).</p> <p>The amount of money employers match, and the way company matching programs work, varies. But it is possible to earn thousands of dollars in free money each year if you contribute enough of each paycheck to qualify for matching funds from your employer. Those funds are basically free dollars from your company, and can help provide another boost to a 401(k) plan that needs more money.</p> <h2>Change your spending priorities</h2> <p>Once retirement nears, boosting your savings for it should become your top financial priority. Fortunately, many adults in their 50s have already helped pay for their children's college tuitions, so that major expense is behind them. These adults can then boost the amount of money they contribute to old IRAs or underfunded 401(k) funds.</p> <p>But what if you still have children getting ready to attend or already attending college? It's OK to tell these kids that your retirement savings come first.</p> <p>Financial experts agree that it is more important for adults to build their retirement savings than it is for them to pay for their children's college tuitions. This doesn't mean that you can't help your kids pay for college. It just means that you shouldn't contribute so much that you can't afford to sock away enough for retirement. (See also: <a href="http://www.wisebread.com/are-you-ruining-your-retirement-by-spoiling-your-kids?Ref=seealso" target="_blank">Are You Ruining Your Retirement by Spoiling Your Kids?</a>)</p> <p>As you move past 50, it's time to shift priorities toward yourself. You don't want to enter retirement unsure of whether you have enough dollars saved up to afford it.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fhow-to-revive-an-old-retirement-fund&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FHow%2520to%2520Revive%2520an%2520Old%2520Retirement%2520Fund.jpg&amp;description=How%20to%20Revive%20an%20Old%20Retirement%20Fund"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/How%20to%20Revive%20an%20Old%20Retirement%20Fund.jpg" alt="How to Revive an Old Retirement Fund" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/how-to-revive-an-old-retirement-fund">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/half-of-americans-are-wrong-about-their-retirement-savings">Half of Americans Are Wrong About Their Retirement Savings</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-common-retirement-regrets-you-can-avoid">3 Common Retirement Regrets You Can Avoid</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-face-these-7-scary-facts-about-retirement-saving">How to Face These 7 Scary Facts About Retirement Saving</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-age-milestones-that-impact-your-retirement">6 Age Milestones That Impact Your 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/10-signs-you-arent-saving-enough-for-retirement">10 Signs You Aren&#039;t Saving Enough for Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement 401(k) baby boomers catch up contributions IRA neglect nest egg old accounts Fri, 10 Nov 2017 09:00:06 +0000 Dan Rafter 2045998 at http://www.wisebread.com How to Protect Your Retirement Account From a Hack http://www.wisebread.com/how-to-protect-your-retirement-account-from-a-hack <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-protect-your-retirement-account-from-a-hack" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/young_man_using_a_laptop.jpg" alt="Young man using a laptop" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Unlike your bank accounts that are protected by the Federal Deposit Insurance Corporation for losses up to $250,000, there is no such universal protection for your retirement funds. If you get hacked, thieves can gain access to your retirement account and transfer funds into their own pockets.</p> <p>What would happen if your investment account was hacked and funds were stolen? Many brokerages have customer protection guarantees in case of unauthorized account activity, but customers are responsible for taking certain action before and after the hack to qualify for reimbursement of stolen funds.</p> <p>Investment brokerage policies vary on the subject of restoring losses from unauthorized activities. In general, customers are responsible for promptly detecting and notifying the brokerage of unauthorized activity, and for showing that the security lapse was not their fault.</p> <p>Here are steps you can take to protect your retirement account.</p> <h2>Monitor investment accounts</h2> <p>Unlike a checking account or credit card account that is typically monitored fairly closely, a transfer from an investment account can easily go unnoticed for months until a quarterly statement. The first step in getting funds restored to your retirement account after a hack is to notify the brokerage that unauthorized activity has occurred.</p> <p>Instead of waiting for a quarterly account statement in the mail, you can access your account electronically to check for unexpected activity. Some brokers allow you to set up alerts and receive notifications by email if a transaction has processed.</p> <h2>Protect account access credentials</h2> <p>There are several important security measures you can take to prevent a thief from accessing your retirement account.</p> <h3>1. Set up two-step verification</h3> <p>An easy way to boost the security of your access credentials is to sign up for two-step verification with your brokerage. This means that in addition to your password, you&rsquo;ll need a one-time numeric code that is sent to you via text message or email when you try to log in. This adds a layer of security; simply having your login and password is not enough for a thief to gain access to your account.</p> <h3>2. Beware of phishing scams</h3> <p>Criminals often send out emails that appear to be legitimate asking for login information. They may also try to trick you into clicking on a link that leads to a fake website designed to capture your username and password when you try to log in. Some internet security products verify that websites are authentic and post a warning when you try to access unconfirmed sites, in order to provide protection from phishing. (See also: <a href="http://www.wisebread.com/how-to-avoid-phishing-scams?ref=seealso" target="_blank">How to Avoid Phishing Scams</a>)</p> <h3>3. Don't sign in on a public Wi-Fi connection</h3> <p>Avoid using public computers to access your retirement account, and avoid logging in over an unsecured Wi-Fi connection. You should also avoid reusing the same password for multiple accounts.</p> <h3>4. Don't share your login with anyone</h3> <p>Think twice before sharing your access credentials with others, even companies such as Mint or Personal Capital that use your login to help monitor your account. If a company that has your login information gets hacked, and your access credentials are stolen and used to drain your account, this loss may <em>not</em> be covered by the recovery policy of your broker. (See also: <a href="http://www.wisebread.com/stop-making-these-8-risky-password-mistakes?Ref=seealso" target="_blank">Stop Making These 8 Risky Password Mistakes</a>)</p> <h2>Secure your computer</h2> <p>Hackers can steal retirement account access credentials directly from your computer. Install anti-virus and anti-malware software, including a firewall, to prevent thieves from breaking in. Use a login for your computer to keep others from accessing your files. After a hack, investigators from the brokerage may want to examine your computer to see that you were using reasonable security features when determining whether you were at fault for the hack.</p> <h2>Policies of major brokers for hacked accounts</h2> <p>Account restoration policies in response to unauthorized activity vary by broker. Following are links to policies at major firms so you can check to see what is required to get retirement funds restored after a hack.</p> <ul> <li> <p><a href="https://www.fidelity.com/security/customer-protection-guarantee" target="_blank">Fidelity</a></p> </li> <li> <p><a href="http://www.schwab.com/public/schwab/nn/legal_compliance/schwabsafe/security_guarantee.html" target="_blank">Charles Schwab</a></p> </li> <li> <p><a href="https://www.scottrade.com/documents/pdf/osc.pdf" target="_blank">Scottrade</a></p> </li> <li> <p><a href="https://personal.vanguard.com/us/help/SecurityOnlineFraudPledgeContent.jsp" target="_blank">Vanguard</a></p> </li> <li> <p><a href="https://us.etrade.com/e/t/home/securityguarantee" target="_blank">E*trade</a></p> </li> <li> <p><a href="https://www.tdameritrade.com/security/asset-protection-guarantee.page" target="_blank">TD Ameritrade</a></p> </li> </ul> <p>In general, you are responsible for monitoring and protecting your own retirement account by keeping your password secure and taking reasonable security precautions on your computer or other devices. If the hack and resulting loss occurs due to breach of the brokerage's computer system, you'll likely get your funds restored based on the policies of most brokerages.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fhow-to-protect-your-retirement-account-from-a-hack&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FHow%2520to%2520Protect%2520Your%2520Retirement%2520Account%2520From%2520a%2520Hack.jpg&amp;description=How%20to%20Protect%20Your%20Retirement%20Account%20From%20a%20Hack"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/How%20to%20Protect%20Your%20Retirement%20Account%20From%20a%20Hack.jpg" alt="How to Protect Your Retirement Account From a Hack" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dr-penny-pincher">Dr Penny Pincher</a> of <a href="http://www.wisebread.com/how-to-protect-your-retirement-account-from-a-hack">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/dont-panic-do-this-if-your-identity-gets-stolen">Don&#039;t Panic: Do This If Your Identity Gets Stolen</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-protect-elderly-loved-ones-from-financial-scams">How to Protect Elderly Loved Ones From Financial Scams</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-protect-your-child-from-identity-theft">How to Protect Your Child From Identity Theft</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/10-ways-to-keep-your-private-info-private">10 Ways to Keep Your Private Info Private</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/phishing-scams-continue-to-plague-social-media-sites">Phishing Scams Continue to Plague Social Media Sites</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Consumer Affairs Retirement fraud identity theft passwords phishing protections retirement accounts scams security breach stolen funds Wed, 08 Nov 2017 09:00:09 +0000 Dr Penny Pincher 2048695 at http://www.wisebread.com 4 Ways to Protect Your Retirement From Inflation http://www.wisebread.com/4-ways-to-protect-your-retirement-from-inflation <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-ways-to-protect-your-retirement-from-inflation" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/protecting_your_nest_egg.jpg" alt="Protecting Your Nest Egg" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>When you're saving for retirement, it's easy to forget that the goods you'll be buying years or decades from now will probably cost more, all thanks to inflation. It's important to keep this in mind when planning the amount of money you'll need during your after-work years.</p> <p>Here are five ways you can inflation-proof your retirement savings:</p> <h2>Don't be too conservative</h2> <p>It can be tempting to stow a greater percentage of your retirement income in low-risk bonds, especially as you get nearer to your retirement date. And bonds certainly should be part of your retirement portfolio. But too many people focus too much on bonds. They don't look at the real return on these investment vehicles with the effects of inflation factored in. Because bonds are less risky, they also offer lower rates of return.</p> <p>Say a bond has rate of return of 6 percent. If inflation is at 3 percent, that rate of return is really only 3 percent &mdash; a fairly low payoff.</p> <p>That's why it's important to include some riskier investments, such as stocks, in your retirement savings plan. Yes, there is more risk that stocks will lose value. But stocks also have the potential of providing a far higher rate of return; one that will help overcome the rising costs that come with inflation. (See also: <a href="http://www.wisebread.com/7-reasons-to-invest-in-stocks-past-age-50?ref=seealso" target="_blank">7 Reasons to Invest in Stocks Past Age 50</a>)</p> <h2>Do your research</h2> <p>Investing in just any group of stocks won't help you overcome inflation. Certain companies and financial sectors thrive when inflation rises, while others tend to struggle. For instance, investing in retail stocks might not help you overcome inflation. That's because retailers tend to struggle when high inflation makes the products they are selling unattractive to consumers. However, companies in the agricultural sector tend to do better when inflation is higher. Their stocks, then, are a better hedge against a rising inflation rate.</p> <h2>Invest in treasury inflation-protected securities</h2> <p>Treasury inflation-protected securities, better known as TIPS, are designed to protect investors from inflation. That's because the return is tied to the Consumer Price Index. This is an especially useful tool for investors living on a fixed income, like retirees.</p> <p>Say you invest $100,000 in TIPS. If inflation is 4 percent, your principal balance will now be worth $104,000 after a year. When TIPS reach their maturity date, investors get back either their original principal amount &mdash; what they originally invested &mdash; or one that's been adjusted for inflation, whichever is greater. TIPS also provide a bit of interest income, paying this out every six months. Investors don't have to pay state and local taxes on this interest or on the growth in principal, but they do have to pay federal taxes on that money earned.</p> <p>Investors can purchase TIPS at no cost from the U.S. Treasury in $100 values. You might also be able to invest in TIPS when you invest in a mutual fund that includes them as part of their investment mix.</p> <h2>Invest in commercial real estate</h2> <p>The value of commercial real estate can continue to rise even if the stock market is struggling. By including investments in commercial real estate along with stocks in your retirement savings portfolio, you can build a diverse investment mix that you can then use as a hedge against inflation.</p> <p>The easiest way to invest in commercial real estate is to put your money in a real estate investment trust, or REIT. With a REIT, you'll be pooling your money alongside other investors in commercial real estate buildings such as offices and apartment properties. You can also invest in a mutual fund that includes commercial real estate assets among its investment mix. (See also: <a href="http://www.wisebread.com/the-only-5-rules-you-need-to-know-about-investing-in-real-estate?ref=seealso" target="_blank">The Only 5 Rules You Need to Know About Investing in Real Estate</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F4-ways-to-protect-your-retirement-from-inflation&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F4%2520Ways%2520to%2520Protect%2520Your%2520Retirement%2520From%2520Inflation.jpg&amp;description=4%20Ways%20to%20Protect%20Your%20Retirement%20From%20Inflation"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/4%20Ways%20to%20Protect%20Your%20Retirement%20From%20Inflation.jpg" alt="4 Ways to Protect Your Retirement From Inflation" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/4-ways-to-protect-your-retirement-from-inflation">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-reasons-to-invest-in-stocks-past-age-50">7 Reasons to Invest in Stocks Past Age 50</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-save-for-retirement-when-you-are-unemployed">How to Save for Retirement When You Are Unemployed</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/half-of-americans-are-wrong-about-their-retirement-savings">Half of Americans Are Wrong About Their Retirement Savings</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/one-smart-thing-you-can-do-for-your-retirement-today">One Smart Thing You Can Do for Your Retirement Today</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-threats-to-a-secure-retirement">9 Threats to a Secure Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement inflation long term care insurance nest egg protecting your money real estate investing reit risk saving money stocks Fri, 03 Nov 2017 09:00:06 +0000 Dan Rafter 2043245 at http://www.wisebread.com 5 Money Moves to Make Before Taking a Mini Retirement http://www.wisebread.com/5-money-moves-to-make-before-taking-a-mini-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-money-moves-to-make-before-taking-a-mini-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/lazy_summer_afternoon_0.jpg" alt="Lazy summer afternoon" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>We know how retirement is supposed to go: You spend 40 or more years working, and then, hopefully after saving enough money, you retire from the working world in one grand finale.</p> <p>But what if you could instead take several breaks throughout your career? What if, after working 10 years, you decided to take a year off and return to a full-time job later? What if you decided to do the same thing all over again 10 years later?</p> <p>That's the idea behind the mini retirement, a small but growing trend among people who don't want to wait until their senior years to pursue goals or just relax, away from work, in a way you can't during weekends or short vacations. You can do anything you want during these miniature retirement periods: travel the world, spend more time with your kids, start an online business, or pursue a hobby. And when the mini retirement ends, you return to work full-time, either at the company you left or a new one.</p> <p>A mini retirement is similar to a sabbatical, but sabbaticals tend to be one-off breaks, whereas mini retirements are intended to recur throughout your career. A mini retirement may also be used to explore other career paths and make a transition, while a sabbatical often involves going back to the same job you left.</p> <p>Taking a mini retirement comes with many benefits, but if you're not prepared, it can also put a strain on your financial stability. Here are five money moves you need to make before embarking on a mini retirement of your own.</p> <h2>1. Budget what you'll need</h2> <p>To get an idea of whether a mini retirement is even feasible, you'll need to figure out how much money you'd spend during your break from work. This means factoring in the costs of travel if your plans include taking a long trip. It means considering the cost of health insurance, which you will probably have to pay for on your own once you leave your full-time job. And, of course, it means budgeting for everything from your monthly mortgage payment, to your children's education, to the weekly groceries. Whatever you do, don't embark on your mini retirement without first determining how much money you'll be spending during it.</p> <h2>2. Save, save, save</h2> <p>Once you have an idea of how much you'll need for your mini retirement, you'll need to start stashing money away for it. Depending on your income and your mini-retirement budget, this could take several years. For instance, if you think you'll need $40,000 during your mini retirement, you could plan to save $10,000 a year for four years.</p> <p>This kind of saving takes discipline. Keep your eye on the goal to stay motivated. It also helps to <a href="http://www.wisebread.com/earn-more-interest-by-reducing-savings-friction" target="_blank">reduce savings friction</a> by, for instance, having funds automatically deposited into savings every month. (See also: <a href="http://www.wisebread.com/the-easy-way-to-save-up-a-big-travel-budget" target="_blank">How to Save Up for a Big Travel Budget</a>)</p> <h2>3. Determine your new final retirement goals</h2> <p>A mini retirement can help rejuvenate you during your working days, but it will also change your financial strategy for your final retirement. If you aren't earning a full-time salary for a year or more, your retirement savings simply won't grow as quickly. You'll have to be realistic about what steps you'll have to take so that you will be financially ready for your final retirement.</p> <p>This might mean saving more money each year. Or it might mean pushing your final retirement back a year or two. You'll have to determine how the pain of taking those steps compares to the benefits you'll receive from a mini retirement.</p> <h2>4. Pay off your debt</h2> <p>You don't want to enter a mini retirement burdened with high amounts of credit card debt. It will be much more difficult to pay down this debt if you're not earning a steady income from work. So, before you leave your job for your break, get that <a href="http://www.wisebread.com/the-fastest-method-to-eliminate-credit-card-debt" target="_blank">credit card debt down to zero</a>.</p> <p>While you're at it, clear as many of your other debts as you can, too. You probably won't be able to pay off your mortgage loan, but you might be able to pay off your car loan. Any debt that you can eliminate before taking a mini retirement will help make the transition away from a full-time salary easier.</p> <h2>5. Resolve to rein in your spending</h2> <p>You might have big plans for your mini retirement. But remember, big plans often cost big money. Be realistic about how much you can spend while taking your break from work. The more you spend, the more difficult your transition will be.</p> <p>It's OK to travel, but you don't have to stay at the most expensive hotels or eat at the costliest restaurants. And if you're staying at home during most or all of your mini retirement, resist the temptation to spend big on shopping trips, movies, and restaurant meals. (See also: <a href="http://www.wisebread.com/5-types-of-overspenders-which-one-are-you?ref=seealso" target="_blank">5 Types of Overspenders &mdash; Which One Are You?</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F5-money-moves-to-make-before-taking-a-mini-retirement&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F5%2520Money%2520Moves%2520to%2520Make%2520Before%2520Taking%2520a%2520Mini%2520Retirement.jpg&amp;description=5%20Money%20Moves%20to%20Make%20Before%20Taking%20a%20Mini%20Retirement"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/5%20Money%20Moves%20to%20Make%20Before%20Taking%20a%20Mini%20Retirement.jpg" alt="5 Money Moves to Make Before Taking a Mini Retirement" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/5-money-moves-to-make-before-taking-a-mini-retirement">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-5"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-live-a-retired-life-before-retirement">How to Live a Retired Life 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/5-questions-couples-must-ask-before-retirement">5 Questions Couples Must Ask Before Retirement</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-save-for-retirement-while-caring-for-kids-and-parents">How to Save for Retirement While Caring for Kids and Parents</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-ways-to-protect-your-retirement-from-inflation">4 Ways to Protect Your Retirement From Inflation</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-choose-the-perfect-country-to-retire-in">How to Choose the Perfect Country to Retire In</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Lifestyle Retirement mini retirements sabbatical saving money time off traveling work leave year off Thu, 02 Nov 2017 09:00:06 +0000 Dan Rafter 2040658 at http://www.wisebread.com 3 Common Retirement Regrets You Can Avoid http://www.wisebread.com/3-common-retirement-regrets-you-can-avoid <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/3-common-retirement-regrets-you-can-avoid" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/retirement_plan_concept.jpg" alt="Retirement plan concept" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>One of the best ways to set your life on a positive course &mdash; financially and otherwise &mdash; is to find out what older people wish they had done when they were younger. Along these lines, Vanguard <a href="https://vanguardblog.com/2017/04/18/the-coulda-shoulda-woulda-behind-every-retirement-story/" target="_blank">recently asked readers</a> of its blog, &quot;If you had a do-over, what would you do differently to prepare for retirement?&quot;</p> <p>That question generated a treasure trove of advice. They covered a lot of ground, but many pertained to the following three regrets.</p> <h2>Getting started with an investing plan too late</h2> <p>This is a common lament among older people, and it's easy to see why. Numerous studies show that too many people have too little saved for their later years. According to the 2017 Retirement Confidence Survey by the Employee Benefit Research Institute, only 56 percent of American workers are saving for retirement at all. Of those with no formal retirement plan, 67 percent have less than $1,000 in savings and investments. That can spell hardship later in life.</p> <p>In the words of Vanguard readers:</p> <p>&quot;I wish someone would have taught me about the power of compounding when I was 10 instead of learning about it when I was in my early 30s.&quot;</p> <p>&quot;If I had a 'do-over,' I would have taken my financial future more seriously much sooner. I eventually learned the right lessons, but I long-courted the deadly twins &mdash; ignorance and immediate self-gratification. Thus, I forfeited my best financial friend &mdash; time. Now time is my unforgiving and fleet-footed competitor, and it is only by doing considerably more of my late-learned lessons that I am able to maintain a winded, yet hopeful, pace.&quot;</p> <h3>What to do?</h3> <p>Start investing! If that seems far easier said than done, a couple of practical steps you could take include:</p> <ol style="margin-left: 40px;"> <li> <p><a href="http://www.wisebread.com/build-your-first-budget-in-5-easy-steps" target="_blank">Create a budget</a> so you can proactively plan how to best allocate your income in a way that makes room for investing, and;</p> </li> <li> <p>Set up an automatic monthly transfer from your paycheck to your workplace retirement plan or from your checking account to an IRA. (See also: <a href="http://www.wisebread.com/7-retirement-planning-steps-late-starters-must-make?ref=seealso" target="_blank">7 Retirement Planning Steps Late Starters Must Make</a>)</p> </li> </ol> <h2>Not thinking carefully about the tax implications of different retirement savings options</h2> <p>Several Vanguard readers regretted using tax-<em>deferred </em>investment vehicles such as a traditional 401(k) or IRA instead of a tax-<em>free </em>vehicle such as a Roth IRA.</p> <p>Respondents noted:</p> <p>&quot;In addition to being diversified in asset classes, I should have also been diversified in tax types &mdash; i.e., most of my funds are in a 401(k) &hellip; so now everything I withdraw is taxable.&quot;</p> <p>&quot;The mistake I made was not converting my IRA to a Roth IRA in the 1990s. I thought the taxes for the conversion were too high. The result is that we are paying a higher tax rate now because the RMD (required minimum distribution) has raised our tax bracket and has increased our Medicare premium considerably each month. It has been an expensive lesson.&quot;</p> <h3>What to do?</h3> <p>Consider a Roth IRA or 401(k). Generally speaking, a Roth works best for younger people who are in a relatively low tax bracket. However, even for older, better-paid people, consider splitting your retirement contributions between a Roth and a traditional 401(k) or IRA. (See also: <a href="http://www.wisebread.com/401k-or-ira-you-need-both?ref=seealso" target="_blank">401K or IRA? You Need Both</a>)</p> <h2>Not developing a compelling vision for retirement</h2> <p>Several readers said their retirement planning was mostly about money. They wish they had spent more time thinking about how to use their time in their later years.</p> <p>Some examples:</p> <p>&quot;The financial aspects of retirement have worked out OK. I had been planning that aspect of retirement for many, many years. What I did not anticipate or prepare for was the lack of identity in retirement. When I walked out the door on my last day of work, that was the last I saw or heard from coworkers. I had a job where I mattered and all of a sudden that stopped. Yes, the financial aspects of retirement are important, but you cannot neglect the psychological aspects of retirement.&quot;</p> <p>&quot;Don't just assume you'll enjoy relaxing after working for many years. Your job was a large part of your identity and you need to have a plan to fill that in with something else!&quot;</p> <h3>What to do?</h3> <p>Think about an issue you care about and how you might be part of the solution, whether through volunteer work or maybe even a business you start.</p> <p>In her book, <em>Life Reimagined</em>, Barbara Bradley Hagerty summarizes countless studies about how to move effectively from midlife onward. She said the research is clear: Being part of a cause that matters to you increases happiness and even extends life.</p> <p>Being intentional about avoiding these three common retiree regrets should give you greater confidence and peace of mind that you're on track toward a financially comfortable, meaningful retirement. And <em>that </em>could go a long way toward helping you dodge one other very common regret among the elderly: having spent too much time worrying.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F3-common-retirement-regrets-you-can-avoid&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F3%2520Common%2520Retirement%2520Regrets%2520You%2520Can%2520Avoid.jpg&amp;description=Goal%20Setting%3A%20Getting%20Out%20of%20Debt%20Once%20and%20For%20All"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/3%20Common%20Retirement%20Regrets%20You%20Can%20Avoid.jpg" alt="3 Common Retirement Regrets You Can Avoid" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/matt-bell">Matt Bell</a> of <a href="http://www.wisebread.com/3-common-retirement-regrets-you-can-avoid">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-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-age-milestones-that-impact-your-retirement">6 Age Milestones That Impact Your 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/half-of-americans-are-wrong-about-their-retirement-savings">Half of Americans Are Wrong About Their Retirement Savings</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/if-you-want-your-401k-to-grow-stop-doing-these-6-things">If You Want Your 401K to Grow, Stop Doing These 6 Things</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/intimidated-by-retirement-investing-get-professional-help">Intimidated by Retirement Investing? Get Professional Help!</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/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> </ul> </div> </div> </div> </div><br/></br> Retirement 401(k) identity crisis investing IRA late starts midlife regrets taxes Wed, 01 Nov 2017 09:00:06 +0000 Matt Bell 2040659 at http://www.wisebread.com It's So Simple: 6 Steps to a Stable Retirement http://www.wisebread.com/its-so-simple-6-steps-to-a-stable-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/its-so-simple-6-steps-to-a-stable-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/senior_couple_dancing.jpg" alt="Senior couple dancing" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you are new to personal finance, you might find yourself thinking that reaching retirement is sort of like reaching a mythical place like Hogwarts. In both cases, the process required for entry is never adequately explained &mdash; and getting there yourself feels more like fantasy than reality.</p> <p>While it's unlikely that an owl will ever arrive to welcome you to a magical school, retirement is actually attainable for each and every muggle. In fact, the rules for reaching a stable retirement are relatively simple and require absolutely no financial wizardry on your part,</p> <p>Here are the only six things you need to do to achieve a stable retirement &mdash; no magic wands required.</p> <h2>1. Always spend less than you earn</h2> <p>No matter how much you make, you need to live on less than you earn. This is the kind of so-simple-it-feels-obvious advice that many personal finance experts take for granted, but keeping your expenses below your income is the cornerstone of saving for a stable retirement. Many people assume that they need to make a certain level of income before they can afford to start saving for retirement, but that's not true. As long as you always spend less than you earn, you can always save toward your retirement.</p> <p>If you're not sure how to go about reducing your expenses so that you're no longer spending everything that comes in, start by tracking your spending. This will help you better understand where your money is going so you can cut back on unnecessary spending. (See also: <a href="http://www.wisebread.com/save-more-and-spend-less-by-increasing-your-mental-transaction-costs?ref=seealso" target="_blank">Save More and Spend Less by Increasing Your &quot;Mental Transaction Costs&quot;</a>)</p> <h2>2. Max out your retirement contributions</h2> <p>Both your employer-sponsored 401(k) and your individual retirement account (IRA) have yearly contribution limits that you should strive to meet every year. The 2017 contribution limits are $18,000 for 401(k) plans (plus an additional $6,000 in catch-up contributions if over age 50), and $5,500 for IRAs ($6,500 if over age 50). The traditional versions of these investment vehicles are tax-deferred, which means you are funding your accounts with pretax dollars. Roth 401(k) plans and IRAs are funded with money you have paid taxes on, but they, like the traditional vehicles, grow tax-free.</p> <p>Many people can't afford to meet the full contribution limit for their 401(k) plan, plus maxing out an IRA as well. However, getting as close to the maximum contribution as you can for both of these vehicles will put you well on your way to retirement stability. In addition, many employers offer a 401(k) contribution match &mdash; and not maxing out this kind of matching program is akin to leaving free money on the table. (See also: <a href="http://www.wisebread.com/how-much-should-you-have-saved-for-retirement-by-30-40-50?ref=seealso" target="_blank">How Much Should You Have Saved for Retirement by 30? 40? 50?</a>)</p> <h2>3. Work at least 35 years</h2> <p>While retiring early is a common dream among many workers, leaving the workforce before putting in 35 full years of employment could damage your bottom line in retirement. That's because your Social Security benefits are calculated using the 35 highest earning years in your career. If you have less than 35 years of work experience, the Social Security Administration uses zeros to create your benefit calculation, lowering your average earnings and your payout. If you don't have 35 years of employment history, it's a good idea to keep working to get those zeros replaced in your Social Security calculation.</p> <p>Doing whatever you can to increase your monthly benefit will make a big difference in your bottom line once you retire. The most important increase you can make is to work at least 35 years total &mdash; although waiting as long as you can to take Social Security benefits is also an important strategy for increasing your monthly Social Security check. (See also: <a href="http://www.wisebread.com/6-smart-ways-to-boost-your-social-security-payout-before-retirement?Ref=seealso" target="_blank">6 Smart Ways to Boost Your Social Security Payout Before Retirement</a>)</p> <h2>4. Avoid debt</h2> <p>We live in a society that tells us we can have it all right now and pay for it later. The problem is that we <em>will</em> indeed pay for it later &mdash; with an impoverished retirement. While it may be possible to finance the lifestyle you want with debt, you will have no money available to save for retirement or otherwise invest. In addition, the added interest expense of borrowing money to pay for your lifestyle just makes it that much more expensive and unsustainable. (See also: <a href="http://www.wisebread.com/5-ways-to-pay-off-high-interest-credit-card-debt?ref=seealso" target="_blank">5 Ways to Pay Off High Interest Credit Card Debt</a>)</p> <h2>5. Invest for the long-term with index funds</h2> <p>While the movies show investing as a kind of game that you win by figuring out when to buy low and sell high, the best way to make sure your money grows is to follow a long-term buy-and-hold strategy.</p> <p>A 2016 DALBAR study on investment behavior revealed that investors routinely underperform the market despite solid annualized returns. For example, at the end of 2015, the S&amp;P 500 was averaging a return of 8.19 percent. That same year, investors saw returns top out at a measly average 4.67 percent &mdash; and this pattern is not new. Why such a discrepancy? Simple; rather than employing a buy-and-hold strategy, investors routinely try (and fail) to time the market. Year after year, their returns suffer as a result.</p> <p>You can use statistics and a long investment term to your advantage by investing in index funds. These funds aim to replicate the movement of specific securities in a target index, which means an index fund is going to do about as well as the target securities will do. (See also: <a href="http://www.wisebread.com/want-your-investments-to-do-better-stop-watching-the-news?ref=seealso" target="_blank">Want Your Investments to Do Better? Stop Watching the News</a>)</p> <h2>6. Take care of your health</h2> <p>Your health can have an enormous impact on your financial stability in retirement. That's because health care costs are a major concern in your older years, especially since this is one aspect of your retirement budget that you may not have control over. According to a 2016 Fidelity study, a 65-year-old couple retiring in 2016 will need about $260,000 to cover their medical and health care costs for the rest of their lives.</p> <p>While kale smoothies and daily kettlebell workouts cannot ensure your good health in retirement, taking good care of yourself throughout your life does improve the odds that you'll stay healthier as you age. You can consider each jog and healthy meal as an investment in your future. (See also: <a href="http://www.wisebread.com/dont-let-poor-health-kill-your-retirement-fund?ref=seealso" target="_blank">Don't Let Poor Health Kill Your Retirement Fund</a>)</p> <h2>Reaching retirement, one step at a time</h2> <p>Achieving a stable retirement doesn't require any magic. Instead, it's a matter of following some simple rules that will ensure you have the money you need to retire comfortably.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fits-so-simple-6-steps-to-a-stable-retirement&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FIt%2527s%2520So%2520Simple_%25206%2520Steps%2520to%2520a%2520Stable%2520Retirement.jpg&amp;description=It's%20So%20Simple%3A%206%20Steps%20to%20a%20Stable%20Retirement"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/It%27s%20So%20Simple_%206%20Steps%20to%20a%20Stable%20Retirement.jpg" alt="It's So Simple: 6 Steps to a Stable Retirement" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/emily-guy-birken">Emily Guy Birken</a> of <a href="http://www.wisebread.com/its-so-simple-6-steps-to-a-stable-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-signs-your-retirement-is-on-track">8 Signs Your Retirement Is on Track</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-benefits-of-carrying-a-mortgage-into-retirement">5 Benefits of Carrying a Mortgage Into Retirement</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-reasons-an-hsa-is-actually-worth-having">10 Reasons an HSA Is Actually Worth Having</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/are-you-putting-off-these-9-adult-money-moves">Are You Putting Off These 9 Adult Money Moves?</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-money-moves-to-make-the-moment-you-decide-to-retire">12 Money Moves to Make the Moment You Decide to Retire</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Retirement buy and hold contributions debt health care index funds investing returns social security benefits stable retirement Tue, 31 Oct 2017 09:00:06 +0000 Emily Guy Birken 2041362 at http://www.wisebread.com Best Money Tips: 10 Steps to Early Retirement http://www.wisebread.com/best-money-tips-10-steps-to-early-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-money-tips-10-steps-to-early-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/married_couple_beach_635845698.jpg" alt="Couple achieving early retirement" 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 steps to early retirement, bad spending habits that are killing your budget, and the ultimate guide to driving with Uber.</p> <h2>Top 5 Articles</h2> <p><a href="http://www.mymoneydesign.com/personal-finance-2/retirement/steps-to-retire-early/">10 Steps to Retire Early &ndash; What You Should Be Doing Right Now!</a> &mdash; Make it a habit to challenge all purchases. Are you getting exactly what you want at the absolute best price? [My Money Design]</p> <p><a href="http://walletsquirrel.com/bad-spending-habits/">9 Bad Spending Habits That are Killing Your Budget</a> &mdash; Stop making excuses to enable your bad spending habits. Focus on your final goal. [Wallet Squirrel]</p> <p><a href="https://everythingfinanceblog.com/22089/driving-with-uber.html">The Ultimate Guide to Driving with Uber</a> &mdash; Here's what you need to know to start making money as an Uber driver. [Everything Finance]</p> <p><a href="https://blog.allstate.com/5-tips-help-stay-healthy-safe-cruise-im/">5 Tips to Help Stay Healthy and Safe on a Cruise</a> &mdash; The simple most important thing to do for a safe and healthy cruise vacation is to keep your hands clean. Wash your hands properly before eating or drinking and after using the bathroom or changing a diaper. [The Allstate Blog]</p> <p><a href="https://www.popsugar.com/smart-living/Halloween-Party-Themes-43966612">5 Themes to Inspire Your Next Halloween Party</a> &mdash; Host an elegant Halloween party with gray and white pumpkins, tree silhouettes, black lace, and blood-red cocktails. [PopSugar Smart Living]</p> <h2>Other Essential Reading</h2> <p><a href="http://www.everybodylovesyourmoney.com/2017/10/24/5-easy-ways-parents-can-save-money-christmas.html">5 Easy Ways Parents Can Save Money on Christmas</a> &mdash; Make a conscious effort to defy sales tactics. Stay out of the stores on Black Friday and don't be suckered into a deal just because the retailer says they're low on stock or time is running out. Stick to your list and don't budge an inch! [Everybody Loves Your Money]</p> <p><a href="https://www.dontpayfull.com/blog/cheap-business-class-tickets">Budget Airline Travel: How to Get Cheap Business or First Class Tickets</a> &mdash; There are a few different ways to get business class tickets without spending thousands of dollars. [Don't Pay Full]</p> <p><a href="https://www.pickthebrain.com/blog/improve-2-simple-steps/">How to Improve Yourself in 2 Simple Steps</a> &mdash; Self-improvement can feel overwhelming, but when you get down to it, it really only takes two steps to make lasting changes in your life. [Pick The Brain]</p> <p><a href="http://www.productiveflourishing.com/successful-entrepreneurs-financial-mistake/">This Is the Big Financial Mistake Successful Entrepreneurs Avoid</a> &mdash; Does the success of your business translate into your <em>personal</em> financial success and security? [Productive Flourishing]</p> <p><a href="https://www.csmonitor.com/Environment/2017/1023/Climate-scientist-steps-out-of-the-lab-and-into-the-wind">Climate scientist steps out of the lab and into the wind</a> &mdash; A former NOAA scientist set on a cross-country bike trip to talk with everyday Americans about global warming. [The Christian Science Monitor]</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-10-steps-to-early-retirement">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-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/how-one-woman-retired-at-60-and-traveled-the-world">How One Woman Retired at 60 and Traveled the World</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-keys-to-an-early-retirement">4 Keys to an Early Retirement</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-questions-to-ask-before-you-start-claiming-your-social-security-benefits">5 Questions to Ask Before You Start Claiming Your Social Security Benefits</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-reasons-people-dont-retire-early-and-how-you-can">4 Reasons People Don&#039;t Retire Early — and How You Can</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/trading-work-for-never-ending-weekends-how-to-retire-early">Trading Work for Never-Ending Weekends: How to Retire Early</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement best money tips early retirement Wed, 25 Oct 2017 08:30:11 +0000 Amy Lu 2041946 at http://www.wisebread.com 5 Benefits of Carrying a Mortgage Into Retirement http://www.wisebread.com/5-benefits-of-carrying-a-mortgage-into-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-benefits-of-carrying-a-mortgage-into-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/senior_black_couple_standing_outside_a_large_suburban_house.jpg" alt="Senior black couple standing outside a large suburban house" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The goal is a simple one: You want to enter your retirement years without monthly mortgage payments. Unfortunately, not everyone meets this goal. According to Voya Financial, 26 percent of current retirees still have an outstanding mortgage balance.</p> <p>If you're one of these retirees, don't despair. It's not ideal, but leaving the working world with monthly mortgage payments doesn't have to be a financial disaster. There are some benefits of carrying a mortgage into your retirement years. (See also: <a href="http://www.wisebread.com/why-retiring-with-debt-isnt-the-end-of-the-world?ref=seealso" target="_blank">Why Retiring With Debt Isn't the End of the World</a>)</p> <h2>1. It's better than credit card debt</h2> <p>Mortgage debt comes with low interest rates. That makes it much less painful than credit card debt, for example. While your mortgage loan might come with an interest rate of 4 percent or even lower, you'd be lucky if the interest rate on your credit card was only 15 percent.</p> <p>So if you are nearing retirement and you have both mortgage and credit card debt, it makes more sense to devote any extra dollars to <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=internal" target="_blank">paying off your credit cards</a> first. You can start worrying about your mortgage after you've eliminated your debt with the highest interest.</p> <p>Of course, it's best to enter retirement with neither mortgage nor credit card debt. If this isn't possible for you, do the smart thing and tackle those cards first. (See also: <a href="http://www.wisebread.com/what-to-do-if-youre-retiring-with-debt?ref=seealso" target="_blank">What to Do If You're Retiring With Debt</a>)</p> <h2>2. Sometimes it's better to invest</h2> <p>You might be able to pay off that mortgage loan before retirement if you sink enough of your extra dollars into it. But it might make more sense to place those same dollars into the stock market or other investment vehicle.</p> <p>The average annual return for the S&amp;P 500 since it was first launched in 1928 has been about 10 percent. And that's factoring in both great years and terrible years. So instead of pouring more money into your mortgage, you might do better financially by investing your extra dollars and enjoying the higher returns. (See also: <a href="http://www.wisebread.com/7-reasons-to-invest-in-stocks-past-age-50?ref=seealso" target="_blank">7 Reasons to Invest in Stocks Past Age 50</a>)</p> <p>This only holds true, of course, if you can actually afford your mortgage payment once you move into retirement. If you're worried that you won't have enough monthly cash flow to make these payments on time, do everything you can to pay off that mortgage first. (See also: <a href="http://www.wisebread.com/6-ways-you-can-cut-costs-right-before-you-retire-0?ref=seealso" target="_blank">6 Ways You Can Cut Costs Right Before You Retire</a>)</p> <h2>3. Paying rent can be risky</h2> <p>Your retirement plan might involve selling your home, paying off your mortgage, and downsizing to an apartment. But be careful: Renting comes with plenty of risk.</p> <p>If you have a fixed-rate mortgage, your payment will remain mostly constant until you pay it off. If you're renting, though, your landlord can raise your monthly payment every time your current lease agreement comes to an end.</p> <p>When living on a fixed income, certainty is good. The life of a renter doesn't have as much certainty. Again, if you can afford your monthly mortgage payment, you might want to keep it and avoid the uncertainty of rent that could fluctuate from year to year.</p> <h2>4. You won't lose the tax deduction</h2> <p>Homeowners with mortgage payments do receive a tax deduction every year. Each year, they can deduct the amount of interest they pay on their home loans. If you pay off your mortgage loan, you'll lose this deduction. (See also: <a href="http://www.wisebread.com/is-it-safe-to-re-finance-your-home-close-to-retirement?ref=seealso" target="_blank">Is it Safe to Re-Finance Your Home Close to Retirement?</a>)</p> <p>It's important to note, though, that this deduction might not be particularly large by the time you're nearing retirement. That's because you pay far more interest each year during the earliest days of your mortgage. By retirement age, you'll probably be paying far less in interest with each monthly payment.</p> <p>Again, though, if having a mortgage payment fits comfortably in your budget, you might want to keep that deduction. (See also: <a href="http://www.wisebread.com/10-surprising-ways-real-estate-cuts-your-taxes?ref=seealso" target="_blank">10 Surprising Ways Real Estate Cuts Your Taxes</a>)</p> <h2>5. You keep your dream home</h2> <p>Most retirees who need to pay off a mortgage do so by selling their homes. But what if you love your home? What if it's located in the ideal location near family members and friends? You might not want to sell.</p> <p>And what if selling your home won't generate enough income to allow you to move into an assisted-living facility, downtown condo, or smaller suburban home? There's no guarantee that you'll fetch the dollars you need in a home sale.</p> <p>Keeping the mortgage &mdash; if you can afford the payments &mdash; could allow you to stay in a home that already fits your needs.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F5-benefits-of-carrying-a-mortgage-into-retirement&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F5%2520Benefits%2520of%2520Carrying%2520a%2520Mortgage%2520Into%2520Retirement.jpg&amp;description=5%20Benefits%20of%20Carrying%20a%20Mortgage%20Into%20Retirement"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/5%20Benefits%20of%20Carrying%20a%20Mortgage%20Into%20Retirement.jpg" alt="5 Benefits of Carrying a Mortgage Into Retirement" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/5-benefits-of-carrying-a-mortgage-into-retirement">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-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/5-money-moves-that-will-ruin-your-mortgage-application">5 Money Moves That Will Ruin Your Mortgage Application</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-you-pay-your-mortgage-off-early">Should You Pay Your Mortgage Off Early?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-money-moves-to-make-the-moment-you-decide-to-retire">12 Money Moves to Make the Moment You Decide 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/5-mortgage-details-you-should-know-before-you-sign">5 Mortgage Details You Should Know Before You Sign</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-build-equity-in-your-home">How to Build Equity in Your Home</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing Retirement benefits debt homeownership investing loans low interest rates monthly payments mortgages tax deductions Wed, 25 Oct 2017 08:30:06 +0000 Dan Rafter 2039415 at http://www.wisebread.com 9 Retirement Hotspots That Are Cheaper Now Than Ever Before http://www.wisebread.com/9-retirement-hotspots-that-are-cheaper-now-than-ever-before <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/9-retirement-hotspots-that-are-cheaper-now-than-ever-before" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/glimpse_of_andalusia.jpg" alt="Glimpse of Andalusia" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Financial considerations are the biggest factor for many people when deciding where they want to enjoy their retirement years. As the strength of the dollar continues its hold against other currencies, it&rsquo;s providing us with far more purchasing clout when it comes to buying other currencies.</p> <p>This in turn is helping to make many destinations even more affordable to U.S. citizens who are looking to decamp to foreign locales. Here are nine retirement hot spots that are cheaper than you thought. (See also: <a href="http://www.wisebread.com/retire-for-half-the-cost-in-these-5-countries?ref=seealso" target="_blank">Retire for Half the Cost in These 5 Countries</a>)</p> <h2>1. Panama</h2> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5197/casco_viejo_nightlife_0.jpg" width="605" height="340" alt="" /></p> <p>With its interesting mix of advanced amenities and lush natural landscapes, Panama has been one of the most popular retirement hot spots in Latin America for a number of years. The capital, Panama City, is a skyscraper-filled, modern metropolis with a well developed infrastructure to rival any city in the U.S.</p> <p>The U.S. dollar is actually legal currency in Panama so you&rsquo;ll be able to see just what value you&rsquo;re getting without any conversions. The cost of living in Panama is comparatively low. Numbeo puts it at around 26 percent of what it is in the U.S., with expenses such as health care and real estate working out extremely cheaply. (See also: <a href="http://www.wisebread.com/5-countries-where-you-can-retire-for-1000-a-month?ref=seealso" target="_blank">5 Countries Where You Can Retire for $1,000 a Month</a>)</p> <h2>2. Mexico</h2> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5197/museo_soumaya_in_mexico_city.jpg" width="605" height="340" alt="" /></p> <p>Hopping over the border to Mexico has always been a convenient option for U.S. citizens wanting somewhere nearby to retire to. Rich with incredible culture, fascinating history, a great coastline, and a mouthwatering cuisine, Mexico is both familiar and exotic at the same time.</p> <p>The exchange rate hit a high in 2017, meaning U.S. dollars go further there now. That, combined with a cost of living of around 60 percent lower than in the U.S., means your dollar will go a lot further in Mexico than it would at home.</p> <p>While drug-related crime has risen in recent years, there are many retirement communities that are completely safe. (See also: <a href="http://www.wisebread.com/how-almost-anyone-can-afford-to-retire-in-mexico?ref=seealso" target="_blank">How Almost Anyone Can Afford to Retire in Mexico</a>)</p> <h2>3. Spain</h2> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5197/glimpse_of_andalusia.jpg" width="605" height="340" alt="" /></p> <p>Spain frequently tops the list of the most popular retirement destinations for Europeans. It&rsquo;s little wonder when you consider the number of major cities, the stunning beachside resorts along the coastline, and the slow pace of life.</p> <p>The dollar is closing in on par with the Euro and the country has only just pulled out of a financial crisis that began in 2008. As a result, U.S. citizens have more purchasing power than ever in Spain right now, making the prospect of retiring here even more enticing. The cost of living stands at about 27 percent lower than the U.S., according to Numbeo, so it&rsquo;s no surprise that there are over 5.5 million foreign nationals living in Spain.</p> <h2>4. Ecuador</h2> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5197/fruit_market_otavalo_ecuador.jpg" width="605" height="340" alt="" /></p> <p>If you&rsquo;re a lover of the great outdoors, then Ecuador could be the ideal choice as your retirement location. It&rsquo;s home to portions of the Andes mountain range and the Amazon Rainforest, some of the most untouched Pacific Coast beaches in South America, and the remarkable Galápagos Islands.</p> <p>Pricewise it comes in at around 50 percent cheaper than the U.S., according to Numbeo, so you&rsquo;ll have plenty of cash left over for exploring and adventuring each month. Ecuador adopted the U.S. dollar in 2000 as its official currency so your nest egg won&rsquo;t be affected by exchange charges or currency fluctuations. (See also: <a href="http://www.wisebread.com/5-incredible-places-to-retire-abroad-that-anyone-can-afford?ref=seealso" target="_blank">5 Amazing Places to Retire Abroad That Anyone Can Afford</a>)</p> <h2>5. Costa Rica</h2> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5197/wild_caribbean_beach_of_Costa_rica.jpg" width="605" height="340" alt="" /></p> <p>Costa Rica is famous among surfers all over the world for its awesome swells, but in recent years it&rsquo;s also been making waves of a different kind. People of retirement age are flocking here for its year-round tropical climate, stunning beaches, and green landscapes.</p> <p>Numbeo reports that the cost of living is around 34 percent less in Costa Rica, so it&rsquo;s easy to see why up to 100,000 American citizens have decided to call Costa Rica home. Exchange rates to the Costa Rican Colon have been steadily rising over the past year, peaking at around 591 to the dollar.</p> <h2>6. Malaysia</h2> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5197/classic_local_rickshaw.jpg" width="605" height="340" alt="" /></p> <p>Malaysia is one of the most diverse countries in Asia, making it a continuously interesting place to live. It has influences from Malay, Chinese, and Indian populations clearly visible in the culture and cuisine, with an added bonus that English is widely spoken. It also has bustling, modern cities that have the same amenities, restaurants, and funky bars that you&rsquo;re used to in the U.S.</p> <p>Many retirees enjoy a better standard of living here than they would be able to afford in the U.S. thanks to the cost of living being around 52 percent lower, according to Numbeo. Health care is one of the biggest reasons that retirees come to Malaysia &mdash; its quality is so good that a medical tourism boom has sprung up.</p> <h2>7. Malta</h2> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5197/boats_in_bugibba_bay_malta.jpg" width="605" height="340" alt="" /></p> <p>Thanks to the laid back island life with year-round sun, Malta is a popular destination for retirees. This tiny archipelago of just three islands lies in the Mediterranean Sea between the South coast of Italy and North Africa and has a population of around only 400,000.</p> <p>Many of Malta&rsquo;s residents are English speaking, and one of the islands, Gozo, is home to a particularly large expat community with a big American contingent. Numbeo reports that prices here are around 13 percent cheaper than in the U.S. overall, but it&rsquo;s possible to live for much cheaper.</p> <h2>8. Portugal</h2> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5197/beautiful_beach_in_carvoeiro_algarve_portugal.jpg" width="605" height="340" alt="" /></p> <p>Europeans have been retiring to Portugal for decades, attracted by the warm weather, the picturesque coastline, and government tax breaks offered to overseas retirees. But the secret is slowly beginning to reach U.S. shores as Americans start to realize just what they&rsquo;re missing out on.</p> <p>Portugal has some impressive infrastructure boasting world class golf courses, fantastic restaurants, and some of the highest rated health care in the world. Despite all of this, the cost of living here is still relatively low, and you&rsquo;ll pay around 34 percent less in Portugal than in the U.S., according to Numbeo.</p> <h2>9. Thailand</h2> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5197/the_best_of_landscape_in_chiang_mai.jpg" width="605" height="340" alt="" /></p> <p>One of the most popular tourist destinations in the world, Thailand is also a hot spot for retirees from all over the globe. Thanks to its diversity, it&rsquo;s possible to settle down in a vast city, a lush green mountainous region, or even a secluded island with golden beaches.</p> <p>Despite its popularity, Thailand remains one of the cheapest countries in Asia to live in, with costs at over 43 percent less than in the U.S., according to Numbeo. The exchange rate has dropped in recent months, but is still considered favorable for expats wanting to move here now. (See also: <a href="http://www.wisebread.com/5-countries-that-welcome-american-retirees?ref=seealso" target="_blank">5 Countries That Welcome American Retirees</a>)</p> <h2 style="text-align: center;">Like this post? Pin it!</h2> <div align="center"><a data-pin-do="buttonBookmark" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <div><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/9%20Retirement%20Hotspots%20That%20Are%20Cheaper%20Now%20Than%20Ever%20Before%20%282%29.jpg" style="float: left; width: 31%; margin-right: 3%; margin-bottom: 0.5em;" alt="" /></p> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/9%20Retirement%20Hotspots%20That%20Are%20Cheaper%20Now%20Than%20Ever%20Before.jpg&#10;" style="float: left; width: 31%; margin-right: 3%; margin-bottom: 0.5em;" alt="" /> <img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/9%20Retirement%20Hotspots%20That%20Are%20Cheaper%20Now%20Than%20Ever%20Before%20%281%29.jpg" style="float: left; width: 31%; margin-right: 0%; margin-bottom: 0.5em;" alt="" /></p> </div> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/nick-wharton">Nick Wharton</a> of <a href="http://www.wisebread.com/9-retirement-hotspots-that-are-cheaper-now-than-ever-before">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-to-choose-the-perfect-country-to-retire-in">How to Choose the Perfect Country to Retire In</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-incredible-places-to-retire-abroad-that-anyone-can-afford">5 Incredible Places to Retire Abroad That Anyone Can Afford</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-to-make-a-snowbird-retirement-affordable">6 Ways to Make a Snowbird Retirement Affordable</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/avoid-these-6-common-mistakes-when-moving-across-the-country">Avoid These 6 Common Mistakes When Moving Across the Country</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-ways-to-get-the-most-value-from-your-all-inclusive-vacation">11 Ways to Get the Most Value From Your All-Inclusive Vacation</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement Travel international travel moving retire abroad retirement retirement tips travel travel tips Wed, 18 Oct 2017 08:30:11 +0000 Nick Wharton 2038473 at http://www.wisebread.com 5 Ways to Get the Most From Your Employer’s Automated Retirement Plan http://www.wisebread.com/5-ways-to-get-the-most-from-your-employer-s-automated-retirement-plan <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-ways-to-get-the-most-from-your-employer-s-automated-retirement-plan" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/arrows_pointing_in_positive_direction_on_401k_statement.jpg" alt="Arrows Pointing In Positive Direction On 401(k) Statement" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>An increasing number of companies are automating their 401(k) plans &mdash; automatically enrolling new hires and even automatically choosing investments for employees. If that's true of your employer, don't be lulled into a false sense of confidence. Just because many decisions are being made for you doesn't necessarily mean they're the <em>right</em> decisions. Here's what you need to know.</p> <h2>1. Stay in</h2> <p>The starting point of automated retirement plans is automated enrollment. To not participate, you have to opt <em>out. </em>Don't do that. For the vast majority of employees, participation is a good thing.</p> <h2>2. Invest enough</h2> <p>Most automated plans set employee contributions at very low rates, such as 3 percent of salary, at least initially. Many employees, perhaps assuming that's how much they <em>should</em> be investing, never change their contribution rate.</p> <p>However, 3 percent of salary is almost certainly not enough &mdash; not enough to get the full company match if that's available, and not enough to save adequately for retirement. So, use a free online retirement planning calculator to find out how much you should be saving and set your contribution rate accordingly.</p> <p>If you can't afford to contribute enough right away, see if your company's plan offers <em>auto-escalation</em>, which will automatically increase your contribution rate over time. If it does, signing up would help you follow through on your good intentions.</p> <h2>3. Choose the right investment(s)</h2> <p>Your plan may automatically invest your contributions in a target-date fund. Such funds have many benefits, but also a few features you should watch out for. The primary benefits are that they come with preset asset allocations based on the year of your intended retirement, and they automatically become more conservatively invested as you near your target retirement date. (See also: <a href="http://www.wisebread.com/what-you-need-to-know-about-the-easiest-way-to-save-for-retirement?ref=seealso" target="_blank">What You Need to Know About the Easiest Way to Save for Retirement</a>)</p> <p>The primary thing to watch out for is that not all target-date funds are created equal. Funds from different fund companies all designed with the same target retirement date in mind can have very different stock/bond allocations.</p> <p>It would be best to determine your optimal asset allocation using a tool such as Vanguard's free <a href="https://personal.vanguard.com/us/FundsInvQuestionnaire" target="_blank">Investor Questionnaire</a>. Then choose the target-date fund that most closely matches that allocation. It might be one with an earlier or later target retirement date than your actual planned retirement date, depending on your optimal asset allocation.</p> <h2>4. Don't pay too much in fees</h2> <p>If a target-date fund is the default investment in your 401(k) plan, and if you like the idea of using a target-date fund, you should still check the fund's expense ratio. The lower, the better. For example, with a fund charging an expense ratio of 0.75 percent, you'll pay $7.50 in fees each year for every $1,000 you have invested. If the expense ratio is 0.25 percent, you'll pay $2.50 per year for every $1,000 invested.</p> <p>If the default fund's expense ratio is on the high side (to give you a point of reference, Vanguard charges just 0.16 percent for its 2040 target-date fund), see if your plan gives you access to a brokerage window. If so, you should be able to choose a target-date fund from among many fund companies, which should enable you to choose a lower-cost fund. (See also: <a href="http://www.wisebread.com/watch-out-for-these-5-sneaky-401k-fees?ref=seealso" target="_blank">Watch Out for These 5 Sneaky 401K Fees</a>)</p> <p>Another option is to see if your plan offers index funds, which typically have very low expense ratios. If so, consider using such funds to build a portfolio that matches your optimal asset allocation. You may be able to do so using as few as three funds.</p> <h2>5. Keep your hands off the money</h2> <p>Some companies with automatic retirement plans are finding that many participants are surprised by how quickly money has built up in their accounts. Surprise is quickly followed by a desire for that money, which is then followed by a loan.</p> <p>It would be far better to remember what the money is for (retirement!) and keep your hands off. One of the key ingredients for successful investing is time. Pulling money from your account, even temporarily, gives it less time to compound. Plus, if you borrow against your account and then leave your employer &mdash; whether by your choice or your employer's &mdash; you'll have to repay the entire loan, usually within 60 days.</p> <p>Automation has been very effective at driving up participation rates in 401(k) plans, which has been beneficial for thousands of people. However, to get the most out of your employer's automated plan, make sure the automated choices are truly the best choices for you. If they're not, don't be afraid to make some manual changes.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F5-ways-to-get-the-most-from-your-employer-s-automated-retirement-plan&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F5%2520Ways%2520to%2520Get%2520the%2520Most%2520From%2520Your%2520Employers%2520Automated%2520Retirement%2520Plan.jpg&amp;description=5%20Ways%20to%20Get%20the%20Most%20From%20Your%20Employers%20Automated%20Retirement%20Plan"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/5%20Ways%20to%20Get%20the%20Most%20From%20Your%20Employers%20Automated%20Retirement%20Plan.jpg" alt="5 Ways to Get the Most From Your Employer&rsquo;s Automated Retirement Plan" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/matt-bell">Matt Bell</a> of <a href="http://www.wisebread.com/5-ways-to-get-the-most-from-your-employer-s-automated-retirement-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-11"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-traps-to-avoid-with-your-401k">7 Traps to Avoid With 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/how-to-face-4-ugly-truths-about-retirement-planning">How to Face 4 Ugly Truths About Retirement Planning</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/bookmark-this-a-step-by-step-guide-to-choosing-401k-investments">Bookmark This: A Step-by-Step Guide to Choosing 401(k) Investments</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-age-milestones-that-impact-your-retirement">6 Age Milestones That Impact Your 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/how-to-save-for-retirement-when-you-are-unemployed">How to Save for Retirement When You Are Unemployed</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement 401(k) automated retirement plans contributions expense ratios fees loans target date funds Wed, 18 Oct 2017 08:30:06 +0000 Matt Bell 2037239 at http://www.wisebread.com How to Overcome These 4 Common Retirement Fears http://www.wisebread.com/how-to-overcome-these-4-common-retirement-fears <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-overcome-these-4-common-retirement-fears" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/mature_businesswoman_portrait_in_her_office.jpg" alt="Mature Businesswoman Portrait In Her Office" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Modern retirement is a somewhat daunting prospect. Unlike previous generations, today's workers generally cannot count on a pension to fund their retirements &mdash; which means the buck stops with you when it comes to saving up the necessary money to live comfortably after you hang up your hat. Add to that the constant rhetoric about Social Security's imminent demise and the spiraling costs of health care for an aging population, and it's no wonder that thinking about retirement is heartburn-inducing.</p> <p>But even though many common retirement fears are perfectly rational, you do not have to feel overwhelmed by your concerns. Here's how you can overcome four of the most common retirement fears and plan for a fulfilling retirement.</p> <h2>I can't count on Social Security</h2> <p>The Social Security Trust Fund has been losing value since 2013, and it is projected to be entirely depleted by the year 2034. This fact is often touted as a reason for current workers to give up on the idea of receiving Social Security benefits at all once they reach full retirement age.</p> <p>After all, the Trust Fund will be empty by the time many current workers retire, and projected tax revenues will cover only 79 percent of promised benefits. This could mean anyone who is entitled to a $1,500 monthly benefit will only receive $1,185.</p> <h3>How to overcome this fear</h3> <p>While it is absolutely true that the Trust Fund will be depleted in less than 20 years, that does not mean that Social Security will simply dry up for current workers. American workers can count on Social Security to be there when they retire, no matter how old or young they are.</p> <p>Here's why you don't need to panic: To begin with, the dwindling of the Trust Fund is neither new nor imminent. It's also important to note that the United States is the only country in the world that attempts to predict the 75-year longevity of its social insurance funds, which means we are in a position to do something about the anticipated shortfall.</p> <p>Over the next couple of decades, it is likely that our government will make relatively small changes to the Social Security program in order to make up the 21 percent anticipated shortfall that will occur once the Trust Fund has run dry.</p> <p>In addition, 79 percent of promised benefits is much more than nothing. Even if we face the worst case scenario of no solution being proposed between now and 2034 (which seems unlikely, considering how popular Social Security is), there will still be something available for current workers, even if it is less than what was originally promised. (See also: <a href="http://www.wisebread.com/5-sobering-facts-about-social-security-you-shouldnt-panic-over?ref=seealso" target="_blank">5 Sobering Facts About Social Security You Shouldn't Panic Over</a>)</p> <h2>I'm going to outlive my money</h2> <p>Not having enough money in retirement is a truly frightening thought. And since it is impossible to know for certain how much money you will need in retirement, it's not possible to entirely dispel this fear, even if you have a robust retirement account.</p> <p>However, most Americans have very little money set aside for retirement. According to an Employee Benefit Research Institute survey from April 2017, 47 percent of American workers have less than $25,000 set aside for retirement. Considering the fact that it is prudent to withdraw no more than 4 percent of your nest egg per year during retirement to avoid outliving your savings, $25,000 would only net $1,000 of retirement income per year, which is nowhere near enough to live on.</p> <h3>How to overcome this fear</h3> <p>If you are among the 47 percent of American workers with less than $25,000 saved for retirement, the best way to deal with your fear of outliving your savings is to increase those savings.</p> <p>As of 2017, you can contribute up to $18,000 per year to a 401(k) or 403(b) plan, plus an additional $6,000 if you are over age 50. You may also contribute $5,500 to an IRA, plus an additional $1,000 if you are over 50. Maximizing those contributions can do a great deal to help you prepare for retirement. Even if contributing the maximum is out of your financial reach right now, upping your contribution by 1 or 2 percent can make a big difference in your nest egg's health.</p> <p>If you are already saving as much as you can for retirement and still worry about outliving your money, doing some research into the costs of what you want to do in retirement can help you overcome those fears. Knowing the real costs of retirement when you have already been a diligent saver can help you put your fears in perspective. (See also: <a href="http://www.wisebread.com/7-retirement-planning-steps-late-starters-must-make?ref=seealso" target="_blank">7 Retirement Planning Steps Late Starters Must Make</a>)</p> <h2>Illness in retirement will bankrupt me</h2> <p>According to Fidelity Benefits Consulting, the average cost of medical expenses for a 65-year-old couple retiring in 2016 will be an estimated $260,000. What's even more frightening about this enormous dollar figure is the fact that Fidelity based its calculations on 65-year-old retirees &mdash; meaning that the hypothetical retiring couple is already eligible for Medicare.</p> <p>Health care costs are undeniably high, and retirees are vulnerable to the high cost of medical care since it is difficult to shop around for better prices or stretch a fixed income. This means it's perfectly reasonable to worry that you might get sick after you retire and spend down all of your nest egg.</p> <h3>How to overcome this fear</h3> <p>It's true that health care is likely to be one of your biggest expenses in retirement, but that does not necessarily mean that an illness will bankrupt you.</p> <p>The first thing to do is learn about what you can expect from Medicare. Medicare Part A covers inpatient hospital care, home health care, and hospice care. Part B functions much like the typical health insurance you are familiar with from your workplace. Between these two, Medicare will cover about 80 percent of most of your medical needs. If you have a tough medical diagnosis, Medicare will cover your treatment, and careful money management can help you stay financially fit. (See also: <a href="http://www.wisebread.com/5-common-medicare-myths-debunked?ref=seealso" target="_blank">5 Common Medicare Myths, Debunked</a>)</p> <p>However, Medicare does not cover long-term care. This type of care &mdash; which describes the nonmedical help the elderly might need for daily living &mdash; is the aspect of your health care that can quickly overwhelm a nest egg.</p> <p><a href="http://www.wisebread.com/is-long-term-care-insurance-worth-it" target="_blank">Long-term care insurance</a> is a good option for some middle-income retirees, as it will make sure assets are protected in case you need long-term care. This kind of insurance can be pricey, however, which can put the cost out of reach for some retirees.</p> <p>If long-term care insurance is not in the cards for you, recognize that Medicaid will pay for your long-term care once you have exhausted your own resources. This is hardly an ideal option, but it can help ease your stress if you recognize that you will be able to get the care you need, no matter your financial situation.</p> <h2>I won't know who I am in retirement</h2> <p>The 2002 Jack Nicholson movie <em>About Schmidt</em> does an excellent job of showing how isolating retirement can be for some career-oriented workers. Nicholson's Warren Schmidt feels lost after retiring from several decades of working at an insurance company, and he returns to his office to try to recapture some of his sense of himself as an expert in his field, only to be brushed off by the young man who has taken his job.</p> <p>It's natural to be afraid of such a major life transition, particularly if you have always defined yourself by your career. Entering retirement without the structure of a daily routine can induce anxiety and fear, which can hardly help you to start writing your new chapter.</p> <h3>How to overcome this fear</h3> <p>One of the most important things our culture needs to do is stop looking at work and retirement as two distinct things, and start looking at them as two different parts of your whole life. Both your career and your retirement are your life, and you need to see it all as something that you can use to define yourself.</p> <p>That means structuring your life while you are working to include the things you will want to do when you are retired. For instance, if you dream of traveling in retirement, don't wait until you are retired to start your journeys. If you commit to making trips while you are still working, you will be well-prepared to be a traveler in retirement, and you will already define yourself by more than just your work.</p> <p>The best part about working to overcome this fear is that it gives you the opportunity to do the fun things you love while you are still in the midst of your career. With a little advance planning, retirement can provide a fulfilling evolution of the identity you've cultivated throughout your career.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fhow-to-overcome-these-4-common-retirement-fears&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FHow%2520to%2520Overcome%2520These%25204%2520Common%2520Retirement%2520Fears.jpg&amp;description=How%20to%20Overcome%20These%204%20Common%20Retirement%20Fears"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;">&nbsp;<img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/How%20to%20Overcome%20These%204%20Common%20Retirement%20Fears.jpg" alt="How to Overcome These 4 Common Retirement Fears" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/emily-guy-birken">Emily Guy Birken</a> of <a href="http://www.wisebread.com/how-to-overcome-these-4-common-retirement-fears">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/13-financial-steps-to-take-before-retiring-abroad">13 Financial Steps to Take Before Retiring Abroad</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-face-these-7-scary-facts-about-retirement-saving">How to Face These 7 Scary Facts About Retirement Saving</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-how-your-taxes-will-change-when-you-retire">Here&#039;s How Your Taxes Will Change When You Retire</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-common-medicare-myths-debunked">5 Common Medicare Myths, Debunked</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-help-your-parents-retire">How to Help Your Parents Retire</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement health care long term care medicare outliving money retirement fears social security Wed, 18 Oct 2017 08:00:07 +0000 Emily Guy Birken 2037739 at http://www.wisebread.com How to Choose the Perfect Country to Retire In http://www.wisebread.com/how-to-choose-the-perfect-country-to-retire-in <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-choose-the-perfect-country-to-retire-in" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/happy_senior_couple_sitting_on_a_sail_boat.jpg" alt="Happy Senior Couple Sitting on a Sail Boat" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Many of us harbor dreams of retiring overseas in some far-flung, exotic country. Whether it&rsquo;s for pure adventure, to make retirement dollars stretch further, or both, retiring abroad is becoming more common. But choosing exactly where to go can be difficult. Without proper planning and consideration, a country that appears perfect on the surface could end up being a nightmare. (See also: <a href="http://www.wisebread.com/9-things-to-know-before-retiring-abroad?ref=seealso" target="_blank">9 Things to Know Before Retiring Abroad</a>)</p> <p>I know just how daunting the task of choosing a country can be. I&rsquo;ve been living a semiretired life in multiple countries over the past eight years and I&rsquo;ve written many articles on early retirement. I&rsquo;ve found it helps to start with a list of all the countries where you can envision yourself living. Maybe it will be made up of places you&rsquo;ve fallen in love with while visiting in the past. Perhaps you&rsquo;ll include countries you&rsquo;ve never visited, but have heard are great retirement havens for Americans. From there, follow these guidelines to shorten your list and eventually pin down the perfect retirement destination for you. (See also: <a href="http://www.wisebread.com/retire-for-half-the-cost-in-these-5-countries?ref=seealso" target="_blank">Retire for Half the Cost in These 5 Countries</a>)</p> <h2>Figure out your finances</h2> <p>Finding a country that fits your finances is probably the most important part of the puzzle. It&rsquo;s crucial that you opt for someplace where you can enjoy the lifestyle that you dream of without draining your bank account in the process. (See also: <a href="http://www.wisebread.com/5-american-cities-where-you-can-retire-on-just-social-security?ref=seealso" target="_blank">5 American Cities Where You Can Retire On Just Social Security</a>)</p> <p>As a first step, you need to calculate exactly how much you have in your retirement savings and how much you can withdraw every month. Then, project how much income you&rsquo;ll have from other sources, such as Social Security or any private pension or annuity plans you have. Account for any taxes you might have to pay, and come up with a ballpark figure for how much you&rsquo;ll be able to spend every month during retirement. (See also: <a href="http://www.wisebread.com/5-incredible-places-to-retire-abroad-that-anyone-can-afford?ref=seealso" target="_blank">5 Incredible Places to Retire Abroad That Anyone Can Afford</a>)</p> <h2>Rule out unaffordable destinations</h2> <p>Once you have your estimated income, start researching the cost of living in each place on your dream list and determine whether it fits your finances. Tools like <a href="https://www.numbeo.com/cost-of-living/" target="_blank">Numbeo</a> and <a href="https://www.expatistan.com/cost-of-living" target="_blank">Expatistan</a> are great for estimating the cost of living in different countries. Cross out the places you can&rsquo;t afford. This will naturally narrow down which countries are realistic to put on a short list. (See also: <a href="http://www.wisebread.com/5-countries-where-you-can-retire-for-1000-a-month?ref=seealso2" target="_blank">5 Countries Where You Can Retire on $1,000 a Month</a>)</p> <h2>Check out the quality and affordability of health care</h2> <p>Health care is one of the most significant factors to take into account when choosing a retirement destination. Medicare generally won&rsquo;t cover you outside of the U.S., so you need to put a plan in place for how you&rsquo;ll afford any medical requirements. Fortunately, some of the most affordable countries to live in also have top class medical services, but it&rsquo;s something you&rsquo;ll need to research for each country on your list. (See also: <a href="http://www.wisebread.com/dont-let-these-expenses-spoil-your-retirement-abroad?ref=seealso" target="_blank">Don't Let These Expenses Spoil Your Retirement Abroad</a>)</p> <p>If the health care is cheap, it may be possible to just pay as you go, but you should also look into suitable insurance plans. In particular, think about how you&rsquo;d pay for treating a major illness or catastrophic injuries.</p> <h2>Take your hobbies and interests into account</h2> <p>No doubt you have a good idea of how you&rsquo;d like to fill your free time once you&rsquo;re not working anymore. But make sure you double check that you&rsquo;re able to do the things you love most in the country of your choice.</p> <p>If you&rsquo;re a keen golfer, there&rsquo;s no point in selecting a country that has no golf courses, as it&rsquo;s probably something you&rsquo;ll want to do more of in retirement. Don&rsquo;t just assume that every country will have the facilities or resources you need for your hobbies and pastimes.</p> <h2>Consider your security</h2> <p>Unrest and crime are two factors that can quickly endanger your life, affect your finances, and hamper your dreams. Though it&rsquo;s impossible to predict what will happen in the future, it is possible to make educated assumptions based on the historical and current security situation in the city, region, and country you&rsquo;re considering. Is it somewhere prone to civil unrest, gang activity, or petty crime? Are there upcoming elections that may significantly alter the political landscape?</p> <p>Check out the <a href="https://travel.state.gov/content/passports/en/country.html" target="_blank">U.S. State Department&rsquo;s travel website</a>, which provides advice on every country in the world. Also read articles and check with local residents to see whether any problems reported in the media ring true in real life.</p> <h2>Research visa options and other relevant laws</h2> <p>Residency laws differ from country to country and can come with significant costs attached. Check these requirements thoroughly. In most cases, you can find information put out by the country&rsquo;s immigration office online. You can also contact the closest consulate or embassy of the country you&rsquo;re considering. Often, you will need to apply for residency while you&rsquo;re outside that country, but check first. (See Also: <a href="http://www.wisebread.com/5-countries-that-welcome-american-retirees?ref=seealso" target="_blank">5 Countries That Welcome American Retirees</a>)</p> <p>Consider other relevant laws and regulations, too. Perhaps you won&rsquo;t be allowed to work if you&rsquo;re on a retiree visa, or you won&rsquo;t be allowed to buy property in certain areas. You may or may not be subject to local taxes, as well. Remember also that moving overseas does not preclude the requirement to <a href="https://www.irs.gov/individuals/international-taxpayers/taxpayers-living-abroad" target="_blank">pay taxes in the U.S.</a>, even if it&rsquo;s necessary to pay them in your new home.</p> <h2>Consider cultural fit</h2> <p>Moving to a new country, not understanding the language, and trying to adjust to the culture all at the same time can be a singularly isolating experience. Ask yourself if you&rsquo;re ready to learn a new language if necessary, and whether you&rsquo;re able to change to fit in with the culture of the places you&rsquo;re considering. Are there things that you don&rsquo;t like about a particular culture that you think you&rsquo;d grow accustomed to? On the other hand, could annoying local biases or customs that you&rsquo;ve put up with on a vacation grow unbearably wearisome once you&rsquo;re living in that place full-time?</p> <h2>Get to know the weather</h2> <p>It&rsquo;s a good idea to check year-round weather forecasts, too. Even if you think you&rsquo;re familiar with the outlook somewhere, it could drastically change throughout the year. If you&rsquo;ve always visited during high season, make a conscious effort to check what the weather is like during low season. There&rsquo;s often a reason why tourists don&rsquo;t visit then. Temperatures may rise or drop to uncomfortable levels, storms may make living dangerous or at least inconvenient, and drawn-out rains may just make everyone miserable. Many weather websites or destination-specific websites have data on historical temperatures and precipitation for every month of the year. (See also: <a href="http://www.wisebread.com/33-places-to-retire-if-you-love-the-rain?ref=seealso" target="_blank">33 Places to Retire If You Love the Rain</a>)</p> <h2>Do a test run</h2> <p>Possibly the biggest mistake that retirees can make before heading abroad is to take the plunge without having tested the waters first. Do yourself a big favor and complete a test run in the country that you settle on. It may cost you a little extra, but the expense is usually worth it.</p> <p>Consider where you&rsquo;ll go if you don&rsquo;t like your new retirement country. Maybe you&rsquo;ll want to move back to the home you own in the U.S. If so, it makes sense not to sell right away. Perhaps you can rent it out temporarily while you do your test run.</p> <p>Then make a semi-permanent move. Rent a temporary home, preferably furnished, and get by with whatever you can take in suitcases. Give yourself enough time to experience different seasons, get to know a few people, and see if your monthly budget will really work. If it doesn&rsquo;t work out, you may be disappointed, but at least you&rsquo;ll have minimized your moving expenses and you&rsquo;ll have a place to go when you move back. (See also: <a href="http://www.wisebread.com/4-questions-you-need-to-answer-before-relocating-in-retirement?ref=seealso" target="_blank">4 Questions You Need To Answer Before Relocating in Retirement</a>)</p> <h2 style="text-align: center;">Like this post? Pin it!</h2> <div align="center"><a data-pin-do="buttonBookmark" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <div><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/How%20to%20Choose%20the%20Perfect%20Country%20to%20Retire%20In%20%284%29_0.jpg" style="float: left; width: 31%; margin-right: 3%; margin-bottom: 0.5em;" alt="" /></p> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/How%20to%20Choose%20the%20Perfect%20Country%20to%20Retire%20In%20%281%29.jpg" style="float: left; width: 31%; margin-right: 3%; margin-bottom: 0.5em;" alt="" /> <img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/How%20to%20Choose%20the%20Perfect%20Country%20to%20Retire%20In%20%283%29.jpg" style="float: left; width: 31%; margin-right: 0%; margin-bottom: 0.5em;" alt="" /></p> </div> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/nick-wharton">Nick Wharton</a> of <a href="http://www.wisebread.com/how-to-choose-the-perfect-country-to-retire-in">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-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/9-retirement-hotspots-that-are-cheaper-now-than-ever-before">9 Retirement Hotspots That Are Cheaper Now Than Ever Before</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/13-financial-steps-to-take-before-retiring-abroad">13 Financial Steps to Take Before Retiring Abroad</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/x-exciting-world-cities-you-can-afford-to-retire-in">4 Exciting World Cities You Can Afford to Retire In</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-travel-in-retirement-keeps-you-young">6 Ways Travel in Retirement Keeps You Young</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-incredible-world-cities-you-can-afford">5 Incredible World Cities You Can Afford</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement Travel living expenses moving retirement retirement fund retiring abroad saving money Mon, 16 Oct 2017 08:30:10 +0000 Nick Wharton 2035913 at http://www.wisebread.com