Retirement http://www.wisebread.com/taxonomy/term/417/all en-US 4 Ways to Boost Your 401(k) Returns http://www.wisebread.com/4-ways-to-boost-your-401k-returns <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-ways-to-boost-your-401k-returns" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/businessmen-meeting-handshake-200402197-001-small.jpg" alt="businessmen meeting handshake" title="businessmen meeting handshake" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>Employer-sponsored 401(k) plans are powerful retirement vehicles. Beyond empowering you to take the first (and perhaps most important) step toward retirement savings, 401(k) contributions are also made using pre-tax income, meaning they can reduce your current income tax obligation, too. (See also: <a href="http://www.wisebread.com/if-you-want-your-401k-to-grow-stop-doing-these-6-things?ref=seealso">If You Want Your 401(k) to Grow, Stop Doing These 6 Things</a>)</p> <p>But the benefits of 401(k) plans don't end there &mdash; consider these additional ways to power charge your plan for maximum returns.</p> <h2>1. Get a Full Company Match</h2> <p>The most attractive benefit of 401(k)s is that most corporations match some percentage of your contributions, up to 6% of your salary. Let's say you earn $50,000 per year, and your company matches 100% of your contributions, up to 6% of your salary. That's a $3,000 per year match &mdash; or in other words, it's $3,000 in free money. Of course, not all companies offer such generous matches, but consider contributing as much as your company will match in order to maximize this source of free retirement money.</p> <h2>2. Choose Low-Fee Funds</h2> <p>The fees you pay on your investments can seriously erode your earnings. The SEC notes that even a 1% annual fee paid on a $100,000 portfolio will cost you $28,000 over 20 years. Yikes! That's why keeping your fees low &mdash; by choosing passively managed index funds or ETFs, where possible &mdash; is so important. Not only do you get to keep more of your money, but you also get to enjoy the extra growth on that money, thanks to the effect of compounding. All 401(k) plan offerings are required to disclose their fees; aim to select offerings with fees below 1%.</p> <p>Actively managed mutual funds often have the highest fees, so check the fine print.</p> <h2>3. Diversify</h2> <p>401(k) plans offer hassle-free strategic investing, including the ability to diversify your investments in order to help reduce risk. Often, a major investment firm like TD Ameritrade, Vanguard, or T.Rowe Price manages the plan and has worked with your employer to offer a variety of options which enable you to diversify your investments. But it's up to you to make use of them.</p> <p>If you don't feel comfortable creating your own diversified set of selections, consider choosing a broad index fund or Target-Date Fund. The latter selects investments based on your expected retirement date, automatically adjusting for risk and return profiles over time. This enables you to capture many of the benefits of diversification, without actively selecting several funds.</p> <h2>4. Rollover 401(k) Plans When You Change Employers</h2> <p>Most of us change jobs (and even careers) throughout our lives, but frequent job-switching shouldn't prevent you from participating in a 401(k). And if and when you leave a job, you can rollover your plan's assets into your new company's 401(k). If you're moving to a role that doesn't offer a 401(k) (such as a small company, or self-employment), avoid paying huge early withdrawal fees by rolling over to an IRA within 60-days of cashing out.</p> <p>If you're considering job offers, take into account a company's benefits package. It is one of the most important things to consider next to compensation. Seek an employer that offers a 401(k), and preferably one that offers matched contributions. Without a strong retirement plan, you're likely just extending the number of years you'll need to work, so proceed accordingly.</p> <p><em>What are you doing to supercharge your 401(k)?</em></p> <a href="http://www.wisebread.com/4-ways-to-boost-your-401k-returns" class="sharethis-link" title="4 Ways to Boost Your 401(k) Returns" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/qiana-chavaia">Qiana Chavaia</a> of <a href="http://www.wisebread.com/4-ways-to-boost-your-401k-returns">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-ways-to-keep-your-retirement-funds-from-disappearing">7 Ways to Keep Your Retirement Funds From Disappearing</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/this-is-why-you-cant-postpone-planning-for-your-retirement-and-how-to-start">This Is Why You Can&#039;t Postpone Planning for Your Retirement (And How to Start)</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/book-review-cash-rich-retirement">Book review: Cash-Rich Retirement</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/choosing-a-retirement-account-whats-available-and-what-s-best-for-you">Choosing a Retirement Account: What&#039;s Available, and What’s Best for You?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/this-one-thing-will-get-you-to-1-million-tax-free">This One Thing Will Get You to $1 Million (Tax-Free!)</a></span> </div> </li> </ul> </div> </div> </div> </div> Retirement 401(k) investing retirement planning Thu, 04 Dec 2014 15:00:21 +0000 Qiana Chavaia 1263266 at http://www.wisebread.com Don't Choose These 10 Cities If You Want to Retire Comfortably http://www.wisebread.com/dont-choose-these-10-cities-if-you-want-to-retire-comfortably <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/dont-choose-these-10-cities-if-you-want-to-retire-comfortably" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/washington%20dc.jpg" alt="washington dc" title="washington dc" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Retirement is a time to enjoy hobbies, move a little slower in daily life, travel, and after decades of hard work, just rest. All of which is tough if you pick the wrong retirement city. (See also: <a href="http://www.wisebread.com/10-unexpected-things-you-should-consider-when-picking-where-you-retire?ref=seealso">10 Unexpected Things You Should Consider When Picking Where You Retire</a>)</p> <p>When looking at locations, you'll generally want to weigh six categories: cost of living, housing costs, taxes, the health care system, activities for seniors, and, yes, the weather. And with those in mind, you'll likely want to steer clear of these 10 cities that fall short in one or two or more of those categories.</p> <h2>1. San Francisco, CA</h2> <p><img width="605" height="340" alt="" src="http://www.wisebread.com/files/fruganomics/u5123/golden%20gate%20bridge.jpg" /></p> <p>The weather is very mild &mdash; it doesn't get hot in the summer and winters are usually rainy. However, the cost of housing in this area is so high that most retirees are not going to be able to find it within their budget. Retirement income is taxed heavily in the state of California, unlike many other states. The cost of living is also very high. In fact, Kiplinger ranked <a href="http://www.kiplinger.com/slideshow/retirement/T006-S001-worst-states-for-retirement/index.html">California as the worst state to retire</a>.</p> <h2>2. Honolulu, HI</h2> <p><img width="605" height="340" alt="" src="http://www.wisebread.com/files/fruganomics/u5123/honolulu.jpg" /></p> <p>While the location is beautiful and the weather gorgeous year round, Honolulu will require you to have quite a large nest egg. According to a recent <a href="http://wallethub.com/edu/best-places-to-retire/6165/">study done by WalletHub</a>, cost of living in the city are among the highest in the country. It's also very expensive to travel to and from Hawaii, making family gatherings more difficult.</p> <h2>3. Oklahoma City, OK</h2> <p><img width="605" height="340" alt="" src="http://www.wisebread.com/files/fruganomics/u5123/oklahoma%20city.jpg" /></p> <p>Healthcare is a concern for all seniors, and it will be a real concern if you retire to Oklahoma, which ranks among one of <a href="http://nhqrnet.ahrq.gov/inhqrdr/Oklahoma/snapshot/summary/All_Measures/All_Topics">the worst in the country for health care</a> (trailed only by West Virginia). Crime is also a problem here, with the city <a href="http://os.cqpress.com/citycrime/2013/2014_CityCrimeRankingsbyPopulation.pdf">ranking 7th in the nation</a> for crime among large cities.</p> <h2>4. Louisville, KY</h2> <p><img width="605" height="340" alt="" src="http://www.wisebread.com/files/fruganomics/u5123/louisville.jpg" /></p> <p>The low cost of living, modest housing costs, and picturesque mountains may make it appear to be a good choice for retirement, but Louisville has been named as the &quot;<a href="http://www.aafa.org/pdfs/FINAL_public_LIST_Spring_2014.pdf">worst place for allergy sufferers to live</a>,&quot; making it an easy destination to avoid by retirees with respiratory or other health issues.</p> <h2>5. Bridgeport, CT</h2> <p><img width="605" height="340" alt="" src="http://www.wisebread.com/files/fruganomics/u5123/bridgeport.jpg" /></p> <p>High taxes are a major concern for retirees, and some states tax retirement income much more than other states. (Florida's low rate is what makes it one of the most desirable states for retirees, for example.) But Connecticut is one of those states that taxes both Social Security and pension income. Bridgeport, more specifically, has expensive housing costs and even more expensive health care costs. Assisted living facilities in this area of the country can charge over over $400 a day &mdash; <a href="https://www.genworth.com/cost-of-care/landing.html">almost twice the national average</a> for long-term care, which will deplete your nest egg very quickly should you require assistance at some point.</p> <h2>6. New York, NY</h2> <p><img width="605" height="340" alt="" src="http://www.wisebread.com/files/fruganomics/u5123/new%20york%20city.jpg" /></p> <p>The Big Apple requires a big budget, as real estate is pricey and hard to afford on a fixed income. By taking your current retirement budget and adjusting it to the high cost of living for any of the more popular parts of NYC <a href="http://money.cnn.com/calculator/pf/cost-of-living/">via this calculator</a>, you can see that the real estate isn't the only thing that will cost you. Even retirees who own their own homes will feel the pinch of higher utility bills and transportation fees.</p> <h2>7. Chicago, IL</h2> <p><img width="605" height="340" alt="" src="http://www.wisebread.com/files/fruganomics/u5123/chicago.jpg" /></p> <p>Illinois as a whole gets a low approval rating from its own residents, with one in four saying <a href="http://www.gallup.com/poll/168653/montanans-alaskans-say-states-among-top-places-live.aspx">the state is the worst place to live</a>. Why? It could possibly be because of the high income tax hikes and lower bond rates, both signs of a troubled economy. Add in the fact that many Chicago residents have decided to leave the city altogether, making Chi-town the <a href="http://www.forbes.com/pictures/mli45lmhg/4-chicago-ill/">6th most-abandoned large city</a> in the U.S. and it's a less appealing option to live out the rest of your years.</p> <h2>8. Philadelphia, PA</h2> <p><img width="605" height="340" alt="" src="http://www.wisebread.com/files/fruganomics/u5123/philadelphia.jpg" /></p> <p>While it's not as expensive to live in as New York City, there are some issues that may keep the 65 and older crowd away from the city of brotherly love. A higher-than-average sales tax and poor air quality may be of concern to retirees. Throw in the <a href="http://os.cqpress.com/citycrime/2013/2014_CityCrimeRankingsbyPopulation.pdf">high rate of crime</a> (it ranks 5th nationwide), and you have a few good reasons to shop around for your retirement abode.</p> <h2>9. Washington, D.C.</h2> <p><img width="605" height="340" alt="" src="http://www.wisebread.com/files/fruganomics/u5123/washington%20dc.jpg" /></p> <p>In addition to brutally cold winters, economics continues to be a problem for our nation's capital, with the numbers of those under the <a href="http://www.dcfpi.org/poverty-rates-remain-high-for-some-groups-of-dc-residents">poverty line increasing</a> &mdash; despite a rise in median income. With seniors living on a fixed income, the high cost of real estate can also cause concern.</p> <h2>10. Providence, RI</h2> <p><img width="605" height="340" alt="" src="http://www.wisebread.com/files/fruganomics/u5123/providence.jpg" /></p> <p>Across numerous rating scales out there, Providence almost always appears at the top of the worst lists. This is due to a high cost of living, high tax rates, and one of the highest unemployment rates in the nation (currently at a rate of 10% for the city and <a href="http://www.providencejournal.com/business/content/20141124-r.i.-unemployment-rate-again-3rd-worst-in-nation.ece">3rd highest</a> for the entire state.) If you are hoping to supplement your income or kill some boredom during your retired years, finding a part-time job in Providence may be impossible.</p> <p><em>Where are you planning to retire?</em></p> <a href="http://www.wisebread.com/dont-choose-these-10-cities-if-you-want-to-retire-comfortably" class="sharethis-link" title="Don&#039;t Choose These 10 Cities If You Want to Retire Comfortably" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/linsey-knerl">Linsey Knerl</a> of <a href="http://www.wisebread.com/dont-choose-these-10-cities-if-you-want-to-retire-comfortably">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/book-review-work-less-live-more">Book review: Work Less, Live More</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-five-types-of-people-who-never-retire-are-you-one-of-them">The Five Types of People Who Never Retire (Are You One of Them?)</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/are-you-on-this-list-of-cushiest-retirement-jobs">Are YOU on This List of Cushiest Retirement Jobs?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/book-review-cash-rich-retirement">Book review: Cash-Rich 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-much-money-should-a-ceo-make">How much money should a CEO make?</a></span> </div> </li> </ul> </div> </div> </div> </div> Career and Income Retirement cost of living places to retire retire retirement cities where to live Thu, 04 Dec 2014 11:00:07 +0000 Linsey Knerl 1263679 at http://www.wisebread.com The Five Types of People Who Never Retire (Are You One of Them?) http://www.wisebread.com/the-five-types-of-people-who-never-retire-are-you-one-of-them <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-five-types-of-people-who-never-retire-are-you-one-of-them" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/man-busy-office-166114539-small.jpg" alt="man busy office" title="man busy office" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p style="margin-left: 40px;">&quot;I actually think the whole concept of retirement is a bit stupid, so yes, I do want to do something else. There is this strange thing that just because chronologically on a Friday night you have reached a certain age&hellip; with all that experience, how can it be that on a Monday morning, you are useless?&quot; &mdash; Stuart Rose</p> <p>What springs to mind when you think about retirement? I wistfully think about sleeping in, and not using a time clock (which I despise). But for other people, the word &quot;retirement&quot; causes shudders. (See also: <a href="http://www.wisebread.com/will-you-ever-be-able-to-retire?ref=seealso">Will You Ever Be Able to Retire?</a>)</p> <p>Consider these five categories of people who will never retire. Are you among them?</p> <h2>1. The Broke Non-Retiree</h2> <p>Personally, I find this the most unsettling scenario. Whether due to poor financial planning or heavier-than-anticipated financial needs, more and more older workers continue to find themselves in the labor pool. According to the Center for Public Affairs Research, a 2013 survey revealed that a startling 47% now <a href="http://www.apnorc.org/PDFs/Working%20Longer/NORC-AP-NORC-Working-longer.pdf">plan to retire at a later age</a> than they expected when they were 40. The survey also found that 39% of workers age 50 and older report having $100,000 or less saved for retirement, not including pensions or homes; 24% have less than 10,000.</p> <p>Maybe it's time to take stock of your financial future by <a href="http://moneyover55.about.com/od/preretirementplanning/a/estimate_expenses_in_retirement.htm">estimating your retirement expenses</a>.</p> <h2>2. The Workaholic</h2> <p>There is a difference between the person who enjoys work, and does so with enthusiasm, and the person whose life is out of balance and cannot stop working. Perhaps you have run across some of these in your work, too. As the Wall Street Journal explains, workaholics have<a href="http://online.wsj.com/articles/for-some-retirement-brings-grief-1414886644?mod=e2tw"> difficulty transitioning from work to retirement life</a>, because so much of their identity, social network, and purpose is tied to their career. They can feel adrift in retirement without the structure work provides.</p> <p>When working is almost an addiction, it can be devastating to face retirement. One of my former co-workers springs to mind. Although qualified to retire for years, she fought it tooth and nail, taking work home and working weekends. Even when finally convinced by management that it was time for her to step down, she would find excuses to drop by the office, or call people to have lunch. If you recognize yourself in this description, there is help available. Consider support groups, such as <a href="http://www.workaholics-anonymous.org/page.php?page=home">Workaholics Anonymous</a>, which aim to help workaholics develop coping skills and the ability to relax during downtime.</p> <h2>3. The Successful Investor</h2> <p>You may know some people in this category. They bought rentals, years ago, and now are landlords. Or perhaps they bought silver or gold, or learned how to effectively invest in the stock market. There is a common thread here: They got moving, educated themselves, and by their 50s, were enjoying a leisurely lifestyle. But that doesn't mean they want to (or can) stop. Many keep at it, repairing their rentals, or checking their investments every day. They've made being a successful investor their life's work, and they have no need to &quot;retire&quot; from it.</p> <h2>4. The Life Re-Inventor</h2> <p>Starting a new career later in life can be an invigorating way to re-invent yourself. My friend Nancy, a former school art teacher, began working with the mentally ill, eventually started teaching classes, and is now co-authoring a book about art therapy. She finds it tremendously rewarding and has learned a lot of new things. Her husband, an engineer, always wanted to be a teacher, so he started volunteering at a school. He was so successful at tutoring, he was shortly offered a paying position.</p> <p>For my friends, the career switch was fairly easy. However, you certainly wouldn't want to quit your present job and jump into something new without doing some research and soul-searching. Will your new career help fulfill life ambitions? Will it offer a large enough paycheck to make the switch and time investment worthwhile? (See also: <a href="http://www.wisebread.com/6-ways-to-avoid-running-out-of-money-in-retirement?ref=seealso">6 Ways to Avoid Running Out of Money in Retirement</a>)</p> <h2>5. The Mega-Successful Lifers</h2> <p>Consider the lives of the truly, astoundingly successful. For a mega-successful CEO or famous actor, the demand for their talents are so high, that there's less incentive to quit working. According to a study by Merrill Lynch and Age Wave, the <a href="http://nbr.com/2014/07/22/millionaires-never-retire/">desire to keep working</a> until the last day is common to over 60% of the wealthy. But you don't have to be filthy rich or famous for this to be true of you, too. Evidence also suggests that many people who are successful in more realistic endeavors &mdash; such as artists, small business owners or physicians &mdash; also feel the incentive to continue using their talents until the very last day. Will you?</p> <p><em>What are your retirement plans? Do you see yourself in one of these categories? Please share in comments!</em></p> <a href="http://www.wisebread.com/the-five-types-of-people-who-never-retire-are-you-one-of-them" class="sharethis-link" title="The Five Types of People Who Never Retire (Are You One of Them?)" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/marla-walters">Marla Walters</a> of <a href="http://www.wisebread.com/the-five-types-of-people-who-never-retire-are-you-one-of-them">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/book-review-cash-rich-retirement">Book review: Cash-Rich 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/book-review-retire-on-less-than-you-think">Book review: Retire on Less Than You Think</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-choose-these-10-cities-if-you-want-to-retire-comfortably">Don&#039;t Choose These 10 Cities If You Want to Retire Comfortably</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-to-avoid-running-out-of-money-in-retirement">6 Ways to Avoid Running Out of Money in Retirement</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-thoughts-everyone-has-their-first-day-of-retirement">6 Thoughts Everyone Has Their First Day of Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div> Retirement retire retirement planning Wed, 26 Nov 2014 16:30:17 +0000 Marla Walters 1260444 at http://www.wisebread.com Best Money Tips: Common Retirement Planning Mistakes http://www.wisebread.com/best-money-tips-common-retirement-planning-mistakes <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-money-tips-common-retirement-planning-mistakes" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/couple-reviewing-bills-77744657-small_0.jpg" alt="couple reviewing bills" title="couple reviewing bills" 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 some very cool articles on common retirement planning mistakes, amazing ways to use balloons, and stocking your medicine cabinet for less.</p> <h2>Top 5 Articles</h2> <p><a href="http://couplemoney.com/retirement/what-are-the-most-common-mistakes-people-make-when-planning-for-retirement">What Are the Most Common Mistakes People Make When Planning for Retirement?</a> &mdash; Don't wait until you have more money to invest; time is one of your biggest allies when it comes to retirement planning, so start as soon as possible! [Couple Money]</p> <p><a href="http://www.popsugar.com/smart-living/Uses-Balloons-31135985">23 Amazing Ways to Use Balloons</a> &mdash; You can use balloons make chocolate cups for all sorts of yummy treats! [PopSugar Smart Living]</p> <p><a href="http://www.getrichslowly.org/blog/2014/11/10/cold-and-flu-season-stock-your-medicine-cabinet-for-less/">Cold and Flu Season: Stock Your Medicine Cabinet for Less</a> &mdash; Buying generic medications can save you up to 50% or more. [Get Rich Slowly]</p> <p><a href="http://www.creditsesame.com/blog/how-to-dispute-a-credit-card-charge/">Know Your Rights: How to Dispute a Credit Card Charge</a> &mdash; Contact the merchant first. Most businesses will happily correct a mistake. [Credit Sesame]</p> <p><a href="http://couponpal.com/blog/7-ugly-christmas-sweater-party-ideas-for-the-tackiest-party-ever">7 Ugly Christmas Sweater Party Ideas for the Tackiest Party Ever</a> &mdash; The focus of any Ugly Christmas Sweater Party will obviously be the sweaters. To ensure you have the best (or worst), start with a mildly ugly sweater, then add strategically-placed DIY embellishments. [CouponPal]</p> <h2>Other Essential Reading</h2> <p><a href="http://ptmoney.com/financial-worries-for-millenials/">3 Financial Worries That Didn't Exist for Your Parents</a> &mdash; The sophistication of data mining is fairly new. Having access to your search information allows companies to tailor their marketing to what you're looking for, making it harder and harder to resist their tactics. [PT Money]</p> <p><a href="http://www.freemoneywisdom.com/5-smart-internet-businesses-to-start-under-50/">5 Smart Internet Businesses to Start for Under $50</a> &mdash; Are you crafty or artistic? You can make some extra money by creating custom gifts for birthdays, anniversaries, holidays, and more! [Free Wisdom]</p> <p><a href="http://www.dontpayfull.com/blog/top-10-painless-ways-to-save-money-without-changing-your-lifestyle">Top 10 Painless Ways to Save Money Without Changing Your Lifestyle!</a> &mdash; Many companies will offer a discount when you sign up for their bundled packages. [Don't Pay Full]</p> <p><a href="http://parentingsquad.com/how-to-not-spoil-your-kids-this-christmas">How to Not Spoil Your Kids This Christmas</a> &mdash; Set a limit on the number of gifts each child receives &mdash; or how much you spend on them &mdash; and stick to it! [Parenting Squad]</p> <p><a href="http://moneysmartlife.com/improve-credit-score/">How to Improve Your Credit Score by Focusing on Payment History and Reducing Credit Card Debt</a> &mdash; Your payment history is a big part of most credit scoring models. If you're serious about improving your credit score, then you need to start making your payments on time. [Money Smart Life]</p> <a href="http://www.wisebread.com/best-money-tips-common-retirement-planning-mistakes" class="sharethis-link" title="Best Money Tips: Common Retirement Planning Mistakes" rel="nofollow">ShareThis</a><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-common-retirement-planning-mistakes">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/dont-choose-these-10-cities-if-you-want-to-retire-comfortably">Don&#039;t Choose These 10 Cities If You Want to Retire Comfortably</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-unexpected-things-you-should-consider-when-picking-where-you-retire">10 Unexpected Things You Should Consider When Picking Where You Retire</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-balance-saving-for-retirement-emergency-fund-and-paying-off-debt">How to Balance Saving for Retirement, Emergency Fund, and Paying Off Debt</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/14-ways-to-retire-early">14 Ways to Retire Early</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-five-types-of-people-who-never-retire-are-you-one-of-them">The Five Types of People Who Never Retire (Are You One of Them?)</a></span> </div> </li> </ul> </div> </div> </div> </div> Retirement best money tips financial mistakes Wed, 12 Nov 2014 20:00:10 +0000 Amy Lu 1253955 at http://www.wisebread.com 7 Occasions When You Should Definitely Hire a Financial Advisor http://www.wisebread.com/7-occasions-when-you-should-definitely-hire-a-financial-advisor <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-occasions-when-you-should-definitely-hire-a-financial-advisor" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/financial-advisor-153824915-small.jpg" alt="financial advisor" title="financial advisor" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Laying out a few hundred dollars for a financial advisor can seem like money down the drain if everything is going smoothly. (See also: <a href="http://www.wisebread.com/9-signs-you-need-to-fire-your-financial-planner?ref=seealso">9 Signs You Need to Fire Your Financial Planner</a>)</p> <p>Until it isn't. Life's road bumps pop up, and good and bad things that happen can lead to financial problems or opportunities that you weren't prepared for. Here are seven occasions when a financial advisor should be called in to help.</p> <h2>1. Ruinous Debt</h2> <p>We're not talking about having payments for a credit card lapse for a month, but deep debt where you're having difficulty deciding which bills to pay and which to put off each month. This is a case where you don't want to have to pay a financial advisor &mdash; whether it's a one-time fee or percentage of assets that they manage. Instead, go somewhere such as the <a href="https://www.nfcc.org/index.php">National Foundation for Credit Counseling</a> or look for <a href="http://www.usa.gov/topics/money/credit/debt/out-of-control.shtml">local nonprofit agencies for free help</a>. At the very least, get help setting up a budget.</p> <h2>2. Career Change</h2> <p>Hopefully, this is an opportunity to earn more money and therefore put more money aside in a retirement account. A financial advisor can help you pick a retirement account that's right for you.</p> <p>Young people with the potential for increasing their assets who are starting their careers should seek a financial planner, says Eric Roberge, a fee-only certified financial planner in Boston and founder of <a href="http://beyondyourhammock.com/">Beyond Your Hammock</a>. This is especially true for a single person earning at least $75,000 a year or a couple earning $150,000 because they should have more money to invest, Roberge says.</p> <h2>3. Sudden Wealth</h2> <p>An inheritance, insurance payout, lump-sum pension payment, divorce settlement, lottery winning, or any other sudden influx of new money can burn a hole in a pocket, says Mike Sena, a certified financial planner at <a href="http://www.whitestreetadvisors.com/">White Street Advisors</a> in Roswell, GA. It can be tempting to splurge a little &mdash; or a lot. Instead, seek advice on how best to use your windfall now &mdash; and for years to come.</p> <h2>4. Death in the Family</h2> <p>The death of a close relative can be a key time to get financial help. You could face tax implications or need help with estate planning, for example.</p> <p>Roberge had a client who didn't seek his advice after her father died with a $600,000 annuity she inherited, and she took some money out of the annuity. She ended up having to pay a $40,000 tax bill, which Roberge says he could have helped her avoid.</p> <h2>5. Passing on a Family Business</h2> <p>Your parents and grandparents may want you to continue running the family business when they die, but you may not. This is a conversation that a financial advisor can help with early, says <a href="http://charleskochel.com/">Charles Kochel</a>, a wealth advisor for a fee-only Registered Investment Advisor in Arkansas. Kochel specializes in helping farmers transfer the family farm from one generation to the next.</p> <p>&quot;A major concern of a large family farm is legacy planning,&quot; he says. &quot;The issue is usually lack of communication. Multigenerational farmers assume the next generation will want to come back home, after college, and manage the farm or the assumption is that farming may prove too costly.</p> <p>&quot;A series of conversations needs to take place, often emotional and uncomfortable,&quot; Kochel says. &quot;A family meeting and ongoing proactive conversations help monitor the wants and needs of the entire legacy.&quot;</p> <p>The family will likely evolve over the years, and a financial advisor can help systemize the process and create an ongoing conversation that will move the estate planning beyond a one-time event.</p> <h2>6. Big Drop in the Stock Market</h2> <p>If your portfolio includes stocks, a financial advisor can help you come up with a financial plan, and stick to it.</p> <p>&quot;Most people think they can handle their own investments, but when the stock market drops, they start second-guessing their plan,&quot; says Tyler Gray, a financial planner at <a href="http://www.sageoakfinancial.com/">Sage Oak Financial</a> in Tulsa, OK.</p> <p>In 2008-09, for example, &quot;you had a lot of people who pulled out of the market at the worst possible time because they didn't have an advisor to help them stay disciplined,&quot; Gray says. &quot;The worst part is that many of these folks never got back in the market and have missed out on a lot of growth over the last five years.&quot;</p> <h2>7. Growing Family</h2> <p>Whether you're getting married or having children, it's best to have a financial conversation ahead of time, Sena suggests. New couples merging finances or planning for a baby and all of the costs that go into raising a child should have a financial plan.</p> <p>&quot;In general, anyone who is not meeting or exceeding their life and financial goals should work with an advisor,&quot; White says. &quot;Most of us are simply too close to our money to be objective.&quot;</p> <p>For better or worse, major life events can cause people to rethink their lives and plan for the future. Planning for a financial future should be part of many major events in life.</p> <p><em>Have you ever sought advice from a financial planner? What prompted you? Was the advice worthwhile and helpful? Please share in comments!</em></p> <a href="http://www.wisebread.com/7-occasions-when-you-should-definitely-hire-a-financial-advisor" class="sharethis-link" title="7 Occasions When You Should Definitely Hire a Financial Advisor" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/aaron-crowe">Aaron Crowe</a> of <a href="http://www.wisebread.com/7-occasions-when-you-should-definitely-hire-a-financial-advisor">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-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/intimidated-by-retirement-investing-get-professional-help">Intimidated by Retirement Investing? Get Professional Help!</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/is-this-hidden-cost-sapping-your-retirement-savings">Is This Hidden Cost Sapping Your Retirement Savings?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-inspiring-people-who-each-paid-off-over-100000-in-debt">5 Inspiring People Who Each Paid Off Over $100,000 in Debt</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-one-third-of-americans-havent-saved-for-retirement">Why One-Third of Americans Haven&#039;t Saved for 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/the-false-allure-of-compound-interest">The False Allure of Compound Interest</a></span> </div> </li> </ul> </div> </div> </div> </div> Debt Management Investment Retirement debt financial planner financial planning investing retirement Mon, 03 Nov 2014 13:00:04 +0000 Aaron Crowe 1248279 at http://www.wisebread.com 7 Ways to Keep Your Retirement Funds From Disappearing http://www.wisebread.com/7-ways-to-keep-your-retirement-funds-from-disappearing <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-ways-to-keep-your-retirement-funds-from-disappearing" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/mature-couple-finances-488124131-small.jpg" alt="mature couple finances" title="mature couple finances" class="imagecache imagecache-250w" width="250" height="124" /></a> </div> </div> </div> <p>More than one-third of Americans have <a href="http://www.cbsnews.com/news/shocking-number-of-americans-have-no-retirement-savings/">no retirement savings</a>.</p> <p>This shocking figure should provide a wake up call and set you on your course to better prepare for retirement. Even if you haven't started yet, it's never too late. (See also: <a href="http://www.wisebread.com/this-is-the-basic-intro-to-having-a-retirement-fund-that-everyone-needs-to-read?ref=seealso">This Is the Basic Intro to Having a Retirement Fund That Everyone Needs to Read</a>).</p> <p>No matter the size of your retirement account, here are seven effective strategies to help you keep your retirement account from disappearing.</p> <h2>1. Borrow as Little as Possible From a Retirement Fund</h2> <p>Sometimes finding good financing options can be difficult. That's when you may start eyeing your 401(k) for a loan. While you may think that it is easy to pay those funds back, statistics show that's not the case. Every year Americans default on about <a href="http://money.cnn.com/2012/07/17/retirement/401k-loan-defaults/">$37 billion in 401(k) loans</a>.</p> <p>If you are unable to pay back your 401(k) loan within five years, you're hit with a double whammy:</p> <ul> <li>The unpaid balance becomes an early withdrawal from your 401(k), receives a 10% early distribution tax penalty from the IRS, and becomes taxable income as well.<br /> &nbsp;</li> <li>You cannot make up for those contributions to your retirement account. Every year you have a contribution limit, and if you don't use it, you lose it!</li> </ul> <p>There are very, very few instances in which you should borrow from your retirement fund. One of those few instances is when you need a down payment for a home purchase. (See also: <a href="http://www.wisebread.com/this-is-when-you-should-borrow-from-your-retirement-account?ref=seealso">This Is When You Should Borrow From Your Retirement Account</a>)</p> <h2>2. Set Up an Emergency Fund</h2> <p>26% of Americans have <a href="http://blogs.wsj.com/numbers/one-in-four-americans-has-no-emergency-savings-1467/">no emergency savings</a>.</p> <p>This is a major reason retirement disappears. You need to plan ahead and have enough saved up to cover your income for at least six months. In 2014, only 40% of Americans are able to save enough to cover at least three months. Don't become part of that statistic and start saving today towards a rainy day.</p> <p>Having an emergency fund does away with the need to tap your retirement accounts. Your nest egg should be your very last resort for money before retirement. However, don't just stop with maintaining an emergency fund: Create a detailed plan of action for when disaster strikes. (See also: <a href="http://www.wisebread.com/emergency-plan-better-than-an-emergency-fund?ref=seealso">Emergency Plan: Better Than an Emergency Fund</a>)</p> <h2>3. Avoid Early Withdrawal Penalties</h2> <p>In 2010, penalized 401(k) withdrawals hit a <a href="http://business.time.com/2013/01/23/cash-leaking-out-of-401k-plans-at-alarming-rate/">record high of almost $60 billion</a>. Taking early withdrawals (also known as distributions) puts a heavy toll on your nest egg. Not only are you responsible for the applicable income taxes, but also you have to pay the 10% additional early distribution tax.</p> <p>Fortunately, the IRS does provide some <a href="http://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/Retirement-Topics&mdash;-Tax-on-Early-Distributions">exceptions to the 10% additional tax on early distributions</a>. For example, you can withdraw early without penalty:</p> <ul> <li>From eligible IRA, SEP, Simple IRA, and SARSEP plans for qualifying higher education expenses for your spouse or immediate family members;<br /> &nbsp;</li> <li>From eligible retirement plans, including 401(k) plans, for unreimbursed medical expenses exceeding 10% of your income; and<br /> &nbsp;</li> <li>Up to $10,000 from eligible traditional IRA plans for <a href="http://money.usnews.com/money/blogs/my-money/2013/10/28/using-your-ira-for-a-downpayment">first-time home purchases or substantial home improvements</a>.</li> </ul> <p>While there exceptions to the 10% additional tax, there are no exceptions to applicable income taxes, including capital gains. Consult your financial advisor before attempting any early withdrawals from your retirement accounts.</p> <h2>4. Minimize Management Fees</h2> <p>Talking about retirement plan managers, you need to check how much you are paying in plan management fees. According to an <a href="http://assets.aarp.org/rgcenter/econ/401k-fees-awareness-11.pdf">AARP study on 401(k) participants</a>, about three in five Americans are unaware of how much they are paying in fees for their retirement accounts, and almost one in three is unsure of the impact of fees in their retirement savings.</p> <p>A good rule of thumb is that your total expense ratio should be no more than 1%. For example, if you have $30,000 in retirement savings, your total management expense should be no more than $300. If you're getting charged more than that, it is time to dump that plan and look for more reasonable alternatives.</p> <p>If you have several retirement accounts from previous employers, evaluate if it makes sense to roll over all those balances into your retirement account with the smallest management fees. Before initiating the rollover, review all applicable fees and eligibility rules.</p> <h2>5. Stop Playing the Market</h2> <p>When you hear about &quot;a hot stock tip,&quot; you should walk away. Like Benjamin Franklin said, the only sure things in life are death and taxes. Nearly half of 401(k) plan owners don't know what their <a href="http://money.msn.com/investing/why-workers-are-botching-their-401k-investments">best investment options</a> are.</p> <p>There are several problems with playing the market on your own.</p> <ul> <li>Most retirement plans charge fees for every transaction that you make. Remember that you want to <em>minimize </em>fees.<br /> &nbsp;</li> <li>Trying to juggle your day job and the stock market may cause a lot of unneeded stress.<br /> &nbsp;</li> <li>The average actively managed mutual fund returns <a href="http://www.fool.com/School/MutualFunds/Performance/Record.htm">approximately 2% less per year than the stock market</a>. And these are the pros that do it for a living!</li> </ul> <p>Keep in mind at all times that getting to your retirement goal isn't a sprint; it's a marathon.</p> <h2>6. Participate in Employer-Sponsored Plans</h2> <p>If you have the option of signing up for an employer-sponsored retirement program, do it. Nine in 10 Americans participating in <a href="http://www.ebri.org/publications/ib/index.cfm?fa=ibDisp&amp;content_id=5362">employer-sponsored retirement plans</a> actually save for retirement. Trying to save on your own is much harder and requires a lot of self-discipline. This is why only two in 10 Americans are able to have a nest egg without an employer-sponsored plan.</p> <p>There are two additional benefits to participating in employer-sponsored plans. First, some of them match your contributions. The <a href="http://www.americanbenefitscouncil.org/documents2013/401k_stats.pdf">average employer match is 4.5% of pay</a> to a retirement account. Don't leave free money on the table. Second, <a href="http://www.shrm.org/research/surveyfindings/articles/documents/13-0245%202013_empbenefits_fnl.pdf">more than half of companies offer some type of investment advice</a>. This is valuable and free information to make more informed decisions about your retirement strategy.</p> <h2>7. Consider Annuities</h2> <p>Why?</p> <ul> <li>Some types of annuities guarantee a steady stream of income.<br /> &nbsp;</li> <li>Like retirement plans, annuities allow you to defer taxes until retirement.<br /> &nbsp;</li> <li>Unlike retirement plans, annuities have no contribution limits.<br /> &nbsp;</li> <li>Some annuities offer upside income potential, while guaranteeing your original investment or a minimum return on your investment to your beneficiaries in case of your death.<br /> &nbsp;</li> <li>Annuities allow older individuals to make additional catchup contributions.</li> </ul> <p>There are different types of annuities, so make sure to review and understand the applicable rules, such as required initial investments and applicable fees. Talk with your financial advisor about whether or not annuities make sense with your retirement planning strategy. (See also: <a href="http://www.wisebread.com/dont-know-what-annuities-are-you-might-be-missing-out?ref=seealso">Don't Know What Annuities Are? You Might Be Missing Out</a>)</p> <p><em>What are other useful strategies to avoid a disappearing retirement? Please share in comments below!</em></p> <a href="http://www.wisebread.com/7-ways-to-keep-your-retirement-funds-from-disappearing" class="sharethis-link" title="7 Ways to Keep Your Retirement Funds From Disappearing" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/damian-davila">Damian Davila</a> of <a href="http://www.wisebread.com/7-ways-to-keep-your-retirement-funds-from-disappearing">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-6"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-ways-to-boost-your-401k-returns">4 Ways to Boost Your 401(k) Returns</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/this-is-why-you-cant-postpone-planning-for-your-retirement-and-how-to-start">This Is Why You Can&#039;t Postpone Planning for Your Retirement (And How to Start)</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/book-review-cash-rich-retirement">Book review: Cash-Rich Retirement</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/choosing-a-retirement-account-whats-available-and-what-s-best-for-you">Choosing a Retirement Account: What&#039;s Available, and What’s Best for You?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/this-one-thing-will-get-you-to-1-million-tax-free">This One Thing Will Get You to $1 Million (Tax-Free!)</a></span> </div> </li> </ul> </div> </div> </div> </div> Retirement 401(k) annuity investing retirement planning Mon, 20 Oct 2014 13:00:06 +0000 Damian Davila 1237800 at http://www.wisebread.com 6 Thoughts Everyone Has Their First Day of Retirement http://www.wisebread.com/6-thoughts-everyone-has-their-first-day-of-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-thoughts-everyone-has-their-first-day-of-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/retirement-thinking-177547670-small.jpg" alt="man thinking" title="man thinking" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>It's a major milestone in anyone's life: retirement. You spend so many hours dreaming about just what you'll do with the time, that when it happens, you often aren't prepared for the reality of it. Retirement isn't always the answer to the unfulfilled life that many expect it to be, however, and some even struggle with the new way of life. (See also: <a href="http://www.wisebread.com/12-things-you-didnt-know-about-retirement?ref=seealso">12 Things You Don't Know About Retirement</a>)</p> <p>Getting a handle on the new feelings can take time. Here are a few of the initial reactions to the new season, along with some tips for keeping everything in perspective.</p> <h2>1. What Will I Do With All the Time?</h2> <p>Going from a full-time career to no job at all can be a jarring experience, one that can even feel like a loss to some. In addition, &quot;Many new retirees are concerned about how they will fill up their new found free time after retiring,&quot; says Hank Coleman, publisher of the popular site, <a href="http://moneyqanda.com/">Money Q&amp;A</a>. &quot;It can be beneficial for new retirees to take retirement for a test drive. You may want to consider a mini-retirement for a few months before you take the plunge full-time. Maybe you have a hobby or a side business that you want to pursue. Use some of your vacation days before retiring to try out what you'll be doing when you finally cut the work cord for good.&quot;</p> <h2>2. How Can I Stay On Track With My Nest Egg?</h2> <p>Outliving your retirement savings is a legitimate concern for many, and it's one that shouldn't be overlooked. Even if you've done the math and are confident that you can make your savings last, it's best to continue using a budget and assess your progress at least every six months. Check in with your accounts at the end of each year, and see how tax changes, new Medicare laws, or other legislation could positively or negatively affect your monthly living expenses. Make adjustments as needed.</p> <h2>3. Should I Stay or Should I Go?</h2> <p>If your retirement plans included getting away, or possibly even moving, it may be tempting to do so right away. Like any expensive or life-changing decision, however, it's always good to go into it informed. And while plenty of websites are always stating their opinions on the top locations to retire, the logistics of uprooting your home in your retirement years can be stressful. Things to consider &mdash; in addition to cost of living or climate &mdash; should include proximity to the family that may care for you in your older years. (See also: <a href="http://www.wisebread.com/5-incredible-places-to-retire-abroad-that-anyone-can-afford?ref=seealso">5 Incredible Places to Retire Abroad That Anyone Can Afford</a>)</p> <h2>4. Who Am I Now?</h2> <p>If you took pride in your career, or simply identified with your occupation for so long that you don't have a world outside of it, it may be tempting to consider yourself as &quot;just a retiree.&quot; It's not necessary to consider yourself so closely tied to your profession &mdash; or lack of. Start to take inventory of your gifts, skills, and character traits outside of your 9-to-5; you may be surprised to find that you can have an identity built on the kind of person you are, despite having just considered yourself the sum of our working years.</p> <h2>5. How Will This Affect My Relationships?</h2> <p>&quot;When a man retires, his wife gets twice the husband but only half the income.&quot; &mdash; Chi Chi Rodriguez&quot;</p> <p>This vintage joke never gets old, and it couldn't be truer. One of the toughest adjustments to retirement happens when couples find they instantly have more hours in their day to spend together. For the entrepreneur or couple who works with their significant other already, it's not as dramatic as the office worker who now gets to see their partner for an additional 50 or 60 hours a week. Don't feel that you have to spend it all together, however; many couples find that having separate hobbies well into their retirement is the key to a happy rest of their lives together.</p> <h2>6. Is This It?</h2> <p>Retirement should be celebrated, but for many, it also gets them thinking about death. The final years of life &mdash; whether they be just a few, or more than 30 &mdash; can be met with anxiety and uncertainty. (See also: <a href="http://www.wisebread.com/dont-let-poor-health-kill-your-retirement-fund?ref=seealso">Don't Let Poor Health Kill Your Retirement Fund</a>)</p> <p>One way to combat the tensions and worry that some new retirees face is to made a proactive plan toward preventative health care and finding hobbies that can prolong life. Activities around exercise, healthy foods, or relieving stress can be enjoyable well into old age, and they are just the sort of things that can help make the later years vibrant, too. Look for other retirees to share these experiences with; signing up for a seniors cooking class, for example, can give life skills for meeting upcoming health challenges and can introduce you to new faces to spend those work-free days with.</p> <p><em>Are you retired? What did you think on your first days of retirement?</em></p> <a href="http://www.wisebread.com/6-thoughts-everyone-has-their-first-day-of-retirement" class="sharethis-link" title="6 Thoughts Everyone Has Their First Day of Retirement" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/linsey-knerl">Linsey Knerl</a> of <a href="http://www.wisebread.com/6-thoughts-everyone-has-their-first-day-of-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/the-five-types-of-people-who-never-retire-are-you-one-of-them">The Five Types of People Who Never Retire (Are You One of Them?)</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-to-avoid-running-out-of-money-in-retirement">6 Ways to Avoid Running Out of Money in 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/4-ways-to-boost-your-401k-returns">4 Ways to Boost Your 401(k) Returns</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-ways-to-keep-your-retirement-funds-from-disappearing">7 Ways to Keep Your Retirement Funds From Disappearing</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-essential-truths-for-a-successful-retirement">7 Essential Truths for a Successful Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div> Retirement retirement planning retiring where to retire Wed, 08 Oct 2014 13:00:04 +0000 Linsey Knerl 1227988 at http://www.wisebread.com Best Money Tips: Top 10 Retirement Planning Mistakes http://www.wisebread.com/best-money-tips-top-10-retirement-planning-mistakes <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-money-tips-top-10-retirement-planning-mistakes" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/retirement-planning-stress-176759357-small.jpg" alt="retirement planning stress" title="retirement planning stress" 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 some stellar articles on retirement planning mistakes, money rules that nobody will ever teach you, and budgeting on a variable income.</p> <h2>Top 5 Articles</h2> <p><a href="http://christianpf.com/retirement-planning-mistakes/">Top 10 Retirement Planning Mistakes &mdash; Are You Making Any of Them?</a> &mdash; Are you making the retirement planning mistake of not saving enough? What about waiting too long to start saving? [Christian PF]</p> <p><a href="http://studenomics.com/personal-finance/secret-money-rules/">The Secret Money Rules That Nobody Will Ever Teach You</a> &mdash; Chances are, no one will teach you that you should always live within your means. [Studenomics]</p> <p><a href="http://kylieofiu.com/2014/09/budgeting-on-a-variable-income/">Budgeting on a Variable Income</a> &mdash; It is vital to gather all your bills and track your spending when you budget on a variable income. [Kylie Ofiu]</p> <p><a href="http://www.mightybargainhunter.com/one-person-responsible-financial-decisions/">The One Person Responsible for Your Financial Decisions</a> &mdash; Remember that financial advice, no matter how reasonable, is not one size fits all. [Mighty Bargain Hunter]</p> <p><a href="http://citi.us/1p0oTpk">6 Ways to Keep Your Top-Performing Millennials on Board</a> &mdash; Creating opportunities for international travel can help companies keep millennials on board. [Women &amp; Co]</p> <h2>Other Essential Reading</h2> <p><a href="http://www.narrowbridge.net/get-off-the-grid/">How to Get Off the Grid</a> &mdash; To get off the grid, consider trying to grow your own food. [NarrowBridge Finance]</p> <p><a href="http://dontmesswithtaxes.typepad.com/dont_mess_with_taxes/2014/09/old-age-toll-physical-emotional-financial.html">Getting Old Sucks. We Can't Stop Father Time, But We Can Prepare Physically, Emotionally and Financially</a> &mdash; Are you taking advantage of how the tax code can help you in retirement? [Don't Mess With Taxes]</p> <p><a href="http://sweatingthebigstuff.com/ways-reduce-financial-stress/">4 Ways to Reduce Financial Stress</a> &mdash; If you want to reduce financial stress, create a budget and earn more money. [Sweating the Big Stuff]</p> <p><a href="http://www.popsugar.com/smart-living/Magic-Eraser-Uses-35760193">37 Creative Uses for Your Magic Eraser</a> &mdash; Use your magic eraser to remove stains on dishes and clean the inside of your oven. [PopSugar Smart Living]</p> <p><a href="http://parentingsquad.com/20-mostly-free-ways-to-enjoy-fall-with-your-family">20 Mostly Free Ways to Enjoy Fall With Your Family</a> &mdash; Enjoy fall with your family without breaking the bank by making hot apple cider and visiting a local farm. [Parenting Squad]</p> <a href="http://www.wisebread.com/best-money-tips-top-10-retirement-planning-mistakes" class="sharethis-link" title="Best Money Tips: Top 10 Retirement Planning Mistakes" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/ashley-jacobs">Ashley Jacobs</a> of <a href="http://www.wisebread.com/best-money-tips-top-10-retirement-planning-mistakes">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/10-unexpected-things-you-should-consider-when-picking-where-you-retire">10 Unexpected Things You Should Consider When Picking Where You Retire</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-balance-saving-for-retirement-emergency-fund-and-paying-off-debt">How to Balance Saving for Retirement, Emergency Fund, and Paying Off Debt</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/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-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-occasions-when-you-should-definitely-hire-a-financial-advisor">7 Occasions When You Should Definitely Hire a Financial Advisor</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-one-third-of-americans-havent-saved-for-retirement">Why One-Third of Americans Haven&#039;t Saved for Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div> Retirement best money tips Mistakes retirement Wed, 24 Sep 2014 19:00:05 +0000 Ashley Jacobs 1219314 at http://www.wisebread.com Why One-Third of Americans Haven't Saved for Retirement http://www.wisebread.com/why-one-third-of-americans-havent-saved-for-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/why-one-third-of-americans-havent-saved-for-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/old-man-frustrated-bills-179813059-small.jpg" alt="old man frustrated" title="old man frustrated" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>More than a third of <a href="http://www.bankrate.com/finance/consumer-index/survey-36-percent-not-saving-for-retirement.aspx">Americans haven't started saving for retirement</a>, according to a recent report by Bankrate.com. Interestingly, it's not just young workers who aren't banking their bucks. The survey found that more than a quarter of those aged 50 &ndash; 64 haven't started saving for retirement, either. (See also: <a href="http://www.wisebread.com/10-easy-ways-to-supercharge-your-retirement?ref=seealso">10 Easy Ways to Supercharge Your Retirement</a>)</p> <p>While it's true that the current generation of retirees and pre-retirees are more likely to have a pension plan to cushion their financial burden, the Bankrate.com results point to a staggering conclusion. A large number of Americans &mdash; regardless of age &mdash; are unprepared to take financial responsibility for retirement. So, what's holding us back?</p> <h2>1. We're Living Paycheck to Paycheck</h2> <p>One-third of American households <a href="http://www.brookings.edu/about/projects/bpea/papers/2014/wealthy-hand-to-mouth">live paycheck to paycheck</a>. Of those families, 66% are middle class and have a median income of $41,000.</p> <p>It's difficult to save for retirement when disposable income is limited, but if you manage to do it, most employers offer a match on your 401(k) contributions. An employer match can add a substantial boost to your retirement account balance. (See also: <a href="http://www.wisebread.com/trick-yourself-into-saving-more-of-your-biweekly-paychecks?ref=seealso">Trick Yourself into Saving More of Your Biweekly Paychecks</a>)</p> <h2>2. We Procrastinate</h2> <p>It's tempting to put big decisions off and wait for the next big raise, until the next bill is paid off, or until the kids are through college. The problem, <a href="https://time.com/money/3265108/retirement-savings-crisis-solution/">as defined by one financial journalist</a>, is that savings levels aren't all that different between new workers and those already retired.</p> <p>Putting an end to procrastination can have a monumental effect on your end balance. According to recent research from the Employee Benefit Research Institute, 401(k) participants who consistently contributed to their accounts over the five years ending in 2012<a href="http://www.ebri.org/pdf/PR1089.Longit.31July14.pdf"> saw a healthy 6.8% average annual uptick</a> in their collective balances, even despite a 34.7% drop during the financial crisis of 2008.</p> <p>Further, the earlier you start, the easier it is to build substantial savings. In his analysis of the Bankrate.com poll results, Greg McBride, CFA and Bankrate's chief financial analyst says, &quot;the power of compounding is most evident over long periods of time, and having a longer period of time for your retirement savings to grow and compound makes today's contributions much more impactful.&quot; (See also: <a href="http://www.wisebread.com/this-is-why-you-cant-postpone-planning-for-your-retirement-and-how-to-start?ref=seealso">This is Why You Can't Postpone Planning for Your Retirement</a>)</p> <h2>3. We Don't Have a Retirement Plan at Work</h2> <p>Even if you don't have access to an employer-sponsored retirement savings option, don't let that keep you from having a plan of your own. According to the Employee Benefit Research Institute study noted above, those with a plan are 72% likely to feel very or somewhat confident about their prospects for retirement. Those without a plan, meanwhile, are 69% more likely to feel not at all or not too confident about retirement.</p> <p><a href="http://money.cnn.com/2014/04/01/pf/expert/retirement-savings/">Those without a plan</a> can benefit from several plans such as the traditional IRA, Roth IRA, MyRA, or a traditional brokerage account.</p> <h2>4. We're in Denial</h2> <p>Some workers assume they can maintain their current workload for the remainder of their lives and so choose to forego or limit retirement savings. While later-life retirements are increasing in frequency, the assumption that one can work until death doesn't account for uncontrollable factors like an unexpected job loss or medical issue.</p> <p>Even among those who are saving, many are not saving enough. In <a href="http://www.cnbc.com/id/101480388%23">a recent article</a>, one finance giant CEO tagged the average retirement contribution level at 6% while suggesting that 10% would be better. (See also: <a href="http://www.wisebread.com/6-harmful-money-beliefs-that-are-keeping-you-poor?ref=seealso">6 Harmful Money Beliefs That Are Keeping You Poor</a>)</p> <p>Low or nonexistent contribution levels indicate that many workers aren't taking the time to figure out just <a href="http://www.wisebread.com/how-much-money-will-you-need-to-retire">how much they'll need in retirement</a>. Being aware of your end goal number is the first step to getting financially prepared for retirement &mdash; at every age.</p> <p><em>Are you among the one-third of Americans who haven't saved for retirement?</em></p> <a href="http://www.wisebread.com/why-one-third-of-americans-havent-saved-for-retirement" class="sharethis-link" title="Why One-Third of Americans Haven&#039;t Saved for Retirement" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/alaina-tweddale">Alaina Tweddale</a> of <a href="http://www.wisebread.com/why-one-third-of-americans-havent-saved-for-retirement">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-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/this-is-why-you-cant-postpone-planning-for-your-retirement-and-how-to-start">This Is Why You Can&#039;t Postpone Planning for Your Retirement (And How to Start)</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-occasions-when-you-should-definitely-hire-a-financial-advisor">7 Occasions When You Should Definitely Hire a Financial Advisor</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/boost-your-retirement-savings-fast-with-this-6-step-plan">Boost Your Retirement Savings Fast With This 6-Step Plan</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/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-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-tax-moves-you-need-to-make-right-now">6 Tax Moves You Need to Make Right Now</a></span> </div> </li> </ul> </div> </div> </div> </div> Debt Management Retirement 401(k) retirement saving Tue, 23 Sep 2014 13:00:06 +0000 Alaina Tweddale 1218886 at http://www.wisebread.com 10 Unexpected Things You Should Consider When Picking Where You Retire http://www.wisebread.com/10-unexpected-things-you-should-consider-when-picking-where-you-retire <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/10-unexpected-things-you-should-consider-when-picking-where-you-retire" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/senior-couple-touring-166160155-small.jpg" alt="senior couple touring" title="senior couple touring" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Retirement often brings about relocation &mdash; possibly to a warmer area, a place with better health care, a quieter community, or just wherever Sal and Judy ended up. What a nice couple!</p> <p>Retirees often focus on things like hospitals, access to national parks, closeness to family, or an established community of senior citizens &mdash; and rightly so. Yet, while these factors will play a major part in the quality of a retiree's life, they aren't the only ones that should be considered.</p> <p>What about other factors that we don't immediately associate with where we're going to retire? Are we being too minimal when we consider the &quot;ideal&quot; location? Perhaps there should be a more comprehensive list of considerations when it comes time to choose the ideal retirement spot. (See also: <a href="http://www.wisebread.com/5-incredible-places-to-retire-abroad-that-anyone-can-afford?ref=seealso">5 Incredible Places to Retire Abroad That Anyone Can Afford</a>)</p> <p>In essence, your retirement location should consider need, but it should also consider preferences and personality. What do you enjoy doing and what kind of atmosphere do you feel the most relaxed in?</p> <p>Here are a few things that if given some forethought, might impact where you decide to settle.</p> <h2>1. Tax Friendliness for Retirees</h2> <p>Tax policies for retirees (and in general) differ from state to state, so if you're on the fence about which part of the country you want to live in, this might be enough to tip you one way or the other. For example, <a href="http://www.kiplinger.com/slideshow/retirement/T006-S001-10-most-tax-friendly-states-for-retirees/">Florida and Alaska</a> have no state income tax, inheritance tax, or estate tax. There are also some helpful exemptions for retirees depending on the state.</p> <h2>2. Airport Proximity</h2> <p>If you plan to do a lot of traveling, consider the proximity of where you live to a larger airport. You can view all of the United State's airport locations on the <a href="http://www.ncdot.gov/travel/airports/">NCDOT website</a>.</p> <h2>3. Access to the Big City</h2> <p>Most retirees prefer to have some separation from big city life. If you do plan to live in a more quiet and rural area, consider how often you might want to visit a bigger city for entertainment, shopping, and just getting out. If you think you'll make that drive frequently, look for the <a href="http://www.wisebread.com/10-of-americas-awesomest-cheap-cities">best rural spots</a> that give you easy driving access to a bigger city.</p> <h2>4. The Restaurant Scene</h2> <p>An active and diverse restaurant scene can really improve your retirement experience, giving you a variety of places to eat and plenty of excuses to have a night out. You'll need to do some local research to find the more unique places. The <a href="https://itunes.apple.com/us/app/restaurant-finder/id324540243?mt=8">Restaurant Finder app</a> will allow you to search areas ahead of time.</p> <h2>5. The &quot;Tourism Factor&quot;</h2> <p>A lot of places that are retiree friendly (take <a href="http://www.thevillages.com/">The Villages</a> in Florida for example) are also active tourist destinations. While some people are attracted to that atmosphere, others prefer to avoid it.</p> <h2>6. Projected Town Growth</h2> <p>Small towns can grow quickly these days as communities that were once little more than a road and woods have become busy streets lined with businesses. If this is something you want to avoid, it can be tough to predict, though targeting more rural areas that are a sizeable distance from bigger cities is a good way to start. You can also do some research on sites like Forbes to get a feel for projected <a href="http://www.forbes.com/sites/joelkotkin/2013/09/04/a-map-of-americas-future-where-growth-will-be-over-the-next-decade/">population growth and development</a> over the next few years.</p> <h2>7. Agriculture</h2> <p>Farmer's markets and access to fresh food are good for your health and offer a small town sense of community. Some places are known for their agricultural prowess, so perhaps they should be on your short list.</p> <h2>8. Traffic</h2> <p>You've spent your entire life dealing with an awful commute, so do you really want it to continue when you retire? The best way to know for sure is by visiting a place during the busy driving times (Friday night, Saturday, holiday weekends), and by simple word of mouth.</p> <h2>9. Weather</h2> <p>With extra time to get out and do some sightseeing you wouldn't want those activities being constantly hampered by extreme temperatures or bad weather. Consider places with more yearly warm weather or a more moderate climate.</p> <h2>10. Availability of Part-Time Work</h2> <p>An increasing number of retirees are opting to continue working in a part time job. This is often to continue in a profession, put in the time, or to supplement retirement savings. Whatever your reasoning, if you plan to work part time it may have a big impact on where you retire.</p> <h2>A Comprehensive Approach</h2> <p>It's important to take your time when you're choosing a retirement location and to be sure you've got a list of considerations that encompasses everything that's going to impact your lifestyle as a retiree; In other words, a comprehensive approach.</p> <p>Family, health and finances are certainly the core issues, but don't dismiss your own preferences and what your day-to-day life is going to look like. Those things will matter, so take the time to get them right.</p> <p><em>Did you retire to a different area? What factors played a role in the decision-making process? If you're currently weighing your options, what factors are you considering? Let me know in the comments below.</em></p> <a href="http://www.wisebread.com/10-unexpected-things-you-should-consider-when-picking-where-you-retire" class="sharethis-link" title="10 Unexpected Things You Should Consider When Picking Where You Retire" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/10-unexpected-things-you-should-consider-when-picking-where-you-retire">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-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/if-you-want-your-401k-to-grow-stop-doing-these-6-things">If You Want Your 401K to Grow, Stop Doing These 6 Things</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-tax-moves-you-need-to-make-right-now">6 Tax Moves You Need to Make Right Now</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-balance-saving-for-retirement-emergency-fund-and-paying-off-debt">How to Balance Saving for Retirement, Emergency Fund, and Paying Off Debt</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-incredible-places-to-retire-abroad-that-anyone-can-afford">5 Incredible Places to Retire Abroad That Anyone Can Afford</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-occasions-when-you-should-definitely-hire-a-financial-advisor">7 Occasions When You Should Definitely Hire a Financial Advisor</a></span> </div> </li> </ul> </div> </div> </div> </div> Retirement city life retirement retirement community taxes Fri, 25 Jul 2014 13:00:02 +0000 Mikey Rox 1167640 at http://www.wisebread.com Best Money Tips: The Retirement Edition http://www.wisebread.com/best-money-tips-the-retirement-edition-0 <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-money-tips-the-retirement-edition-0" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/retirement-savings-183436662-small.jpg" alt="retirement" title="retirement" class="imagecache imagecache-250w" width="250" height="143" /></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 some of the best articles from around the web on retirement!</p> <h2>Top 5 Articles</h2> <p><a href="http://www.getrichslowly.org/blog/2013/05/15/all-you-need-to-know-about-saving-for-retirement/">All You Need to Know About Saving for Retirement</a> &mdash; When you start saving for retirement, try to save 10%-15% of your income. [Get Rich Slowly]</p> <p><a href="http://lenpenzo.com/blog/id22963-5-ways-to-avoid-outspending-your-income-in-retirement.html">5 Ways to Avoid Outspending Your Income in Retirement</a> &mdash; Planning for longevity can help you avoid outspending your income in retirement. [Len Penzo dot Com]</p> <p><a href="http://www.creditsesame.com/blog/tips-for-maximizing-your-retirement-savings/">4 Quick Tips for Maximizing Your Retirement Savings</a> &mdash; To maximize your retirement savings, minimize your account fees. [Credit Sesame]</p> <p><a href="http://www.bargaineering.com/articles/starting-a-retirement-account-when-you-get-your-first-job.html">5 Tips for Starting a Retirement Account When You Get Your First Job</a> &mdash; If you just landed your first job, make it a point to try to max out your company match. [Bargaineering]</p> <p><a href="http://www.kiplinger.com/article/retirement/T037-C000-S002-work-longer-and-prosper.html">Work Longer and Prosper</a> &mdash; Sometimes working longer can mean the difference between a comfortable retirement and one where you are forced to skimp. [Kiplinger]</p> <h2>Other Essential Reading</h2> <p><a href="http://www.moneytalksnews.com/2014/05/07/retiring-soon-dont-make-these-8-mistakes/">Retiring Soon? Don't Make These 8 Mistakes</a> &mdash; If you are retiring soon, don't underestimate your costs or celebrate with a big purchase. [Money Talks News]</p> <p><a href="http://www.fivecentnickel.com/2014/05/12/retirement-saving-size-isnt-the-only-consideration/">Retirement Saving: Size Isn't the Only Consideration</a> &mdash; When thinking about retirement savings, consider where you live and social security projections. [Five Cent Nickel]</p> <p><a href="http://www.goodfinancialcents.com/average-retirement-savings-how-does-your-savings-stack-up/">Average Retirement Savings by Age &mdash; How Does Your Savings Stack Up?</a> &mdash; To get your retirement savings above average, open an individual retirement account. [Good Financial Cents]</p> <p><a href="http://www.savvysugar.com/How-Much-Do-I-Need-Save-Retirement-15193125">What's Your Number? Retirement Number, That Is</a> &mdash; One of the most popular ways to figure out how much you need to save for retirement is to set a savings goal of 11 times your working salary. [PopSugar Smart Living]</p> <p><a href="http://parentingsquad.com/should-parents-invest-in-roth-iras">Should Parents Invest in Roth IRAs?</a> &mdash; Money invested in a Roth IRA grows tax-free, but is taxed upfront. [Parenting Squad]</p> <a href="http://www.wisebread.com/best-money-tips-the-retirement-edition-0" class="sharethis-link" title="Best Money Tips: The Retirement Edition" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/ashley-jacobs">Ashley Jacobs</a> of <a href="http://www.wisebread.com/best-money-tips-the-retirement-edition-0">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/10-unexpected-things-you-should-consider-when-picking-where-you-retire">10 Unexpected Things You Should Consider When Picking Where You Retire</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-balance-saving-for-retirement-emergency-fund-and-paying-off-debt">How to Balance Saving for Retirement, Emergency Fund, and Paying Off Debt</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/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-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-occasions-when-you-should-definitely-hire-a-financial-advisor">7 Occasions When You Should Definitely Hire a Financial Advisor</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-one-third-of-americans-havent-saved-for-retirement">Why One-Third of Americans Haven&#039;t Saved for Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div> Retirement best money tips retirement Mon, 14 Jul 2014 19:00:04 +0000 Ashley Jacobs 1146778 at http://www.wisebread.com This One Thing Will Get You to $1 Million (Tax-Free!) http://www.wisebread.com/this-one-thing-will-get-you-to-1-million-tax-free <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/this-one-thing-will-get-you-to-1-million-tax-free" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/retirement-savings-163904331-small.jpg" alt="retirement savings" title="retirement savings" class="imagecache imagecache-250w" width="250" height="146" /></a> </div> </div> </div> <p>We're surrounded by financial advice, often in the form of lists containing 10 (or 25! or 50!) things you can do to help solve a particular problem. While much of this information is useful, it can also be overwhelming. Where do you begin? On what things should you focus your efforts?</p> <p>I'd suggest starting with the end in mind &mdash; with your ultimate goal &mdash; and let that guide you to the highest priority activities to help you achieve it. For most of us the end goal is financial independence, and that requires accumulating enough wealth to no longer rely on income from a job. (See also: <a href="http://www.wisebread.com/just-saving-isnt-enough-how-cash-flow-allocation-helps-you-retire?ref=seealso">How Cash Flow Allocation Helps You Retire</a>)</p> <p>Okay, here's where focusing on the highest impact activities comes in. For most Americans, only two financial items generate around 80% of their wealth: real estate and retirement savings. Let's tackle one of them, retirement savings. If you get that one thing right then hundreds of other, lower impact activities won't matter much.</p> <h2>Retirement Savings</h2> <p>So let's begin. What are some typical sources of retirement savings?</p> <ul> <li>Your employer (in the form of a 401(k), 403(b) or similar program, or in rare instances a pension).<br /> &nbsp;</li> <li>The government (Social Security retirement payments).<br /> &nbsp;</li> <li>Yourself.</li> </ul> <p>Unfortunately, the first two sources are becoming increasingly uncertain, so let's narrow our focus even further, on the one retirement savings source where you have complete control: Yourself.</p> <p>IMPORTANT! Before proceeding, I would strongly suggest that if your employer offers a matching 401(k) or similar program that you contribute an amount that gets you the maximum match. What we're addressing in this article will <em>supplement</em> that 401(k) savings plan, if you're lucky enough to have one.</p> <p>Alright, so what one thing that you have control over can get you to $1 million in retirement savings, tax free? Drum roll, please&hellip;.</p> <h2>It's a Roth IRA</h2> <p>Contribute $200 per month into a Roth IRA (where earnings on the account and withdrawals after age 59&frac12; are tax-free).</p> <p>That's it! Simple, isn't it?</p> <p>Actually, yes, it is simple. That's the beauty of it. But it does require meeting a few conditions.</p> <h3>1. Invest the Money in Stocks</h3> <p>You have the option of putting your Roth IRA contributions to work in one or a combination of investments such as bonds, treasuries, CDs, money market funds, and stocks. Unlike bonds, treasuries, and especially CDs or money market funds, stock market returns have historically outpaced inflation by a comfortable margin. Over the past 50 years stock funds invested in large companies have yielded a return of 9.2%. Over the past <a href="http://usatoday30.usatoday.com/money/perfi/columnist/krantz/story/2011-10-17/rate-of-return-for-stocks/50807868/1">20 years it's been 7.9%</a>. For our purposes, to be conservative I will assume an average return of 7.5%.</p> <h3>2. Stick With It!</h3> <p>Religiously. Even obsessively, if that's what it takes. Make that $200 contribution without exception every month until it becomes automatic. In fact, setting it up as an automatic transfer from each paycheck is the best way to go. That way you never see the money and therefore never miss it.</p> <h3>3. Wait</h3> <p>This is where the magic occurs. After contributing long enough you'll reach a threshold, where your total saved amount starts to achieve a dramatic upward trajectory due to compounding.</p> <h2>The Power of Compounding</h2> <p>To illustrate the magical power of compounding, consider the story of the king and the court jester. Legend has it that a long, long time ago a court jester's heroic act saved his king. The king was so moved by the jester's bravery that he offered to give the jester anything he wanted. The jester asked for one cent, doubled each day for a month. &quot;That's all?&quot; said the king. The wish was granted. (See also: <a href="http://www.wisebread.com/10-easy-ways-to-supercharge-your-retirement?ref=seealso">10 Easy Ways to Supercharge Your Retirement</a>)</p> <p>Halfway through the month the balance grew to only $164. But during the final week it started its rapid rise &mdash; it passed the threshold &mdash; and spiked upwards, ending the month at over $5.3 million.</p> <p><img width="605" height="303" src="http://www.wisebread.com/files/fruganomics/Whelan Chart.png" alt="" /></p> <p>As you can see in graph, it took some time for the small initial amount to grow. Eventually, though, the balance grew large enough so that with each doubling it started shooting up very rapidly. That's the threshold you want to reach. But to do so you need to start early &mdash; i.e. NOW!</p> <h2>How Long Will It Take?</h2> <p>So, how long are we talking about to reach this magic threshold? If you start at age 21 and your $200 monthly Roth IRA contributions grow at 7.5%, then you will reach $1 million, tax-free, at age 67, which is the current target age for receiving full Social Security retirement benefits if you were born after 1960.</p> <p>What if you were to start saving at age 31 instead of 21? Then your total will only be $360,000. Big difference. That's because you didn't quite reach the threshold where compounding really starts to kick in. But still not bad.</p> <p>Now I'm guessing that not everyone who reads this is 21 years old, so you're probably thinking &quot;What can I do to make up for lost time?&quot; Here are some ideas:</p> <ul> <li>At $200 per month your total annual contribution will be $2,400 but for most households the maximum annual Roth contribution is $5,500, so if you can afford it double your monthly contribution until you're caught up.<br /> &nbsp;</li> <li>If you have money in a savings account, consider transferring up to $3,100 from it to supplement your $2,400 annual amount.<br /> &nbsp;</li> <li>You can reach your annual contribution limit by transferring money from a tax-deductible account (such as a traditional IRA) to a Roth in the same year. (Check with a financial or tax professional to be sure you understand the rules for this kind of transfer.)<br /> &nbsp;</li> <li>Getting a tax refund? Put all or a portion of it into the Roth account.<br /> &nbsp;</li> <li>Take advantage of the Roth IRA &quot;float&quot; period, which allows you to count contributions made until April 15th towards the previous year's total.<br /> &nbsp;</li> <li>Over time, as your earnings grow and you can afford more than $200 per month, increase that monthly contribution by $50 or $100 or more. Consider having all or part of your annual raise in salary automatically added to your monthly Roth contribution.</li> </ul> <p>At a time when a slew of financial information and advice seems to be coming at us from all directions it's easy to feel overwhelmed. You don't need to be. Take back control by keeping things simple and focusing on this one activity. As you approach your golden years and reach the threshold, you'll be glad you did.</p> <p><em>Have you taken this one simple step toward putting aside money for retirement?</em></p> <a href="http://www.wisebread.com/this-one-thing-will-get-you-to-1-million-tax-free" class="sharethis-link" title="This One Thing Will Get You to $1 Million (Tax-Free!)" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/keith-whelan">Keith Whelan</a> of <a href="http://www.wisebread.com/this-one-thing-will-get-you-to-1-million-tax-free">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/the-false-allure-of-compound-interest">The False Allure of Compound Interest</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/this-is-why-you-cant-postpone-planning-for-your-retirement-and-how-to-start">This Is Why You Can&#039;t Postpone Planning for Your Retirement (And How to Start)</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-silly-reasons-people-dont-invest-but-should">9 Silly Reasons People Don&#039;t Invest (But Should)</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-valid-reasons-not-to-contribute-to-your-401k">6 Valid Reasons Not to Contribute to Your 401(k)</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/you-may-be-putting-your-retirement-money-in-the-wrong-place">You May Be Putting Your Retirement Money in the Wrong Place</a></span> </div> </li> </ul> </div> </div> </div> </div> Investment Retirement 401(k) compound interest investing Roth IRA saving Mon, 14 Jul 2014 09:00:05 +0000 Keith Whelan 1157120 at http://www.wisebread.com Don't Let Poor Health Kill Your Retirement Fund http://www.wisebread.com/dont-let-poor-health-kill-your-retirement-fund <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/dont-let-poor-health-kill-your-retirement-fund" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/retirement-health-177852330-small.jpg" alt="retirement health" title="retirement health" class="imagecache imagecache-250w" width="250" height="151" /></a> </div> </div> </div> <p>Poor health can destroy your finances in retirement if you fail to build both a healthy retirement fund and a healthy retirement body.</p> <p>Research shows that physical and financial health are closely linked. In a 2002 University of Michigan study, <a href="http://hrsonline.isr.umich.edu/">married couples with excellent health averaged $500,000</a> in net worth, about three times that of married couples with poor health who had an average of $164,000. (See also: <a href="http://www.wisebread.com/10-easy-ways-to-supercharge-your-retirement?ref=seealso">10 Easy Ways to Supercharge Your Retirement</a>)</p> <p>When it comes to costs, many Americans may underestimate how much money they'll spend on health care in their golden years. Over half of the respondents to a Fidelity Investments Retirement Savings Assessment survey say they'll need about $50,000. But Fidelity predicts an average couple will <a href="http://www.fidelity.com/inside-fidelity/individual-investing/fidelity-study-shows-84-percent">need more than $220,000</a> over the course of their retirement &mdash; just for health care!</p> <p>Indeed, retirees now spend more on health care than they do on food, and at the present rate, health care will be retirees' largest expense after housing.</p> <p>So to help you prepare, start thinking hard about the following steps.</p> <h2>Building a Healthy Retirement Budget</h2> <p>Investment broker Fidelity recommends <a href="https://www.fidelity.com/viewpoints/retirement/health-care-costs-when-you-retire">taking these four steps</a> to prepare for health care costs in retirement.</p> <h3>1. Set a Savings Goal</h3> <p>Set an annual savings goal of 10% to 15% or more of your income, including 401(k) plans and IRAs. Consider saving part of any raises, bonuses, or tax refunds and increasing contributions to savings plans by 1% every year.</p> <h3>2. Go on Auto-Pilot</h3> <p>Sign up for automatic savings plans with your financial services company. Use the automatic increase feature in your 401(k) plan if it's offered.</p> <h3>3. Use Health Care Savings Accounts</h3> <p>HSAs, offered through employers, offer a triple tax advantage. Contributions and investment earnings accumulate tax-free and roll over year to year if not spent. Distributions for qualified medical expenses are not subject to federal taxes. (See also: <a href="http://www.wisebread.com/how-to-choose-a-health-insurance-plan?ref=seealso">How to Choose a Health Insurance Plan</a>)</p> <h3>4. Understand Medicare Options</h3> <p>Most people qualify for Medicare hospital insurance, or Part A, at age 65 and don't pay for the coverage if they paid Medicare taxes while working, according to Fidelity.</p> <p>However, you pay monthly premiums for Medicare medical insurance, or Part B, which covers doctor visits and other medical services. Plus, there's no limit on out-of-pocket expenses.</p> <h3>4. Understand Unbundled Vs. Bundled Coverage</h3> <p>Unbundled coverage involves using Medicare Part A and Part B along with Veterans benefits, former employer retiree plans or purchasing supplemental, or Medigap, insurance from a private insurance company. That route may be best if you want to fill in gaps in coverage and keep the original Medicare coverage. You can use any doctor or facility you like but may pay higher premium. The policies don't include prescription coverage so you'll need to buy Medicare Part D to cover prescription drugs.</p> <p>Bundled coverage is Medicare Advantage or Managed Care plans, privately managed plans that combine Medicare Parts A and B, and supplemental coverage you purchase. They often include prescription coverage and can offer lower premiums or better benefits. Simpler than unbundled coverage, it requires just one ID card.</p> <p>The disadvantage is that it can limit you to only network providers.</p> <p>Medicare's website offers a <a href="https://www.medicare.gov/find-a-plan/questions/home.aspx">useful tool</a> for comparing supplemental insurance in your state.</p> <h2>Building a Healthy Retirement Body</h2> <p>Maintaining a healthy lifestyle and being informed during your working years is key to your financial fitness in retirement. Here's ten actions to take now to improve your health in the future (some pulled from health care insurer Aetna's excellent website, <a href="http://www.planforyourhealth.com">Plan For Your Health</a>):</p> <h3>1. Know Your Cholesterol</h3> <p>Cholesterol has a big impact on heart health. Healthy cholesterol levels are 200 milligrams per deciliter (mg/dL) or <a href="http://www.mayoclinic.org/diseases-conditions/high-blood-cholesterol/in-depth/cholesterol-levels/art-20048245">lower for total cholesterol</a>, 100 mg/dL or lower for LDL cholesterol, and 60 mg/dL or higher for HDL (or &quot;good&quot;) cholesterol, and 150 mg/dL or lower for triglycerides (fat).</p> <h3>2. Don't Smoke</h3> <p>Smoking raises blood pressure, increases fatty plaque in arteries, and increases chances for heart attacks.</p> <h3>3. Check Your Blood Sugar</h3> <p>Have your blood sugar level tested once a year. High blood sugar levels indicate higher chances of diabetes, which in turn means higher odds for other health problems.</p> <h3>4. Eat Right</h3> <p>Eat high-fiber foods, fruits, vegetables, legumes and whole grains. Apples can decrease the risk of cancer, according to <a href="http://www.aarp.org/health/healthy-living/info-2014/cancer-fighting-foods-drinks.html">AARP</a>. A handful of nuts a day may help prevent both heart disease and cancer. Beans and lentils are good for your colon, garlic fights off digestive-tract cancers, and curry has ingredients that may offer protection against brain tumors. (See also: <a href="http://www.wisebread.com/eating-at-the-intersection-of-cheap-and-healthy?ref=seealso">Eating at the Intersection of Cheap and Healthy</a>)</p> <h3>5. Exercise Daily</h3> <p>Daily exercise reduces the ill-effects of aging, such as worsening eyesight and less bone density. Even 10 minutes of exercise a day helps, writes James Rouse, a naturopathic physician and host of &quot;<a href="http://optimumwellness.com/">Optimum Wellness</a>.&quot; The many simple exercise options, he says, include going for walking, dancing, bicycling, playing water volleyball, or jumping on a trampoline.</p> <h3>6. Be Friendly</h3> <p>Stress builds up if you keep your feelings bottled inside. Talk to your friends and family and ask for support. If you don't have a good support system, work to develop one to have someone to talk to when you're upset.</p> <h3>7. Relieve Pressure</h3> <p>To prevent or manage high blood pressure, use less salt, limit alcohol and caffeine, quit smoking, mind your cholesterol, and exercise daily. Besides making you unhappy, too much stress can increase your heart rate and raise your blood pressure. Try meditation, deep breathing, muscle relaxation, listening to relaxing music, or picturing pleasant scenes.</p> <h3>8. Take Health Tests</h3> <p>Women should have a Pap smear annually until age 65, a mammogram annually starting at age 50, a bone density test to guard against bone thinning, <a href="http://www.aarp.org/health/healthy-living/info-04-2013/basic-health-guide-men-women-dr-oz.html?cmp=RDRCT-HLTHGD_MAR12_013">advises Dr. Mehmet Oz</a>, host of &quot;The Dr. Oz Show.&quot;</p> <p>Men should have a prostate-specific antigen, or PSA, test at age 50 for a baseline reading, followed by yearly testing. Both men and women should have a colonoscopy at age 50, then once every 10 years.</p> <h3>9. Watch Your Weight</h3> <p>Over 60% of American adults are overweight and a third are obese. An average woman of 5 feet 4 inches is obese at 175 pounds. An average man of 5 feet 9 inches is obese at 196 pounds, says Dr. Oz. Measure your waist above your hip bone and below your rib cage. It should be less than half your height.</p> <h3>10. Beware the Sun</h3> <p>Use sunscreen and reapply it every two hours when you're in the sun, Dr. Oz advises. Men should remember their ears and scalp where they're more prone to skin cancer than women. Wear sunglasses in bright sun to help ward of failing eyesight in latter years.</p> <p><em>How are you planning for health care costs in retirement? Please share in comments!</em></p> <a href="http://www.wisebread.com/dont-let-poor-health-kill-your-retirement-fund" class="sharethis-link" title="Don&#039;t Let Poor Health Kill Your Retirement Fund" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/michael-kling">Michael Kling</a> of <a href="http://www.wisebread.com/dont-let-poor-health-kill-your-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-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/these-7-exercises-are-scientifically-proven-to-increase-happiness">These 7 Exercises Are Scientifically Proven to Increase Happiness</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-occasions-when-you-should-definitely-hire-a-financial-advisor">7 Occasions When You Should Definitely Hire a Financial Advisor</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-simple-ways-to-lower-your-cholesterol">10 Simple Ways to Lower Your Cholesterol</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/boost-your-retirement-savings-fast-with-this-6-step-plan">Boost Your Retirement Savings Fast With This 6-Step Plan</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/financial-tricks-to-master-for-a-happier-life">Financial Tricks to Master for a Happier Life</a></span> </div> </li> </ul> </div> </div> </div> </div> Health and Beauty Retirement aging fitness Health investing retirement retirement fund Fri, 04 Jul 2014 13:00:04 +0000 Michael Kling 1153231 at http://www.wisebread.com If You Want Your 401K to Grow, Stop Doing These 6 Things http://www.wisebread.com/if-you-want-your-401k-to-grow-stop-doing-these-6-things <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/if-you-want-your-401k-to-grow-stop-doing-these-6-things" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/401k-savings-452996721-small.jpg" alt="401k savings" title="401k savings" class="imagecache imagecache-250w" width="250" height="156" /></a> </div> </div> </div> <p>Are you counting on your 401(k) to fund your dream retirement? If so, make sure you're not making the following common mistakes. By avoiding these pitfalls, you'll ensure that you end up with the most money possible. (See also: <a href="http://www.wisebread.com/optimize-your-ira-and-401k?ref=seealso">Optimize Your IRA and Your 401(k)</a>)</p> <h2>Stick to the Default Contribution Percentage</h2> <p>If your employer automatically enrolls you in your 401(k), that's a great thing. More employees usually end up participating in the plan than if they had to sign up on their own. Sticking to the default contribution rate, however, is not that good. The <a href="http://money.usnews.com/money/retirement/articles/2013/11/18/the-downside-of-401k-automatic-enrollment">average default contribution rate</a> for plans with automatic enrollment is just 3.4%.</p> <p>There are two reasons why this won't help your 401(k) grow.</p> <h3>1. Too Low to Earn the Full Employer Match</h3> <p>This may not be the amount that'll get you the full matching contribution from your employer. On average, most workers would need to contribute an average of 5.1% of pay to get the full match their employers are offering. The employer match is extra money your employer will give you for free, as long as you contribute your own money first. Since you're entitled to this money as part of your compensation package, it wouldn't be wise to pass it up.</p> <h3>2. Falls Short of the Contribution Limit</h3> <p>This may not be the amount that'll get you contributing up to the full <a href="http://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/Retirement-Topics---401%28k%29-and-Profit-Sharing-Plan-Contribution-Limits">IRS contribution limit</a>. The contribution limit is the most amount of money you can invest in a single year. And the more money you put in now, the more money you'll have later. In 2014, you can contribute a maximum of $17,500. If you're age 50 or over, this amount increases to $23,000.</p> <p>In order to contribute at the 3% rate and still reach the maximum of $17,500, you'd need to be making about $590,000 per year. So if your salary is less than that, find ways to contribute more than 3%. Because the more money you invest now, the more you'll have later.</p> <h2>Stick to the Default Fund Choice</h2> <p>If your employer automatically enrolls you in your 401(k), they may also choose the fund you're invested in. Sometimes, this isn't the best choice.</p> <p>Check to see if the default fund is either a money market or stable value fund. If it is, you may want to switch to another fund. These funds aren't designed to really grow your money. Instead, their purpose &mdash; as their name suggests &mdash; is simply to keep the value of your money stable.</p> <p>Better investment choices include stock and bond index funds. For more help on choosing the best fund, check out <a href="http://www.amazon.com/gp/product/0470067365/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=390957&amp;creativeASIN=0470067365&amp;linkCode=as2&amp;tag=wisbre03-20&amp;linkId=V3ISWB6EAGPEJZLJ">The Bogleheads' Guide to Investing</a>.</p> <h2>Put Too Much Money in Your Company's Stock</h2> <p>Professionals recommend no more than 5% to 10% in a company's stock. And there's a good reason why.</p> <p>Remember what happened to Enron? Employees who put most of their retirement funds in their company stock not only lost their jobs &mdash; they also <a href="http://www.wsws.org/en/articles/2002/01/enro-j14.html">lost their retirement money</a>.</p> <p>Rather than investing most of your money in your company's stock, it's better to ensure that your money is properly diversified.</p> <h2>Borrow From Your 401(k)</h2> <p>The main reason not to do this is because if you take out a loan from your 401(k), then that money is no longer working towards your retirement needs. In other words, you lose the power of <a href="https://personal.vanguard.com/us/insights/saving-investing/power-of-compounding">compounding</a>.</p> <p>Also, if you leave your job, you'll generally be required to repay the loan balance <a href="https://guidance.fidelity.com/viewpoints-workplace/borrowing-from-your-retirement-sv">within 60 days</a>. If you don't, the unpaid balance is considered as defaulted. This means you'll need to pay a 10% penalty on top of owing income taxes on the defaulted amount if you are not at least age 59 &frac12;. (See also: <a href="http://www.wisebread.com/this-is-when-you-should-borrow-from-your-retirement-account?ref=seealso">This Is When You Should Borrow From Your Retirement Account</a>)</p> <h2>Cash Out If You Leave Your Job</h2> <p>By cashing out, you not only get taxed and penalized, but similar to borrowing, you also lose the earnings that money could have generated.</p> <p>Worst of all, you probably <a href="http://www.forbes.com/sites/fidelity/2014/04/17/the-risks-of-cashing-out-your-401k-early/">won't even get all of your money</a>: If you haven't reached age 59 &frac12;, your employer is required to withhold 20% for the IRS. On top of that, you'll need to pay a 10% early withdrawal penalty.</p> <p>So for every $1,000 you cash out, you would only receive about $700. The other $300 would go to the IRS.</p> <h2>Settle for High Fees</h2> <p>Most employees don't realize it, but there are costs associated with investing in your 401(k).</p> <p>These include fees to pay brokers, accountants, administrators, and fund managers just to name a few.</p> <p>How much can all of this add up to?</p> <p>In <a href="http://www.amazon.com/gp/product/0767929845/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=390957&amp;creativeASIN=0767929845&amp;linkCode=as2&amp;tag=wisbre03-20&amp;linkId=27ZD3XFCFMBL4UQV">Fight For Your Money</a>, David Bach found that when you add in these fees and hidden charges, the average 401(k) plan actually costs employees between 3% and 3.5% of what they've got invested each year.</p> <p>So what should you do?</p> <p>Ask your company or 401(k) provider for a breakdown of the fees you're being charged. If they are much more than 3%, <a href="http://www.bogleheads.org/wiki/How_to_campaign_for_a_better_401%28k%29_plan">complain</a>.</p> <p>By ensuring that you don't make these mistakes, you'll increase your chances of building a nice, large nest egg for your retirement.</p> <p><em>Are you making any of these 401(k) mistakes? Any others we should be aware of? Please share in comments!</em></p> <a href="http://www.wisebread.com/if-you-want-your-401k-to-grow-stop-doing-these-6-things" class="sharethis-link" title="If You Want Your 401K to Grow, Stop Doing These 6 Things" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/darren-wu">Darren Wu</a> of <a href="http://www.wisebread.com/if-you-want-your-401k-to-grow-stop-doing-these-6-things">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-14"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/this-is-why-you-cant-postpone-planning-for-your-retirement-and-how-to-start">This Is Why You Can&#039;t Postpone Planning for Your Retirement (And How to Start)</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-reasons-why-you-must-open-a-roth-ira-before-april-15">4 Reasons Why You Must Open a Roth IRA Before April 15</a></span> </div> </li> <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-unexpected-things-you-should-consider-when-picking-where-you-retire">10 Unexpected Things You Should Consider When Picking Where 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/why-one-third-of-americans-havent-saved-for-retirement">Why One-Third of Americans Haven&#039;t Saved for 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/boost-your-retirement-savings-fast-with-this-6-step-plan">Boost Your Retirement Savings Fast With This 6-Step Plan</a></span> </div> </li> </ul> </div> </div> </div> </div> Retirement 401(k) investment IRA retirement taxes Mon, 30 Jun 2014 09:00:05 +0000 Darren Wu 1150361 at http://www.wisebread.com 12 Things You Didn't Know About Retirement http://www.wisebread.com/12-things-you-didnt-know-about-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/12-things-you-didnt-know-about-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/retirement-86490853-small.jpg" alt="retirement" title="retirement" class="imagecache imagecache-250w" width="250" height="145" /></a> </div> </div> </div> <p>It's nice to get out of the rat race.</p> <p>However, once you hit retirement you have to learn to get along with way less &quot;cheese.&quot; With <a href="http://www.ebri.org/pdf/FF.276.Ests.10Apr14.pdf">less than half of Americans</a> having ever thought about how much money they need for retirement, it is clear that several people are still clueless about retirement. (See also: <a href="http://www.wisebread.com/this-is-the-basic-intro-to-having-a-retirement-fund-that-everyone-needs-to-read?ref=seealso">This Is the Basic Intro to Having a Retirement Fund That Everyone Needs to Read</a>)</p> <p>If you consider yourself a know-it-all in retirement matters, here is a list of 12 things about retirement that may shock you.</p> <h2>1. Some May Not Retire At All</h2> <p>If you think that most people retire at age 65, think again. Back in 1991, only about 11% of workers expected to retire after age 65. Fast forward to 2014 and 33% of workers expect to retire after age 65 and <a href="http://www.ebri.org/pdf/FF.273.RetAge.20Mar14.pdf">10% don't plan to retire at all</a>. Attitudes are changing and more Americans are considering semi-retirement during their golden years.</p> <h2>2. $1 Million Is Not Enough</h2> <p>For several years, financial advisors have used $1 million as a rule of thumb for your target retirement fund. As life expectancy improves, this target may be too low. With men and women reaching ages <a href="http://www.ssa.gov/planners/lifeexpectancy.htm">84 and 86</a> respectively, $1 million nest eggs may run out. Considering a 4% annual withdrawal, a $1 million retirement fund may last you only <a href="http://www.bankrate.com/finance/retirement/retirement-statistics-1.aspx">about 25 years</a>. The Social Security Administration projects that about 10% of 65 year olds will even live beyond 95.</p> <h2>3. Gen Y Needs to Save $2 Million</h2> <p>Here is some bad news for those born in the early 1980's and later. <a href="http://money.usnews.com/money/retirement/articles/2011/09/15/gen-ys-2-million-retirement-price-tag">Many registered investment advisors</a> recommend members of Gen Y have a retirement savings goal of at least $2 million. Inflation, higher student debt, more expensive health care, and longer life expectancy are major causes for this radical increase. The key to saving $2 million for retirement is starting early. Assuming a 7% average annual return, you'll need to save $510 per month if you start at age 20. If you start age 40, you'll need to put away $2,270 every month. (See also: <a href="http://www.wisebread.com/retirement-planning-if-you-re-under-30?ref=seealso">Retirement Planning If You're Under 30</a>)</p> <h2>4. Full Retirement Age Is 67</h2> <p>When reading the fine print from your retirement accounts, an age that appears a lot is 59 &frac12;. This is the age at which most retirement accounts allow you to start taking withdrawals without any penalty. This is not the case for social security benefits. The <a href="http://www.ssa.gov/retire2/retirechart.htm">full retirement age</a> for those born 1960 and later is 67.</p> <p>This means that if you decide to retire before age 67, you are entitled to reduced social security retirement benefits. For example, if you retire at 65, you get about 13.3% less than you would at age 67. On the other hand, if you decide to retire past age 67 you are entitled to <a href="http://www.ssa.gov/retire2/delayret.htm">delayed retirement credits</a>, which boost your benefits slightly. Delayed retirement credits reach a cap at age 70.</p> <h2>5. Almost Half of Americans Have Less Than $10,000 Saved for Retirement</h2> <p><a href="http://www.ebri.org/files/Final-FS.RCS-13.FS_3.Saving.FINAL.pdf">46% of all American workers</a> have less than $10,000 saved for retirement and 29% of all American workers have less than $1,000 saved for retirement. If you fall under either of these categories, get your retirement strategy together. (See also: <a href="http://www.wisebread.com/10-easy-ways-to-supercharge-your-retirement?ref=seealso">10 Easy Ways to Supercharge Your Retirement</a>)</p> <h2>6. Employer-Sponsored Plans Increase the Likelihood You'll Save</h2> <p>Here is some good news: Those workers that participate in retirement plans at work are 45% more likely to save than those that don't. According to data from the Employee Benefit Research Institute, those saving for retirement at work are more likely to have saved at least $50,000.</p> <h2>7. Self-Employed Can Save for Retirement</h2> <p>Freelancers, independent contractors, and small business owners can save for retirement, too. The best options are <a href="http://www.irs.gov/Retirement-Plans/One-Participant-401(k)-Plans">one participant 401(k)'s</a> and <a href="http://www.irs.gov/Retirement-Plans/Plan-Sponsor/Simplified-Employee-Pension-Plan-(SEP)">Simplified Employee Pensions</a> (SEP's), which both have higher caps than Roth or Traditional IRAs. Under both retirement accounts, you can put away up to 20% of your net self-employment earnings with a cap at $51,000, as of 2013. Most financial firms can offer a SEP, but fewer can offer a one participant 401(k). Contact your financial institution for more details for eligibility requirements and rules.</p> <h2>8. Older Workers Can Save $5,500 Extra for Retirement</h2> <p>It is never too late to start saving for retirement. The IRS gives all workers age 50 or older the chance to make catch-up contributions of <a href="http://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/Retirement-Topics-Catch-Up-Contributions">$5,500 every year</a> to their retirement accounts. These catch-up contributions are the best way to give your nest egg a much needed boost.</p> <h2>9. Married Couples Save More</h2> <p>When it comes to retirement planning, married couples are doing better than singles. Unmarried men and women are just as likely to have ever saved for retirement and to be currently contributing to a retirement account. However, those <a href="http://www.ebri.org/pdf/FF.275.Svrs.3Apr141.pdf">probabilities double for married workers</a> and their spouses. Nearly 75% of married of married couples are currently saving for retirement. These statistics prove that two heads think better than one.</p> <h2>10. Children Can Contribute to an IRA</h2> <p>That's not a typo. Little Jimmy can start putting away that lemonade stand money into a traditional IRA, even if he's just age 10. You can open a traditional IRA, a Roth IRA, or an Education IRA for your children and they can <a href="http://www.fool.com/money/investingforkids/investingforkids03.htm">contribute up to $2,000 per year</a> from their income. While you will have custodial control over your kid's account until she reaches legal age, you have to eventually turn over the rights to her. Make sure to discuss with her the implications of early withdrawals.</p> <h2>11. Non-Working Spouses Can Have Retirement Funds, Too</h2> <p>If you file taxes jointly with your spouse and have non-working spouse, you can fund your spouse's traditional or Roth IRA. The working spouse can contribute up to $5,500 per year to the non-working spouse's account, and up to $6,500 when over age 50.</p> <h2>12. IRAs Are Protected From Bankruptcy Proceedings</h2> <p>Under the <a href="http://www.gpo.gov/fdsys/pkg/PLAW-109publ8/html/PLAW-109publ8.htm">Bankruptcy Abuse Prevention and Consumer Protection Act</a> (BAPCPA) of 2005, the first $1 million of traditional IRAs and Roth IRAs are protected in case of bankruptcy. The amount protected is adjusted every 3 years to current cost of livings standards and, as of 2013, it stands at $1,245,475. There is no protection cap for employer-sponsored retirement plans, such as 401(k)s, 403(b) profit sharing plans, and 457(b) deferred compensation plans.</p> <p><em>Did anything here surprise you? Please share in comments!</em></p> <a href="http://www.wisebread.com/12-things-you-didnt-know-about-retirement" class="sharethis-link" title="12 Things You Didn&#039;t Know About Retirement" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/damian-davila">Damian Davila</a> of <a href="http://www.wisebread.com/12-things-you-didnt-know-about-retirement">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. 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