Retirement http://www.wisebread.com/taxonomy/term/417/all en-US 9 Creative Ways to Boost Your Retirement Savings http://www.wisebread.com/9-creative-ways-to-boost-your-retirement-savings <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/9-creative-ways-to-boost-your-retirement-savings" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/happy_girl_is_taking_pictures_with_her_mobile_phone.jpg" alt="Happy girl is taking pictures with her mobile phone" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Everyone knows how important it is to save for retirement. However, actually setting aside money for your future can be challenging. When you're short on cash and have other demands on your budget, there might be little to nothing left to put toward your nest egg. How are you supposed to save for your future when you're completely strapped in the present?</p> <p>If you don't make enough money right now to set aside, there are still ways to grow your retirement savings. You just have to think outside the box.</p> <h2>1. Use your tax refund</h2> <p>Many people daydream about how they want to spend their tax refund, which is often the biggest windfall they'll see all year. In fact, last year the average tax refund was $2,763, according to the IRS.</p> <p>If you're getting a tax refund this year, put it to work. Rather than spending your refund on electronics or a vacation, consider depositing that money straight into your retirement fund. With the power of compound interest, that refund could grow by the thousands by the time you retire.</p> <h2>2. Deposit your credit card rewards</h2> <p>If you have a <a href="http://www.wisebread.com/5-best-cash-back-credit-cards" target="_blank">credit card that offers cash back</a>, that cash can be a regular source of extra money for your retirement fund. If you already use your credit card for routine purchases like utilities, gas, and groceries, this is easy money. Just make sure you are paying off your credit card balance in full every month.</p> <h2>3. Use cash back apps</h2> <p>If you don't have a cash back credit card, you can still earn money for doing the shopping you were going to do anyway. Apps like <a href="https://ibotta.com/r/jcsgjbv" target="_blank">Ibotta</a> or SavingStar let you earn cash back on grocery purchases, while sites like <a href="http://www.ebates.com/rf.do?referrerid=vIhagUaAxdMIsu435wELZg%3D%3D&amp;eeid=26471" target="_blank">eBates</a> offer a percentage back on many online purchases. You'll earn a percentage of your purchase as cash, and a check will be mailed to you &mdash; which you can toss straight into your retirement account. It's a low-effort way to earn extra money going about your normal routine. (See also: <a href="http://www.wisebread.com/8-apps-that-actually-pay-you-to-shop?ref=seealso" target="_blank">7 Apps That Actually Pay You to Shop</a>)</p> <h2>4. Launch a side hustle</h2> <p>If you have some extra time, you can earn money in the evenings or on weekends by <a href="http://www.wisebread.com/14-best-side-jobs-for-fast-cash" target="_blank">launching a side hustle for fast cash</a>. From walking dogs to making deliveries, there are hundreds of side gigs you can do in just a few hours a week. That extra income can go a long way to funding your retirement.</p> <h2>5. Sell your clutter</h2> <p>Take a look around at all of the electronics, textbooks, toys, and more that you never use. You may have as much as a few thousand dollars' worth of items collecting dust in your home. That clutter can be eliminated while netting you some money for your retirement. Sell items on sites like eBay, LetGo, and Bookscouter to get cash for your stuff. (See also: <a href="http://www.wisebread.com/5-things-in-your-garage-that-have-serious-re-sale-value?ref=seealso" target="_blank">5 Things in Your Garage That Have Serious Re-Sale Value</a>)</p> <h2>6. Rent out extra space</h2> <p>If you have an extra bedroom, you can rent it out on sites like Airbnb or VRBO. Depending on your location and the size of your space, you could charge hundreds per night. However, you don't even need an extra room to make money. You can rent out a spare closet or storage space in the garage on Spacer, or rent out your parking spot on SpotHero. (See also: <a href="http://www.wisebread.com/5-easy-ways-to-make-good-money-from-airbnb?ref=seealso" target="_blank">5 Easy Ways to Make Good Money From Airbnb</a>)</p> <h2>7. Sell photos online</h2> <p>If you like photography, you can earn passive income to put toward your retirement savings by selling your photos. You can try your hand at selling stock photography on sites like iStock or Shutterstock, or you could sell your artwork in an online portfolio or on arts and craft sites like Etsy. You could also try selling smartphone photos on Foap, which is an app that connects brands with photographers looking to sell their images. (See also: <a href="http://www.wisebread.com/earn-extra-income-with-your-smartphone-camera?ref=seealso" target="_blank">Earn Extra Income With Your Smartphone Camera</a>)</p> <h2>8. Let strangers drive your car</h2> <p>If you don't drive your car every day, your vehicle can become a lucrative source of income. You can rent it out to tourists or business travelers on Turo and set your own daily rate. According to the company, you can make nearly $5,800 a year if your car's market value is $20,000 and you rent it out for 12 days per month. That alone could get you to the contribution limit on an IRA.</p> <h2>9. Trade in clothes for cash</h2> <p>If you have clothes, handbags, or shoes that you don't wear anymore, stop letting them take up precious closet space. You can sell those items on sites like Poshmark, Tradesy, and even in-person at consignment stores like Plato's Closet or Clothes Mentor. A single bag of clothes could net you enough to send a couple hundred dollars toward your retirement account.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/kat-tretina">Kat Tretina</a> of <a href="http://www.wisebread.com/9-creative-ways-to-boost-your-retirement-savings">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-easy-ways-to-earn-more-on-ebay">11 Easy Ways to Earn More on eBay</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-fast-ways-to-restock-an-emergency-fund-after-an-emergency">6 Fast Ways to Restock an Emergency Fund After an Emergency</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/my-16-favorite-ways-to-get-rid-of-clutter">My 16 Favorite Ways to Get Rid of Clutter</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-things-millennials-can-do-right-now-for-an-early-retirement">8 Things Millennials Can Do Right Now for an Early Retirement</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-come-up-with-1000-in-the-next-30-days">How to Come Up With $1,000 in the Next 30 Days</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Extra Income Retirement boost your retirement clutter making money renting saving money selling side gigs tax refunds Wed, 25 Apr 2018 08:00:09 +0000 Kat Tretina 2131007 at http://www.wisebread.com How Job-Hoppers Can Keep Up With Their Retirement Savings http://www.wisebread.com/how-job-hoppers-can-keep-up-with-their-retirement-savings <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-job-hoppers-can-keep-up-with-their-retirement-savings" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_saving_in_a_jar.jpg" alt="Woman saving in a jar" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>It's very common these days for young people to move from job to job. The days of sticking with a company for decades and earning a big pension are over.</p> <p>Thankfully, 401(k) plans and individual retirement accounts allow workers to switch jobs without losing their retirement savings, but it's still possible for all that job-hopping to disrupt your ability to save. If you do switch jobs regularly, there are some sensible things you can do to ensure that your retirement plan stays on track.</p> <h2>Open a traditional or Roth IRA</h2> <p>If you are between jobs with no access to an employer-sponsored retirement plan, there are still things you can do to save. If you have any earned income at all, you can contribute to an individual retirement account, which allows you to invest with some tax advantages.</p> <p>With a traditional IRA, any money you contribute is deducted from your taxable income. With a Roth IRA, your money is taxed upfront, but you will avoid paying any taxes on investment gains when you withdraw the money when you retire. IRAs can be very powerful tools for retirement savings for self-employed people, part-time workers, or those with irregular incomes. You can maintain and contribute to these accounts even after you get a 401(k) plan from a new employer. (See also: <a href="http://www.wisebread.com/401k-or-ira-you-need-both?ref=seealso" target="_blank">401(k) or IRA? You Need Both</a>)</p> <h2>Roll over your 401(k)</h2> <p>If you had a 401(k) from one employer and switch jobs, you can take the funds from the old account and add it to the new one. This is called a 401(k) rollover. There usually is no penalty if you don't merge the accounts right away, but over time the old 401(k) provider may start to bug you about it. You should consider a rollover if the retirement fund from your new employer offers better investment options, lower fees, or both. If you call the brokerage firm that is managing your old 401(k), they will usually be happy to walk you through the steps to carry out a rollover. (See also: <a href="http://www.wisebread.com/a-simple-guide-to-rolling-over-all-of-your-401ks-and-iras?ref=seealso" target="_blank">A Simple Guide to Rolling Over All of Your 401Ks and IRAs</a>)</p> <h2>Open a rollover IRA</h2> <p>If you no longer have access to a 401(k) or don't like the investment options in your new retirement plan, you can place your investments in a new individual retirement account. This is called a rollover IRA, and it can be better than a 401(k) because you usually will have many more investment options, from mutual funds and ETFs to individual stocks and bonds.</p> <h2>Look into a 401(k)-to-Roth IRA conversion</h2> <p>When you have a 401(k), you will eventually be obligated to pay tax on any gains when you begin withdrawing money in retirement. That's why some investors look into turning their 401(k) and traditional IRA accounts into a Roth IRA, which allows money to grow tax-free.</p> <p>The big catch to making this conversion is that you must pay tax on any gains you've had up until now. That could be a big chunk of change that you may not be in a position to handle right now, but a smart move if you think your tax bracket will be higher in the future. An accountant or financial adviser can help you determine whether converting an old 401(k) to a Roth IRA makes sense for you.</p> <h2>Play catch up</h2> <p>Let's say you left a job and were not able to contribute to retirement accounts for three months. But, you land a new job with a higher salary than before. If this happens, consider bumping up your retirement contributions to make up for that lost time. Any time you get new or unexpected income, consider using that to backfill the retirement accounts you may have been neglecting.</p> <p>Once you make those extra payments, you may find that you have the ability to contribute the higher amount on an ongoing basis. And that's great, because the more you are able to save, the more you'll have in the long run. (See also: <a href="http://www.wisebread.com/6-ways-meeting-the-2018-401k-contribution-limits-will-brighten-your-future?ref=seealso" target="_blank">6 Ways Meeting the 2018 401(k) Contribution Limits Will Brighten Your Future</a>)</p> <h2>Pay close attention to the employer match</h2> <p>Employers can vary greatly in how much they contribute to workers' 401(k) accounts. Some will provide direct contributions while also matching what the employee put in. Some offer a full match on contributions, while others match just a portion. And some don't contribute at all. It's important to remember this when switching companies, especially if you are moving to a company with a retirement plan that's less generous.</p> <p>Ideally, you will want to make sure that the total amount of money going into your 401(k) remains the same or goes up over time. If your new employer is contributing less on a percentage basis, consider bumping up your own contributions to make up the difference. (See also: <a href="http://www.wisebread.com/7-things-you-should-know-about-your-401k-match?ref=seealso" target="_blank">7 Things You Should Know About Your 401(k) Match</a>)</p> <h2>Don't forget about the vesting period</h2> <p>If you work at a company that contributes to your 401(k) plan, it's possible that you may not be able to keep those contributions unless you stay at the company a certain number of years. For example, the company may reclaim any contributions if you leave before two years. This is called the vesting period.</p> <p>To get the full advantage of a company retirement plan, it makes sense to stay through the full vesting period. Some companies offer a tiered vesting schedule, in which employees keep an increasing portion of company contributions each year until they are fully vested.</p> <p>Be sure to read the documentation on your 401(k) plan to understand the vesting policies. If you leave the company before you are fully vested, you may be leaving large sums of money on the table.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/how-job-hoppers-can-keep-up-with-their-retirement-savings">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/left-a-job-do-a-rollover">Left a job? Do a rollover.</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/intimidated-by-retirement-investing-get-professional-help">Intimidated by Retirement Investing? Get Professional Help!</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-step-by-step-guide-to-rolling-over-your-401k">The Step-by-Step Guide to Rolling Over Your 401(k)</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/where-to-invest-your-money-after-youve-maxed-out-your-retirement-account">Where to Invest Your Money After You&#039;ve Maxed Out Your Retirement Account</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-face-these-7-scary-facts-about-retirement-saving">How to Face These 7 Scary Facts About Retirement Saving</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement 401(k) IRA job hopping matching rollover Roth IRA switching jobs vesting Mon, 16 Apr 2018 08:30:09 +0000 Tim Lemke 2129298 at http://www.wisebread.com Where to Invest Your Money After You've Maxed Out Your Retirement Account http://www.wisebread.com/where-to-invest-your-money-after-youve-maxed-out-your-retirement-account <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/where-to-invest-your-money-after-youve-maxed-out-your-retirement-account" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/getting_a_fortune.jpg" alt="Getting a fortune" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Are you a super saver? Have you managed to contribute the maximum amounts allowed into your 401(k) or individual retirement accounts? If so, you may now be wondering what to do with any additional money you have. Should you continue to invest? If so, how? Should you spend it on a Picasso painting or give it to your kids?</p> <p>There are many options for people who have maxed out their retirement contributions. Here are some of them.</p> <h2>Taxable brokerage account</h2> <p>I'm a huge fan of the tax-advantaged nature of retirement accounts, but regular taxable brokerage accounts have their good qualities. For one thing, they are more flexible than retirement accounts. There is no limit to what you can invest in a taxable brokerage account, and while you will pay tax on any dividends and capital gains in these accounts, there is no additional penalty for withdrawing money before you retire. If you collect dividends from investments in a taxable brokerage account, they can be a great source of extra income.</p> <h2>Real estate</h2> <p>If you've put as much money into retirement accounts as you can, why not take a look at buying a property or house as a possible investment? Real estate can appreciate in value just like stocks, and you may even be able to draw income from tenants as well.</p> <p>Investing in real estate is obviously different from investing in stocks or bonds. In this case, you are investing in actual property. There may be more costs upfront, and you may face the expense and work associated with managing it. But there are many people who have gotten wealthy by buying and selling properties.</p> <p>It's worth noting that under the new tax law, you can't claim a tax deduction for mortgage interest from a second home. But the potential for real estate to rise in value and generate income is still a powerful thing. (See also: <a href="http://www.wisebread.com/the-only-5-rules-you-need-to-know-about-investing-in-real-estate?ref=seealso" target="_blank">The Only 5 Rules You Need to Know About Investing in Real Estate</a>)</p> <h2>Peer-to-peer lending</h2> <p>Did you know it's possible to make money directly off other people's borrowing? With peer-to-peer lending, an individual can use an online platform to purchase someone else's debt and make money off the interest payments. The money you can earn is based off the riskiness of the loan; more creditworthy borrowers will pay out less than those with worse credit.</p> <p>There is always the risk of borrowers defaulting on loans, but most lenders have found good returns by purchasing a &quot;portfolio&quot; of loans at various risk levels. Lending Club and Prosper are two of the most popular peer-to-peer lending platforms. (See also: <a href="http://www.wisebread.com/how-to-make-money-with-peer-to-peer-lending-service-prosper?ref=seealso" target="_blank">How to Make Money With Peer-to-Peer Lending Service Prosper</a>)</p> <h2>Education savings accounts</h2> <p>If you have children or other relatives that will be going to college, you can help fund their education and receive some tax benefits for yourself. A 529 college savings plan is a popular option, because it allows someone to invest money and withdraw the gains tax free, provided the funds are used to pay for college. In many instances, the contributions are also deducted from your taxable income. The new tax law allows 529 plans to be used for other education expenses, such as private high school, as well. (See also: <a href="http://www.wisebread.com/the-9-best-state-529-college-savings-plans?ref=seealso" target="_blank">The 9 Best State 529 College Savings Plans</a>)</p> <h2>The bank</h2> <p>It may seem silly to just put money in a simple savings account when interest rates are still quite low. But it's possible that, in an effort to max out your retirement accounts, you've been neglecting your cash savings. Having a good amount of cash on hand can give you a nice cushion in the event of an emergency and prevent you from raiding your retirement accounts. If you don't have at least three months' worth of expenses saved, it's a good idea to bolster that savings. Once you hit three months' of expenses saved, go for six. (See also: <a href="http://www.wisebread.com/5-best-online-savings-accounts?ref=seealso" target="_blank">The Best Online Savings Accounts</a>)</p> <p>It's actually not uncommon for people of high net worth to have cash flow problems, because they focus so heavily on investing their money. If you are maxing out your retirement contributions, you're doing great. There's really nothing wrong with having more cash on hand than you may need, and you may find that it gives you some nice peace of mind.</p> <h2>Collectibles</h2> <p>I am personally not a huge fan of collectibles as an investment, but they can be useful as part of a broad portfolio. A savvy, knowledgeable collector can make good money on things like art, antiques, trading cards, or even classic cars. And collecting can be good fun. Just be aware that the returns on collectibles rarely top what you can get in the stock market. (See also: <a href="http://www.wisebread.com/10-collectibles-that-almost-always-become-more-valuable?ref=seealso" target="_blank">10 Collectibles That Almost Always Become More Valuable</a>)</p> <h2>Donations to charity</h2> <p>You may think that once you've maxed out your retirement contributions, there are no more tax breaks to be had. But you can get a tax deduction for donating to most charities. So you can feel good about supporting a worthy cause while helping yourself financially.</p> <p>The one caveat here is that under the new tax law, it may be financially smarter for people to take the standard deduction rather than itemize. This could make donating to charity less advantageous from a tax perspective.</p> <h2>Gift it to family</h2> <p>If you are very wealthy and expect that your children or other family members will inherit your money when you die, it may be a good idea to begin transferring that wealth now to avoid taxes. Under the new tax law, the exemption for gift and estate taxes &mdash; the amount you can give away in your lifetime &mdash; is $11.2 million per individual. Married couples can transfer double that amount, or $22.4 million. It's also possible to make an annual gift of up to $15,000 per person (married couples can gift $30,000 per recipient) without paying taxes.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fwhere-to-invest-your-money-after-youve-maxed-out-your-retirement-account&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FWhere%2520to%2520Invest%2520Your%2520Money%2520After%2520You%2527ve%2520Maxed%2520Out%2520Your%2520Retirement%2520Account_0.jpg&amp;description=Where%20to%20Invest%20Your%20Money%20After%20You've%20Maxed%20Out%20Your%20Retirement%20Account"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/Where%20to%20Invest%20Your%20Money%20After%20You%27ve%20Maxed%20Out%20Your%20Retirement%20Account_0.jpg" alt="Where to Invest Your Money After You've Maxed Out Your Retirement Account" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/where-to-invest-your-money-after-youve-maxed-out-your-retirement-account">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-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/8-things-millennials-can-do-right-now-for-an-early-retirement">8 Things Millennials Can Do Right Now for an Early Retirement</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-easiest-ways-to-catch-up-on-retirement-savings-later-in-life">7 Easiest Ways to Catch Up on Retirement Savings Later in Life</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-signs-youre-making-all-the-right-moves-for-retirement">8 Signs You&#039;re Making All the Right Moves for 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/11-basic-questions-about-retirement-saving-everyone-should-ask">11 Basic Questions About Retirement Saving Everyone Should Ask</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/half-of-americans-are-wrong-about-their-retirement-savings">Half of Americans Are Wrong About Their Retirement Savings</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement 401(k) charity contributions gifts IRA maxed out peer to peer lending real estate investing saving money taxable brokerage accounts Tue, 10 Apr 2018 08:00:06 +0000 Tim Lemke 2115368 at http://www.wisebread.com 5 Surefire Ways to Maintain a Good Credit Score in Retirement http://www.wisebread.com/5-surefire-ways-to-maintain-a-good-credit-score-in-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-surefire-ways-to-maintain-a-good-credit-score-in-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/new_investment_plans.jpg" alt="New investment plans" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You're nearing retirement. Once you hit this milestone, you won't have any reason to worry about your credit score, right? Not exactly.</p> <p>Maybe you expect to have your auto loan and mortgage paid off by the time you hit retirement. Maybe you don't even expect to apply for any new credit cards once you leave the working world. But what you plan is often far different from what actually happens.</p> <p>What if you haven't paid off your mortgage by retirement and you want to refinance your existing loan to one with a lower mortgage payment? You'll need a good credit score. What if your car breaks down and you need to buy a new one? If you want to finance the purchase of a new car, you'll need a solid credit score to qualify for an auto loan.</p> <p>There's good news here, though: Keeping your credit score high during your retirement years doesn't have to be difficult. You just need to remain diligent about paying your bills on time and using your credit wisely. Here are some ways you can do that.</p> <h2>1. Keep using credit</h2> <p>You might decide after retirement to live an all-cash lifestyle. This makes a certain amount of sense: You're on a fixed income, and you certainly don't want to run up debt on your credit cards. Paying for everything in cash will prevent that from happening.</p> <p>But if you don't use credit, your credit score will start to suffer. You build a strong credit score by using credit wisely. If you don't use it at all, how can you prove you remain a good credit risk after leaving the working world?</p> <p>This can be especially difficult in retirement. If you don't have a mortgage or auto payment anymore, you won't be making as many monthly payments to boost your credit score. So, it's a best practice to keep using your credit card regularly to make some purchases. But only charge what you can afford to pay off in full each month. When your credit card bill is due, pay off your entire balance, and do so on time. This way, you demonstrate good credit skills while also avoiding credit card debt. (See also: <a href="http://www.wisebread.com/why-your-credit-score-matters-in-retirement?ref=seealso" target="_blank">Why Your Credit Score Matters in Retirement</a>)</p> <h2>2. Don't close credit card accounts you don't use</h2> <p>After retirement, you might not use as many credit cards as you did while working. You might even consider closing those credit card accounts that you no longer use. Resist this urge, though.</p> <p>A good chunk of your credit score depends on how much credit you are using. This is known as your <a href="http://www.wisebread.com/this-one-ratio-is-the-key-to-a-good-credit-score?ref=internal" target="_blank">credit utilization ratio</a>. The more of your available credit you are using, the worse it is for your credit score. If you close an open credit card account, even one you no longer use, you will immediately increase your credit utilization ratio.</p> <p>Let's say you have three credit cards, each with a limit of $5,000. That means you have $15,000 in total available credit. Now let's say you owe $3,000 in credit card debt. You have a credit utilization ratio of 20 percent ($3,000 divided by $15,000), which is considered good &mdash; lenders typically like to see this number under 30 percent. If you close one of your cards, you will automatically lower your total available credit to $10,000. Now, owing $3,000 out of $10,000 just bumped your credit utilization ratio up to 30 percent, all without you spending a cent.</p> <p>You don't have to use the credit cards that have been sitting untouched in your wallet. But you shouldn't close those accounts, either. (See also: <a href="http://www.wisebread.com/how-to-ditch-a-credit-card-without-dinging-your-credit-score?ref=seealso" target="_blank">How to Close a Credit Card Without Dinging Your Credit Score</a>)</p> <h2>3. Be careful when co-signing</h2> <p>It's natural once you hit retirement to want to help your children or grandchildren financially. But be careful when one of your relatives asks you to co-sign on an auto or mortgage loan.</p> <p>Young adults often have limited credit histories and it can be difficult for them to qualify for financing. They often turn to co-signers &mdash; usually a parent &mdash; for help. Lenders are more likely to approve their loan requests if someone with a longer, more established credit history is signing up for the loan, too.</p> <p>There's a huge problem with co-signing. If the person you're helping doesn't pay the bill, those late payments go on <em>your </em>credit reports. You are now equally responsible for this new debt. And if your relative defaults on the loan? You'll be the one on the hook.</p> <p>Co-sign with caution. It is very rarely an advisable move, and can land your credit score in hot water. (See also: <a href="http://www.wisebread.com/is-it-ever-okay-to-cosign-a-loan?ref=seealso" target="_blank">When Should You Co-Sign a Loan?</a>)</p> <h2>4. Check your credit reports</h2> <p>You might not think much about your credit in retirement, but you should still check your three credit reports once every year.</p> <p>You can do this for free at <a href="https://www.annualcreditreport.com/" target="_blank">AnnualCreditReport.com</a>. Make sure to order copies of each of your three credit reports &mdash; from Experian, Equifax, and TransUnion &mdash; as each might have slightly different information.</p> <p>Check the reports for any mistakes. Maybe a report lists that you missed an auto payment last year and you know you haven't. Correct the mistake by notifying the offending credit bureau. You can do this through email. A mistake on your credit report can cause your credit score to plummet.</p> <p>It's also a good habit to monitor your reports for accounts you did not open. If something looks suspicious, you may have a case of identity fraud on your hands. (See also: <a href="http://www.wisebread.com/how-to-read-a-credit-report?ref=seealso" target="_blank">How to Read a Credit Report</a>)</p> <h2>5. Keep paying those bills on time</h2> <p>The last step to keeping your score high during retirement might be the most important: Keep paying your bills on time each month.</p> <p>Of course, this is good advice for anyone trying to maintain a good credit score. A single missed payment on a credit card account, mortgage loan, auto loan, or student loan can cause your credit score to fall by as many as 100 points. So even after you leave the working world, keep making those payments on time. (See also: <a href="http://www.wisebread.com/3-ways-retirees-can-build-credit?ref=seealso" target="_blank">3 Ways Retirees Can Build Credit</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F5-surefire-ways-to-maintain-a-good-credit-score-in-retirement&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F5%2520Surefire%2520Ways%2520to%2520Maintain%2520a%2520Good%2520Credit%2520Score%2520in%2520Retirement.jpg&amp;description=5%20Surefire%20Ways%20to%20Maintain%20a%20Good%20Credit%20Score%20in%20Retirement"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/5%20Surefire%20Ways%20to%20Maintain%20a%20Good%20Credit%20Score%20in%20Retirement.jpg" alt="5 Surefire Ways to Maintain a Good Credit Score in Retirement" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/5-surefire-ways-to-maintain-a-good-credit-score-in-retirement">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-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/credit-challenged-how-alternative-credit-data-can-help-those-with-little-or-no-credit">Credit Challenged? How Alternative Credit Data Can Help Those With Little or No Credit</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/avoid-these-5-common-mistakes-while-rebuilding-your-credit">Avoid These 5 Common Mistakes While Rebuilding Your Credit</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/what-the-new-credit-card-formula-means-for-your-wallet">What the New Credit Card Formula Means for Your Wallet</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-ways-to-build-business-credit-when-youre-self-employed">5 Ways to Build Business Credit When You&#039;re Self-Employed</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-things-your-credit-report-does-not-include">7 Things Your Credit Report Does NOT Include</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement borrowing co-signing credit history credit reports credit score lending paying bills Thu, 29 Mar 2018 09:00:06 +0000 Dan Rafter 2115359 at http://www.wisebread.com 8 Ways Retirees Can Spring Clean Their Finances http://www.wisebread.com/8-ways-retirees-can-spring-clean-their-finances <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-ways-retirees-can-spring-clean-their-finances" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/senior_couple_paying_bills_online_at_home.jpg" alt="Senior couple paying bills online at home" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>So you've finally made the jump out of the working world and into blissful retirement. Congratulations! If you've been careful in your financial planning, you should have plenty of money to sustain yourself for a long time and have a happy post-work life. But even the most well-off retirees could benefit from re-examining their financial situation.</p> <p>Here are a few ways retirees can get their finances spic and span this spring.</p> <h2>1. Check your spending</h2> <p>After you've spent a large portion of your life amassing a large retirement fund, you may feel like your days of watching every dollar are over. But it's still important to make sure your expenses aren't higher than what your savings can afford. Now that you are home instead of heading to the office every day, you may be spending more on utilities. You may have unreimbursed expenses relating to caring for your grandchildren. That African safari trip may have cost you more than expected.</p> <p>If you have an annuity or are making regular withdrawals in retirement, it's important to avoid spending more than those payments. Otherwise, you may find yourself lacking in funds down the road. You may be fortunate to live for many more years, but you don't want to go broke along the way. (See also: <a href="http://www.wisebread.com/6-ways-you-can-cut-costs-right-before-you-retire-0?ref=seealso" target="_blank">6 Ways You Can Cut Costs Right Before You Retire</a>)</p> <h2>2. Meet with a financial adviser</h2> <p>Even retirees who have plenty of money and a good financial plan can benefit from a checkup with an adviser. A good financial planner can help you assess whether your retirement savings are still on track to last and if there are any necessary tweaks. An adviser can also help walk you through any changes to tax laws and explain any changes to the investment landscape. Once you retire, don't just put your head in the sand and assume your money will last as long as you do. A periodic financial check-in with an expert can be hugely valuable to anyone seeking the best retirement possible. (See also: <a href="http://www.wisebread.com/3-reasons-to-be-picky-when-hiring-a-financial-planner?ref=seealso" target="_blank">3 Reasons to Be Picky When Hiring a Financial Planner</a>)</p> <h2>3. Assess your withdrawals</h2> <p>Once you reach age 70 &frac12;, you may be required to make minimum withdrawals from your retirement accounts. The ultimate size of these withdrawals &mdash; and whether you decide to start withdrawing sooner &mdash; will determine how much you have to live on, and how much you'll have left in your accounts. If you are taking withdrawals already, take some time to determine whether the amount taken out each month is sufficient or too much. (See also: <a href="http://www.wisebread.com/3-financial-penalties-every-retiree-should-avoid?ref=seealso" target="_blank">3 Financial Penalties Every Retiree Should Avoid</a>)</p> <h2>4. Re-examine your will</h2> <p>You remember filling out a will many years ago, but do you remember what it says? Do you still agree with the directives regarding who gets your assets when you pass? These aren't pleasant things to think about, but your family will appreciate it if your wishes are made clear. It may even make sense to discuss this with your children and other family members so there are no surprises or acrimony later. (See also: <a href="http://www.wisebread.com/6-times-you-need-to-update-your-will?ref=seealso" target="_blank">6 Times You Need to Update Your Will</a>)</p> <h2>5. Rebalance your portfolio</h2> <p>If you are retired, your investment portfolio should be geared more toward preserving income than growing it. It's OK to own some stocks, but it makes sense to also mix in some bonds, cash, and other more conservative investments. You may think your portfolio is optimized for retirement, but there's a chance it may have gotten out of balance. This is especially true over the last few years when stocks have performed very well.</p> <p>Everyone, not just retirees, is encouraged to rebalance their portfolios every year. If you haven't taken a hard look at your investments in a while, take the time to see if some smart buying and selling will get you back on the right track. (See also: <a href="http://www.wisebread.com/7-reasons-to-invest-in-stocks-past-age-50?ref=seealso" target="_blank">7 Reasons to Invest in Stocks Past Age 50</a>)</p> <h2>6. Do a deep dive into your charitable giving</h2> <p>You may finally be in a position to be generous with your money. But are you being smart and strategic about how you are giving to charity?</p> <p>Charitable donations are not only a wonderful thing to do, they can help you financially by saving you on taxes. If you itemize tax deductions, charitable donations can reduce your tax bill. Donating shares of stock to a charity can help you avoid capital gains taxes. If you are considering donating to charity, come up with a smart plan to support the causes you love as part of a broader tax savings strategy. (See also: <a href="http://www.wisebread.com/5-ways-giving-to-charity-is-good-for-you?ref=seealso" target="_blank">5 Ways Giving to Charity Is Good for You</a>)</p> <h2>7. Assess your health insurance situation</h2> <p>Older Americans can benefit from Medicare, but you may not be eligible if you retire early. And even if you do get Medicare, that doesn't cover every medical expense. Most retirees find that they need to purchase a Medicare supplement plan, as well as additional insurance for eyeglasses, hearing aids, dental work, and other health needs. You'll also need to consider whether long-term care insurance is right for you. Don't assume you are properly insured just because you are eligible for Medicare. (See also: <a href="http://www.wisebread.com/how-to-make-sense-of-the-different-parts-of-medicare?ref=seealso" target="_blank">How to Make Sense of the Different Parts of Medicare</a>)</p> <h2>8. Hit the gym and eat better</h2> <p>Exercising may not seem like a financial decision, but in many ways it is. Getting and staying healthy will not only help you enjoy retirement more, but it could help reduce medical bills that may not be covered by insurance. Work to lose weight, lower your blood pressure, and make better lifestyle choices. You may find yourself not only healthier, but wealthier too. (See also: <a href="http://www.wisebread.com/7-smart-ways-to-invest-in-your-health?ref=seealso" target="_blank">7 Smart Ways to Invest in Your Health</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F8-ways-retirees-can-spring-clean-their-finances&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F8%2520Ways%2520Retirees%2520Can%2520Spring%2520Clean%2520Their%2520Finances.jpg&amp;description=8%20Ways%20Retirees%20Can%20Spring%20Clean%20Their%20Finances"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/8%20Ways%20Retirees%20Can%20Spring%20Clean%20Their%20Finances.jpg" alt="8 Ways Retirees Can Spring Clean Their Finances" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/8-ways-retirees-can-spring-clean-their-finances">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/8-questions-financial-advisers-hear-most-often">8 Questions Financial Advisers Hear Most Often</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-costly-mistakes-diy-investors-make">9 Costly Mistakes DIY Investors Make</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-retirement-struggles-nobody-talks-about-and-how-to-beat-them">5 Retirement Struggles Nobody Talks About — And How to Beat Them</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/new-job-dont-make-these-7-mistakes-with-your-benefits">New Job? Don&#039;t Make These 7 Mistakes With Your Benefits</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/if-youre-lucky-enough-to-receive-a-pension-here-are-6-things-you-need-to-do">If You&#039;re Lucky Enough to Receive a Pension, Here Are 6 Things You Need to Do</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement charity financial advisers financial planning health care money moves rebalancing spending spring cleaning taxes Wed, 28 Mar 2018 09:00:07 +0000 Tim Lemke 2119356 at http://www.wisebread.com 3 Financial Penalties Every Retiree Should Avoid http://www.wisebread.com/3-financial-penalties-every-retiree-should-avoid <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/3-financial-penalties-every-retiree-should-avoid" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/old_couple_having_problems_with_their_home_finances_0.jpg" alt="Old couple having problems with their home finances" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Managing money effectively can be challenging enough, but paying unnecessary financial fines only makes it tougher &mdash; especially in retirement. Here are three hefty penalties many older people may face, and how to avoid them.</p> <h2>1. Failing to take RMDs</h2> <p>If you are age 70&frac12; or older, have money in a tax-deferred retirement account, and fail to take your required minimum distributions (RMDs), you will owe a penalty equal to half the required-but-not-taken amount. You'll also have to catch up on the amount you were supposed to take and pay tax on that.</p> <p>The potential penalty pertains to traditional IRAs and 401(k)s &mdash; any retirement account that enabled you to make tax-deductible contributions and defer taxes on investment gains. It does not pertain to Roth accounts.</p> <p>You see, Uncle Sam wants his money, and age 70&frac12; is as long as he's willing to wait. Even if you don't need the money, you have to start drawing it out of your account(s) and paying taxes on it or face the penalty.</p> <p>To determine the amount of your RMD for a particular year, take the account balance at the end of the prior year and divide it by the distribution period from the IRS's Uniform Lifetime Table found in <a href="https://www.irs.gov/retirement-plans/plan-participant-employee/required-minimum-distribution-worksheets" target="_blank">these IRS work sheets</a>.</p> <p>For the year you turn 70&frac12;, your RMD must be taken by April 1 of the following year. For all subsequent years, it must be taken by the end of the year. If you have multiple accounts, you must calculate your RMD for each one. For IRAs, the total distribution amount can be taken from just one of the accounts or spread out across all of them, and it can be taken as a lump sum or little by little throughout the year. RMDs from employer-sponsored retirement accounts or inherited IRAs must be taken from their respective accounts.</p> <h2>2. Claiming Social Security too early</h2> <p>If you claim Social Security benefits when you are first eligible at age 62, you will lock yourself in to the lowest possible monthly payments. For those born in 1960 or later, it will be about 30 percent less than if you wait until your full retirement age of 67.</p> <p>The Social Security Administration's <a href="https://www.ssa.gov/planners/retire/retirechart.html" target="_blank">full retirement age chart</a> has the details. Even better, check the actual benefit amounts you'll be eligible for at different ages by creating your own account on the SSA's site.</p> <p>Some argue that by collecting even a reduced benefit beginning at age 62, that five-year head start is more beneficial than waiting. And it's true that there are some people for whom it may make sense to claim as early as possible. However, with longer life spans, waiting at least until full retirement age &mdash; and arguably, even waiting until the maximum age of 70 &mdash; will prove most beneficial for most people.</p> <p>Plus, consider a married couple's situation in which the man is the higher earner. Because women tend to live longer than men, and because widows are eligible to replace their monthly benefit with their husband's upon his death, that's one more reason why a higher-earning husband may want to wait until he's eligible for his highest monthly benefit. (See also: <a href="http://www.wisebread.com/3-reasons-to-claim-social-security-before-your-retirement-age?ref=seealso" target="_blank">3 Reasons to Claim Social Security Before Your Retirement Age</a>)</p> <h2>3. Missing the Medicare sign-up deadline</h2> <p>Medicare eligibility begins at age 65. If you claim Social Security benefits at least four months before your 65th birthday, you'll be automatically enrolled in Medicare at the appropriate time. However, if you hold off on Social Security until you're older than 65 but you want Medicare coverage, you'll have to sign-up for it within a seven-month window that begins three months before your 65th birthday month. Otherwise, you'll face two possible penalties &mdash; one for Medicare Part A (hospital insurance) and one for Part B (medical insurance).</p> <p>Most people qualify for premium-free Part A coverage based on how much they or their spouse contributed to Medicare during their careers. However, if you don't qualify for free Part A coverage and don't sign up on time, opting for it later will cost you in the form of premiums that are 10 percent more expensive than they would have been otherwise.</p> <p>Those higher premiums will be in effect for twice the number of years that you've been eligible for coverage. In other words, if you sign up at age 67 (two years past the age when you were first eligible), you'll owe the higher premiums for four years. Bottom line on Part A? Most people should sign up when they are first eligible.</p> <p>The penalty for missing the sign-up window for Part B is even more significant &mdash; 10 percent higher premiums for as long as you have coverage. Plus, your earliest opportunity to sign up will be the next January-through-March period, with the policy going into effect on July 1, so you may experience a coverage gap.</p> <p>Of course, a prime reason why you might want to opt out of Medicare Part B is that you're still working, have health insurance, and don't want to pay the additional premium.</p> <p>According to Medicare, if your employer has less than 20 employees, you should sign up for Medicare Parts A and B when you are first eligible. It will become your primary health insurance, with any other coverage you have only paying expenses not covered by Medicare.</p> <p>If your employer has 20 or more employees and you are covered by a group insurance plan, you don't have to sign up for Medicare Part B (if you do, it will become your secondary insurance). However, when you leave that employer, you'll have to sign up within eight months or face the penalty mentioned earlier. (See also: <a href="http://www.wisebread.com/how-to-make-sense-of-the-different-parts-of-medicare?ref=seealso" target="_blank">How to Make Sense of the Different Parts of Medicare</a>)</p> <p>Clearly, as you get older, certain birthdays aren't just causes for celebration. They're reminders to make careful decisions about your tax-deferred retirement accounts, Social Security, and Medicare.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F3-financial-penalties-every-retiree-should-avoid&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F3%2520Financial%2520Penalties%2520Every%2520Retiree%2520Should%2520Avoid.jpg&amp;description=3%20Financial%20Penalties%20Every%20Retiree%20Should%20Avoid"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/3%20Financial%20Penalties%20Every%20Retiree%20Should%20Avoid.jpg" alt="3 Financial Penalties Every Retiree Should Avoid" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/matt-bell">Matt Bell</a> of <a href="http://www.wisebread.com/3-financial-penalties-every-retiree-should-avoid">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-age-milestones-that-impact-your-retirement">6 Age Milestones That Impact Your Retirement</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/three-of-the-toughest-decisions-youll-face-in-retirement">Three of the Toughest Decisions You&#039;ll Face 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/heres-how-your-taxes-will-change-when-you-retire">Here&#039;s How Your Taxes Will Change When You Retire</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/13-crucial-social-security-terms-everyone-needs-to-know">13 Crucial Social Security Terms Everyone Needs to Know</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/what-you-need-to-know-about-working-while-collecting-social-security">What You Need to Know About Working While Collecting Social Security</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement benefits deadlines medicare penalties required minimum distributions rmd social security Thu, 22 Mar 2018 09:30:19 +0000 Matt Bell 2115992 at http://www.wisebread.com Free "Digital Retirement Coach" Aims to Take Angst Out of Retirement Planning http://www.wisebread.com/free-digital-retirement-coach-aims-to-take-angst-out-of-retirement-planning <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/free-digital-retirement-coach-aims-to-take-angst-out-of-retirement-planning" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/couple_happy_laptop_623865198.jpg" alt="Couple working on retirement planning" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you're like me, you dread thinking about retirement planning. But a new website from two nonprofit organizations, AARP and the Ad Council, incorporates a &quot;digital retirement coach&quot; that helps you get started with minimal pain.</p> <p>That's saying a lot. According to a survey commissioned by AARP and Ad Council, 45 percent of moderate-income Americans between 40 and 59 years old said they would prefer a visit to the dentist to a meeting with a financial adviser. The same survey found that 49 percent of people in that age group were not confident about retirement planning.</p> <p>To be sure, there are plenty of obstacles to retirement saving, including tight budgets and lack of financial confidence. Yet most of the 40- to 59-year-olds surveyed have already met significant financial challenges in their lives, including buying a car or a house, or paying off a student loan or mortgage. More than half have used money-saving strategies like coupon-clipping and comparison shopping.</p> <p>With that data in mind, AARP and the Ad Council created <a href="https://aceyourretirement.org/" target="_blank">AceYourRetirement.org</a>, a free website that takes a lot of complexity and stress out of retirement saving. That's also where you'll meet a chatbot named Avo, the site's digital retirement coach. But why a chatbot?</p> <p>&quot;People already feel overwhelmed or stressed when they think about their retirement savings,&quot; says Mary Liz Burns, the Strategy Director of Financial Resilience at AARP, &quot;and we wanted to create an empowering experience to help people get on track &mdash; they <em>can</em> do this! AceYourRetirement.org and our friendly digital coach, Avo are fun and accessible for everyone, and there is no judgement. As you use the site, you feel like you are simply texting with a friend.&quot;</p> <p>Here's what I found when I visited.</p> <h2>It doesn't look like other retirement planning websites</h2> <p>Here's a screenshot of my visit.</p> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5171/Avo_001.png" alt="" width="605" height="337" /></p> <p>It looks more like the interface on a smartphone chat or texting app than an accounting tool. There are no form fields to fill with personally identifiable information, or spreadsheets to download and save. There are no ads pitching retirement saving products (it was created by nonprofits, after all).</p> <p>After you click through a few introductory screens, a smiling chatbot named Avo blinks at you and begins to ask questions. Avo is a &quot;digital retirement coach&quot; that makes the whole process feel friendly and supportive. You answer its questions by typing a few words in the chat window or by selecting &quot;yes&quot; or &quot;no&quot; with a slider button.</p> <h2>It doesn't ask you for a bunch of financial details</h2> <p>Avo asks your age, when you plan to retire, whether you plan to work part-time once you do, and if you have kids. Only one question is tough &mdash; the percentage of income you're already setting aside for retirement, so you may want to get a handle on that before you start.</p> <p>After half a dozen or so similar questions, it returns with some advice. The questionnaire was much shorter than I expected it to be.</p> <h2>It gives you three action items when you're finished</h2> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5171/Avo_002.png" alt="" width="605" height="339" /></p> <p>Mine were:</p> <ul> <li>Get paid to wait.</li> <li>Picture yourself post-retirement.</li> <li>What's your number?</li> </ul> <p>With the action items, the website drops the chatbot and gets down to brass tacks.</p> <p>&quot;Get paid to wait&quot; advised me to delay taking Social Security to maximize my monthly payment. It also pointed me to additional tools where I can learn my full retirement age (according to the Social Security Administration), and how much I can expect to receive once I do take Social Security.</p> <p>Reading this is a little more involved than answering a chatbot's questions, but honestly, it still takes only 20 minutes max. The other two action items were more detailed and required more time &mdash; and financial details &mdash; before I could check them off my to-do list.</p> <h2>It's a cute face on top of a lot of retirement planning depth</h2> <p>Digging in on the other two action items meant reviewing my current savings and expenses to estimate my post-retirement needs and calculating how much I need to save to get there. These are the familiar calculations one finds at retirement planning websites across the internet.</p> <p>Presented here as a series of step-by-step tasks, the road ahead seems a little less daunting. That's not to say the required amount that I need to save isn't daunting &mdash; it is! &mdash; but with the website's help, at least I have a number to aim for.</p> <h2>The website sets me on the right path, but I have to follow through</h2> <p>With the savings goal in hand, I have an idea of the scope of the challenge ahead, but I still have a lot of work to do. I need to increase my savings to reach that number, and there is more to that than answering questions in chat and filling in calculator fields. I need to choose the right savings vehicles, prioritize some spending, and eliminate credit card debt once and for all.</p> <p>The resources included in the action items offer additional detail on how to accomplish some of these important tasks. It's still a lot of work, but at least with the provided guidance I'm more confident now that I know where to start.</p> <h2>Will Avo be a financial adviser in the future?</h2> <p>There is a lot of chatter in personal finance circles about using behavioral &quot;nudges&quot; to help people become better at money management, including retirement planning. Popular personal finance apps like Mint and Personal Capital make the task easier by eliminating a lot of the tedium through automation, and they make it more fun with user-friendly interfaces.</p> <p>Elsewhere, financial experts often encourage us to automate saving through direct deposit from our paychecks, and there's been a shift toward making 401(k) deductions &quot;opt-out&quot; rather than &quot;opt-in.&quot; When the deductions are done by default, we're much more likely to take advantage of them.</p> <p>Right now, Avo does a great job helping reluctant savers get over early resistance to retirement planning. Maybe one day, Avo will work in tandem with a financial robo-adviser tied to our investment accounts to give us with more in-depth financial planning.</p> <p>For now, give Avo a try and see if you don't feel more confident about retirement planning, too.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Ffree-digital-retirement-coach-aims-to-take-angst-out-of-retirement-planning&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FFree%2520_Digital%2520Retirement%2520Coach_%2520Aims%2520to%2520Take%2520Angst%2520Out%2520of%2520Retirement%2520Planning.jpg&amp;description=Free%20%22Digital%20Retirement%20Coach%22%20Aims%20to%20Take%20Angst%20Out%20of%20Retirement%20Planning"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/Free%20_Digital%20Retirement%20Coach_%20Aims%20to%20Take%20Angst%20Out%20of%20Retirement%20Planning.jpg" alt="Free &quot;Digital Retirement Coach&quot; Aims to Take Angst Out of Retirement Planning" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/lars-peterson">Lars Peterson</a> of <a href="http://www.wisebread.com/free-digital-retirement-coach-aims-to-take-angst-out-of-retirement-planning">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-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/8-money-moves-to-make-the-moment-you-get-a-promotion">8 Money Moves to Make the Moment You Get a Promotion</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/the-retirement-latte">The Retirement Latte</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-retirement-planning-steps-late-starters-must-make">7 Retirement Planning Steps Late Starters Must Make</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-occasions-when-you-should-definitely-hire-a-financial-advisor">7 Occasions When You Should Definitely Hire a Financial Advisor</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Career and Income Retirement aarp ad council bots fintech investing retirement retirement calculator retirement planning saving Wed, 21 Mar 2018 14:01:05 +0000 Lars Peterson 2121988 at http://www.wisebread.com Best Money Tips: Essential Tips to Manage Your 401(k) http://www.wisebread.com/best-money-tips-essential-tips-to-manage-your-401k <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-money-tips-essential-tips-to-manage-your-401k" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/401k_piggy_bank_645234372.jpg" alt="Finding ways to manage a 401(k)" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Welcome to Wise Bread's <a href="http://www.wisebread.com/topic/best-money-tips">Best Money Tips</a> Roundup! Today we found articles on tips for managing your 401(k), steps you can take to get your tax refund ASAP, and how to hustle as a new parent.</p> <h2>Top 5 Articles</h2> <p><a href="https://www.moneyunder30.com/essential-tips-to-manage-your-401k">6 Essential Tips to Manage Your 401(k)</a> &mdash; Increase your contribution by 1-5 percent, then set it up to increase by 1 percent annually. You'll hardly notice the difference in your paycheck, but it'll have a big impact on your portfolio down the road. [Money Under 30]</p> <p><a href="https://wallethacks.com/wheres-my-refund-fast/">Where&rsquo;s My Refund? How to Get Your Tax Refund As Quickly As Possible</a> &mdash; When you get your tax refund depends on when you filed, how you filed, and how you asked for your refund. [Wallet Hacks]</p> <p><a href="http://www.moneyaftergraduation.com/2018/03/07/hustle-new-parent/">How to Hustle as a New Parent</a> &mdash;These tips will help you manage that difficult work-life balance with a new baby in tow. [Money After Graduation]</p> <p><a href="https://www.popsugar.com/smart-living/Unclogging-Toilet-Bombs-32903823">Unclog Your Commode With Eco-Friendly Toilet Bombs</a> &mdash; These eco-friendly toilet bombs use the degreasing power of dish soap to bust through tough clogs and clean your commode. [PopSugar Smart Living]</p> <p><a href="https://thetinylife.com/tips-for-getting-started-keeping-chickens/">Getting Started With Chickens</a> &mdash; There are many benefits to keeping chickens beyond the eggs they provide. Learn what it takes to care for these productive birds! [The Tiny Life]</p> <h2>Other Essential Reading</h2> <p><a href="https://bemorewithless.com/air/">How to Land Your Plane: 8 ways to help you feel more grounded</a> &mdash; If your schedule and routines haven been thrown off, don't try to jump back in and expect things to go back to normal right away. Dip into your daily routines, giving yourself time to adjust. [Be More With Less]</p> <p><a href="https://www.theclassysimplelife.com/is-minimalism-right-for-you/">Is Minimalism Right For You?</a> &mdash; The minimalist lifestyle can be hard to maintain. Ask yourself these questions to figure out if minimalism is right for you. [The Classy Life]</p> <p><a href="http://www.pocketyourdollars.com/2018/03/ultimate-list-ways-moms-can-make-money-home/">The Ultimate List of Ways Moms Can Make Money From Home</a> &mdash; The only thing you need to start working from home is the willingness to serve and a product or service that people need. [Pocket Your Dollars]</p> <p><a href="https://thecollegeinvestor.com/21541/different-ways-to-get-student-loan-forgiveness/">80 Different Ways To Get Student Loan Forgiveness</a> &mdash; Need help with your student loan debt? Consider applying for one of these student loan forgiveness programs! [The College Investor]</p> <p><a href="https://www.csmonitor.com/Science/2018/0301/How-to-make-science-experiments-as-common-at-home-as-bedtime-stories">How to make science experiments as common at home as bedtime stories</a> &mdash; A recent study looks into the ways families with preschool-age children incorporate science learning into their lives, and what barriers keep them from doing so more. [The Christian Science Monitor]</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/amy-lu">Amy Lu</a> of <a href="http://www.wisebread.com/best-money-tips-essential-tips-to-manage-your-401k">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/8-startling-facts-that-will-make-you-want-to-invest">8 Startling Facts That Will Make You Want to Invest</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-things-millennials-can-do-right-now-for-an-early-retirement">8 Things Millennials Can Do Right Now for an Early Retirement</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-alternatives-to-a-401k-plan">5 Alternatives to a 401(k) 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/5-ways-to-boost-your-odds-of-retiring-early">5 Ways to Boost Your Odds of Retiring Early</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <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> </ul> </div> </div> </div> </div><br/></br> Investment Retirement 401(k) best money tips Wed, 14 Mar 2018 09:31:18 +0000 Amy Lu 2118000 at http://www.wisebread.com 8 Startling Facts That Will Make You Want to Invest http://www.wisebread.com/8-startling-facts-that-will-make-you-want-to-invest <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-startling-facts-that-will-make-you-want-to-invest" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/retirement_savings_golden_nest_egg.jpg" alt="Retirement savings golden nest egg" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Sometimes you need to be startled into action when it comes to investing. It's easy to come up with excuses not to begin placing money in the markets and saving for retirement. Armed with the right information, however, most people would likely choose to invest rather than stay on the sidelines.</p> <p>Perhaps it's time to digest these eye-opening facts and realize that waiting to invest could be a big mistake.</p> <h2>1. The average retirement savings is measly</h2> <p>According to a 2016 survey from the Transamerica Center for Retirement Studies, baby boomers have an average retirement savings of $147,000. Those from Generation X have an average $69,000, while millennials have $31,000 saved. Those figures have probably risen slightly in the last two years, but are still well shy of the totals necessary for a comfortable retirement.</p> <p>Older people approaching retirement age may have held off investing in their earlier years and are now playing catch up. Younger people have more time to invest and get to where they need to be &mdash; but the longer they wait, the harder it gets. (See also: <a href="http://www.wisebread.com/7-retirement-planning-steps-late-starters-must-make?ref=seealso" target="_blank">7 Retirement Planning Steps Late Starters Must Make</a>)</p> <h2>2. You may be retired longer than you worked</h2> <p>Imagine starting work at 21 and retiring at 60. That's 39 years in the workforce. If you live to 100, that's an additional 40 years &mdash; longer than the time you spent working! People are living longer these days, so it's not uncommon to see retirees still kicking it well into their 90s and beyond. In some cases, retirements are stretching past 40 years. Are you doing all you can to allow your money to last that long? Smart investing may be the only way to accumulate enough cash to support a retirement of that length. (See also: <a href="http://www.wisebread.com/5-ways-longevity-is-changing-retirement-planning-and-what-to-do-about-it?ref=seealso" target="_blank">5 Ways Longevity Is Changing Retirement Planning (And What to Do About It)</a>)</p> <h2>3. Very few people get a pension these days</h2> <p>Defined benefit plans, in which a company guarantees workers a specific amount of money each year in their retirement, have been going away fast. Today, only 13 percent of nonunion private sector workers have access to a defined benefit plan, according to the Bureau of Labor Statistics.</p> <p>Instead, most companies now only offer defined contribution plans, such as a 401(k). With these plans, workers must invest their own money, and companies may offer to match a certain percentage of contributions (some don't). If you're in the workforce, it's likely incumbent upon you to take charge of your own retirement savings. (See also: <a href="http://www.wisebread.com/if-youre-lucky-enough-to-receive-a-pension-here-are-6-things-you-need-to-do?ref=seealso" target="_blank">If You're Lucky Enough to Receive a Pension, Here Are 6 Things You Need to Do</a>)</p> <h2>4. Half of workers say they'll probably work during retirement</h2> <p>Isn't the entire idea of retirement to stop working? For many people, ceasing to work entirely just isn't in the cards. The Transamerica survey revealed that about half of all workers &mdash; including baby boomers, Gen Xers, and millennials &mdash; expect to work at least part-time during retirement. Working is fine if you want to, but if you dread the idea of punching a clock in your old age, invest now.</p> <h2>5. About 20 percent of seniors rely on Social Security for nearly everything</h2> <p>Social Security is certainly better than nothing if you're retired, but it's not a lot of money. The maximum Social Security benefit for 2018 is $2,788 per month, or about $33,500 a year, if you retire at age 66. You could get up to $3,698 monthly if you are willing to wait until age 70 begin accepting payments.</p> <p>You won't starve, but you're not going to be cruising the Mediterranean, either. And yet, roughly one in five Americans over 65 rely on Social Security for 90 percent or more of their income, according to a 2015 study from AARP. There are some states where this figure rises to more than one in three older residents. This is a startling figure when you consider that Social Security is currently running a deficit. Invest now, so that Social Security can be like icing on your retirement cake. (See also: <a href="http://www.wisebread.com/5-questions-to-ask-before-you-start-claiming-your-social-security-benefits?ref=seealso" target="_blank">5 Questions to Ask Before You Start Claiming Your Social Security Benefits</a>)</p> <h2>6. The market rarely has bad years</h2> <p>Everyone remembers when the market crashed about a decade ago during the financial crisis. And there have been some high-profile bad years in the past. But consider this: Since the end of World War II, the S&amp;P 500 has <a href="http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html" target="_blank">recorded a negative annual return</a> just 15 times. That's 15 bad years out of 72. The New York Yankees have won 17 World Series titles during the same period! Only once since World War II &mdash; from 2000 to 2002 &mdash; has the market had three bad years in a row, and there's only one other instance of back-to-back negative annual returns. So even if you had no idea what year it was and still chose not to invest, you'd likely be missing out on positive returns. (See also: <a href="http://www.wisebread.com/how-the-risk-averse-can-get-into-the-stock-market?Ref=seealso" target="_blank">How the Risk Averse Can Get Into the Stock Market</a>)</p> <h2>7. Almost as many people own dogs as stocks</h2> <p>About 54 percent of Americans own stocks, according to research from Gallup. Meanwhile, the American Pet Products Association reports that 48 percent of Americans own dogs. Dogs are nice. Dogs can be enjoyable. Dogs are good to have in retirement as companions, but they won't appreciate in value or help pay the bills as you get older.</p> <p>Invest now, and you can have a comfortable retirement, complete with as many canine friends as you want.</p> <h2>8. If you invested $100 in Amazon 20 years ago, you'd have $50,000</h2> <p>When Amazon went public in 1997, its shares were trading at about $18. As of this writing, the company is now trading at more than $1,300 per share. A simple $100 investment 20 years ago would be worth tens of thousands today. Of course, Amazon's stock returns aren't typical. But it goes to show how even a modest investment over time can prove to be enormously lucrative.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F8-startling-facts-that-will-make-you-want-to-invest&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F8%2520Startling%2520Facts%2520That%2520Will%2520Make%2520You%2520Want%2520to%2520Invest.jpg&amp;description=8%20Startling%20Facts%20That%20Will%20Make%20You%20Want%20to%20Invest"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/8%20Startling%20Facts%20That%20Will%20Make%20You%20Want%20to%20Invest.jpg" alt="8 Startling Facts That Will Make You Want to Invest" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/8-startling-facts-that-will-make-you-want-to-invest">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-make-sure-you-dont-run-out-of-money-in-retirement">How to Make Sure You Don&#039;t Run Out of Money in Retirement</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-reasons-youre-never-too-old-to-buy-stocks">7 Reasons You&#039;re Never Too Old to Buy Stocks</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-signs-its-time-to-retire">8 Signs It&#039;s Time to Retire</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-easiest-ways-to-catch-up-on-retirement-savings-later-in-life">7 Easiest Ways to Catch Up on Retirement Savings Later in Life</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-retirement-rules-you-should-be-breaking">6 Retirement Rules You Should Be Breaking</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment Retirement 401(k) fun facts late retirement pensions returns s&p 500 social security startling facts stocks working Wed, 14 Mar 2018 09:01:08 +0000 Tim Lemke 2106620 at http://www.wisebread.com 11 Basic Questions About Retirement Saving Everyone Should Ask http://www.wisebread.com/11-basic-questions-about-retirement-saving-everyone-should-ask <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/11-basic-questions-about-retirement-saving-everyone-should-ask" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/investing_money_for_retirement_in_piggy_bank_0.jpg" alt="Investing money for retirement in piggy bank" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Saving for retirement is critically important &mdash; we all know that. But sometimes, the confusing details can throw us off course or prevent us from doing all we can to properly grow our nest egg.</p> <p>Education is the best tool when it comes to most matters of personal finance. And for retirement planning, there are some facts everyone should know. It's time to ask yourself these questions and brush up on the basics of retirement savings.</p> <h2>1. When can I start contributing to a retirement account?</h2> <p>With a traditional or Roth IRA, you can generally start contributing funds as soon as the account has been set up. However, rules can vary for employer-sponsored 401(k) plans. Some 401(k) plans may have a waiting period ranging from six to 12 months to make your first contribution, while others may allow you to contribute immediately. It's a good practice to check all applicable rules for your workplace retirement plan at the time of sign-up and again during every open enrollment period. (See also: <a href="http://www.wisebread.com/8-critical-401k-questions-you-need-to-ask-your-employer?ref=seealso" target="_blank">8 Critical 401(k) Questions You Need to Ask Your Employer</a>)</p> <h2>2. How much can I save in each type of account?</h2> <p>You can sock away the most money per year in a 401(k). In 2018, you can contribute up to $18,500 to a 401(k), and an additional $6,000 in catch-up contributions if you're over age 50. By comparison, you can only contribute up to $5,550 to an IRA ($6,500 if over age 50). Due to its higher contribution limits, a 401(k) is a very beneficial account for those trying to make up for low savings in previous years or those close to retirement age. However, if possible, having both types of accounts is the even better option. (See also: <a href="http://www.wisebread.com/401k-or-ira-you-need-both?ref=seealso" target="_blank">401(k) or IRA? You Need Both</a>)</p> <h2>3. Am I taking advantage of the company match?</h2> <p>If you're offered a company match, you <em>must </em>take advantage of it. And since 94 percent of Vanguard 401(k) plans provide employer contributions, chances are that you have access to a workplace savings plan with a matching formula.</p> <p>A common formula for matching is $0.50 per dollar that you contribute up to 6 percent of your annual pay. This means that a worker making $50,000 per year could receive an extra $3,000 in employer matching contributions by contributing $6,000 of their annual salary into a 401(k). Some might say there's no such thing as a free lunch, but an employer match on your 401(k) truly is a freebie. (See also: <a href="http://www.wisebread.com/7-things-you-should-know-about-your-401k-match?ref=seealso" target="_blank">7 Things You Should Know About Your 401(k) Match</a>)</p> <h2>4. What happens if I change jobs?</h2> <p>From the date that you separate from your employer, you should aim to decide what to do with your 401(k) balance within 60 days. The reason for 60 days is that this is the deadline to complete an indirect rollover into a new retirement account (if your employer were to cash out your entire balance and hand you a check) and pay back any outstanding loans on your 401(k) (if not paid, they become taxable income and may even trigger penalties).</p> <p>Under most scenarios, you have six rollover options for your total vested account balance:</p> <ul> <li> <p>Keep your account.</p> </li> <li> <p>Rollover account into a new or existing IRA.</p> </li> <li> <p>Rollover account into a new or existing qualified plan.</p> </li> <li> <p>Do an indirect rollover.</p> </li> <li> <p>Request a full cash-out of your account.</p> </li> <li> <p>Do a mix of the above five options.</p> </li> </ul> <p>(See also: <a href="http://www.wisebread.com/a-simple-guide-to-rolling-over-all-of-your-401ks-and-iras?ref=seealso" target="_blank">A Simple Guide to Rolling Over All of Your 401Ks and IRAs</a>)</p> <h2>5. Is it better to contribute after-tax or pretax dollars?</h2> <p>There is no right or wrong answer here, as either way offers a benefit. Contributing with pretax dollars (traditional IRA, 401(k)) allows you to reduce your taxable income by deferring income taxes until retirement, at which point you're more likely to be in a lower tax bracket. So, if you're expecting to be making more money now than you will be in retirement, you should contribute pretax money. This is the majority of American workers.</p> <p>Workers just beginning their careers, workers in professions with a high upside income potential, and individuals expecting a large windfall, such as a family trust or inheritance, can greatly benefit from contributing after-tax dollars to a Roth IRA or Roth 401(k).</p> <h2>6. Can I withdraw money early from my accounts?</h2> <p>Early distribution rules vary per type of plan.</p> <h3>401(k)</h3> <p>Generally, you can only take money from a 401(k) plan early due to a hardship or extreme situation, such as avoiding a foreclosure, making a first-time home purchase, or an unexpected medical expense. However, rules vary per plan: Some plans may only offer you the option to take out a loan, while other plans won't allow you to withdraw money early at all. If you take a distribution from a 401(k) before age 59 &frac12;, you become liable for applicable income taxes and penalties.</p> <h3>Traditional IRA</h3> <p>There are several instances in which you can take an early distribution from a traditional IRA without incurring a penalty. This includes unreimbursed medical expenses, health insurance premiums during unemployment, the purchase of a first home, higher education expenses, and others. (See also: <a href="http://www.wisebread.com/7-penalty-free-ways-to-withdraw-money-from-your-retirement-account?ref=seealso" target="_blank">7 Penalty-Free Ways to Withdraw Money From Your Retirement Account</a>)</p> <h3>Roth IRA</h3> <p>Early withdrawals on <em>contributions</em> from a Roth IRA can be made at any time without incurring taxes and penalties, since you have already paid taxes on the money. Withdrawing any amount that exceeds your contributions counts as <em>earnings</em>, and is therefore subject to tax and penalties. In order to avoid those taxes and penalties, your Roth IRA must be at least five years old and withdrawals must be used for a qualified expense, such as the purchase of a new home or a disability. Higher education costs are also exempt from penalties, but you must pay income tax on the withdrawals.</p> <h2>7. What are required minimum distributions?</h2> <p>Eventually, the IRS wants its money in the form of taxes on your retirement distributions. When you reach age 70 &frac12;, you must begin taking required minimum distributions (RMDs) from your retirement plans. These rules apply to traditional and Roth 401(k) plans, as well as 403(b) plans, 457(b) plans, and traditional IRA-based plans such as SEPs, SARSEPs, and SIMPLE IRAs. If you fail to take your RMD, the IRS will take 50 percent of the amount you should have withdrawn as a penalty.</p> <p>The exception to the RMD rule is the Roth IRA, which is funded with post-tax dollars. (See also: <a href="http://www.wisebread.com/which-of-these-9-retirement-accounts-is-right-for-you?ref=seealso" target="_blank">Which of These 9 Retirement Accounts Is Right for You?</a>)</p> <h2>8. Are there any tax credits for retirement contributions?</h2> <p>Come tax time, eligible workers can claim the Retirement Savings Contributions Credit, better known as the Saver's Credit. Depending on your adjusted gross income (AGI), you can claim 50, 20, or 10 percent of your retirement plan contributions, up to $2,000 for single filers and $4,000 for married filing jointly. For example, a married couple with an AGI between $41,001 and $63,000 can claim 10 percent of their eligible contributions for the Saver's Credit in 2018. (See also: <a href="http://www.wisebread.com/5-dumb-401k-mistakes-smart-people-make?ref=seealso" target="_blank">Dumb 401(k) Mistakes Smart People Make</a>)</p> <h2>9. What is the recommended 401(k) portfolio allocation?</h2> <p>Here's some advice from one of the most successful investors of all time, Warren Buffett: Put 90 percent of your 401(k) balance in a very low-cost S&amp;P 500 index fund, and the remaining 10 percent in short-term government bonds. Keeping true to his word, he has included this very same advice in his will. (See also: <a href="http://www.wisebread.com/bookmark-this-a-step-by-step-guide-to-choosing-401k-investments?ref=seealso" target="_blank">Bookmark This: A Step-by-Step Guide to Choosing 401(k) Investments</a>)</p> <h2>10. What is an HSA?</h2> <p>Those with a high deductible health plan (HDHP) are eligible for a health savings account (HSA), which is a way to make pretax contributions to save for medical expenses. Many HSA providers offer the option to put money in an investment account with several fund options, including mutual funds and low-cost index funds.</p> <p>The main benefit of saving for medical expenses using an HSA is that you won't have to pay any income taxes on withdrawals used for qualifying medical expenses (even before retirement age). And when you do hit age 65, your HSA will basically become a traditional IRA. You can withdraw funds for any reason penalty-free, only paying income tax on the distributions. (See also: <a href="http://www.wisebread.com/how-an-hsa-could-help-your-retirement?ref=seealso" target="_blank">How an HSA Could Help Your Retirement</a>)</p> <h2>11. Does my plan offer financial advice services?</h2> <p>More and more plans are jumping on the bandwagon of offering a robo-adviser (an automated service suggesting or performing certain types of transactions on your behalf). The range of trades that a robo-adviser can perform ranges from periodically rebalancing your portfolio to selling securities.</p> <p>Fees can range, too: Some robo-advisers charge about 0.15 percent of your account balance or a flat monthly fee. Some plans may also offer you a-la-carte paid options to add a standard robo-adviser service. (See also: <a href="http://www.wisebread.com/9-questions-you-should-ask-before-hiring-a-robo-adviser?ref=seealso" target="_blank">9 Questions You Should Ask Before Hiring a Robo-Adviser</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F11-basic-questions-about-retirement-saving-everyone-should-ask&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F11%2520Basic%2520Questions%2520About%2520Retirement%2520Saving%2520Everyone%2520Should%2520Ask.jpg&amp;description=11%20Basic%20Questions%20About%20Retirement%20Saving%20Everyone%20Should%20Ask"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/11%20Basic%20Questions%20About%20Retirement%20Saving%20Everyone%20Should%20Ask.jpg" alt="11 Basic Questions About Retirement Saving Everyone Should Ask" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/damian-davila">Damian Davila</a> of <a href="http://www.wisebread.com/11-basic-questions-about-retirement-saving-everyone-should-ask">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/8-critical-401k-questions-you-need-to-ask-your-employer">8 Critical 401(k) Questions You Need to Ask Your Employer</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-age-milestones-that-impact-your-retirement">6 Age Milestones That Impact Your 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/which-of-these-9-retirement-accounts-is-right-for-you">Which of These 9 Retirement Accounts Is Right for You?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-every-retirement-saver-should-know-about-required-minimum-distributions">What Every Retirement Saver Should Know About Required Minimum Distributions</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/where-to-invest-your-money-after-youve-maxed-out-your-retirement-account">Where to Invest Your Money After You&#039;ve Maxed Out Your Retirement Account</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement 401(k) basics contributions early withdrawals employer match health savings accounts IRA penalties questions tax credits taxes Tue, 13 Mar 2018 10:00:06 +0000 Damian Davila 2115991 at http://www.wisebread.com 7 Reasons You're Never Too Old to Buy Stocks http://www.wisebread.com/7-reasons-youre-never-too-old-to-buy-stocks <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-reasons-youre-never-too-old-to-buy-stocks" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/grandfather_and_grandson_play_lying_on_grass.jpg" alt="Grandfather and grandson play lying on grass" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>One common rule of thumb for investors is to move away from stocks into more conservative investments as you get older. The thinking behind this is that stocks always carry the risk of losing value, and that's not something you want to see with your retirement fund.</p> <p>But completely abandoning stocks may not be the right strategy, either. Holding some stocks in your portfolio can be a hedge against inflation, and can help ensure that your retirement money lasts as long as you do.</p> <p>Here's a look at some reasons why, even for older investors, stocks are always a good buy.</p> <h2>1. You may live longer than you think</h2> <p>Many people assume that once you approach retirement age, all of your efforts should be focused on protecting your assets rather than growing them. But the reality is that many retirees will need their money to last 30 years or more, and the only way to make money last that long is to continue to accumulate it.</p> <p>Having some money in stocks will, in most years, allow you to replenish money that you spend from your portfolio. Consider this: If you have a nest egg of $1 million and spend $50,000 annually, your savings will be gone in about 20 years. But if you are able to add 4 percent to your portfolio each year from stocks, your savings could last another decade or more. (See also: <a href="http://www.wisebread.com/5-ways-longevity-is-changing-retirement-planning-and-what-to-do-about-it?ref=seealso" target="_blank">5 Ways Longevity Is Changing Retirement Planning (And What to Do About It)</a>)</p> <h2>2. Many stocks can be safe investments</h2> <p>We tend think of stocks as risky and volatile investments, but that's not always the case. Many stocks are actually very common and useful investments for people looking to bring stability to their portfolio.</p> <p>Dividend stocks are a common component of retiree accounts, because they generate income for the investor and generally don't rise and fall dramatically in price. There are also some industries, such as consumer goods, that have offered steady returns year in and year out. Some stocks, such as Wal-Mart, are good bets even during bad economic times. You don't have to lay off stocks entirely as you get close to retirement age. It's just a matter of finding stable, income-producing stocks that can serve you well as you get older.</p> <h2>3. Markets rebound fairly quickly</h2> <p>No one likes to see the stock market take a big dive, but the good news is that it always goes back up. There are only a handful of times in history when the stock market has had consecutive down years. Moreover, years with negative returns are often followed up with positive returns of greater magnitude. History shows that if you lose money in the markets one year, you'll likely make that money and more back within a few years. In other words, even if you are well into your senior years, you're unlikely to see your entire savings gone in a single swoop. (See also: <a href="http://www.wisebread.com/6-confidence-inspiring-facts-about-the-stock-market?ref=seealso" target="_blank">6 Confidence-Inspiring Facts About the Stock Market</a>)</p> <h2>4. Stocks don't need to comprise your whole portfolio</h2> <p>Buying stocks when you are at or near retirement age is only a bad idea if you're not also invested in more stable things like bonds and cash. Stocks don't have to make up 100 percent of your retirement fund. They don't even have to make up 50 or 25 percent. But having stocks as a relatively small percentage of your portfolio can help make your money last longer without adding much risk.</p> <p>For example, let's say you have $1 million in your retirement fund. And let's say 10 percent of that ($100,000) is in stocks, with the rest in bonds and cash. If the stock market were to take a dive of 30 percent in one year, you might lose $30,000 from the stock portion of the portfolio. That's $30,000 out of a total of $1 million saved, or just 3 percent of your total savings. You'd still have $970,000 left. Given that the market historically goes up more than it goes down, this is a reasonable risk to take. (See also: <a href="http://www.wisebread.com/how-the-risk-averse-can-get-into-the-stock-market?ref=seealso" target="_blank">How the Risk Averse Can Get Into the Stock Market</a>)</p> <h2>5. Returns from bonds and cash are lousy these days</h2> <p>For many years, it was common for Americans to get good returns on government and municipal bonds, as well as normal savings accounts and certificates of deposit. Thus, retirement accounts were constantly being replenished with new money.</p> <p>Nowadays, interest rates are still at some of their lowest rates in history, so it's easy to see how your personal spending rate will outpace the returns from your retirement funds. In fact, there is some risk that your returns may not even outpace the rate of inflation. Only with stocks will you be able to see the types of gains once seen from bonds and cash in the past, and you'll never be at risk of seeing inflation eat away at your nest egg.</p> <h2>6. Transgenerational wealth is a powerful thing</h2> <p>Have you ever wondered how massively wealthy people got their money? It's often because they inherited it. In fact, many younger Americans say they are expecting a sizable inheritance. According to a recent survey from Natixis, 60 percent of millennials believe they will inherit some money from their parents.</p> <p>If you want to ensure financial security for your children and even generations beyond, your own personal retirement time horizon is irrelevant. Only through stocks can you continue to accumulate returns that generate the kind of wealth that will transform the lives of your heirs.</p> <h2>7. Stocks are just more fun</h2> <p>Cash is safe. Bonds are safe. But they are boring as heck. And it's downright wrong to assume that older people can't have some excitement in their lives.</p> <p>Placing money in the stock market and watching it grow is fun. Being a shareholder of a company is fun. And if you are retired, you actually now have time to pay attention to your investments. Of course, you never want to let a desire for fun force you into a silly investment decision. Stocks should comprise a relatively small section of retirement funds for older people. But I'm not about to tell our seniors they can't let loose a little bit. (See also: <a href="http://www.wisebread.com/7-reasons-to-invest-in-stocks-past-age-50?ref=seealso" target="_blank">7 Reasons to Invest in Stocks Past Age 50</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fhow-to-talk-about-a-previous-job-in-an-interview&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F7%2520Reasons%2520Youre%2520Never%2520Too%2520Old%2520to%2520Buy%2520Stocks.jpg&amp;description=7%20Reasons%20Youre%20Never%20Too%20Old%20to%20Buy%20Stocks"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/7%20Reasons%20Youre%20Never%20Too%20Old%20to%20Buy%20Stocks.jpg" alt="7 Reasons You're Never Too Old to Buy Stocks" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/7-reasons-youre-never-too-old-to-buy-stocks">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-ways-longevity-is-changing-retirement-planning-and-what-to-do-about-it">5 Ways Longevity Is Changing Retirement Planning (And What to Do About It)</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-types-of-investors-which-one-are-you">8 Types of Investors — Which One Are You?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-3-rules-every-mediocre-investor-must-know">The 3 Rules Every Mediocre Investor Must Know</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-reasons-to-invest-in-stocks-past-age-50">7 Reasons to Invest in Stocks Past Age 50</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/want-your-investments-to-do-better-stop-watching-the-news">Want Your Investments to Do Better? Stop Watching the News</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment Retirement bonds inflation longevity market crash old age returns risk stock market stocks Mon, 12 Mar 2018 09:00:06 +0000 Tim Lemke 2114064 at http://www.wisebread.com How to Retire With Less Than $1 Million in Savings http://www.wisebread.com/how-to-retire-with-less-than-1-million-in-savings <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-retire-with-less-than-1-million-in-savings" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/finding_new_ways_to_safe_money.jpg" alt="Finding new ways to safe money" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The sad truth is that many Americans are vastly underprepared when it comes to retirement savings. A 2016 GoBankingRates survey revealed that 33 percent of Americans have nothing saved for retirement at all. In total, 56 percent have less than $10,000 saved.</p> <p>How much money does it actually take to retire comfortably? It seems like one million dollars is the magic number many people think of &mdash; and today, with people continuing to live longer, some think that magic number should be closer to $2 million. But is it really necessary? Could some people could get by in retirement on less?</p> <p>For some, a smaller retirement income could actually support a reasonable lifestyle provided inflation and health care costs don&rsquo;t get out of hand. For others, it might be a financial struggle.</p> <p>That being said, let's explore all the different ways you could live a happy retirement even if you don&rsquo;t amass a million-dollar nest egg.</p> <h2>Work part-time</h2> <p>If your nest egg won&rsquo;t stretch far enough for all of your financial needs, a part-time job could help immensely. Not only can the extra income come in handy, but a few hours of work per week can have a positive effect on retirees' mental health, as well as their sense of purpose and social life.</p> <p>You can choose to work in the same field as you always have or launch a second career, maybe in a field you've always been curious about. Turning a hobby into a business could also be profitable, provided it doesn't require a large financial investment to get off the ground. If you already have the skills and materials needed to get started, it can be a cost-effective and rewarding option to bring in extra income. (See also: <a href="http://www.wisebread.com/5-questions-retirees-should-ask-before-starting-a-small-business?ref=seealso" target="_blank">5 Questions Retirees Should Ask Before Starting a Small Business</a>)</p> <h2>Wait to take Social Security</h2> <p>If you can live comfortably on your savings early in your retirement, most people should hold off on taking Social Security benefits for as long as they can. The Social Security Administration reports that if you delay receiving retirement benefits until after your full retirement age, your monthly benefit continues to increase. If you can wait until you&rsquo;re 70 (the maximum age for waiting) you can get 132 percent of your expected payout. Unless your physical health or family history makes you think you will die before your late 70s, it usually makes sense to wait.</p> <p>This strategy requires patience and frugality, and it may not work for retirees who need their benefits earlier to get by. Before taking this option, make sure you&rsquo;ve got the financial means to wait, and that you have no other options for bringing in an alternative source of income. (See also: <a href="http://www.wisebread.com/6-smart-ways-to-boost-your-social-security-payout-before-retirement?ref=seealso" target="_blank">6 Smart Ways to Boost Your Social Security Payout Before Retirement</a>)</p> <h2>Reduce your housing costs</h2> <p>Housing is one of the largest expenses you&rsquo;ll incur in life. If you can decrease this expense, you could live on a lot less in retirement. One way of doing this is to move into a smaller home or apartment. This could help you eliminate or drastically lower your mortgage payment, as well as minimize other housing costs like utilities, maintenance, and property taxes.</p> <p>Another option is moving in with friends or family, if they are willing and able to take you in. Sharing a home is becoming increasingly common due to the rising costs of living for not only retirees, but for everyone else. If you don't have friends or family you could bunk with, you could try to find a roommate that could help foot your housing bill. (See also: <a href="http://www.wisebread.com/6-ways-you-can-cut-costs-right-before-you-retire-0?ref=seealso" target="_blank">6 Ways You Can Cut Costs Right Before You Retire</a>)</p> <h2>Invest in a health savings account (HSA)</h2> <p>A health savings account is available to those who have a high deductible health care plan. You contribute pretax dollars into your HSA, and can use those same pretax dollars to cover qualified health care expenses &mdash; everything from hearing aids, to X-rays, to bandages.</p> <p>The best part about this plan is that it can become a helpful part of your retirement savings when you turn 65. At this point, your HSA basically becomes a traditional IRA. You can withdraw the funds for anything &mdash; health care related or not &mdash; to help supplement your retirement income. Funds withdrawn for qualified medical expenses will continue to be tax-free, while nonmedical withdrawals will be taxed as ordinary income. (See also: <a href="http://www.wisebread.com/how-an-hsa-could-help-your-retirement?ref=seealso" target="_blank">How an HSA Could Help Your Retirement</a>)</p> <h2>Consider relocating to a low-cost country</h2> <p>The number of American expats abroad is very surprising. The U.S. Department of State estimates that as many as 9 million citizens live overseas. There's a reason so many Americans are choosing to live out their golden years abroad; moving to a country with a lower cost of living means that their retirement dollars are stretching a lot further.</p> <p>In lower cost of living countries, you will see steep savings on housing, food, and even health care. Many people can also afford inexpensive help from locals to assist in tasks like cooking, cleaning, and running errands.</p> <p>What&rsquo;s more is that many of these countries have beachfront properties and communities that are affordable even for the non-millionaire retiree. Though you may be leaving friends and family behind, the good news is that they may be more likely to visit you if there&rsquo;s a beach involved. (See also: <a href="http://www.wisebread.com/4-affordable-retirement-spots-with-world-class-health-care?ref=seealso" target="_blank">4 Affordable Retirement Spots With World-Class Health Care</a>)</p> <h2>Invest in cash producing assets</h2> <p>If you don&rsquo;t have one million dollars in cash, you might be able to make up the balance with other assets like real estate, stocks, or a small business. All of these assets have the potential to add another stream of income for you in retirement.</p> <p>Real estate can be an excellent source of cash flow if you are able to charge rents that exceed expenses for your property. If you own dividend-yielding stocks, the income from dividend payouts can also boost your bottom line. Finally, if you have an interest in a business that is profitable, you could retire on less than $1 million with a moderate amount of monthly net income. (See also: <a href="http://www.wisebread.com/7-reasons-to-invest-in-stocks-past-age-50?Ref=seealso" target="_blank">7 Reasons to Invest in Stocks Past Age 50</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fhow-to-retire-with-less-than-1-million-in-savings&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FHow%2520to%2520Retire%2520With%2520Less%2520Than%25201%2520Million%2520in%2520Savings.jpg&amp;description=How%20to%20Retire%20With%20Less%20Than%201%20Million%20in%20Savings"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/How%20to%20Retire%20With%20Less%20Than%201%20Million%20in%20Savings.jpg" alt="How to Retire With Less Than $1 Million in Savings" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/aja-mcclanahan">Aja McClanahan</a> of <a href="http://www.wisebread.com/how-to-retire-with-less-than-1-million-in-savings">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-plan-for-a-forced-early-retirement">How to Plan for a Forced Early Retirement</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-reasons-you-might-have-a-phased-retirement">4 Reasons You Might Have a &quot;Phased&quot; 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/heres-how-far-1-million-will-actually-go-in-retirement">Here&#039;s How Far $1 Million Will Actually Go in Retirement</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-signs-its-time-to-retire">8 Signs It&#039;s Time to Retire</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-help-your-parents-retire">How to Help Your Parents Retire</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement assets cost of living health savings accounts housing costs part time jobs phased retirement saving money social security Fri, 09 Mar 2018 09:00:07 +0000 Aja McClanahan 2112923 at http://www.wisebread.com 9 Times Life Can Throw Retirement Off Course http://www.wisebread.com/9-times-life-can-throw-retirement-off-course <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/9-times-life-can-throw-retirement-off-course" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/sad_employee_looking_at_the_office.jpg" alt="Sad employee looking at the office" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Saving for retirement requires discipline. Ideally, you are able to amass a nice nest egg by putting aside a big chunk of money each month and investing it wisely. But it doesn't take much for you to get off track. Life happens, and you are often faced with expenses and other burdens that make saving for retirement less of a priority.</p> <p>But you needn't let life get in the way of your long-term financial goals. With some planning and good decision making, you can continue to save regardless of what comes your way.</p> <p>Here are some things that can throw your retirement planning out of whack, and how to deal with them.</p> <h2>1. Job loss</h2> <p>If you suddenly find yourself out of work, it can be a huge blow to your retirement savings because you no longer have income you can set aside. You are no longer able to contribute to that company's 401(k) plan, and you lose any matching or direct contributions that were coming from your employer.</p> <p>An extended job loss could result in the loss of tens of thousands of dollars in retirement savings over time. However, you can always contribute more to your 401(k) plan later to catch up once you get back to working, and if you have a large enough emergency fund (at least three to six months' worth of income), you may still be able to contribute to retirement through individual retirement accounts (IRAs) or taxable brokerage accounts.</p> <p>A job loss can hurt, but if you are relatively young and have a lot saved already, the loss of a few months of retirement contributions won't make too much of a difference in the long run.</p> <h2>2. Divorce</h2> <p>Dissolving a marriage is a tough choice to make, and it's one that can be fraught with financial implications. There could be large upfront legal costs associated with the divorce itself, and the long-term impact can be significant. Suddenly, your household income has been split in half while you each now have to pay for your own separate housing costs, utilities, and meals. You may be on the hook for child support or alimony payments. And now the combined retirement nest egg you were counting on has been slashed. When this happens, it's hard to think about retirement savings.</p> <p>You can protect your retirement, however, by avoiding the temptation to cash out accounts upon your divorce. Some couples have unfortunately been known to do this during the asset-splitting process, resulting in huge capital gains taxes and penalties (plus the loss of any potential earnings from that money).</p> <p>If you and your spouse are considering divorce, be sure to think hard about the financial implications. If you do decide to separate, don't lose sight of the importance of saving for retirement, despite the new challenge in doing so. (See also: <a href="http://www.wisebread.com/how-to-protect-yourself-financially-during-a-divorce-or-separation?ref=seealso" target="_blank">How to Protect Yourself Financially During a Divorce or Separation</a>)</p> <h2>3. A major emergency</h2> <p>You suffered a significant injury and only part of your medical bills were covered by insurance. You totaled your car. Your house was gutted by fire. When these things happen, retirement saving may be the last thing on your mind. In fact, if you are not prepared, you may end up raiding your retirement funds to pay your bills. This could mean penalties and taxes and years of potential lost income.</p> <p>You can continue to save for retirement, however, if you've built up a significant emergency fund. Three to six months' worth of income is a good rule of thumb to cover whatever unexpected costs you may have. With a good emergency fund, you may not have to raid your retirement funds at all, and may even be able to continue contributing at the same level. (See also: <a href="http://www.wisebread.com/7-easy-ways-to-build-an-emergency-fund-from-0?ref=seealso" target="_blank">7 Easy Ways to Build an Emergency Fund From $0</a>)</p> <h2>4. Having a child</h2> <p>You and your spouse are rolling in dough, pumping those retirement accounts to the max and watching the savings grow at a rapid pace. Then you decide to have a baby. In case you weren't aware, kids add cost. The United States Department of Agriculture calculates the average cost of raising a child from birth through age 17 to be $233,610. So you can imagine how having a kid could throw your finances off track.</p> <p>If you are thinking of having a child, you need to plan for it financially, by either boosting your income, cutting back on other expenses, or (ideally) both. If you think you can put off saving for retirement until the kids are out of the house, that's a big mistake. (See also: <a href="http://www.wisebread.com/7-signs-youre-financially-ready-to-start-a-family?ref=seealso" target="_blank">7 Signs You're Financially Ready to Start a Family</a>)</p> <h2>5. Going back to school</h2> <p>There may come a time in your life when you feel a desire to finish college or get an advanced degree. Certainly, education can be the key to developing a great career and stable finances. But you still need to be smart about it.</p> <p>Our nation is filled with young people who are crushed by student debt and unable to even consider saving for retirement. If you're heading back to school, make sure you're pursuing something that can actually pay off in the form of a better career or higher-paying job. Try to avoid taking out burdensome student loans, if you can. Examine if it's possible to continue working while pursuing the degree so you're not losing income.</p> <p>Your early years are the best time to save money for retirement, because your money has time to grow. Don't let higher education be a burden in your efforts to save.</p> <h2>6. Caring for an older parent</h2> <p>Your parents spent a couple of decades taking care of you, and now it's your turn to look after them. It's never easy to watch your loved ones deal with health problems as they age, and it can be a source of both mental and financial stress. You may choose to have a parent move in with you, or you may have to take time off work to search for other care options. You may need to pick up a share of their medical bills, or take care of other affairs, like selling their home. All of this can throw a curveball to your own retirement savings.</p> <p>To avoid any serious financial strain, it helps to plan ahead and have some savings set aside to care for your loved ones. It also helps to have a conversation with your parents early on to make sure they have the financial resources to cover their own expenses as they age. (See also: <a href="http://www.wisebread.com/6-financial-steps-to-take-when-your-aging-parents-move-in?ref=seealso" target="_blank">6 Financial Steps to Take When Your Aging Parents Move In</a>)</p> <h2>7. The market crashes</h2> <p>It's a bummer to see a chunk of your retirement savings wiped away when the stock market goes down. You may feel like all of your efforts to save were for nought. But that's the wrong attitude.</p> <p>When investing, you should always be aware that the market could go down at any time. If you are close to retirement age, work to make sure your portfolio is heavier on bonds and cash than more volatile stocks. If you are further away from retirement, don't panic. Remember that the market has always rebounded, and you can take advantage of the fact that investments are cheaper than they were. (See also: <a href="http://www.wisebread.com/6-confidence-inspiring-facts-about-the-stock-market?ref=seealso" target="_blank">6 Confidence-Inspiring Facts About the Stock Market</a>)</p> <h2>8. Buying a house</h2> <p>It's very common to see your housing expenses rise once you move from renting to homeownership. Many people will stretch their budgets to get the home they want, and also fail to take into account property taxes, mortgage insurance, community fees, and the cost to maintain the home. If your housing expenses are now higher than in the past, you may now have less money available to set aside for retirement.</p> <p>To avoid this, don't buy a home that will dramatically increase your monthly housing costs. Look to save as much of a down payment as possible before purchasing, and work to get the lowest interest rate you can. Homeownership is a key part of obtaining financial freedom &mdash; it should not be something that prevents you from achieving your financial goals. (See also: <a href="http://www.wisebread.com/4-easy-ways-to-start-saving-for-a-down-payment-on-a-home?ref=seealso" target="_blank">4 Easy Ways to Start Saving for a Down Payment on a Home</a>)</p> <h2>9. Moving to a more expensive area</h2> <p>You decided to move into the city because it's closer to work and offers a more vibrant social scene. But before long, you realized that it's really putting a dent into your finances. Your cost of living has shot up, leaving you with less money available to save for retirement.</p> <p>If this happens to you, it's time to reevaluate your overall financial picture. Track your expenses and see if it's possible to cut some costs. Look for a cheaper apartment. Consider walking or biking to work instead of driving. Be smarter about what you spend when going out with your friends. Don't let your desire to live the good life now crush your ability to save for the future.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F9-times-life-can-throw-retirement-off-course&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F9%2520Times%2520Life%2520Can%2520Throw%2520Retirement%2520Off%2520Course.jpg&amp;description=9%20Times%20Life%20Can%20Throw%20Retirement%20Off%20Course"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/9%20Times%20Life%20Can%20Throw%20Retirement%20Off%20Course.jpg" alt="9 Times Life Can Throw Retirement Off Course" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/9-times-life-can-throw-retirement-off-course">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-times-you-need-to-update-your-will">6 Times You Need to Update Your Will</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-minute-finance-start-an-emergency-fund">5-Minute Finance: Start an Emergency Fund</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-ways-to-boost-your-financial-resilience">5 Ways to Boost Your Financial Resilience</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-benefits-of-carrying-a-mortgage-into-retirement">5 Benefits of Carrying a Mortgage Into Retirement</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-reasons-youre-never-too-old-to-buy-stocks">7 Reasons You&#039;re Never Too Old to Buy Stocks</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement back to school caregiving divorce emergency funds having children homeownership job loss life events market crash new baby Thu, 08 Mar 2018 09:00:09 +0000 Tim Lemke 2112922 at http://www.wisebread.com 5 Kinds of Insurance Every Retiree Should Consider http://www.wisebread.com/5-kinds-of-insurance-every-retiree-should-consider <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-kinds-of-insurance-every-retiree-should-consider" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/senior_couple_sit_on_steps_outside_their_house.jpg" alt="Senior couple sit on steps outside their house" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Your insurance needs don't remain constant throughout your life. You need different insurance coverage when you're single and in your 20s than you do when you're raising a family in your 40s. When you retire, your insurance needs will evolve once again.</p> <p>There are certain types of insurance protections you'll no longer need after leaving the workforce, and other types that you'll want to add. Here is a primer on the kinds of insurance that every retiree should consider.</p> <h2>1. Health insurance</h2> <p>You'll absolutely need health insurance after you've retired. Health care costs are only rising, and seniors tend to spend a large percentage of their income on medical care each year.</p> <p>A study released by Fidelity Benefits Consulting said that the average 65-year-old couple retiring in 2017 would need $275,000 to cover their medical expenses throughout retirement. That number isn't falling, either. Fidelity reported that the 2017 figure is up from the $260,000 that the average 65-year-old couple needed in 2016.</p> <p>Most seniors will qualify for Medicare, the federal health care insurance program, when they turn 65. Medicare isn't free, but it does cost far less than what you'd pay for private insurance. Medicare covers a lot, but it doesn't cover every medical service you might need.</p> <p>Do you need to purchase supplemental health insurance to boost the coverage you're already getting with Medicare? That's not an easy question to answer. It all depends on your health and how often you plan on visiting a doctor after you retire. For many retirees, Medicare may be adequate. (See also: <a href="http://www.wisebread.com/5-common-medicare-myths-debunked?Ref=seealso" target="_blank">5 Common Medicare Myths, Debunked</a>)</p> <h2>2. Homeowners or renters insurance</h2> <p>Will you still own a home after you retire? If so, you still need your homeowners insurance policy. This policy will pay out to help you rebuild if your home is damaged by a fire or other natural disaster. It will also help you pay for any items inside your home &mdash; such as electronics, clothing, furniture, and jewelry &mdash; that get stolen or damaged in a disaster.</p> <p>Renters insurance works the same way, but it protects people who are renting an apartment. If you plan on ditching your home and renting after you retire, make sure to invest in a renters insurance policy. Think about how much money you'd need to replace your valuables if they were stolen or destroyed. (See also: <a href="http://www.wisebread.com/5-reasons-you-definitely-need-renters-insurance?Ref=seealso" target="_blank">5 Reasons You Definitely Need Renters Insurance</a>)</p> <h2>3. Auto insurance</h2> <p>If you plan to keep driving after retirement, you'll need to pay for auto insurance. It's illegal in most U.S. states to drive without car insurance.</p> <p>Maybe you're planning to sell your car and move into an urban neighborhood after you retire. Instead of doing your own driving, you plan to walk, take public transportation, or Uber to grocery stores, movie theaters, and restaurants. In this case, getting rid of your car insurance might make sense. But even if you're hanging onto your car only for emergencies or long trips, you'll need to keep your auto insurance policy.</p> <h2>4. Life insurance</h2> <p>Life insurance is usually one type of policy you can drop after retirement. After all, life insurance is a way to protect your loved ones who are dependent on your income. Once you get to retirement age, these dependents &mdash; usually your children &mdash; should be self-sufficient. They won't need a payout after you die to pay their bills.</p> <p>But what if your spouse or children still aren't financially self-sufficient by the time you retire? If that's the case, you should hang onto your life insurance policy. Maybe you have a child with special needs. That child might still rely on financial assistance from you. What if you were gone and you didn't have a life insurance policy? Would that child still get the financial assistance necessary?</p> <p>In most cases, retirees no longer need life insurance policies. But for special cases, keeping the policy is the smart move. (See also: <a href="http://www.wisebread.com/when-dropping-your-life-insurance-is-the-right-decision?ref=seealso" target="_blank">When Dropping Your Life Insurance Is the Right Decision</a>)</p> <h2>5. Umbrella insurance</h2> <p>What if someone was visiting your home and seriously injured themselves? Would your homeowners insurance policy provide enough protection? Maybe. But umbrella insurance can provide retirees with the peace of mind that they'll be protected even if their homeowners insurance doesn't offer enough coverage.</p> <p>Umbrella insurance provides <em>extra </em>liability coverage above the limits of your homeowners and auto insurance policies. Basically, it pays out in cases where your homeowners and auto policies don't pay enough to cover all of the damages for which you are responsible.</p> <p>Say you get into an auto accident that ends up with a liability claim of $1 million. If your auto insurance only covers a maximum of $500,000 for liability, your umbrella policy would cover the remaining $500,000. (See also: <a href="http://www.wisebread.com/beware-your-insurance-may-not-cover-these-8-losses?ref=seealso" target="_blank">Beware: Your Insurance May Not Cover These 8 Losses</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F5-kinds-of-insurance-every-retiree-should-consider&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F5%2520Kinds%2520of%2520Insurance%2520Every%2520Retiree%2520Should%2520Consider.jpg&amp;description=5%20Kinds%20of%20Insurance%20Every%20Retiree%20Should%20Consider"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/5%20Kinds%20of%20Insurance%20Every%20Retiree%20Should%20Consider.jpg" alt="5 Kinds of Insurance Every Retiree Should Consider" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/5-kinds-of-insurance-every-retiree-should-consider">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/beware-your-insurance-may-not-cover-these-8-losses">Beware: Your Insurance May Not Cover These 8 Losses</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-times-when-bundling-insurance-doesnt-make-sense">4 Times When Bundling Insurance Doesn&#039;t Make Sense</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-ways-to-safeguard-your-financial-future-with-just-200">5 Ways to Safeguard Your Financial Future With Just $200</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-ways-to-spend-your-last-minute-health-care-fsa-funds">8 Ways to Spend Your Last-Minute Health Care FSA Funds</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/term-vs-whole-life-insurance-heres-how-to-choose">Term vs Whole Life Insurance: Here&#039;s How to Choose</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Insurance Retirement auto insurance dependents health care health insurance homeowners insurance life insurance medicare renters insurance umbrella insurance Thu, 01 Mar 2018 09:30:09 +0000 Dan Rafter 2107316 at http://www.wisebread.com 6 European Cities Where Retirement Is Actually Affordable http://www.wisebread.com/6-european-cities-where-retirement-is-actually-affordable <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-european-cities-where-retirement-is-actually-affordable" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/chain_bridge_budapest.jpg" alt="Chain bridge Budapest" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>These days, more and more Americans are looking to retire overseas. The <a href="http://www.wisebread.com/7-smart-reasons-to-retire-abroad?ref=internal" target="_blank">reasons for retiring abroad</a> are plenty: adventure, lower cost of living, higher standard of living, and better weather, to name a few. But lists of the <a href="http://www.wisebread.com/9-retirement-hotspots-that-are-cheaper-now-than-ever-before?ref=seealso" target="_blank">most affordable places to retire overseas</a> are often dominated by Latin American and Asian countries.</p> <p>What if you've had your heart set on moving to Europe, though? While a luxury French villa or a vineyard in Tuscany may be out of reach for many people, there are still history-steeped places in Europe where you can experience old-world charm on a limited budget. Here are some of the cheapest cities you can settle down in across various European countries. (See also: <a href="http://www.wisebread.com/how-to-choose-the-perfect-country-to-retire-in?ref=seealso" target="_blank">How to Choose the Perfect Country to Retire in</a>)</p> <h2>1. Budapest, Hungary</h2> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5197/budapest_hungarian_parliament_in_sunset.jpg" width="605" height="340" alt="" /></p> <p>Budapest has long been known for its spire-topped skyline, cultural flair, and thermal baths. The city is an easy place to explore or just relax and do nothing, with plenty to see and do, but a laid-back vibe that's perfect for retirement.</p> <p>Budapest is also known for its affordability, with the cost of living running similar to some medium-priced cities in the U.S., according to the cost-tracking website Expatisan. Rent for a 900-square-foot furnished apartment ranges from $675 to about $1,000 per month. Utilities should cost around $117, and internet around $15. Dinner for two at a neighborhood pub will run you around $22, and a three-course Italian meal for two with wine will set you back $43. (See also: <a href="http://www.wisebread.com/13-financial-steps-to-take-before-retiring-abroad?ref=seealso" target="_blank">13 Financial Steps to Take Before Retiring Abroad</a>)</p> <h2>2. Prague, Czech Republic</h2> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5197/vltava_river_and_charles_bridge_in_prague.jpg" width="605" height="340" alt="" /></p> <p>Prague is another European city whose cultural profile has become well-known. Tourists flock to this interesting hub for its fairy tale architecture, cobblestone streets, outdoor cafes, and world famous beer. The picturesque Vltava River, spanned by more than 30 bridges, forms the soul of the city, with gardens, public squares, and castles rounding out the romantic cityscape.</p> <p>But Prague has more going for it than its stunning views and cheap, free-flowing beer. The city has also remained affordable despite its popularity, making it a smart stop for expat retirees.</p> <p>According to Expatisan, the average cost to rent a furnished 900-square-foot apartment in Prague is only $888 for an average place, or $1,260 per month in the most expensive areas. A liter of milk costs less than $1, two pounds of tomatoes will set you back around $2, and a beer in the supermarket costs only 88 cents.</p> <p>Heck, a bottle of red table wine only costs around $7. If that doesn't bode well for an affordable retirement, we don't know what does. (See also: <a href="http://www.wisebread.com/how-to-get-the-most-out-of-your-overseas-retirement?ref=seealso" target="_blank">How to Get the Most Out of Your Overseas Retirement</a>)</p> <h2>3. Algarve, Portugal</h2> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5197/beautiful_beach_in_carvoeiro_algarve_portugal_1.jpg" width="605" height="340" alt="" /></p> <p>Tourists flock to the Algarve region of Portugal for its scenic ocean cliffs, famous beaches, and many museums. The region is also brimming with historical sites, including old town centers, medieval fortresses, castles, and ancient forts.</p> <p>Living in Algarve is surprisingly affordable, and that's despite the region's proximity to the water. According to cost of living website Numbeo, rent for a one-bedroom apartment in the city center could cost as little as $346, while a three-bedroom apartment in a central location costs an average of $614 per month. Basic utilities (heat, air conditioning, electricity) will add another $87 to your housing costs, on average, they note.</p> <p>Food can also be insanely affordable. A pound of bananas may only cost 54 cents, for example, while a three-course dinner for two in a midrange restaurant may cost as little as $36. (See also: <a href="http://www.wisebread.com/avoid-these-5-mistakes-when-retiring-abroad?ref=seealso" target="_blank">Avoid These 5 Mistakes When Retiring Abroad</a>)</p> <h2>4. Pescara, Italy</h2> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5197/houses_in_farindola_italy.jpg" width="605" height="340" alt="" /></p> <p>Pescara, Italy is ideally located along the country's eastern coast, a few hours from Rome and Naples. Here, you can enjoy a slow Italian lifestyle with some of Italy's most gorgeous waterfronts, and all within a day's reach of some of the world's most important historical sites.</p> <p>You can also save a bundle in the process. Rent in Pescara is surprisingly affordable, with a furnished, 900-square-foot apartment in one of the city's most expensive areas costing just $936, on average, according to Expatistan. Rent in a &quot;normal&quot; area, not necessarily considered to be an expat neighborhood, could cost as little as $679. Add $130 for utilities to the bill and your total housing costs could easily stay below $1,000 per month year-round.</p> <p>Eating out in Pescara can be expensive, but buying your own staples will save you money. Two pounds of potatoes cost about $1.65, bread for two people for a day runs $1.25, and a bottle of table wine will set you back about $7. (See also: <a href="http://www.wisebread.com/what-you-need-to-semi-retire-abroad-right-now?ref=seealso" target="_blank">What You Need to Semi-Retire Abroad Right Now</a>)</p> <h2>5. Bucharest, Romania</h2> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5197/romanian_athenaeum_of_bucarest_romania.jpg" width="605" height="340" alt="" /></p> <p>Bucharest is a great destination if your goal is learning about history, including communism and its role in Romania. Attractions include a long list of gorgeous historical buildings and monuments, a communism-themed walking tour, a Holocaust memorial, and even a Romanian kitsch museum.</p> <p>If you're looking for an affordable place to retire, put Bucharest on your list. A 900-square-foot furnished apartment in the expensive parts of Bucharest will only set you back $723, while an apartment in more middle-class areas could cost as little as $451 per month. Average utility bills only cost around $100 as well, making your overall housing costs affordable.</p> <p>Food can also be downright cheap. A three-course Italian meal for two, including wine, in an expat area costs around $43, a loaf of bread is around 62 cents, and a pound of potatoes is around 30 cents. (See also: <a href="http://www.wisebread.com/dont-let-these-expenses-spoil-your-retirement-abroad?ref=seealso" target="_blank">Don't Let These Expenses Spoil Your Retirement Abroad</a>)</p> <h2>6. Pula, Croatia</h2> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5197/roman_amphitheater_in_pula.jpg" width="605" height="340" alt="" /></p> <p>If you're looking to retire somewhere off the beaten path, Croatia should be on your radar. The seaside city of Pula is of interest specifically due to its low cost of living and amazing history. The harbor town is dotted with well-preserved Roman ruins, including an intact amphitheater and its own Temple of Augustus. Museums here house ancient artifacts, as well as contemporary art.</p> <p>Pula is considered one of the most affordable spots in Europe, with a 900-square-foot furnished apartment in an expat area costing about $580 per month and a similar flat in an average area running $445. Utilities add another $120 per month on average, but a monthly transportation pass costs just $35.</p> <p>You can have a great time dining out in retirement, too, in Pula. A basic dinner for two at a neighborhood pub runs $23, and a beer just $2.50.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F6-european-cities-where-retirement-is-actually-affordable&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F6%2520European%2520Cities%2520Where%2520Retirement%2520Is%2520Actually%2520Affordable.jpg&amp;description=6%20European%20Cities%20Where%20Retirement%20Is%20Actually%20Affordable"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/6%20European%20Cities%20Where%20Retirement%20Is%20Actually%20Affordable.jpg" alt="6 European Cities Where Retirement Is Actually Affordable" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/holly-johnson">Holly Johnson</a> of <a href="http://www.wisebread.com/6-european-cities-where-retirement-is-actually-affordable">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-smart-reasons-to-retire-abroad">7 Smart Reasons to Retire Abroad</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-countries-where-you-can-retire-for-1000-a-month">5 Countries Where You Can Retire for $1,000 a Month</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-european-cities-you-can-visit-for-50-a-day">5 European Cities You Can Visit for $50 a Day</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/retire-for-half-the-cost-in-these-5-countries">Retire for Half the Cost in These 5 Countries</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-affordable-retirement-spots-with-world-class-health-care">4 Affordable Retirement Spots With World-Class Health Care</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement Travel affordable retirement affordable travel cost of living Europe european cities retire abroad travel abroad Wed, 28 Feb 2018 09:31:05 +0000 Holly Johnson 2110074 at http://www.wisebread.com