retirement planning

Ask the Readers: Are You On Track for Retirement?

Ashley Jacobs — Tue, 04 Jun 2019 08:30:11 +0000

Ensuring a comfortable retirement isn't easy. It requires a lot of planning — and a lot of saving. Many people are even deciding to continue working part-time after they've retired to supplement their income.

Are you on track for retirement? At what age do you plan to retire? What are your plans for after retirement?

Tell us whether you're on track for retirement and we'll enter you in a drawing to win a $20 Amazon Gift Card!

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Tell us whether you're on track for retirement and we'll enter you in a drawing to win a $20 Amazon Gift Card!

This article is from Ashley Jacobs of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Best Money Tips: Non-Financial Retirement Planning

Amy Lu — Fri, 11 May 2018 08:30:21 +0000

Welcome to Wise Bread's Best Money Tips Roundup! Today we found articles on nonfinancial retirement planning, areas where you may be paying more than you should, and how to choose your first bank.

Free "Digital Retirement Coach" Aims to Take Angst Out of Retirement Planning

Lars Peterson — Wed, 21 Mar 2018 14:01:05 +0000

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 "digital retirement coach" that helps you get started with minimal pain.

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.

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.

With that data in mind, AARP and the Ad Council created AceYourRetirement.org, 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?

"People already feel overwhelmed or stressed when they think about their retirement savings," says Mary Liz Burns, the Strategy Director of Financial Resilience at AARP, "and we wanted to create an empowering experience to help people get on track — they can 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."

Here's what I found when I visited.

It doesn't look like other retirement planning websites

Here's a screenshot of my visit.

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).

After you click through a few introductory screens, a smiling chatbot named Avo blinks at you and begins to ask questions. Avo is a "digital retirement coach" 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 "yes" or "no" with a slider button.

It doesn't ask you for a bunch of financial details

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 — the percentage of income you're already setting aside for retirement, so you may want to get a handle on that before you start.

After half a dozen or so similar questions, it returns with some advice. The questionnaire was much shorter than I expected it to be.

It gives you three action items when you're finished

Mine were:

Get paid to wait.
Picture yourself post-retirement.
What's your number?

With the action items, the website drops the chatbot and gets down to brass tacks.

"Get paid to wait" 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.

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 — and financial details — before I could check them off my to-do list.

It's a cute face on top of a lot of retirement planning depth

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.

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 — it is! — but with the website's help, at least I have a number to aim for.

The website sets me on the right path, but I have to follow through

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.

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.

Will Avo be a financial adviser in the future?

There is a lot of chatter in personal finance circles about using behavioral "nudges" 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.

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 "opt-out" rather than "opt-in." When the deductions are done by default, we're much more likely to take advantage of them.

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.

For now, give Avo a try and see if you don't feel more confident about retirement planning, too.

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This article is from Lars Peterson of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Things Every Single Person Needs to Do With Their Money

Denise Hill — Mon, 12 Mar 2018 10:00:06 +0000

The number of Americans who wait to get married — or never get hitched — is growing. In fact, for the first time in history, the number of unmarried Americans almost equals those who are married. The U.S. Census Bureau reports that there were 110 million unmarried adults (age 18 and older) in 2016, which is 45 percent of all U.S. residents over the age of 18.

Living a Sex in the City lifestyle may be alluring, but it also comes with hidden financial pitfalls. This is especially true for singles who have never been married. While divorcees and widows have distinct challenges, there are resources and services out there to assist them through their transition. However, if you are someone who has never been married, you're pretty much on your own.

With that in mind, we've compiled a list of the top things that every single person should do with their finances.

1. Make saving money your top priority

As a single person, you only have one income. You have to pay for living expenses and handle any emergency that arises on your own, so having a true emergency fund is paramount.

Financial experts advise that singles have as much as a year's worth of living expenses put away in lieu of the traditional three to six months' worth. A larger emergency fund will help sustain you for longer during lean times or a job loss. Married couples have the benefit of sharing expenses and may have a second income to help them through difficult times. As a single person, you don't have that luxury.

It is also highly advisable that you begin saving for retirement now. Look for ways to maximize your contributions. Take advantage of things like a company match, and contribute 10 to 15 percent of your pay to your employer's 401(k) or an IRA. Educate yourself on the different types of investments and pay particular attention to index funds, which usually have low fees. (See also: 5 Actions Women Can Take Right Now to Get Their Retirement On Track)

2. Stick to a zero-based budget

As a single, your budget is your financial guide and road map. It undergirds your financial success.

It's a good idea to use a zero-based budget as your cash flow plan. A zero-based budget makes you account for every single dollar you spend before you spend it. It makes you accountable for how you choose to allocate your funds and makes you cognizant of where all your money is going. If you earn $3,000 per month, your monthly budget — including every cent you spend, save, or invest — should be accounted for and should total $3,000.

It's also a good idea to institute a routine system to track your expenses. Every few months, keep an extra keen eye on the dollars that go in and out. This will help you gauge and adjust how much you are spending on things like gas, eating out, groceries, and clothes. It will also show you where you can cut back during lean times or if you want to build a fund for a specific purpose such as a vacation or a new vehicle.

3. Protect your credit and avoid debt

Protecting your credit is very important no matter who you are. When it comes to using credit, make sure you use it responsibly. If you use credit cards, keep your balances low enough that you can pay them in full at the end of each month. You should also strive to keep your credit utilization ratio below the recommended 30 percent threshold. (See also: The Fastest Method to Eliminate Credit Card Debt)

If you do have debt — including the dreaded student loans — prioritize paying it off as soon as possible. And once you've gotten rid of it, only use additional financing for large purchases such as a home or a car.

Another part of protecting your credit is routinely reviewing and correcting any mistakes on your credit report. You're allowed one free copy of your credit report every 12 months from each of the three nationwide credit bureaus: Equifax, Experian, and TransUnion. You can obtain these reports from AnnualCreditReport.com. You can also use free resources such as Credit Karma to check your credit score and monitor your information to ensure it's accurate and that your identity hasn't been stolen or misused. (See also: How to Read a Credit Report)

4. Get disability insurance

Disability insurance is critical for all singles, but especially for single women. A 2012 study from the American College showed that women were more likely than men to have a disability that prevents them from working.

The study also found that women were more vulnerable to experiencing tremendous financial distress if they became unable to work due to a disability. Nearly 50 percent of the women surveyed categorized experiencing a disability as "somewhat devastating" in regards to their family's finances. And 22 percent believed that their savings would last less than a month if they were unable to work.

Regardless of your gender, if you are single and employed, your entire source of income could be in jeopardy if you suddenly become disabled. It is imperative that you have adequate disability insurance (especially if you are a single parent).

If your employer offers both short- and long-term disability, take both. Choosing to forgo disability insurance to save a few dollars a month isn't a gamble worth taking. Sure, you are healthy today, but what if …? Insurance helps you plan for and protect against life's what-ifs. (See also: 4 Things You Need to Know About Disability Insurance)

5. Get an accountability buddy

Discipline is easier when you use the buddy system and when you are required to account for your actions and decisions. Married couples often rely on each other for this, but you can rely on the advice and motivation of a trusted friend or family member. Making good financial decisions is tough. Having someone to help you weigh your options will save you time, energy, and money.

When choosing a financial accountability buddy, choose someone who is financially astute, knows you well, is frugal, and has your best interests at heart. Get someone you know will be brutally honest with you and will make you talk through financial decisions. It should be someone with whom you are comfortable sharing financial intimacy.

This may not be your best friend or the one you go to when your heart is broken. This person should be practical, pragmatic, and analytical. He or she should make decisions from the head, not the heart.

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This article is from Denise Hill of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Details You Shouldn't Neglect When Retiring Overseas

Nick Wharton — Tue, 28 Nov 2017 09:30:10 +0000

No one should take the decision to retire abroad lightly. It's a big move that involves a huge amount of careful planning in order to execute it successfully. But even people who believe they've covered every aspect of their move abroad can still overlook some important details. Here are five planning details you shouldn't neglect when retiring overseas. (See also: 9 Things to Know Before Retiring Abroad)

1. Health care

Having a plan in place for how you're going to cope with any adverse health complications that may arise is absolutely paramount. Each country has its own individual health care system in place. Some of these are complicated to access and understand. Some are private, some public, and others are a mixture of the two.

Health care is also potentially extremely expensive if you choose to pay out of pocket, meaning you'll need to get familiar with those costs before choosing where you settle. As a U.S. citizen living abroad, you will not be covered by Medicare in your chosen country, so it's important to have an alternative plan. (See also: 4 Affordable Retirement Spots With World-Class Health Care)

With the majority of U.S. health plans, you won't actually be covered when you're abroad. Depending on the country you're in, you should either get an in-country insurance plan or comprehensive international insurance coverage.

Another thing to consider is the standard of health care in your chosen destination, as well as where you would have to go for treatment. Even those countries that boast world class health care may have very few clinics and hospitals in more rural areas, making them far harder to access. (See also: How to Choose the Perfect Country to Retire In)

2. Local laws

Before making your big move, you need to have thoroughly researched the local laws in your country of choice and how they might affect you when you're living there. It's best not to assume anything without knowing the legal realities, as regulations are very different in each country.

Your will may not be legally enforceable in the country of your choice, and if you have assets, investments, and properties in different countries, things can become extremely complicated. Each country's laws need to be taken into account when the will is being finalized to ensure that your wishes are carried out correctly.

An example of this is forced heirship laws in some European and Latin American countries. These laws state that certain relatives cannot be disinherited from your estate, usually a spouse, children, and grandchildren. There are also lots of tax implications to be considered.

But legal matters go beyond those referring to your assets. Think about other things like driving and traffic laws, and the legality of your license if you intend to drive. Even political and civil freedoms you take for granted at home might be entirely different. (See also: 5 Countries That Welcome American Retirees)

3. Tax requirements

Unfortunately, if you remain a U.S. citizen when you retire abroad, your U.S. tax obligations are an inescapable reality, regardless of where you go in the world. As long as you meet certain income and status requirements, you're still required to file your tax returns every year with the IRS exactly as if you were still at home.

These rules stand even if you relocate all of your assets to your country of retirement, or any other country for that matter. Depending on which country you are in, you'll more than likely have to fulfill tax obligations there as well, which will potentially mean you'll end up being double taxed.

There are a number of countries around the world that have policies in place to address double taxation. For example, Portugal offers Non-Habitual Resident Status, which exempts retirees from paying taxes there. Even so, you will generally still need to continue to pay taxes in the U.S. (See also: Retire for Half the Cost in These 5 Countries)

4. Future assistance to loved ones

As a retiree, you may have children and grandchildren, and even if they're no longer dependent on you, you might still wish to help them out from time to time. If this is the case, then include a contingency for these expenses in your retirement plan.

You might want to contribute toward your children's weddings, help them with a deposit for their first house, or to come and visit you as a family. Grandchildren might have school trips, first cars, or college expenses that you want to assist with, as well.

Wherever these costs may come from, you'll need to have a plan for how you're going to pay for them. This is a separate contingency from your own personal one and you should consider how you can pay for these expenses without denting your own savings. (See also: Don't Let These Expenses Spoil Your Retirement Abroad)

5. An exit plan

Even the best laid plans can go awry, so though it will probably be the very last option you want to consider, it's important to have an exit plan in place. No matter how thorough you are, there are lots of outside factors that could turn your dream sour, and the fact is that it may not work out.

Political instability, drastic fluctuations in exchange rates, financial scams, and even wars could all affect your experience. Homesickness could affect you in ways that you never thought possible.

Without allowing it to negatively impact your retirement by making it a constant consideration, it's still a good idea to make a robust plan for retreating, if need be. Put together a strategy and then forget about it until it's absolutely required. (See also: 9 Retirement Hotspots That Are Cheaper Now Than Ever Before)

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This article is from Nick Wharton of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

7 Ways Retirement Planning Changes When You're Single

Emily Guy Birken — Fri, 14 Jul 2017 09:01:05 +0000

It can sometimes feel like everything is created with couples in mind — including retirement planning. When every article, tip, and suggestion for retirement starts with the assumption that you are married, you might be forgiven for assuming that retiring solo is just a matter of cutting retirement planning advice in half.

But there are specific challenges and concerns (not to mention benefits!) that single retirees need to prepare for before they hang up their careers. Here are seven ways that preparing for retirement is different for singles.

1. You need to have adequate disability insurance

Relying on no one but yourself can feel pretty liberating. Not only do you answer to no one but yourself, but you also get to enjoy the fruits of your own labor without having to compromise.

The downside to this, however, is figuring how you will protect yourself in case your income runs dry. While anyone who relies on income from their job should carry adequate disability insurance, this is even more important for single workers who may not have another safety net to catch them if a disability makes it impossible to work. You need to protect yourself, your income, and your assets from the possibility you may be unable to work, even before you start the nitty-gritty of retirement planning.

Even if you have disability insurance through work, that may not be adequate to protect you from a loss of income. Make sure you know exactly how much your work insurance covers and for how long, so that you are not left without an income if it's not enough. Also, don't assume that you are immune to potential disabilities just because the most strenuous thing you do at work is operate the copy machine. Illness is behind the majority of long-term absences from work — and anyone can get sick at any time.

2. Prepare for your health care needs

Health care costs are a major concern for all retirees, since this is one aspect of your retirement budget that you may not have control over. According to a 2016 Fidelity study, a 65-year-old couple retiring in 2016 would need $260,000 for health care to cover their medical and health care needs for the rest of their lives.

That dollar figure is frightening no matter your marital status, and it's important that single people recognize that their costs may be higher than just half of a couple's health care costs. That's because many married couples can help each other to remain independent in ways that single retirees would need to pay for. For instance, you may need to pay for someone to help you at home or for entry into a retirement community sooner than a married couple would need those things.

While long-term care insurance has often been touted as a method of mitigating these expenses for both married and single retirees, the cost of this kind of insurance has become prohibitive. To prepare for the possibility of bad health in retirement, singles should also explore creative solutions to long-term health issues. For instance, taking in a rent-free roommate who helps with daily tasks is not only money-saving, but also offers social support. Planning ahead for potential solutions to health and mobility issues can provide you with some imaginative solutions that money can't buy.

3. Assign a power of attorney

It's easy to assume that you can skip the whole issue of legal planning if you are single and childless, but that's not necessarily true. For instance, do you know who will take care of your health care or financial decisions if you should become incapacitated? You need to assign a power of attorney to make sure that your wishes are followed if you cannot make your own decisions.

Your power of attorney also needs to know where to find your important papers and should be kept apprised of any changes in your life or directives. This is the person who will pay your bills and handle your advanced directive if you fall ill. You can either pick someone in your life whom you trust, or hire a professional whom you trust to fill that role.

4. Invest in tax-deferred retirement vehicles during your career

Single workers miss out on a number of tax breaks that are offered to married couples. According to Jane Hodges writing for The Wall Street Journal, "Without child tax credits, a spouse exemption, and no one with whom to realize the benefits of filing jointly, singles can take a pretty big tax punch during peak earning years."

For this reason, single workers have a particular need to invest in tax-advantaged retirement vehicles, such as 401(k) and traditional IRA accounts. These vehicles allow you to make pretax contributions, which lowers your taxable income while also helping you prepare financially for retirement.

5. Consider rolling over into a Roth IRA before age 70½

Of course, Uncle Sam will still want his cut of the income you put in tax-deferred retirement accounts, which can cause a nasty tax surprise for singles post-retirement. That's because withdrawals from tax-deferred retirement accounts are taxed as ordinary income, and single retirees still do not have access to the tax breaks offered to married couples.

This can become a serious problem for some single retirees as of age 70½ because of the required minimum distributions on tax-deferred accounts. Traditional IRAs and 401(k)s require that retirees begin withdrawing a minimum distribution (based on a percentage of total assets) at age 70½, which means you might be facing a surprisingly high tax bracket upon reaching age 70½. You may also be forced to take more money from your accounts than you want or need because of the required minimum distribution.

To protect yourself from this potentially painful tax bite, consider rolling over a portion of your assets from tax-deferred funds to a Roth IRA account before age 70½. Since Roth accounts are funded with after-tax dollars, you will have to pay ordinary income tax on your rollover. However, this will allow you to decide when you will pay those taxes and give you more freedom to keep your money invested if you don't need it.

6. Hold off on Social Security for as long as you can

Options for optimizing Social Security benefits are much simpler for singles. Basically, the only way to get a higher monthly benefit if you are single is to wait. The longer you can wait to receive your benefits between age 62 (the earliest you can take benefits) and 70 (when the benefits stop growing), the more money you will see with every monthly check. Even if you cannot wait until age 70, or your full retirement age (currently age 66), know that each month you delay taking your Social Security retirement benefits means a little more money in your checks.

It's also important to remember that the federal government does not necessarily define single the same way you do. If you are divorced but were married for at least 10 years, then you are eligible for spousal benefits based on your ex's income record. However, you will collect your spousal benefits concurrently with your retirement benefits, so you will only see an increased benefit if your ex-spouse made a lot more money than you did.

7. Embrace the opportunities

While the IRS and Social Security Administration may both make marriage look like the better option — at least financially — it's important for singles to remember how many more opportunities they have available to them than do married couples. That's because a footloose and fancy-free retiree has far fewer obstacles to retirement than does a married couple.

For instance, retiring abroad can be a very economical (not to mention fun) choice, and it is much easier for a single retiree to pull up roots than it is for a couple. Similarly, traveling in retirement can be much cheaper for one, since you do not have to compromise on where you are willing to save money.

Single retirees can also explore alternative living options, like living with several friends — there's an excellent reason why all the Golden Girls were single, after all — or taking in a younger boarder or roommate, or even moving to a cheaper state. Making these decisions solo means you can find the living situation or opportunity that best fits your needs, wants, and temperament.

This article is from Emily Guy Birken of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Ways to Invest Like a Pro — No Financial Adviser Required

Matt Bell — Mon, 17 Apr 2017 09:00:09 +0000

Investing can be intimidating. There's a unique language, with expense ratios, ETFs, and dollar-cost averaging — oh my! And there's a lot at stake, like your retirement. (See also: Beginner's Guide to Reading a Stock Table)

However, at the risk of sounding like a home repair store commercial, you can do this and we can help. With the following five keys, you'll be well on your way toward becoming a confident, successful, do-it-yourself investor.

1. Commit to the market

The stock market has been on a tear. Since bottoming out in March 2009, it nearly tripled in value by the end of 2016. And since the start of this year, it has only climbed higher. Unfortunately, for many people, it doesn't matter. According to a recent Gallup poll, about half U.S. adults are not investing in the market.

Some waffle. They're in when it seems safe; they're out when trouble strikes. But pros don't waffle. They're in it for the long haul because they know that as a long-term investment, the U.S. stock market has delivered average annual returns of nearly 10 percent.

2. Know your goal

The most common investment goal is retirement. It that's your goal, make it as specific as possible. How much money do you want to have? By when? And how much do you need to invest each month in order to get there? These questions can feel overwhelming at times, but you need to answer them in order to get a clear picture of your path to a secure retirement. (See also: How Much Should You Have Saved for Retirement by 30? 40? 50?)

3. Determine your optimal asset allocation

While many of the headlines in the investment press are about which investments to choose, there's a different factor that'll have an even greater impact on your investing success. It's making sure you've determined your optimal asset allocation.

Asset allocation refers to how you divvy up the money you invest between asset classes, with the two most important ones being stocks and bonds (preferably, stock and bond mutual funds, since mutual funds enable you to hold a diversified "basket" of stocks and bonds).

Generally, when you're young, your portfolio should tilt more toward stocks. Yes, your portfolio will experience sharper ups and downs, but you should have the time to ride them out, and a higher-risk portfolio should lead you to higher returns. As you get older, you would be wise to reduce stock exposure and increase your allocation to bonds. (See also: The Basics of Asset Allocation)

4. Choose an investment selection process

Pay no attention to headlines touting "This Year's Top Mutual Funds" or "Why You Must Own Gold Now." And tune out all hot tips from your brother-in-law or coworker. What you need is a trustworthy investment selection process.

You could keep it super easy by choosing a target-date mutual fund. These funds have years as part of their name, such as the Fidelity Freedom 2040 fund. Just choose the fund with the year closest to the year you intend to retire. Its stock/bond allocation will be what the mutual fund company thinks is the appropriate mix for someone with that much time until retirement, and that allocation is automatically made more conservative over time. Target-date funds aren't perfect, but they get a lot of the big picture decisions right.

If you prefer a more hands-on approach, you could do your own research and choose index funds to build a portfolio that reflects your optimal asset allocation.

Or, you could subscribe to an investment newsletter, some of which cost far less than the fees charged by financial planners. Investment newsletters usually offer a number of different strategies and then tell you what to invest in. You're still a do-it-yourself investor. You maintain your own account and make your own trades, but you follow the investing process outlined by the newsletter. (See also: Should You Trust Your Money With These 4 Popular Financial Robo-Advisers?)

5. Understand the terrain ahead

One of the most important roles a financial adviser plays is seen during market downturns. That's when the best become therapists, speaking calm words of wisdom into the lives of frightened clients. You could serve the same role for yourself with a little understanding of how the market works.

If you hear that the market turned in a great performance in a certain year, it's easy to make the mistake of assuming this wonderful result came about through a smooth, yearlong, upward ride. It doesn't usually work that way.

Expecting some turbulence can help calm your fears and keep you from selling when the market gets wobbly. (See also: Want Your Investments to Do Better? Stop Watching the News)

Taking all of the steps above will get you headed in the right direction. You have a plan. Now put your plan into action and stay with it. The longer you invest, the more confidence you'll gain and the more comfortable you'll become at being a do-it-yourself investor. (See also: The Only 4 Things You Need to Do to Start Investing)

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This article is from Matt Bell of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Countries That Welcome American Retirees

Nick Wharton — Wed, 08 Feb 2017 11:00:15 +0000

Retiring abroad can be a great way to secure a fun and affordable lifestyle for years to come. Of course, you'll need to plan out some important logistics if you think retiring overseas might be right for you. It helps that some countries have very welcoming policies for U.S. retirees who are looking to relocate.

Some things to consider when choosing a location include residency requirements, taxes, property ownership laws, and health care options. You'll also want to choose a place that allows you to do the activities you're interested in and offers you the quality of life you're looking for. (See also: Retire for Half the Cost in These 5 Countries)

Here are five excellent countries for Americans to retire in.

1. Mexico

Mexico has many advantages going for it, which might explain why there are already a million U.S. citizens retired there. In fact, it has the largest established American expat community of anywhere in the world.

Its proximity to the United States makes it easy to visit home. There's no shortage of direct flights to the U.S., and airfare is generally affordable. You can enter the country on a tourist visa that lasts for six months and then later apply for a temporary or permanent retiree visa. You will have to meet certain income or asset requirements to get one of these visas.

Mexico offers a vibrant culture, sun-soaked beaches, scenic highlands, delicious cuisine, and beautiful colonial architecture that all contribute to an enjoyable retirement here. Depending on what kind of community and lifestyle you choose, Mexico's cost of living can be a fraction of that north of the border.

While relocating to Mexico is the perfect opportunity to brush up on your Spanish skills, you should also know that there are many English speakers that can help make your transition as smooth as possible.

2. Cambodia

If you're trying to get the most bang for your buck, you may want to look to Cambodia, which has the best cost of living for U.S. expats, according to InternationalLiving.com. You can find a rental apartment for as little as $250 a month and eat out at a restaurant for under $5.

The weather is warm year-round and there is an abundance of cultural sites to visit, such as the temples of Angkor Wat located on the site of the ancient capital of the Khmer Empire.

Some challenges might include learning the local language, although there is a significant expat community and many locals speak English as well.

And while buying a condo above the ground floor is much easier for expats these days, thanks to a 2010 law, foreigners looking to buy land will encounter more restrictions. If you specifically want to buy property abroad you might be better off looking elsewhere.

3. Spain

If you want a European lifestyle without the hefty price tag, Spain may be the perfect option for you. With the greenback doing well, European destinations are becoming more affordable for retirees with dollars. Rent is variable but you can find a place for as little as $500, and a dollar can often buy you a beer at a local bar.

Spain offers a temperate Mediterranean climate in the winter, although summer can be hot, with temperatures rising to over 100 degrees Fahrenheit.

To move to Spain permanently, you'll need a residence visa for retirees, which requires you have a certain level of income, among other things. (See related: Don't Let These Expenses Spoil Your Retirement Abroad)

4. Colombia

Colombia is an attractive place for retirees for a few reasons, including the warm climate and affordable high-quality health care.

Plus, there are many direct flights to and from the U.S. for reasonable fares. For instance, you can find a round-trip ticket from Medellín to the states for as little as $350, which is less than some domestic tickets can cost.

Medellin has changed dramatically since it was dubbed the most dangerous city on earth in the early 1990s. The colonial town is now charming, with parks, museums, and plenty of other cultural activities to keep retirees busy and entertained.

5. South Africa

South Africa is a country of stunning beauty and diversity for retirees, with both an expansive coast and mountainous landscape offering many opportunities for outdoor recreation. The country's crown jewel is Cape Town, but Johannesburg is also a cosmopolitan city with many cultural offerings.

Rural areas offer ample opportunities to see exotic wildlife and experience diverse ecosystems. The temperate weather is another great draw for people who are considering moving here.

The cost of living is attractive, too. According to Numbeo, consumer prices are 44% lower in South Africa than in the United States and rent is nearly 50% less expensive, so your retirement funds will go much further here.

While crime is still high in the country, if you stick to the right neighborhoods and take precautions, you can stay safer. English is the language used for business, politics and the media, so it's easy enough for Americans to get around.

There are two visa options: a retired person's permit, available on both a temporary (four-year) and permanent basis; and an independent financial person's permit. The main qualifying criteria for both of these options is that the applicant is able to support themselves financially.

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This article is from Nick Wharton of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

4 Reasons People Don't Retire Early — and How You Can

Amanda Gokee — Tue, 07 Feb 2017 10:30:37 +0000

Retirement is undeniably a time of drastic change in most people's lives. Typically, people have spent at least four decades in the workplace by the time they accept their gold watch. The average retirement age is 62 to 65, depending on where you live, according to a survey by SmartAsset.

While work can provide routine and stability, as the years go by it can also grow to feel burdensome and stale. When to retire is a very personal question, linked to lifestyle and finances. Here are a few of the common reasons people feel they're not ready for retirement. (See also: 4 Reasons Early Retirement Might be Financially Risky)

Worried About Having Enough Money

It's probably not a surprise that monetary reasons are number one on this list. Having a regular paycheck affords a lot of comfort that can be hard to walk away from.

One of the most common reasons most individuals won't consider an early retirement is fear that their savings will be insufficient to provide the lifestyle they've been used to in their working years.

However, if you're serious about wanting to retire now, there are ways you can make your savings go further, such as retiring in a cheaper state, or even a foreign country where the cost of living is lower. Also, using the right credit card can save you thousands of dollars a year.

Alternatively, the gig economy affords a lot of ways for people who are officially retired to earn disposable income. For instance, you could rent out a room on a site like Airbnb to help pad your savings. Just make sure you check out local laws in your area for any restrictions on short-term rentals.

Hesitant to Lose Identity Tied to Work

In the Western world, one of the first questions we ask when meeting someone new is, "What do you do?" The meaning, of course, is what do you do for work. This question is a way of situating someone socioeconomically, understanding their background and education, and gaining a window into their lives.

Of course, identity goes beyond what you do for work, and this is an important shift to be conscious of when considering retirement. Many individuals may feel that they are giving up a part of themselves when they decide to stop working.

However, there are many other meaningful activities outside of work that have an equally important bearing on identity. These may include hobbies such as artwork, exercise, reading, writing, or travel.

While a loss of identity is a common fear for people facing retirement, in reality, retirement can give you the time to explore other creative outlets that you wouldn't have been able to partake in with a busy work schedule.

Instead of viewing the end of work as losing part of your identity, try to shift to viewing this as a time to explore different components of who you are. This will make early retirement meaningful, not boring.

Anxious Due to No Concrete Retirement Plan

According to a 2015 survey by the Deloitte Center for Financial Services, only 49% of consumers have a formal retirement plan. The problem of not having a plan for retirement is that it leaves fears and emotions to govern your decisions, as opposed to concrete numbers. Plus, by putting a plan in place, you can see very clearly what steps you need to follow to reach a certain goal, like retiring in five years, for example. (See also: 7 Retirement Planning Steps for Late Starters)

Afraid of Being Bored and Restless

Some people simply put off retirement because they are worried about being bored with all the extra time on their hands once they're not going to the office every day.

However, retirement doesn't mean that you have to stop working entirely. Some individuals use this time to move from a decades-long career they've grown tired of to more fulfilling employment, or even their own business.

If your new pursuit is something that gives you the chance to vary your work schedule, that can be very stimulating, too. Additionally, some universities offer free classes to those over 65 years of age.

You can also take up countless hobbies like yoga, dance, snorkeling, scuba diving, golfing, hiking, or biking. To stimulate the mind, you can throw yourself into an artistic endeavor or learn a new language, the ideal activity for those who choose to retire overseas.

Retirement is not just the end of one chapter, but also the beginning of a new one. Often, the biggest roadblocks to retiring are fear-based. It can help to re-evaluate the situation by looking at the facts, instead of just relying on emotions.

Of course, the decision to retire is a personal one, and the right age to retire is different for everyone.

This article is from Amanda Gokee of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

4 Keys to an Early Retirement

Nick Wharton — Fri, 03 Feb 2017 10:00:09 +0000

Does it seem like retirement can't come soon enough? Are you tired of feeling like you're wasting time at a job you no longer enjoy, daydreaming about the day you won't have to come in anymore?

The good news is there are several steps that you can take if retiring early is your goal. Retiring early will mean setting clear priorities and goals that you can meet, but it doesn't have to be out of reach. Consider these four tips to get there faster. (See also: 9 Things People Who Retire Early Do)

1. Slash Costs Now

It's easy to go on autopilot with monthly costs, but they can add up fast, especially if you're spending more than you should. By switching providers for home or car insurance, Internet, phone, and cable TV, you could save thousands a year. In fact, do you even need cable TV? What about that gym membership — are you using it enough to justify the cost?

Could you trim expenses even further by downsizing your home or getting by with one car? Leave no monthly cost unexamined.

While you're at it, look at the fees you're paying on your investments. Because of compounding, investment fees that seem small can eat a big chunk out of your retirement savings over time.

All of these cost savings won't be enough on their own to ensure your early retirement, but over the course of a few years they can add up and enable you to retire comfortably earlier than you may have thought. (See also: 14 Things to Do to Retire Early)

2. Look for Tax Advantages

When planning for retirement, it's important to consider the taxes you will have to pay once you stop working. While you can contribute now to 401K or regular IRA accounts using pretax income, you'll have to pay taxes on the distributions once you start to draw down the accounts.

On the other hand, you contribute to a Roth IRA with money that's already been taxed, but then it grows tax-free and you'll pay no taxes when you withdraw the money. Often it's good to have a combination of both types of retirement accounts. A financial adviser can help you decide. But keep in mind that withdrawing from either of these accounts before you hit age 59-1/2 usually incurs a tax penalty.

Taxes on Social Security are another expense to keep in mind for when you hit official retirement age. Social Security benefits may be taxed at the federal level, depending on what your total income is. But the IRS won't tax more than 85% of your benefits. Thirteen states tax Social Security benefits, while other states have low or no taxes for retirees.

3. Retire Abroad Full Time

Retiring early means figuring out a way to live on what you save during a shortened working career. You can lower your needs drastically by changing your country code.

If you've been working and saving in U.S. dollars, you can make that money go much further in a country where the cost of living is lower than in the United States. Many destinations in Central and South America, as well as many parts of Asia and even Europe, are much less expensive for Americans to retire to — and if you're looking for a warmer climate, you can find that too.

Of course, there are some logistics that you should take into consideration when retiring abroad.

Taxes

The U.S. taxes citizens or resident aliens living abroad on worldwide income, including Social Security, other retirement income and any earnings you may get from working in your new country. However, you may be eligible for the Foreign Earned Income Exclusion, which allows you to exclude foreign earnings — up to a certain amount — from your taxable income. The exclusion is adjusted annually for inflation. For 2017 it is $102,100.

You may also be subject to income taxes in the country where you retire, though many countries have treaties with the U.S. that make sure you are not double taxed. You'll need to research local tax laws to make sure you're in compliance.

Logistics

There are a lot of logistics involved in moving to a foreign country. You'll need to research the appropriate visa for the country you'll be living in. Many desirable locations for Americans have special visas for retirees. Generally, you'll need to show you have a certain amount of retirement income and you will not be allowed to work for a local employer on these visas.

Think too about whether you want to sell your home in the U.S. You may want to get rid of furniture and other belongings as well, though retirement havens such as Panama and Nicaragua allow you to import a certain amount of household goods duty-free.

Banking is another consideration. Many expats continue to hold a U.S. bank account and to transfer money between it and an account in the country where they live. If you've got a U.S. account it's also a good idea to have a U.S. travel credit card that charges no foreign transaction fees. A U.S. card can help you purchase from U.S. websites more easily and comes in handy during trips back home.

Health

In some countries, quality health care is so cheap that expats choose to pay out of pocket for treatment and medications. In other cases, you will need to research local health insurance options or make sure your U.S. insurance covers care abroad. Medicare is not available for health care outside of the U.S.

Other expats can be a great resource as you try to find doctors that speak English and have a good reputation.

The U.S. State Department has more resources for planning to retire abroad.

4. Move Abroad Part Time

You can also considerably lower your retirement expenses just by spending a portion of the year abroad, without the commitment of leaving the U.S. entirely.

Different people choose to set up this arrangement differently. Some will return to the same place every year, while others may prefer to try out somewhere new.

Taxes

As with moving abroad full time, you will still be responsible for paying U.S. income taxes on worldwide income, and you may be subject to local taxes as well. Many tax breaks in the U.S. and abroad are dependent on how many days per year you spend in the foreign country, so you'll need to research those requirements.

Logistics

The most important consideration when you'll be spending your time in multiple locations is your accommodations. Will you rent your home while you're away? Will you hire a property manager to make sure that everything is running smoothly in your absence?

Consider home or apartment exchanges if you are going to be overseas for a shorter period of time.

Health

For health insurance, you may want to consider purchasing travel insurance for the part of the year that you'll be out of the country to supplement your plan back home.

Early retirement doesn't have to be an unattainable goal. Focus on setting your priorities and using creative thinking to be able to retire when you want.

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This article is from Nick Wharton of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Questions Couples Must Ask Before Retirement

Dan Rafter — Thu, 10 Nov 2016 09:00:09 +0000

What kind of retirement do you imagine? Do you picture taking a long cruise, traveling to international destinations, and racking up the frequent-flier miles? What if your partner is dreaming about a retirement of lazy days spent reading books, watching movies, and visiting the grandkids?

Those retirements are two very different kinds. And if you and your partner can't agree on a version of your after-work years that satisfies both of you, your retirement might be a stormy one.

Fortunately, you can boost the odds that you and your partner will enjoy your retirement years by asking five key questions before you leave the working world.

1. What Kind of Retirement Do You Want?

This is the most basic of questions, but it might be the most important. Couples need to hammer out exactly what kind of life they want to lead after their working years are over.

When you're working, much of your life is planned out for you. You know when you have to be on the job, for instance. If you're raising kids, your weeks are often filled with band practices, soccer games, and gymnastics meets. You and your partner might not even spend much time together during an average week.

But when you retire? That all changes. Those hours in the office are now hours spent at home. You and your partner need to determine what you want to fill those hours with. You might want to travel and take on new hobbies. Your partner might prefer quiet days with favorite books.

The type of retirement you want also impacts how much money you'll need to save. You'll need more money if you plan to travel the globe and less if you picture quiet nights in your existing home.

If you discuss this before retirement, you might be able to work out compromises. Maybe you agree to take two trips a year. Maybe you agree that you'll investigate a new hobby while your partner plows through War and Peace. But you won't be able to agree on anything if you don't first talk about what your ideal retirements look like.

2. Where Do You Want to Live?

Do you want to stay in your current home? Or perhaps you'd like to sell your home and move into an apartment in the middle of downtown? These are both good choices. But you and your partner need to discuss them before you retire. You don't want to be dreaming of a downtown apartment if your partner is making plans for a new sunroom in your current home.

And what about your grandkids? Do you want to move closer to them? Or do you want to stay put? This, again, is another conversation that you must have before retirement.

3. When Do You Want to Retire?

You might plan on working late into your 70s. Your partner might be counting down the days to 67. Make sure you and your partner discuss when you both plan on retiring.

Your partner might expect that you'll both retire at the same time. Don't make it a surprise that you want to retire earlier or later. The timing of your retirement plays an important role in how much you have to save each year to meet your retirement goals. So talk about this choice early and often.

And if you change your mind? Don't keep it a secret from your partner.

4. How Much Money Do You Need?

This might be the most perplexing question of all to couples. It's also the one that couples need to talk about early in their relationship. Couples need to agree on how much money they'll need each year to live a comfortable retirement. If they don't? The odds are high that money issues will be a constant source of tension.

How much money couples need in retirement varies depending on the lifestyles that they want. Couples who want to travel during their retirement will need more money. Those who want to spend their time visiting their grandkids will need less.

Those couples who plan on living in a pricey seniors' center or an urban apartment building will probably need more money than those who plan to live for as long as possible in a home that they have already paid off.

There are plenty of formulas for determining how much money couples should save during retirement. Your best bet, though, might be to meet with a financial adviser who can help you and your partner work through your retirement goals and determine the best way to save for them.

5. Who Will Do What Chores?

You might have been happy with being the home's main cook if your partner worked longer hours. But what about when you are both retired? Will you still want to handle the bulk of the cooking chores then? Maybe not.

It pays to talk with your partner about who will handle the bills, cook the meals, clean the house, and mow the lawn once retirement arrives. The old ways of splitting these chores might no longer make sense after you both settle into retirement.

Again, not talking about this issue could cause tension. You might not be thrilled to serve your partner dinner if that partner spent all day watching TV or reading a book. So don't be shy about the chores conversation. It might be time to work out a new household schedule.

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This article is from Dan Rafter of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

7 Retirement Planning Steps Late Starters Must Make

Damian Davila — Tue, 04 Oct 2016 10:30:13 +0000

Most Americans aren't saving enough for retirement — and worse, many are off to a late start. Since 2011, the annual percentage of U.S. workers with less than $1,000 in savings and investments for retirement has ranged from 26% to 36%.

These low savings levels are taking a toll on nest eggs. One estimate puts the ideal retirement savings for an individual at age 45 at $162,000 and calculates that, in reality, most Americans are about $100,000 short of that goal by the time they reach age 45. Let's review what late-starters should do to give their savings a necessary boost and learn some tips for those who are 15, 10, or five years away from retirement.

15 Years Away From Retirement

Assuming that your target retirement age is 65, you're now 50 years old and are likely to be part of the Generation X. About half of members of Generation X have less than $10,000 in retirement savings.

Step 1: Take Advantage of Catch-Up Contributions

Starting at age 50, you're now legally allowed to start making annual catch-up contributions on top of the regular contribution limits to your qualifying retirement accounts. In 2016, individuals age 50 and over could contribute an extra:

$6,000 on top of the $18,000 limit to 401K (other than a SIMPLE 401K), 403b, SARSEP, and governmental 457b plans;
$3,000 in catch-up contributions to SIMPLE IRA or SIMPLE 401K plans; and
$1,000 on top of the $5,500 limit to traditional or Roth IRAs.

Additionally, individuals with at least 15 years of employment can make additional contributions to their 403b plans on top of the regular $6,000 in catch-up contributions. For more details, review the IRS rules for 403b contribution limits.

Step 2: Chase Lower Investment Fees

When choosing funds for your 401K, you may think that there's little difference between a fund with an annual expense ratio of 0.16% and a fund with one of 0.25%. However, when you're 15 years away from retirement, those differences compound over time. A $30,000 investment would cost $48 per year on the first fund and $75 per year on the second fund.

By investing in the fund with the higher annual expense ratio, and assuming that both funds have an annual return of 7%, you would miss out on an extra $703.94 in retirement savings by the time you reach age 65. Not to mention on the additional gains on those moneys that you would have during your retirement years.

Several studies have shown that expense ratios are the only reliable predictor of future fund performance. For example, research from rating agency Morningstar has found that low-cost funds consistently outperform high-cost funds.

10 Years Away From Retirement

At this point, you're now 55 years old and you're supposed to be wiser. Still, about 33% of Americans age 55 and over have no retirement savings and 26% have retirement accounts with balances under $50,000. On top of taking advantage of catch-up contributions and chasing lower-cost funds, here are some additional steps to give your retirement strategy a much-needed boost.

Step 3: Consider Cities Where You Can Retire on Just Social Security

It can be a humbling experience to have to tighten your belt after having worked so hard for many decades. If you're going to become part of the 62% of U.S. retirees that expect Social Security to be a major source of income during retirement, start investigating what U.S. cities are better suited to live on your expected check from the Social Security Administration (SSA).

Here are three list of cities to start your search:

Thinking about your budget during your retirement years is a good idea so you can plan withdrawals from your retirement account, figure out your necessary contributions for the next decade, and figure out ways to rein in expenses.

Step 4: Dial Down Your Investment Risk

Desperate times often call for desperate measures. However, playing part-time stock trader with your retirement funds or allocating more moneys to investment vehicles promising higher returns — and more risk! — isn't a good idea. Remember that only 20% to 25% of actively managed funds beat their benchmark.

Talk with your plan administrator about income investing, which focuses on picking financial vehicles that provide a steady stream of income. While you may think that bonds are your only option, there many other securities to choose from. For example, there are stocks that consistently pay dividends.

5 Years Away From Retirement

It's the final countdown to retirement age and now you're age 60. With a retirement savings benchmark of $260,494, about 74% of Americans are behind on their retirement savings. Here are three additional planning steps.

Step 5: Accumulate Delayed Retirement Credits

It's time to get the most accurate picture of your expected retirement benefit from the SSA. To do this, you can use the Social Security Detailed Calculator, which lets you estimate your retirement benefit by accessing your actual earnings record through a secure interface. If you find that monthly benefit check to be too low, one way to boost is delaying your SSA benefit past your full retirement age.

Depending on the year that you were born, your full retirement age will fall somewhere between age 65 and 67. For every year that you delay your retirement benefit past your full retirement age, you can get up to an 8% increase on your total annual benefit. The benefit increase no longer applies when you reach age 70, even if you continue to delay taking benefits.

Step 6: Delay Required Minimum Distributions

Generally, holders of traditional and Roth 401K plans must start taking required minimum distributions (RMDs) once they reach age 70-1/2.

However, there is one way to delay RMDs. If you were to take a part-time job offering a retirement plan that allows you to rollover your old 401K plan, then you can continue to contribute to the new plan and delay your first RMD until April 1st of the year after you retire.

Keep in mind that:

Your old traditional 401K must go into a new 401K;
Your old Roth 401K must go into a new Roth IRA;
Your new plan must accept rollovers; and
You can't hold more than 5% of the company sponsoring the old plan to be able to do a rollover past age 70-1/2.

Before you attempt a rollover past age 70-1/2, consult the plan administrator of your current retirement plan, the one from your potential new employer, and your tax accountant or financial planner, if you have one. This is one of those times that may warrant hiring the right type of financial adviser to prevent any tax penalties.

Step 7: Consider Retiring Abroad

Last but not least, one way to further stretch your nest egg is to retire in a city abroad to live better on a smaller budget, have access to generous tax breaks, and enjoy beautiful locales and ideal weather conditions.

Several countries, including Costa Rica, Panama, and Nicaragua, offer retirement programs that provide U.S. retirees several benefits and require a minimum monthly SSA benefit ranging from $600 to $1,000 to qualify. (See also: 4 Exciting World Cities You Can Afford to Retire In)

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This article is from Damian Davila of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Online Tools to Manage Your Money in Under 10 Minutes a Week

Qiana Chavaia — Fri, 29 Jan 2016 14:00:08 +0000

Innovative personal finance tools are revolutionizing the way we manage and keep track of our money. Not only can they help teach us how to make smarter decisions, but they put us in charge of our money, making the arduous tasks of budgeting, saving, debt management, and investing a thing of the past. Best of all, most of us can manage our money in under 10 minutes a week using these tools.

1. Mint

Mint was one of the first online financial management tools, laying the foundation for some of the other players we see today. The free tool offers a terrific snapshot of your overall finances. From a single dashboard, account holders can link their bank, loan, and brokerage accounts and monitor balances and track purchases in real time. With its financial planning tools, you can establish a monthly budget and monitor your spending patterns. It will alert you as you near your budget threshold, to make you cognizant of overspending.

Mint lets you benchmark financial goals, gives an overview of open accounts and lines of credit, and now there's Mint Credit Monitoring to help you manage your credit score. It constantly tallies your outstanding debts versus assets to display your real net worth, which is something most people tend to forget about. (See also: 8 Cool Mint Tools for Managing Your Money)

2. Investments and Retirement Planning Tools

By now, you've probably heard of robo-advisor sites such as FutureAdvisor, WealthFront, and LearnVest. They're computerized wealth management systems that cater to everyday investors for a fraction of the cost of human advisors. The companies generally target Millennials, a market segment still on the pathway to wealth with fewer assets than required at large private wealth management companies. But investors of any age or net worth can benefit from their free or low-cost portfolio management options, and the hands-off approach means you can keep track of your investments in just minutes.

3. Empower

Founded in 2009, by former Intuit CEO Bill Harris, Empower lays claim to being the first digital wealth management platform. Like most robo-investing platforms, Empower takes assessment of your financial situation and goals starting with a free consultation scheduled with a licensed advisor who recommends a customized investment plan. Those investors with at least $25,000 under management receive ongoing access to a team of financial advisors.

4. Betterment

Betterment entered the game as another major robo-advisor option. Betterment's financial framework offers similar tools to help you reach your financial goals, plan for retirement, invest, and track your savings and investing goals. Once your account is funded, investment moves are made on your behalf. The platform keeps track of your progress and makes recommendations along the way. Their current investment management fees range from $4/month for investing balances under $20,000 and 0.25% annual fee for balances over $20,000.

5. QuickBooks Online

QuickBooks has taken its accounting software solutions online. With all of the same features and more as the computer installed version, QuickBooks Online is an affordable solution for business owners and the self-employed. With QuickBooks Online you can manage your money on the go and access your account from multiple devices.

Some of the features include the ability to grant access to multiple users, including creating an account for your accountant or CPA. It automatically tracks expenses, generates on-click reports, writes checks that you can print from anywhere, creates invoices, and most of all, it automatically downloads and aggregates data from bank and credit card accounts. It then categorizes that information and reconciles, which you should do once a month and have to do at tax time. For me, this has always been an excruciating week-long process — but that's a thing of the past now, thanks to QuickBooks Online.

What online tools do you use to make money management easier?

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This article is from Qiana Chavaia of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Invest Your Time in These 13 Things While You're in Your 20s

POPSUGAR Smart Living — Fri, 27 Mar 2015 09:00:07 +0000

Our 20s fly by before we know it, and we want to make sure we did the decade justice. Did we worry about the right things? Are we where we should be now? The best way to prepare for those questions and answer them to the best of our abilities, is to make sure we spend time on what really matters and what may help us in the future. We took a look at a Quora thread that had great advice for people in their 20s who may be wondering what some of the important things to invest time in may be, and here is what we found.

1. Network

If you form a solid mainstay of people, you are exposed to more opportunities and potential for success in both your career and in your personal life. Build bridges, because you never know when you might be looking to cross them. As Karan Jaiswani put it, "the 20s are all about utilizing your today and structuring your future."

2. Read — A Lot

There is nothing more productive than taking the time to read. Read whatever you can get your hands on — current news, nonfiction, fiction, career advice, self-help books — anything! The more you know and understand about people around you, yourself and the world, the more easily and successfully you can navigate those very things.

"This will keep your mind stimulated and open to ideas. You will get a number of ideas for each author that you can implement in your life. You will also get opinions from across the globe," Rizwan Aseem says.

3. Take Care of Your Body

Making time at night to wash your face, exercise, and remembering to apply (and reapply) sunscreen may not be on the top of your priority list, but it should be. General health care is something that, later in life, you will be glad you considered in your 20s. As Aseem points out, "No matter what you do in your life, you will do it in your body. You cannot replace it, get a new one, or trade it in. This is your body and you will live in it."

4. Use Your Time and Money on Education

Education is an invaluable resource that you are unlikely to ever regret having. Money is well spent when it is used to broaden your mind and pool of knowledge, especially when honing skills to be applied to your career path. Anuj Kumar advises you to "try different things and find out where your passion lies… and then find ways to make a career doing that, adding that "if you need further education, get it."

5. Pay Attention to Your Mental Health and Wellbeing

While your physical health is extremely important, investing time into taking care of your mind should not be forgotten. Stimulate it, challenge it, be conscious of what you're exposing it to daily, and take care of yourself. Aseem makes the point that, "The mind, like anything else, has the characteristics of a muscle. You use it, or lose it. And as long as you are using it, it will remain fit and healthy. The minutes you stop using it, it will decay and rust." So use it!

6. Learn New Skills (and Master Them)

While the advice to "follow your passion" can be good in the general sense, John. J. Bowman urges those in their 20s to master and control a set of skills that can be used to benefit you within the field you are passionate about.

7. Create and Maintain Good Habits

The hardest part of creating good habits is getting started, but once you are able to master them, they will have an undeniably positive impact on your day-to-day as well as your future, because, as Rizwan notes, "once a habit is established it lasts for a life time."

8. Build Meaningful Relationships

Now is the time to drop the fair-weather friends and make time only for those who are really going to stick around and be positive forces in your life. As you mature, so should your relationships, so you don't have time to waste on people who will be harmful rather than helpful in your pursuit of your future goals.

9. Eat Well

Spend time planning meals, learning healthy recipes, and overall taking what you're eating into consideration regularly. Gone are the days when donuts, chips, and sodas can pass as a full day's meal. Even it if takes a little more time and effort, your future self will thank you when you find yourself maintaining your energy and healthy body as you age.

10. Establish a System for Handling Finances

Sit down and figure out how you are spending money, what you are spending it on, and what your ongoing expenses are. "If you take care of your finances starting today they will take care of you when you most need them. When you are old, or sick, or sending your kids to school, or helping a parent through sickness. Your finances will help you," Aseem says. Big pitfalls to avoid: bad business opportunities (if it seems to good to be true — it is), overuse of credit cards, and choosing not to save or put money aside for a rainy day.

11. Travel

In your 20s, you're full of enthusiasm and energy and usually have the mobility to indulge a bit of wanderlust. So indulge it. Experience new cultures, countries, and challenges. You will learn things that you can take with you and apply to your life back at home.

12. Communicate With Loved Ones

Make an effort to remember birthdays, holidays, and important events. Your family and close friends can act as your support system when you need it, but you should put the time in and return the favor. Small gestures that show you are thinking about the people who love you go a long way, so take the extra five minutes to write a nice card and stick it in the mail, or schedule that quick Skype call — you won't regret it.

13. Examine What You Really Want in Life

It's easy to get caught up in the everything going on throughout your 20s, and people often forget to actually sit down and contemplate what it is they really want. Tonya Turpin advised that you "actively, and with intent, become aware of the world and everything it holds. Not just about the outside world, but also the one in your head. Spend time alone because it is the only true way to get to know yourself. Be curious and question everything." Make the time to figure out what you love, and map out a plan of how to get it.

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When we're in our 20s we feel possibility ahead of us as nearly infinite. Grasp it by laying the foundation of your future when you're young, smart, and full of health.

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4 Ways to Boost Your 401(k) Returns

Qiana Chavaia — Thu, 04 Dec 2014 15:00:21 +0000

Employer-sponsored 401(k) plans are powerful retirement vehicles. Beyond empowering you to take the first (and perhaps most important) step toward retirement savings, 401(k) contributions are also made using pre-tax income, meaning they can reduce your current income tax obligation, too. (See also: If You Want Your 401(k) to Grow, Stop Doing These 6 Things)

But the benefits of 401(k) plans don't end there — consider these additional ways to power charge your plan for maximum returns.

1. Get a Full Company Match

The most attractive benefit of 401(k)s is that most corporations match some percentage of your contributions, up to 6% of your salary. Let's say you earn $50,000 per year, and your company matches 100% of your contributions, up to 6% of your salary. That's a $3,000 per year match — or in other words, it's $3,000 in free money. Of course, not all companies offer such generous matches, but consider contributing as much as your company will match in order to maximize this source of free retirement money.

2. Choose Low-Fee Funds

The fees you pay on your investments can seriously erode your earnings. The SEC notes that even a 1% annual fee paid on a $100,000 portfolio will cost you $28,000 over 20 years. Yikes! That's why keeping your fees low — by choosing passively managed index funds or ETFs, where possible — is so important. Not only do you get to keep more of your money, but you also get to enjoy the extra growth on that money, thanks to the effect of compounding. All 401(k) plan offerings are required to disclose their fees; aim to select offerings with fees below 1%.

Actively managed mutual funds often have the highest fees, so check the fine print.

3. Diversify

401(k) plans offer hassle-free strategic investing, including the ability to diversify your investments in order to help reduce risk. Often, a major investment firm like TD Ameritrade, Vanguard, or T.Rowe Price manages the plan and has worked with your employer to offer a variety of options which enable you to diversify your investments. But it's up to you to make use of them.

If you don't feel comfortable creating your own diversified set of selections, consider choosing a broad index fund or Target-Date Fund. The latter selects investments based on your expected retirement date, automatically adjusting for risk and return profiles over time. This enables you to capture many of the benefits of diversification, without actively selecting several funds.

4. Rollover 401(k) Plans When You Change Employers

Most of us change jobs (and even careers) throughout our lives, but frequent job-switching shouldn't prevent you from participating in a 401(k). And if and when you leave a job, you can rollover your plan's assets into your new company's 401(k). If you're moving to a role that doesn't offer a 401(k) (such as a small company, or self-employment), avoid paying huge early withdrawal fees by rolling over to an IRA within 60-days of cashing out.

If you're considering job offers, take into account a company's benefits package. It is one of the most important things to consider next to compensation. Seek an employer that offers a 401(k), and preferably one that offers matched contributions. Without a strong retirement plan, you're likely just extending the number of years you'll need to work, so proceed accordingly.

What are you doing to supercharge your 401(k)?

This article is from Qiana Chavaia of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

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