Retirement https://www.wisebread.com/taxonomy/term/417/all en-US 4 Golden Rules of Investing in Retirement https://www.wisebread.com/4-golden-rules-of-investing-in-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-golden-rules-of-investing-in-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/our_money_is_safe_and_sound.jpg" alt="Our money is safe and sound" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>After you've spent a lifetime investing <em>for </em>retirement, it can feel very different to invest <em>in </em>retirement. Many retirees are hesitant to start withdrawing from the nest eggs they've carefully built over the years. And, they sometimes feel especially nervous about managing that account, knowing it needs to last as long as they do.</p> <p>Thankfully, there are some guidelines that can help. Here are four golden rules for investing in retirement.</p> <h2>1. Don't be too conservative</h2> <p>Longevity is increasing. Your retirement could last for two decades or more. According to the Social Security Administration, a 65-year-old man today can expect to live to nearly age 85. A 65-year-old woman today can expect to live past age 86. And those are just averages. Many people will live well into their 90s.</p> <p>Of course, given a choice, most people would prefer to live a long life. However, the more years you spend in retirement, the longer your nest egg will need to last. That's why it's important to avoid being overly conservative with your investments in your later years. Bond-like returns will only get you so far. (See also: <a href="https://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 &mdash; And What to Do About It</a>)</p> <p>This reality is reflected in many of today's target-date funds. For example, Vanguard's Target Retirement 2020 fund, which is designed for people right on the cusp of retirement, currently has 54 percent of its assets invested in stocks. The lowest level of stock exposure Vanguard's target-date funds ever hit is 30 percent, which occurs seven years after each fund's target date. Thereafter, it remains fixed.</p> <p>If you're managing your own portfolio, you would be wise to take a page from these professionally managed portfolios and make sure you're maintaining a healthy exposure to stocks. (See also: <a href="https://www.wisebread.com/7-reasons-youre-never-too-old-to-buy-stocks?ref=seealso" target="_blank">7 Reasons You're Never Too Old to Buy Stocks</a>)</p> <h2>2. Don't be too aggressive</h2> <p>By the same token, you can't afford to get carried away with risk. With the current long-running bull market showing few signs of running out of steam, it may be tempting to take on more risk than you should, especially if you feel somewhat behind on your retirement savings. But that would be dangerous to your portfolio and your peace of mind.</p> <p>Instead, trust the rules of asset allocation. If your optimal asset allocation calls for a 50/50 stock/bond mix, stick with that. One day, the bull market <em>will </em>end and you'll be glad you weren't invested any more aggressively than you should have been. If you're not sure what your optimal mix should be, <a href="https://personal.vanguard.com/us/FundsInvQuestionnaire" target="_blank">Vanguard's asset allocation questionnaire</a> can help you figure it out.</p> <p>Remember, if your nest egg isn't as large as it should be, you have other options besides taking undue risk with your investments. For example, if you're still in the workforce, pushing back your intended retirement date even by a few months or a year can make a noticeable difference in your financial health. (See also: <a href="https://www.wisebread.com/how-one-more-year-of-work-can-transform-your-retirement?ref=seealso" target="_blank">How One More Year of Work Can Transform Your Retirement</a>)</p> <h2>3. Consider maintaining a cash &quot;bucket&quot;</h2> <p>One of the biggest threats to your portfolio in retirement goes by the fancy name of <em>sequence of returns risk. </em>That refers to the possibility that the market could fall just as you enter retirement. While the market naturally ebbs and flows over time, a significant downturn right at the start of retirement can put a strain on your cash flow throughout retirement.</p> <p>Especially if you lean toward the conservative side of the risk spectrum, one way to manage that risk is to implement the bucket strategy &mdash; creating a cash account containing two to three years' worth of essential living expenses. That can help you avoid having to withdraw from your investment account in a bear market.</p> <p>When the market is falling, you draw living expenses from your cash bucket, giving your investment account time to recover. When the market is growing, you draw from your investment account while also using a portion of your gains to refill your cash bucket. (See also: <a href="https://www.wisebread.com/8-ways-to-preserve-your-net-worth-in-retirement?ref=seealso" target="_blank">8 Ways to Preserve Your Net Worth in Retirement</a>)</p> <h2>4. Make sure you're on the same page as your spouse</h2> <p>Within many marriages, there's a division of labor, with each spouse taking the lead in different areas. If one of you has been managing the investments, now is the time to bring the other into the process. Otherwise, when the investment-manager spouse dies, it can leave the surviving spouse ill-equipped to take over.</p> <p>If you handle the investments in your household, start talking about your investments with your spouse. How many accounts do you have and what's the total balance? What are the online passwords? What strategy are you following with your investments? If you were to die first, how would you recommend your spouse manage the account? If you're using a fairly involved approach, is there a simplified alternative? (See also: <a href="https://www.wisebread.com/5-money-conversations-couples-should-have-before-retirement?ref=seealso" target="_blank">5 Money Conversations Couples Should Have Before Retirement</a>)</p> <p>One of the sweetest rewards of a life lived well is peace of mind in your later years. When it comes to experiencing <em>financial </em>peace of mind during retirement, the four steps described above should help.</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=https%3A%2F%2Fwww.wisebread.com%2F4-golden-rules-of-investing-in-retirement&amp;media=https%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F4%2520Golden%2520Rules%2520of%2520Investing%2520in%2520Retirement.jpg&amp;description=4%20Golden%20Rules%20of%20Investing%20in%20Retirement"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/u5180/4%20Golden%20Rules%20of%20Investing%20in%20Retirement.jpg" alt="4 Golden Rules of Investing in Retirement" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/matt-bell">Matt Bell</a> of <a href="https://www.wisebread.com/4-golden-rules-of-investing-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-9"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="https://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-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://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-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="https://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-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/what-you-need-to-know-about-the-easiest-way-to-save-for-retirement">What You Need to Know About the Easiest Way to Save for Retirement</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="https://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> </ul> </div> </div> </div> </div><br/></br> Investment Retirement bonds cash bucket conservative gains golden rules longevity nest egg returns risk rules of thumb stocks Thu, 19 Jul 2018 08:00:09 +0000 Matt Bell 2154892 at https://www.wisebread.com Best Money Tips: 10 Countries Where Retirees Can Live Large and Save Big https://www.wisebread.com/best-money-tips-10-countries-where-retirees-can-live-large-and-save-big <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-money-tips-10-countries-where-retirees-can-live-large-and-save-big" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/retired_couple_balcony_800441676.jpg" alt="Retired couple living large and saving big" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Welcome to Wise Bread's <a href="http://www.wisebread.com/topic/best-money-tips">Best Money Tips</a> Roundup! Today we found articles on the best countries to retire, how to score cheap flights this summer, and cheap and easy dessert recipes.</p> <h2>Top 5 Articles</h2> <p><a href="https://www.moneytalksnews.com/slideshows/the-10-best-countries-to-retire-where-you-can-live-large-and-save-big/">The 10 Best Countries to Retire Where You Can Live Large and Save Big</a> &mdash; Want more bang for your retirement bucks? These destinations offer affordability, climate, health care, friendliness, and other characteristics that many retirees want. [Money Talks News]</p> <p><a href="https://www.popsugar.com/smart-living/How-Find-Cheap-Summer-Flights-44979060">How to Score Cheap Flights This Summer</a> &mdash; Summer airfare can get pricey, but there are a few ways to snag cheap flights for your next getaway. [PopSugar Smart Living]</p> <p><a href="https://www.littlehouseliving.com/the-best-7-easy-frugal-dessert-recipes-to-try.html">The Best 7 Easy Frugal Dessert Recipes to Try</a> &mdash; Serve up some sweet treats on a budget! Each serving costs less than 50 cents to make. [Little House Living]</p> <p><a href="https://diseasecalleddebt.com/tips-for-starting-a-fix-and-flip-business/">Tips for Starting a Fix-and-flip Business</a> &mdash; Flipping a house is never as easy as it looks on TV, but you can turn your flipping dreams into reality with some dedicated work and these tips! [Disease Called Debt]</p> <p><a href="https://www.dailyworth.com/posts/2410-be-more-productive-by-saying-yes-to-less">Be More Productive by Saying Yes to Less</a> &mdash; Learn how to scale back your commitments and actually get more done! [Daily Worth]</p> <h2>Other Essential Reading</h2> <p><a href="https://fabulesslyfrugal.com/family-birthday-tradition-ideas/#.WzZrKX4nbBI">5 Meaningful Family Birthday Traditions</a> &mdash; Bring more meaning to birthdays in your family by taking up one of these meaningful traditions. [Fabulessly Frugal]</p> <p><a href="https://www.frugalrules.com/best-grocery-rebate-apps/">6 Best Grocery Rebate Apps To Get Cash Back on Your Groceries</a> &mdash; These are the best grocery rebate apps to help you stretch your grocery budget and get cash back on things you were going to buy anyway. [Frugal Rules]</p> <p><a href="http://missfrugalmommy.com/how-diy-projects-help-with-mental-health/">How DIY Projects Help With Mental Health</a> &mdash; Not only can DIY projects help you save money, they are also beneficial to your mental health in many important ways. [Miss Frugal Mommy]</p> <p><a href="https://www.moneyunder30.com/when-to-finance-even-if-you-could-pay-cash">When To Finance Even If You Could Pay Cash</a> &mdash; Paying cash is almost always a smarter move than to go into debt, but there are a few situations where it can make sense to finance even if you have the cash. [Money Under 30]</p> <p><a href="https://www.csmonitor.com/Environment/2018/0629/Arizona-commits-to-producing-drought-plan-for-Colorado-River">Arizona commits to producing drought plan for Colorado River</a> &mdash; Experts predict that the Colorado River will suffer water shortages in the coming years that could affect 40 million people in 7 US states. [The Christian Science Monitor]</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/amy-lu">Amy Lu</a> of <a href="https://www.wisebread.com/best-money-tips-10-countries-where-retirees-can-live-large-and-save-big">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="https://www.wisebread.com/5-ways-to-embrace-having-to-work-in-retirement">5 Ways to Embrace Having to Work 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="https://www.wisebread.com/8-ways-to-preserve-your-net-worth-in-retirement">8 Ways to Preserve Your Net Worth 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="https://www.wisebread.com/5-signs-you-need-to-come-out-of-retirement">5 Signs You Need to Come Out of 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="https://www.wisebread.com/tiny-nestegg-retire-abroad">Tiny Nestegg? Retire abroad!</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/6-millennial-money-habits-every-retiree-should-learn">6 Millennial Money Habits Every Retiree Should Learn</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement best money tips retirees Mon, 02 Jul 2018 08:30:17 +0000 Amy Lu 2153527 at https://www.wisebread.com How One More Year of Work Can Transform Your Retirement https://www.wisebread.com/how-one-more-year-of-work-can-transform-your-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-one-more-year-of-work-can-transform-your-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/our_business_has_no_flaws.jpg" alt="Our business has no flaws" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>As you glance into the future, do you see a life of endless work stretching out in front of you? If so, you're not alone. An increasing number of people are wondering how they'll ever be able to retire.</p> <p>But maybe things aren't as bad as they seem. In fact, a recent study found that delaying retirement by just <em>a few months</em> could have a major impact on your ability to retire and your standard of living in retirement.</p> <p>A National Bureau of Economic Research (NBER) study concluded that &quot;working three to six months longer boosts retirement income by as much as increasing retirement contributions by one percentage point over 30 years of employment.&quot;</p> <p>More specifically, the study found that instead of retiring at age 66, working until age 67 can boost retirement income by 7.75 percent. By contrast, increasing the amount of earnings saved in a retirement account by one percentage point starting at age 36 and keeping it at that level for the next 30 years would raise retirement income by just over 2 percent.</p> <p>The NBER findings held true for singles as well the primary earner of married couple households across a wide range of incomes.</p> <p>That isn't to say that increasing your savings rate is a bad idea. It's just that of the two main options available to workers who are behind on their retirement planning &mdash; saving more or working longer &mdash; working <em>even a little </em>longer will likely pay higher dividends than saving more.</p> <h2>The value of waiting</h2> <p>The researchers noted four benefits from delaying retirement. First, each additional month of work provides an opportunity to save more in a retirement account. Second, it gives that account balance more time to grow. Third, if you plan to buy an annuity, each month that you hold off will increase the benefit amount for the same cost or lower the cost of the same benefit amount.</p> <p>Fourth, and by far most importantly, each month you delay retirement will boost your Social Security benefits. The earliest you can claim benefits is age 62; the latest is age 70. Between those two points, each month that you wait will increase your monthly benefit.</p> <p>You can review your estimated Social Security benefits by creating an account on the <a href="https://secure.ssa.gov/RIL/SiView.do" target="_blank">SSA website</a>. You'll see how dramatically different your estimated monthly benefits will be at age 62, at your &quot;full retirement age&quot; (67 for those born in 1960 or later), and at age 70. For example, my benefit will increase more than 50 percent if I claim at age 67 instead of 62. And if I wait until age 70, my benefit will be nearly twice as high as my age 62 benefit.</p> <p>Once you know your full retirement age benefit, you can also estimate the month-by-month or year-by-year differences in your benefits by using the <a href="https://www.ssa.gov/oact/quickcalc/early_late.html" target="_blank">SSA's calculator</a>. For example, if I were to claim benefits beginning at age 67 instead of age 66, waiting that extra year would give me a 6.5 percent raise &mdash; $2,750 per month vs. $2,582, a difference of $168 per month or $2,016 per year.</p> <p>To understand how that compares to saving more, let's start with &quot;the 4 percent rule,&quot; a common recommendation to withdraw no more than 4 percent of your nest egg each year in order to make sure your retirement savings last throughout retirement. Following that guideline, it would take $50,400 of additional retirement savings in order to provide a $2,016 boost of yearly retirement &quot;income.&quot;</p> <p>To accumulate that much more money in her retirement account, a 56-year-old making $80,000 per year would have to contribute an additional 4.3 percent of salary each month ($289.50) to her workplace retirement plan, generate an average annual return of 7 percent, and do that for 10 years. (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> <p>There may be other benefits to delaying retirement as well.</p> <h2>Continued employer matches on retirement savings</h2> <p>If your employer matches a portion of the money you contribute to your workplace retirement plan, that's an incredible benefit. The longer you keep taking advantage of it, the larger your nest egg will grow. (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>Extended group health insurance</h2> <p>Medicare eligibility begins at age 65, so if you retire before then, you'll need to find coverage elsewhere, which can be expensive. By the same token, if you continue to work past age 65, you may be able to hang onto your group health insurance, which may be more comprehensive than Medicare.</p> <p>If that's your situation, be sure to contact your benefits department to see how your current health insurance works with Medicare. It may be that you'll have to sign up for Medicare even if you keep your current insurance. The number of people employed at your company will dictate how payment of claims will be coordinated between the two insurance plans. (See also: <a href="http://www.wisebread.com/4-common-mistakes-to-avoid-when-you-enroll-in-medicare?ref=seealso" target="_blank">4 Common Mistakes to Avoid When You Enroll in Medicare</a>)</p> <h2>More employer-provided education opportunities</h2> <p>Employer-sponsored training is another valuable benefit, whether it comes in the form of tuition reimbursement for college classes or in-house workshops. If you're among the growing number of people who plan to do some type of work for pay after leaving the full-time workforce, new skills you pick up on your current employer's dime could be well worthwhile.</p> <p>If you're behind on your retirement planning, hopefully this has shown you that you probably won't have to work forever in order to cover your later life expenses. Even relatively small delays in your retirement can make a meaningful difference. And when you factor in the other benefits of working a bit longer, you may be in far better shape than you thought. (See also: <a href="http://www.wisebread.com/6-great-retirement-jobs?ref=seealso" target="_blank">6 Great Retirement Jobs</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=https%3A%2F%2Fwww.wisebread.com%2Fhow-one-more-year-of-work-can-transform-your-retirement&amp;media=https%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FHow%2520One%2520More%2520Year%2520of%2520Work%2520Can%2520Transform%2520Your%2520Retirement.jpg&amp;description=How%20One%20More%20Year%20of%20Work%20Can%20Transform%20Your%20Retirement"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/u5180/How%20One%20More%20Year%20of%20Work%20Can%20Transform%20Your%20Retirement.jpg" alt="How One More Year of Work Can Transform Your Retirement" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/matt-bell">Matt Bell</a> of <a href="https://www.wisebread.com/how-one-more-year-of-work-can-transform-your-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="https://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> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/5-questions-to-ask-before-you-start-claiming-your-social-security-benefits">5 Questions to Ask Before You Start Claiming Your Social Security Benefits</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/how-to-face-4-ugly-truths-about-retirement-planning">How to Face 4 Ugly Truths About Retirement Planning</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://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="https://www.wisebread.com/3-reasons-to-claim-social-security-before-your-retirement-age">3 Reasons to Claim Social Security Before Your Retirement Age</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement employer match full retirement age income insurance medicare social security working Mon, 02 Jul 2018 08:30:17 +0000 Matt Bell 2153115 at https://www.wisebread.com 5 Signs You Need to Come Out of Retirement https://www.wisebread.com/5-signs-you-need-to-come-out-of-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-signs-you-need-to-come-out-of-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/considering_her_next_move_carefully.jpg" alt="Considering her next move carefully" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You imagined retirement as a long-awaited reward for all those years of work. Maybe you pictured cruises around the globe, lazy days playing tennis, or plenty of time to spend with your grandchildren. But now that it's finally here, you're not so happy.</p> <p>Maybe you're bored. Maybe you're restless. Maybe you're having trouble paying the bills. Whatever the issue, your retirement isn't the happy time you expected. The solution? You might need to come out of retirement, at least part-time.</p> <p>Retirement doesn't work for everyone, at least not the first time around. But you might find happiness, a renewed sense of purpose, or financial relief by coming out of retirement and jumping back into the world of work again. Here are some signs that you need to end your retirement and start working again. (See also: <a href="http://www.wisebread.com/6-great-retirement-jobs?ref=seealso" target="_blank">6 Great Retirement Jobs</a>)</p> <h2>1. You're struggling to pay the bills</h2> <p>The most important reason to return to work is if you're struggling to pay your bills each month. Maybe you didn't save enough money during your first go-round in the working world. Maybe your expenses, such as health care, are higher than you expected. Whatever the reason, if your monthly income is barely enough to pay your bills, it might be time to find a job, even a part-time one, to help cover the costs.</p> <p>If you're facing this challenge, know that you're not alone. According to a 2017 report from the Schwartz Center for Economic Policy Analysis, 35 percent of workers from the ages of 55 to 64 didn't have any retirement savings in an IRA or 401(k)-type plan. The median account balance of workers nearing retirement was just $15,000.</p> <h2>2. Your retirement savings are dwindling</h2> <p>Maybe you did save for retirement. But now that you're not working, you're finding that those retirement savings are disappearing much faster than you expected.</p> <p>It could be that you've spent more than you expected during your after-work years, or it could be that you underestimated how much money you'd need to support yourself once you stopped working. After all, people are living longer today than ever. Many people are experiencing retirements that last the same number of years as their career.</p> <p>Returning to work, even part-time, can help prevent you from depleting your savings too quickly. Earning even $1,000 a month might help stretch those savings out long enough to enjoy a happy and healthy retirement. (See also: <a href="http://www.wisebread.com/10-signs-you-arent-saving-enough-for-retirement?ref=seealso" target="_blank">10 Signs You Aren't Saving Enough for Retirement</a>)</p> <h2>3. Your health is suffering</h2> <p>Work might not always be fulfilling, but it does keep you moving. And that can be an underrated benefit.</p> <p>It's easy to get lazy in retirement. You might spend far too much time sitting in front of the TV or reclining on the couch with a book. There's nothing wrong with a bit of relaxation, but what if you're sitting so much that your health is suffering?</p> <p>The Mayo Clinic and other medical professionals have reported that sitting too much can result in serious health problems &mdash; everything from obesity and higher blood pressure, to elevated cholesterol levels. Getting back to work on a full- or part-time basis could keep you from sitting your days away. And that might provide a quick boost to your overall health. (See also: <a href="http://www.wisebread.com/5-retirement-struggles-nobody-talks-about-and-how-to-beat-them?ref=seealso" target="_blank">5 Retirement Struggles Nobody Talks About &mdash; And How to Beat Them</a>)</p> <h2>4. You're bored</h2> <p>Planning on whiling away your days on the golf course, fishing from the banks of your favorite lake, or spending more time with your grandchildren might sound good. And it might be good, too &hellip; for a while.</p> <p>The truth is, days can be long when you're not busy at work. All that free time can start to feel more like a burden than a pleasure if you don't know how to fill the hours. You can only read so many books or binge-watch so much TV.</p> <p>It's easy to get bored during retirement, especially now that retirement is lasting so much longer. Getting a new job could alleviate much of that boredom. It will take you out of the house and give you something to do. It doesn't have to be thrilling work, but it could be just enough to make those long, empty hours seem less intimidating.</p> <h2>5. You're lonely</h2> <p>Miss the office chitchat? Miss the after-work drinks on Fridays? Being retired can cut you out from the social interaction that work often provides. You might start to feel lonely once you leave the working world.</p> <p>Even if your partner is still living and you have adult children and grandchildren, your social circle can shrink dramatically during retirement. That's because many of us rely heavily on work relationships for our social interactions. Rejoining the workforce, even on a limited basis, could boost your social life and ease the loneliness that too often comes with retired life. (See also: <a href="http://www.wisebread.com/how-to-find-your-new-identity-after-retirement?ref=seealso" target="_blank">How to Find Your New Identity After Retirement</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=https%3A%2F%2Fwww.wisebread.com%2F5-signs-you-need-to-come-out-of-retirement&amp;media=https%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F5%2520Signs%2520You%2520Need%2520to%2520Come%2520Out%2520of%2520Retirement.jpg&amp;description=5%20Signs%20You%20Need%20to%20Come%20Out%20of%20Retirement"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/u5180/5%20Signs%20You%20Need%20to%20Come%20Out%20of%20Retirement.jpg" alt="5 Signs You Need to Come Out of Retirement" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="https://www.wisebread.com/5-signs-you-need-to-come-out-of-retirement">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-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="https://www.wisebread.com/5-ways-to-embrace-having-to-work-in-retirement">5 Ways to Embrace Having to Work 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="https://www.wisebread.com/why-retiring-with-debt-isnt-the-end-of-the-world">Why Retiring With Debt Isn&#039;t the End of the World</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="https://www.wisebread.com/4-false-assumptions-that-could-threaten-your-retirement-years">4 False Assumptions That Could Threaten Your Retirement Years</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="https://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-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/6-cool-jobs-for-retirees">6 Cool Jobs for Retirees</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement back to work bills boredom health problems income loneliness part time jobs retirees Fri, 29 Jun 2018 09:00:11 +0000 Dan Rafter 2148678 at https://www.wisebread.com 5 Ways to Embrace Having to Work in Retirement https://www.wisebread.com/5-ways-to-embrace-having-to-work-in-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-ways-to-embrace-having-to-work-in-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/confident_mature_businesswoman_sitting_at_desk.jpg" alt="Confident mature businesswoman sitting at desk" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>We all know what retirement is supposed to look like: You get a nice farewell luncheon and a gold watch from your employer &mdash; and then you get busy golfing, traveling, spoiling the grandkids, and generally living it up in your golden years.</p> <p>So if you find yourself with an underfunded nest egg and the realization that you have to continue working in retirement, you can be forgiven for wanting to throw an epic temper tantrum. Working in retirement is not what we were promised, and if that doesn&rsquo;t warrant some flailing and crying, I don&rsquo;t know what does.</p> <p>But not being able to fully retire doesn&rsquo;t have to put you in a permanent bad mood. Once you&rsquo;ve stopped shaking your fist at the heavens, consider these ways to not only accept, but also embrace the reality of working in retirement.</p> <h2>1. You may be happier than retirees</h2> <p>Though it might seem like retirement is the key to happiness, psychological researchers have found that working is actually better for your subjective well-being. According to a 2014 study by Dr. Elizabeth Mokyr Horner in the Journal of Happiness Studies, retirees do experience a rush of well-being and life satisfaction in the first few months after they retire &mdash; but they feel a sharp decline of their levels of contentment within the first few years of retirement.</p> <p>There are a couple of reasons for this decline in happiness. First, anything you spend years planning for is unlikely to live up to your expectations. It&rsquo;s only natural for retirees to feel let down when they realize their new chapter in life isn&rsquo;t exactly what they expected. In addition, when you end a career that has helped define who you are, it&rsquo;s common to feel adrift once that career has ended. Finally, retirement can often lead to a shrinking social circle, since you no longer see co-workers on a daily basis. Lack of social contact can increase feelings of loneliness and depression, which can be a major problem among retirees.</p> <p>Even if you are not happy about the fact that you have to work past retirement age, remember that working may actually be improving your happiness by helping to define you, giving you a broader social circle, and providing you with a reason to get up every morning. (See also: <a href="http://www.wisebread.com/how-to-find-your-new-identity-after-retirement?ref=seealso" target="_blank">How to Find Your New Identity After Retirement</a>)</p> <h2>2. You can make your workplace better</h2> <p>One of the benefits of working past traditional retirement age is the amount of knowledge and experience you bring to your job. Not only does that make you a valuable member of your workplace, but it provides you with an opportunity to help encourage and shape the culture there. By taking younger co-workers under your wing and making suggestions based on your depth of knowledge, you can potentially improve the company you work for. It&rsquo;s tough to do this without the kind of clout your experience lends you.</p> <h2>3. You can put off taking Social Security</h2> <p>According to the Center for Retirement Research at Boston College, approximately 42 percent of men and 48 percent of women begin taking their Social Security benefits at age 62, the earliest you are eligible to receive them. But Social Security benefits are permanently reduced by up to 30 percent by taking them so far in advance of full retirement age.</p> <p>If you are still working in retirement, you can put off taking your Social Security benefits, and thereby increase your monthly benefit by as much as 8 percent per year that you put off Social Security. In addition, you may also be increasing your Social Security monthly payment by continuing to work, since the Social Security Administration calculates your benefit based on your 35 highest earning years. If you are at the top of your lifetime salary while working past retirement age, these high earning years will replace lower earning years from your youth &mdash; and potentially increase your monthly payment. (See also: <a href="http://www.wisebread.com/6-smart-ways-to-boost-your-social-security-payout-before-retirement?ref=seealso" target="_blank">6 Smart Ways to Boost Your Social Security Payout Before Retirement</a>)</p> <h2>4. You are in a retirement investment sweet spot</h2> <p>Though working past retirement age may not be your idea of fun, it does give you an unparalleled opportunity to invest. First, since you are over the age of 50, you can take advantage of the catch-up provisions that allow you to contribute up to $24,500 to your 401(k) and up to $6,500 to your IRA, allowing you to reduce your tax burden while funding your retirement accounts.</p> <p>In addition, since you are working longer, that means you have a longer investment timeline to play with. This can allow you to invest for growth in ways that a typical retiree could not, since she would be trying to protect principal. Since you anticipate working for a few more years, you get a few more years of the magic of compound interest working to build your wealth. (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>5. You can keep using your employer&rsquo;s health insurance</h2> <p>All Americans are eligible for Medicare as of age 65, but the program costs more than you might expect and covers less than you might think. Not only do you have to pay a premium of at least $134 per month for Medicare Part B, but you will be on the hook for 20 percent of the Medicare approved amount for health care after you have met the annual deductible of $183. In addition, Medicare does not cover prescription drugs, dental or vision care, foot care, hearing aids, or dentures.</p> <p>Being able to stay on your employer&rsquo;s health insurance could be a major benefit to working, since you are likely to have more comprehensive coverage under that insurance and it may be less expensive for you, as well. (See also: <a href="http://www.wisebread.com/4-common-mistakes-to-avoid-when-you-enroll-in-medicare?ref=seealso" target="_blank">4 Common Mistakes to Avoid When You Enroll in Medicare</a>)</p> <h2>No need to curse the heavens</h2> <p>Working in retirement may not be what you planned, but it doesn&rsquo;t have to feel like the end of the world. If you take the time to recognize how working in retirement can actually help your emotional, mental, financial, and physical well-being, you can embrace the reality of working when you&rsquo;d expected to be golfing.</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=https%3A%2F%2Fwww.wisebread.com%2F5-ways-to-embrace-having-to-work-in-retirement&amp;media=https%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F5%2520Ways%2520to%2520Embrace%2520Having%2520to%2520Work%2520in%2520Retirement.jpg&amp;description=5%20Ways%20to%20Embrace%20Having%20to%20Work%20in%20Retirement"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/u5180/5%20Ways%20to%20Embrace%20Having%20to%20Work%20in%20Retirement.jpg" alt="5 Ways to Embrace Having to Work in Retirement" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/emily-guy-birken">Emily Guy Birken</a> of <a href="https://www.wisebread.com/5-ways-to-embrace-having-to-work-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-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/8-ways-to-preserve-your-net-worth-in-retirement">8 Ways to Preserve Your Net Worth 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="https://www.wisebread.com/how-one-more-year-of-work-can-transform-your-retirement">How One More Year of Work Can Transform 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="https://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="https://www.wisebread.com/5-signs-you-need-to-come-out-of-retirement">5 Signs You Need to Come Out of 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="https://www.wisebread.com/tiny-nestegg-retire-abroad">Tiny Nestegg? Retire abroad!</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement back to work Health health insurance investing medicare quality of life retirees social life social security well-being Thu, 28 Jun 2018 08:00:15 +0000 Emily Guy Birken 2148704 at https://www.wisebread.com Why Health Care Should be Part of Your Retirement Savings Plan, Too https://www.wisebread.com/why-health-care-should-be-part-of-your-retirement-savings-plan-too <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/why-health-care-should-be-part-of-your-retirement-savings-plan-too" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/making_a_financial_plan_0.jpg" alt="Making a financial plan" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You might think that retirement planning should be all about the fun and rewarding stuff you are saving up for: remodeling your home, traveling, spoiling your grandkids, and enjoying life. But only thinking about the good parts of your retirement leaves a major piece of your future unfunded: health care.</p> <p>The fact of the matter is that health care could be your largest retirement expense &mdash; by a lot. Each year, Fidelity calculates the average cost of medical expenses for a 65-year-old couple retiring during that calendar year. In 2018, Fidelity has calculated that the average couple will need $280,000 in today's dollars to cover medical expenses in retirement &mdash; and that figure does not include long-term care.</p> <p>As heartburn-inducing as that number is, it's not time to panic. Even people earning average incomes can prepare for health care costs in retirement without robbing a bank, moving in with their children, or learning to practice medicine on oneself. Here's what you need to know about medical care in retirement, and how to prepare yourself and your budget for it. (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>Your health in retirement</h2> <p>Let's start with the bad news: It's likely that your health will deteriorate in retirement.</p> <p>In some ways, it's harder to think about declining health than it is to think about mortality, since we know the latter is inevitable. The statistics on preparing for death vs. preparing for poor health in retirement bear this out, since 42 percent of Americans have a will or estate plan in place, according to a Care.com survey, while the Economic Policy Institute found that only 30 percent of Americans have more than $1,000 saved for retirement.</p> <p>But declining health as you age is a fact of life. According to the CDC, three out of every four Americans over the age of 65 have multiple chronic conditions. These are defined as illnesses or medical conditions that last a year or longer and require ongoing medical attention or limit daily activities.</p> <p>In addition, the Alzheimer's Association reports that one out of every three seniors dies with Alzheimer's or another form of dementia. What is so pernicious about these medical issues is the fact that dealing with chronic health conditions or dementia can be devastating to a retirement budget. (See also: <a href="http://www.wisebread.com/dont-let-poor-health-kill-your-retirement-fund?ref=seealso" target="_blank">Don't Let Poor Health Kill Your Retirement Fund</a>)</p> <h2>What about Medicare?</h2> <p>What is most concerning about the Fidelity calculation of $280,000 for medical care costs in retirement is the fact that the numbers are based on a 65-year-old retiring couple, which means they are eligible for Medicare. In fact, Medicare premiums make up 35 percent of Fidelity's calculation, or $98,000. (The remaining breakdown is 45 percent to co-payments, coinsurance, and deductibles, and 20 percent to prescription drugs.)</p> <p>Medicare costs more than you realize, and covers less than you'd expect. It's important to understand what Medicare does and does not cover. (See also: <a href="http://www.wisebread.com/5-common-medicare-myths-debunked?ref=seealso" target="_blank">5 Common Medicare Myths, Debunked</a>)</p> <h3>Medicare Part A</h3> <p>Medicare Part A, which is also known as hospital insurance, charges no monthly premium for the majority of enrollees. However, Part A coverage is quite sparse. It is called hospital insurance for a reason &mdash; because it only (partially) covers inpatient hospital care, inpatient care in a skilled nursing facility, home health care, and hospice care. In short, Medicare Part A will only pay for a serious medical problem that either lands you in the hospital or is expected to be fatal. It does not cover doctor's visits or prescriptions.</p> <p>In addition, Part A only partially covers this care. You will still have to meet a deductible of $1,340 (for 2018) for each benefit period, and you will be responsible for a coinsurance amount of $335 per day if you stay more than 60 days in a hospital and $167.50 per day if you stay more than 20 days in a skilled nursing facility. (See also: <a href="http://www.wisebread.com/4-common-mistakes-to-avoid-when-you-enroll-in-medicare?ref=seealso" target="_blank">4 Common Mistakes to Avoid When You Enroll in Medicare</a>)</p> <h3>Medicare Part B</h3> <p>This is the part of Medicare that works like regular health insurance. The majority of beneficiaries will pay a monthly premium (which can be deducted from their monthly Social Security check) for this program. As of 2018, the monthly premium for most Medicare Part B beneficiaries is $134, although higher income beneficiaries may have to pay more.</p> <p>On Part B, you will pay all costs for covered services up to the yearly $183 deductible. Once that has been met, you will generally pay 20 percent of the Medicare-approved amount for most doctor services, outpatient therapy, and durable medical equipment. However, Medicare Part B does not cover long-term care (nonmedical help that the elderly may need for daily living), prescription drugs, routine dental or eye care, dentures, hearing aids or exams for fitting them, or routine foot care.</p> <p>These coverage gaps can help explain the astronomical amount of money Fidelity calculates for health care needs in retirement. (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>Why you shouldn't panic</h2> <p>While none of this is good news, it's still no reason to go on a bank-robbing spree or start playing the lottery. There are a number of savvy strategies you can adopt right now to help make sure health care does not overwhelm your retirement budget.</p> <h3>1. Take care of your health</h3> <p>Adequate sleep, exercise, and healthy eating may not seem like part of your financial plan, but they can potentially have a greater return than any traditional investment. Taking better care of yourself can help to improve your health and potentially reduce the need for medical care as you age.</p> <p>However, it's important to remember that even the most fit ultramarathoner who consumes only kale smoothies is not immune to the vagaries of poor health. But you will never regret taking care of yourself, because at the very least, it helps you to feel better in the present. (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> <h3>2. Investigate long-term care insurance</h3> <p>One of the biggest coverage gaps in Medicare is long-term care, which is help that a senior might need with daily living activities such as bathing, dressing, eating, and mobility. Private health insurance also does not cover this kind of care, which means any retiree who needs it will be on the hook to pay for it herself. And according to the Department of Health and Human Services, the average 65-year-old today has a 70 percent chance of needing long-term care at some point in the future.</p> <p>Long-term care insurance can potentially fill the coverage gap. This kind of insurance will help pay for your nonmedical long-term care after you have reached the end of the &quot;elimination period,&quot; which can last anywhere from 20 days to 120 days. Until that point, you will pay for your care out of pocket.</p> <p>Long-term care insurance isn't cheap, though. Prices vary, but a 60-year-old couple could expect to pay between $2,700 and $5,600 per year for a policy that pays for $150 per day in care, for a benefit period of three years. (See also: <a href="http://www.wisebread.com/the-best-age-to-buy-long-term-care-insurance?ref=seealso" target="_blank">The Best Age to Buy Long-Term Care Insurance</a>)</p> <p>This kind of insurance is the best option for about 20 to 30 percent of retirees, according to the Center for Retirement Research at Boston College &mdash; those who have a moderate nest egg. For many others, it will make more sense to exhaust their assets to become eligible for Medicaid, which will cover long-term care. (See also: <a href="http://www.wisebread.com/5-ways-to-make-long-term-care-more-affordable?ref=seealso" target="_blank">5 Ways to Make Long-Term Care More Affordable</a>)</p> <h3>3. Consider a health savings account</h3> <p>If you are in good health as you approach retirement, you may want to sign up for a health savings account (HSA). This account, which works a little like an IRA, allows families to contribute up to $6,900 (as of 2018) and individuals to contribute up to $3,450 in pretax income. If you are over the age of 55, you can contribute an additional $1,000 above these limits. The money grows tax-deferred, and as long as you use any withdrawals for qualified medical expenses, they are also untaxed.</p> <p>The downside of HSAs is that you must have a high-deductible health insurance policy to qualify for one. To be considered a high-deductible policy, your insurance must have a deductible of least $1,350 per individual or $2,700 for a family, and an out-of-pocket maximum that is at most $6,650 per individual plan or $13,300 per family plan.</p> <p>This makes HSA plans a bit of a difficult choice. If you enjoy good health as you approach retirement, they can be an excellent option, since you can also make penalty-free nonmedical withdrawals after age 65 (although you will pay taxes). That means your HSA can be one part of your retirement nest egg that can be used for something other than medical care if you continue to have good health.</p> <p>But the high-deductible health plan puts you in a bad position if you get sick before reaching Medicare eligibility. You might end up having to raid your HSA before your official retirement. (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> <h3>4. Open a Roth IRA for health care savings</h3> <p>Roth IRAs are tax-advantaged investment vehicles that allow you to put aside already taxed money into the account, where it grows tax-deferred. As long as you keep the Roth IRA for at least five years and are over age 59&frac12;, you can withdraw funds from the account tax-free. As of 2018, you can set aside $5,500 per year, and savers over the age of 50 can contribute an additional $1,000.</p> <p>This makes the Roth IRA a good place to earmark funds for health care in retirement. Since there is no penalty or tax on withdrawn funds, you do not have to worry about how a big withdrawal for medical care could affect your taxes in retirement.</p> <p>You can determine the asset allocation of your Roth IRA based on your health expectations. If you are in good health as you approach retirement, plan on investing mostly in growth-oriented stocks, since you don't anticipate needing expensive health care until 10 or 20 years after retirement. If you already have a chronic health issue or know that certain medical problems run in your family, you may want to put most of your money in more stable investments, and only allocate a portion for growth. (See also: <a href="http://www.wisebread.com/the-right-way-to-withdraw-money-from-your-retirement-accounts-during-retirement?ref=seealso" target="_blank">The Right Way to Withdraw Money From Your Retirement Accounts During Retirement</a>)</p> <h2>The good, the bad, and the healthy</h2> <p>Health care in retirement does not need to overwhelm your budget. If you make sure you recognize the potential costs and understand Medicare's coverage gaps, you can prepare for your medical needs as you age. (See also: <a href="http://www.wisebread.com/follow-these-5-steps-to-full-health-care-coverage-in-retirement?ref=seealso" target="_blank">Follow These 5 Steps to Full Health Care Coverage in Retirement</a>)</p> <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=https%3A%2F%2Fwww.wisebread.com%2Fwhy-health-care-should-be-part-of-your-retirement-savings-plan-too&amp;media=https%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FWhy%2520Health%2520Care%2520Should%2520be%2520Part%2520of%2520Your%2520Retirement%2520Savings%2520Plan%252C%2520Too.jpg&amp;description=Why%20Health%20Care%20Should%20be%20Part%20of%20Your%20Retirement%20Savings%20Plan%2C%20Too"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/u5180/Why%20Health%20Care%20Should%20be%20Part%20of%20Your%20Retirement%20Savings%20Plan%2C%20Too.jpg" alt="Why Health Care Should be Part of Your Retirement Savings Plan, Too" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/emily-guy-birken">Emily Guy Birken</a> of <a href="https://www.wisebread.com/why-health-care-should-be-part-of-your-retirement-savings-plan-too">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="https://www.wisebread.com/5-ways-to-build-retirement-stability-in-your-50s">5 Ways to Build Retirement Stability in Your 50s</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="https://www.wisebread.com/how-the-self-employed-can-cut-health-care-costs">How the Self Employed Can Cut Health Care Costs</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="https://www.wisebread.com/4-ways-couples-are-shortchanging-their-retirement-savings">4 Ways Couples Are Shortchanging Their Retirement Savings</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/how-one-more-year-of-work-can-transform-your-retirement">How One More Year of Work Can Transform Your Retirement</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/how-to-revamp-your-budget-for-retirement">How to Revamp Your Budget for Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Health and Beauty Retirement health care health savings accounts HSA insurance long-term care medicare Roth IRA staying healthy Wed, 27 Jun 2018 08:30:15 +0000 Emily Guy Birken 2152287 at https://www.wisebread.com How to Revamp Your Budget for Retirement https://www.wisebread.com/how-to-revamp-your-budget-for-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-revamp-your-budget-for-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/they_have_got_budgeting_down_to_an_art.jpg" alt="They have got budgeting down to an art" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Retirement is a major life adjustment for most people. From figuring out how to spend your days, to determining the best way to manage your personal finances, there are many choices to make.</p> <p>Once you leave the world of paychecks and the daily 9-to-5 behind you, you may also think you're done with budgeting. At this point in your life, you may believe you've got a good handle on your spending and saving habits, and there's no point to budgeting anymore. But that couldn't be further from the truth. Here's a primer on all the ways your post-work budget needs to change.</p> <h2>Pay yourself and the IRS</h2> <p>The first step of building any household budget is figuring out total income. You now have the task of recreating a paycheck for yourself based on your available income sources. In retirement, that may mean a combination of Social Security benefits, a pension, distributions from IRAs and 401(k)s, and personal savings. You'll simultaneously need to cover your monthly living expenses and continually monitor the total balance of your portfolio.</p> <p>Your Social Security check will be a set amount each month, and any pensions or annuities you have may also be. Once you've established how much money you'll need on top of those benefits, you can determine how much to take out of your tax-advantaged retirement accounts.</p> <p>Then there are taxes to consider. You may have the option to have federal income taxes withheld from these payments, and while it's not required that you do so, it will save you the hassle of having to file quarterly estimated taxes. In any case, you'll need to factor taxes into your ongoing budget. (See also: <a href="http://www.wisebread.com/heres-how-you-should-budget-your-social-security-checks?ref=seealso" target="_blank">Here's How You Should Budget Your Social Security Checks</a>)</p> <h2>Stop saving for retirement</h2> <p>You've spent your entire pre-retirement life saving and accumulating assets so that one day you'd be able to live comfortably without having to work. Now that you're finally in the decumulation phase, you no longer have to save a portion of your monthly income for long-term goals. Monthly retirement contributions are one line item you can remove from your budget.</p> <h2>Increase your emergency fund</h2> <p>During your working and saving years, it's important that you have enough cash saved to cover a large unexpected bill or a job loss in order to prevent having to take early withdrawals from retirement accounts or take on debt.</p> <p>In retirement, your need for cash savings may be even greater, but for different reasons. You may not have to worry about something like a job loss, but emergencies can still happen. As your home and vehicle age, you may find yourself needing to make major repairs or replacements. A health care crisis could devastate your finances. If you aren't prepared for major unexpected expenses, you risk wiping out a portion of the nest egg you're meant to be living on for the next few decades.</p> <p>Remember, unlike your pre-retirement years, the majority of your savings may now be in tax-deferred retirement accounts. As you build your yearly income stream, you'll also be considering your income tax liability, taking into account your portfolio balance and your expected withdrawal rate. What happens to those numbers if you have a large emergency expense one year? Having to take distributions from your retirement accounts during those times may permanently affect the long-term viability of your nest egg, which is why a cash reserve can help support your overall retirement plan.</p> <p>Standard financial advice recommends that working people build an emergency fund that can cover at least six months' worth of essential living expenses. In retirement, you should strive to save between 12 and 18 months' worth of those living expenses, including annual insurance premiums. (See also: <a href="http://www.wisebread.com/yes-you-still-need-an-emergency-fund-in-retirement?ref=seealso" target="_blank">Yes, You Still Need an Emergency Fund in Retirement</a>)</p> <h2>Assess your changing housing costs</h2> <p>Housing is usually the largest household expense in everyone's budget, regardless of whether you rent or own. But after raising families and possibly paying a mortgage for 30 or more years, you may be in a position to either downsize, eliminate your mortgage payment, move to a new location, or a combination of all of these options &mdash; which can all meaningfully affect your budget.</p> <p>As you prepare for retirement and rethink your income and budget needs, carefully calculate what your new housing and associated costs will be. For example, you may think about moving into a smaller apartment or condo in a trendy part of town, but a more expensive location can unexpectedly increase your other everyday living expenses.</p> <h2>Prepare for a possible increase in medical expenses</h2> <p>If you're used to having employer-sponsored health insurance, be prepared to do your homework on Medicare <em>before</em> you retire. Many people are surprised to learn that Medicare does not cover all health care expenses, such as routine vision or dental care. Nor does it cover some assisted living expenses, which may create a huge financial strain if you didn't purchase a long-term care policy when you were younger. And if you're traveling outside of the United States, Medicare typically won't cover any health care related costs you may incur.</p> <p>Between purchasing various Medicare coverages, like Part D for prescriptions, and perhaps obtaining a supplemental plan to close the Medicare coverage gaps, you may wind up spending significantly more on making sure all of your health needs are properly insured. Crunch the numbers and make sure your new budget takes all of this into account. (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>Eliminate work-related expenses</h2> <p>Throughout your entire working career, you've probably spent lots of money on various professional and daily work-related expenses. When you exit the workforce, much of that will change as your lifestyle will be different. Things like business attire and dry cleaning, daily transportation and parking costs, or business certifications and professional dues can all be crossed off your budget.</p> <h2>Adjust for an increase in leisure expenditures</h2> <p>When your schedule is completely free and you no longer have a daily commitment to be at work, every day feels like a Saturday. You may find yourself spending money on things you used to do only on the weekends or when you had some time off. Whether it's spending more time eating out, traveling, or participating in hobbies, you may need to adjust your budget for your increased free time.</p> <h2>Consider your gifting choices</h2> <p>If you have children and grandchildren, you may have started thinking about including financial support for them in your retirement budget. In addition to more substantial gifting opportunities that involve legal documents (like a trust), there are other ways to support your family members. Each year, you are able to gift anyone up to the annual gift exclusion, which is $15,000 for 2018, without having to file a gift tax return. A married couple can gift a total of $30,000 to one individual in one year.</p> <p>And if you are interested in helping to save for a family member's education, you can open and fund a 529 account, which is a tax-favored education savings plan. The same yearly gifting rules apply, but with a 529 account, you are allowed to front-load five years' worth of the 2018 $15,000 yearly amount for a total of $75,000 in one year. Once again, that is doubled for a married couple. (See also: <a href="http://www.wisebread.com/4-things-you-need-to-know-about-gift-tax?ref=seealso" target="_blank">4 Things You Need to Know About Gift Tax</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-revamp-your-budget-for-retirement&amp;media=https%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FHow%2520to%2520Revamp%2520Your%2520Budget%2520for%2520Retirement.jpg&amp;description=How%20to%20Revamp%20Your%20Budget%20for%20Retirement"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/u5180/How%20to%20Revamp%20Your%20Budget%20for%20Retirement.jpg" alt="How to Revamp Your Budget for Retirement" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/alicia-rose-hudnett">Alicia Rose Hudnett</a> of <a href="https://www.wisebread.com/how-to-revamp-your-budget-for-retirement">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-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="https://www.wisebread.com/heres-how-you-should-budget-your-social-security-checks">Here&#039;s How You Should Budget Your Social Security Checks</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="https://www.wisebread.com/5-myths-about-money-in-retirement">5 Myths About Money in Retirement</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="https://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="https://www.wisebread.com/6-ways-you-can-cut-costs-right-before-you-retire-0">6 Ways You Can Cut Costs Right Before You 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="https://www.wisebread.com/5-money-conversations-couples-should-have-before-retirement">5 Money Conversations Couples Should Have Before Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting Retirement emergency fund entertainment expenses gifts grandchildren health care housing income long term care medicare taxes Mon, 25 Jun 2018 08:00:29 +0000 Alicia Rose Hudnett 2150387 at https://www.wisebread.com 8 Ways to Preserve Your Net Worth in Retirement https://www.wisebread.com/8-ways-to-preserve-your-net-worth-in-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-ways-to-preserve-your-net-worth-in-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/reaching_their_savings_goals_with_smart_technology.jpg" alt="Reaching their savings goals with smart technology" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>We all know the key to a comfortable retirement is amassing enough wealth to last your entire post-work life. But if you truly want to ensure financial security, you should work to maintain or even build upon your net worth as you age. This requires an aggressive level of saving when you are young, and a lot of discipline along the way &mdash; but it can be done.</p> <p>Let's examine some ways you cannot only make your retirement savings last, but also protect all of your net worth throughout your lifetime.</p> <h2>1. Budget and plan wisely</h2> <p>Retirees generally see their expenses decline as they age. The kids are out of the house, college is paid off, homes are owned free and clear. Don't get too cocky, though; you still need to ensure your expenses don't outpace your income. Continue working hard to live within your means. Keep budgets for most expenses, and develop savings plans for any big-ticket purchases. If you want to maintain your net worth, you can't allow your day-to-day cost of living to get out of hand.</p> <h2>2. Downsize</h2> <p>Do you need to live in such a large house? Do you really need two cars? You can reduce your day-to-day expenses and make your retirement funds last longer by simply scaling down your possessions. Considering selling some of your material items and converting them to cash for living expenses or for investing. Or, just donate them to charity and potentially get a tax break on donations.</p> <p>Even though the footprint of your life may be getting smaller, your net worth can actually increase under these circumstances because you may be converting physical assets (house, car, etc.) to investments that can rise in value and generate new income. (See also: <a href="http://www.wisebread.com/7-reasons-you-need-to-downsize?ref=seealso" target="_blank">7 Reasons You Need to Downsize</a>)</p> <h2>3. Never spend your principal</h2> <p>In an ideal world, you are spending your retirement living off the gains and interest from your savings, not the savings itself. If you amass enough savings, that sum can by itself generate its own income in the form of interest, dividends, and capital gains, and it may be possible to live on that income alone. You need a lot of money saved to make this happen, but it's a wonderful feeling to know you are living comfortably without ever tapping into the bulk of your savings.</p> <h2>4. Avoid taking on new debt</h2> <p>You may be tempted in retirement to finally buy that beach house, that luxury car, or that set of his-and-hers personal watercraft. This is fine if these are things you saved for, but you can't let yourself go overboard. The last thing you want is to take on new debt that will add to your expenses at a time when your income is drastically reduced.</p> <p>Borrowing can lead to interest payments, which can lead to more debt, and then you're seeing your nest egg and net worth drop faster than you ever intended. Avoid debt &mdash; especially new debt &mdash; and you will be in much better shape financially as you age. (See also: <a href="http://www.wisebread.com/what-to-do-if-youre-retiring-with-debt?ref=seealso" target="_blank">What to Do If You're Retiring With Debt</a>)</p> <h2>5. File for Social Security as late as possible</h2> <p>Anyone can begin accepting Social Security benefits starting at age 62, but if you can wait until you're 67 (what the Social Security Administration considers full retirement age), you'll get 100 percent of your benefits. Accepting benefits before your full retirement age means you'll receive lower monthly payments, costing yourself thousands of dollars annually. (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>6. Continue to invest</h2> <p>It may seem counterintuitive to consider investing when you're looking to protect the income you have. But there is a growing body of evidence to suggest that it's OK to invest in stocks even as you get older. Why? Because people are living longer and are more likely to outlast their savings.</p> <p>Continuing to invest smartly in stocks can help you increase your savings and make it last longer. It's certainly wise to move most of your money into safer things like bonds and cash, but setting aside a certain portion for stocks could mean the difference between seeing your net worth shrink and watching it grow.</p> <h2>7. Pay as little tax as you can</h2> <p>Hopefully, you've used tax-advantaged accounts such as a 401(k) and Roth IRA to build your retirement savings. When you retire, you no longer have those vehicles at your disposal. But there are some things you can do to keep the government from taking too much. First, you can work to ensure that any income you have is taxed at as low a rate as possible. This means taking advantage of stock dividends and long-term capital gains, which are taxed at lower rates than normal income. It means purchasing tax-free municipal bonds. It means claiming as many deductions as you can on your taxes. Taxes are necessary to keep our society upright, but there's no reason to pay more than required.</p> <h2>8. Avoid bailing out relatives</h2> <p>This is not an argument against helping out your children or other loved ones with financial expenses. But it's important to be thoughtful about how you help and the impact it may have on your finances. Is the money you are giving to your adult child simply throwing good money after bad?</p> <p>If you are helping to take care of the grandkids, are you being reimbursed for the child care expenses (food, clothes, etc.) you are taking on? Remember that in order to make your retirement funds last, you can't be giving away your savings carelessly. (See also: <a href="http://www.wisebread.com/are-you-ruining-your-retirement-by-spoiling-your-kids?ref=seealso" target="_blank">Are You Ruining Your Retirement by Spoiling Your Kids?</a>)</p> <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-to-preserve-your-net-worth-in-retirement&amp;media=https%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F8%2520Ways%2520to%2520Preserve%2520Your%2520Net%2520Worth%2520in%2520Retirement.jpg&amp;description=8%20Ways%20to%20Preserve%20Your%20Net%20Worth%20in%20Retirement"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/u5180/8%20Ways%20to%20Preserve%20Your%20Net%20Worth%20in%20Retirement.jpg" alt="8 Ways to Preserve Your Net Worth in Retirement" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="https://www.wisebread.com/8-ways-to-preserve-your-net-worth-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-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/5-ways-to-embrace-having-to-work-in-retirement">5 Ways to Embrace Having to Work 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="https://www.wisebread.com/9-essential-personal-finance-skills-to-teach-your-kid-before-they-move-out">9 Essential Personal Finance Skills to Teach Your Kid Before They Move Out</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="https://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-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://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="https://www.wisebread.com/12-money-moves-to-make-the-moment-you-decide-to-retire">12 Money Moves to Make the Moment You Decide to Retire</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement budgeting downsizing family giving money investing net worth retirees social security taxes Thu, 21 Jun 2018 08:01:16 +0000 Tim Lemke 2149185 at https://www.wisebread.com Best Money Tips: The Downsides to Early Retirement https://www.wisebread.com/best-money-tips-the-downsides-to-early-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-money-tips-the-downsides-to-early-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/senior_woman_stressed_673909348.jpg" alt="Woman learning the downsides to early retirement" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Welcome to Wise Bread's <a href="http://www.wisebread.com/topic/best-money-tips">Best Money Tips</a> Roundup! Today we found articles on the downsides to early retirement, clever Alexa commands you will use over and over again, and creative ways to save money this summer.</p> <h2>Top 5 Articles</h2> <p><a href="http://www.budgetsaresexy.com/10-downsides-to-early-retirement/">10 *Downsides* to Early Retirement</a> &mdash; Early retirement is a goal for many people, but before you make the leap, be sure to consider the downsides as well. [Budgets Are Sexy]</p> <p><a href="https://www.usatoday.com/story/tech/columnist/komando/2018/06/09/21-clever-amazon-echo-alexa-commands-komando/675237002/">21 clever Alexa commands you will use again and again</a> &mdash; Many of these commands are super useful, and some are just plain fun! [USA Today]</p> <p><a href="https://www.frugalrules.com/creative-ways-to-save-money-this-summer/">6 Creative Ways to Save Money this Summer</a> &mdash; There are many ways to save money during the summer to help pad your budget for the rest of the year. [Frugal Rules]</p> <p><a href="https://theartofsimple.net/teenmindset/">Transform Your Relationship With Your Teen with These 7 Mindset Shifts</a> &mdash; The key to a healthy relationship with a teenager is connection. [The Art of Simple]</p> <p><a href="https://justagirlandherblog.com/organize-every-room-of-the-house-with-storage-bins/">How to Organize Every Room of the House with Storage Bins</a> &mdash; You can use any variety of boxes, bins, baskets, and tubs for all your organizing needs! [Abby Lawson]</p> <h2>Other Essential Reading</h2> <p><a href="https://www.popsugar.com/smart-living/Design-Ideas-Unused-Spaces-44561454#photo-44561455">5 Creative Ways to Spruce Up Every Nook in Your Home</a> &mdash; Put an empty stretch of wall to good use by setting up a mini office where you can do quick projects, pay bills, and make plans. [PopSugar Smart Living]</p> <p><a href="https://www.csmonitor.com/Environment/2018/0614/Despite-natural-gas-boom-this-Texas-town-is-going-100-renewable">Despite natural gas boom, this Texas town is going 100% renewable</a> &mdash; The residents in Denton, Texas is hoping to make their community the second city in Texas to get all of its electricity from renewable energy. [The Christian Science Monitor]</p> <p><a href="https://www.moneytalksnews.com/slideshows/21-laws-you-could-be-breaking-without-knowing-it/">11 Laws You Could Be Breaking Without Knowing It</a> &mdash; Some of these overlooked mistakes may get you fined &mdash; or jailed! [Money Talks News]</p> <p><a href="https://zenhabits.net/noprob/">It&rsquo;s Not a Problem, It&rsquo;s an Experience</a> &mdash; Don't think of difficult feelings like sadness or anger like a problem you need to solve. Allow yourself to experience those feelings without judgment. [zen habits]</p> <p><a href="https://organize365.com/small-spaces/">Living in Small Spaces</a> &mdash; Use these tips to make the most of a tiny living space! [Organize 365]</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/amy-lu">Amy Lu</a> of <a href="https://www.wisebread.com/best-money-tips-the-downsides-to-early-retirement">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-5"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/5-things-that-could-wreck-an-early-retirement">5 Things That Could Wreck 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="https://www.wisebread.com/5-actions-women-can-take-right-now-to-get-their-retirement-on-track">5 Actions Women Can Take Right Now to Get Their Retirement On Track</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="https://www.wisebread.com/5-questions-to-ask-before-you-start-claiming-your-social-security-benefits">5 Questions to Ask Before You Start Claiming Your Social Security Benefits</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/5-ways-to-handle-a-forced-early-retirement">5 Ways to Handle a Forced 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="https://www.wisebread.com/4-reasons-early-retirement-might-be-financially-risky">4 Reasons Early Retirement Might Be Financially Risky</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement best money tips early retirement Mon, 18 Jun 2018 08:30:27 +0000 Amy Lu 2149669 at https://www.wisebread.com Best Money Tips: 10 Big Ways Retirement Will Be Different in 2030 https://www.wisebread.com/best-money-tips-10-big-ways-retirement-will-be-different-in-2030 <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-money-tips-10-big-ways-retirement-will-be-different-in-2030" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/making_retirement_plan_928088256.jpg" alt="Learning how retirement will change by 2030" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Welcome to Wise Bread's <a href="http://www.wisebread.com/topic/best-money-tips">Best Money Tips</a> Roundup! Today we found articles on ways retirement will be different in 2030, awesome travel site to find the cheapest flight, and how solar panels can save you a fortune.</p> <h2>Top 5 Articles</h2> <p><a href="https://www.kiplinger.com/slideshow/retirement/T057-S010-10-ways-retirement-will-be-different-in-2030/index.html">10 Ways Retirement Will Be Different in 2030</a> -- Rapid advances in technology will reshape how future retirees live, from health care, transportation, aging in place and even shopping. [Kiplinger]</p> <p><a href="https://www.popsugar.com/smart-living/Sites-Cheap-Flights-43453758">10 Awesome Travel Websites to Find the Cheapest Flight</a> -- Travel can get really expensive, but these websites will help you get the biggest bang for your buck. [PopSugar Smart Living]</p> <p><a href="https://www.moneyunder30.com/benefits-of-solar-panels">How Solar Panels Can Save You A Fortune In Energy Costs</a> -- The upfront cost of installing solar panels can easily be justified by the long-term savings. If you have high electric bills or you live in an area with lots of sunshine, the payoff can come even sooner! [Money Under 30]</p> <p><a href="https://adventuresfrugalmom.com/5-steps-to-finding-the-perfect-rental-home-for-you-and-your-family/">5 Steps to Finding the Perfect Rental Home For you and Your Family</a> -- Once you've decided that renting is the best option for your family, how do you go about finding the right one? Gather as much experience and perspective as you can on the process before you select a rental. [Adventures of Frugal Mom]</p> <p><a href="http://frugalnurse.com/2018/06/prevent-treat-mosquito-bites/">Prevent and treat mosquito bites</a> -- It's mosquito season! Learn the best ways to repel the buggers and how to treat bites if they get you. [Frugal Nurse]</p> <h2>Other Essential Reading</h2> <p><a href="http://moneysavingmom.com/2018/06/6-simple-secrets-to-inspire-entrepreneurship-in-kids.html">6 Simple Secrets to Inspire Entrepreneurship in Kids</a> -- Give your kids a head start! Encourage an entrepreneurial attitude in your children while they're young and eager to learn and explore new ideas. [Money Saving Mom]</p> <p><a href="http://www.pennilessparenting.com/2018/06/insider-hacks-to-buying-high-quality.html">Insider Hacks To Buying A High-Quality, Yet Cheap, Mountain Bike</a> -- Riding a bike is a great way to spend time outdoors and get some exercise. Here are a few tips for buying a quality mountain bikes at a bargain price. [Penniless Parenting]</p> <p><a href="https://www.joyfullythriving.com/summer-bucket-list-for-families/">Summer Bucket List for Families</a> -- Make sure this summer fun for the whole crew by putting together a family summer bucket list -- together! [Joyfully Thriving]</p> <p><a href="http://4hatsandfrugal.com/2018/06/how-to-focus-on-homemaking-all-year.html">How To Focus On Homemaking All Year</a> -- There's always work to do when you own your home. This exercise will help you focus on home maintenance and upkeep all year long without feeling overwhelmed. [Four Hats &amp; Frugal]</p> <p><a href="https://thethriftycouple.com/how-to-make-finger-paint-with-flour/">How To Make Finger Paint with Flour (easy, frugal, nontoxic recipe)</a> -- All you need to make cheap, nontoxic finger paint is four ingredients you probably already have! [The Thrifty Couple]</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/amy-lu">Amy Lu</a> of <a href="https://www.wisebread.com/best-money-tips-10-big-ways-retirement-will-be-different-in-2030">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-6"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/7-occasions-when-you-should-definitely-hire-a-financial-advisor">7 Occasions When You Should Definitely Hire a Financial Advisor</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/33-places-to-retire-if-you-love-the-rain">33 Places to Retire If You Love the Rain</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="https://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> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/free-digital-retirement-coach-aims-to-take-angst-out-of-retirement-planning">Free &quot;Digital Retirement Coach&quot; Aims to Take Angst Out of Retirement Planning</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="https://www.wisebread.com/if-you-want-your-401k-to-grow-stop-doing-these-6-things">If You Want Your 401K to Grow, Stop Doing These 6 Things</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement best money tips retirement Fri, 15 Jun 2018 08:30:29 +0000 Amy Lu 2149253 at https://www.wisebread.com 5 Common Habits of Retirement-Savvy Savers https://www.wisebread.com/5-common-habits-of-retirement-savvy-savers <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-common-habits-of-retirement-savvy-savers" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/woman_saving_in_a_jar_0.jpg" alt="Woman saving in a jar" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Here's some good news for anyone behind on retirement savings: Being a smart saver isn't difficult. There's no magic secret to getting it right. Once you understand the rules of the game, you'll know exactly what you need to do to manage your money wisely as you navigate through life.</p> <p>Here are some standard practices that every retirement-savvy saver lives by. Let them inspire and guide you during your own phase of accumulating wealth.</p> <h2>1. They never pass up free money</h2> <p>Whenever you have access to a workplace retirement plan, always check to see if there is a company match on contributions. If there is, make sure you contribute at least enough to earn the match. This is one of the easiest and fastest ways to jump-start your savings &mdash; and, of course, it's free money. Not taking advantage of a company match is one of the biggest missteps you could take with your 401(k). (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>2. They always know where their money is</h2> <p>There is something to be said for having organization among your financial accounts. Having multiple old workplace retirement plans can lead to higher fees (paying multiple plan management and fund fees) and an undiversified portfolio (not realizing that all of your retirement accounts represent one portfolio and should be invested as a whole). Each time you leave a job, consider rolling your old plan over into either an IRA, or if allowed, into your new company's retirement plan. (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 401(k)s and IRAs</a>)</p> <h2>3. They keep retirement savings for retirement</h2> <p>While most early withdrawals of retirement funds will result in a tax bill and a penalty fee, there are a few <em>penalty-free</em> exceptions for certain accounts, including a first-time home purchase or paying for some higher education costs. But these are financial goals that should be saved for separately, regardless of the fact that the government allows you to touch your retirement savings for them. Once you earmark money for retirement, don't factor it into any of your other financial obligations. The best thing you can do for your retirement accounts is to let them grow. (See also: <a href="http://www.wisebread.com/5-questions-to-ask-before-you-borrow-from-your-retirement-account?ref=seealso" target="_blank">5 Questions to Ask Before You Borrow From Your Retirement Account</a>)</p> <h2>4. They pay themselves first</h2> <p>For most people, their first financial priority each month is covering their non-discretionary living expenses, like housing, utilities, and food. But serious retirement savers know that paying their retirement account every single month as well sets them up for successful saving. Build retirement savings into your budget as a nonnegotiable bill, not as a leftover expense that you may or may not be able to pay at the end of the month. (See also: <a href="http://www.wisebread.com/7-reasons-you-really-need-to-pay-yourself-first-seriously?ref=seealso" target="_blank">7 Reasons You Really Need to Pay Yourself First (Seriously)</a>)</p> <h2>5. They use tax-advantaged accounts</h2> <p>It's in everyone's best interest, including the government's, that we save for our own retirement. That's precisely why there are accounts specifically designed to encourage long-term savings. Whether you use a tax-deferred account, which allows your money to compound for decades before any taxes are due, or a tax-exempt account, which allows your after-tax money to grow tax-free and qualified distributions remain untaxed, or a combination of both &mdash; a strategic saver makes use of all available saving tools. (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> <p>Being a retirement-savvy saver doesn't mean having or saving more money than everyone else. It's about knowing what moves can make a difference in your savings goals and being an active and purposeful retirement saver.</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-common-habits-of-retirement-savvy-savers&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F5%2520Common%2520Habits%2520of%2520Retirement-Savvy%2520Savers.jpg&amp;description=5%20Common%20Habits%20of%20Retirement-Savvy%20Savers"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/u5180/5%20Common%20Habits%20of%20Retirement-Savvy%20Savers.jpg" alt="5 Common Habits of Retirement-Savvy Savers" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/alicia-rose-hudnett">Alicia Rose Hudnett</a> of <a href="https://www.wisebread.com/5-common-habits-of-retirement-savvy-savers">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="https://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-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://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-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/left-a-job-do-a-rollover">Left a job? Do a rollover.</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://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-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="https://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> </ul> </div> </div> </div> </div><br/></br> Retirement 401(k) employer match IRA pay yourself first rollover tax advantaged work sponsored retirement plans Wed, 13 Jun 2018 08:00:27 +0000 Alicia Rose Hudnett 2148275 at https://www.wisebread.com Best Money Tips: How Much You Should Spend in Retirement https://www.wisebread.com/best-money-tips-how-much-you-should-spend-in-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-money-tips-how-much-you-should-spend-in-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/senior_woman_laptop_644986914.jpg" alt="Woman learning how much she should spend in retirement" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Welcome to Wise Bread's <a href="http://www.wisebread.com/topic/best-money-tips">Best Money Tips</a> Roundup! Today we found articles on how much you should spend in retirement, ways to save money on Father&rsquo;s Day gifts, and how to use your vacation to improve your everyday life.</p> <h2>Top 5 Articles</h2> <p><a href="https://www.getrichslowly.org/retirement-spending/">How much should you spend in retirement?</a> &mdash; Many retirees struggle to know how much money they should spend &mdash; and how to spend it. [Get Rich Slowly]</p> <p><a href="https://www.thefrugalnavywife.com/save-money-fathers-day/">How to Save Money with Father&rsquo;s Day Gift Ideas</a> &mdash; Use this list for inspiration on how to treat dad like a king without royally busting your budget. [The Frugal Navy Wife]</p> <p><a href="https://www.dailyworth.com/posts/rethink-your-vacation">Rethink Your Vacation: Come Back Refreshed and Recharged</a> &mdash; A vacation isn't just a time where you get away. It can be an opportunity for you to shift your mindset and improve your everyday life. [Daily Worth]</p> <p><a href="https://thefrugalchicken.com/vegetables-plant-june/">It&rsquo;s June&hellip;Here&rsquo;s 17 Vegetables You Can Still Plant For a Full Fall Harvest!</a> &mdash; Summer is fast-approaching, and it's prime time to plant your garden for a late summer/fall harvest! [Pampered Chicken Mama]</p> <p><a href="https://orgjunkie.com/2018/06/stay-motivated-organized-summer.html">How To Stay Motivated and Organized During The Summer</a> &mdash; It can be hard to focus on getting things done when all you want to do is relax in the summer sun. Use these tips to focus on your tasks and stay motivated. [Organizing Junkie]</p> <h2>Other Essential Reading</h2> <p><a href="https://organized31.com/disaster-safety-plan-tips-for-pets/">Disaster Safety Plan Tips for Pets</a> &mdash; Make sure you have a plan for your pets when a natural disaster or emergency hits. If it's not safe for you to be in your home, it's not safe for your pets, either! [Organized 31]</p> <p><a href="https://www.csmonitor.com/Environment/2018/0607/Rethinking-disposable-straws-for-the-sake-of-the-oceans">Rethinking disposable straws &ndash; for the sake of the oceans</a> &mdash; While straws are the current target for legislating single-use plastic items, scientists and environmental activists caution that any real solution is going to take a combination of efforts. [The Christian Science Monitor]</p> <p><a href="https://www.popsugar.com/smart-living/Sleep-Hacks-32299840?stream_view=1#photo-44916601">8 Sleep Hacks That Will Put You Right to Bed</a> &mdash; If you can't fall asleep because you're not breathing properly, use nasal strips as a quick fix to open nasal passages. [PopSugar Smart Living]</p> <p><a href="https://www.rowdykittens.com/blog/2018/6/how-to-make-journaling-part-of-your-daily-routine">How to Make Journaling Part of Your Daily Routine</a> &mdash; Tracking your time for a week, and examining how you spend your time, will help you make behavioral changes that give you space to journal more often. [Rowdy Kittens]</p> <p><a href="https://hbr.org/2018/06/5-common-complaints-about-meetings-and-what-to-do-about-them">5 Common Complaints About Meetings and What to Do About Them</a> &mdash; Here's how to address some of the most common complaints about meetings so your organization can use its time more effectively. [Harvard Business Review]</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/amy-lu">Amy Lu</a> of <a href="https://www.wisebread.com/best-money-tips-how-much-you-should-spend-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-9"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/stop-believing-these-5-myths-about-iras">Stop Believing These 5 Myths About IRAs</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="https://www.wisebread.com/4-golden-rules-of-investing-in-retirement">4 Golden Rules of Investing 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="https://www.wisebread.com/6-ways-you-can-cut-costs-right-before-you-retire-0">6 Ways You Can Cut Costs Right Before 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="https://www.wisebread.com/9-things-people-who-retire-early-do">9 Things People Who Retire Early Do</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="https://www.wisebread.com/how-one-more-year-of-work-can-transform-your-retirement">How One More Year of Work Can Transform Your Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement best money tips retirement spending Mon, 11 Jun 2018 08:30:19 +0000 Amy Lu 2147654 at https://www.wisebread.com The Right Way to Withdraw Money From Your Retirement Accounts During Retirement https://www.wisebread.com/the-right-way-to-withdraw-money-from-your-retirement-accounts-during-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-right-way-to-withdraw-money-from-your-retirement-accounts-during-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/hand_putting_coins_in_glass_jar_with_retro_alarm_clock.jpg" alt="Hand putting coins in glass jar with retro alarm clock" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you've been a diligent saver, you've probably recognized the importance of having a mix of retirement accounts: a tax-deferred IRA or workplace retirement account like a 401(k), a tax-free Roth 401(k) or Roth IRA, and maybe even a taxable brokerage account. And you probably already know that one way the government &quot;persuades&quot; you to keep your money in your IRA and 401(k) accounts is by imposing a penalty on most withdrawals before age 59&frac12;, at which time you can begin taking penalty-free distributions.</p> <p>When you're finally ready to retire and start taking your distributions, you may wonder how to do it and which accounts you should draw from first. While avoiding taxes shouldn't be your only focus &mdash; after all, you've already spent years sheltering your retirement savings &mdash; here are some basic tax strategies that can guide you during the drawdown process.</p> <h2>Tax-deferred savings</h2> <p>One of the most popular ways to save for retirement is through the use of a tax-deferred retirement account, such as a traditional 401(k) or traditional IRA. You may have the majority of your savings in these accounts. Contributions to these accounts are made on a pretax basis. This allows you to keep more of your money during the saving and investing years, with the idea being that, although you will eventually be taxed on your withdrawals, you may be in a lower tax bracket than when you contributed the money.</p> <p>At age 70&frac12;, the government requires you to begin withdrawing money from these accounts and to begin paying ordinary income taxes on any untaxed contributions and earnings that you withdraw. This can create a cycle of withdrawing your required minimum distribution (or RMD) or your own determined income need, and then having to withdraw more money to cover the income taxes due, and then having to pay even more taxes on the money you withdrew to cover the taxes due. Anyone inheriting a tax-deferred retirement account will owe taxes on the money as well. (See also: <a href="http://www.wisebread.com/what-every-retirement-saver-should-know-about-required-minimum-distributions?ref=seealso" target="_blank">What Every Retirement Saver Should Know About Required Minimum Distributions</a>)</p> <h2>Tax-free savings</h2> <p>Another popular retirement account is a Roth IRA or Roth 401(k), and while there are some significant differences between these two accounts, the fundamental structure of how they work is the same. You contribute after-tax money to the account and, assuming you follow all the rules, your money will grow tax-free and remain tax-free even when you begin qualified withdrawals.</p> <p>Unlike a traditional IRA, there are no required minimum distributions you must take from a Roth IRA at a particular age. However, a Roth 401(k) <em>does</em> come with RMDs, so it's worth considering rolling this money over to a Roth IRA in retirement, where it will lose the RMD requirement. (Be sure to do this <em>before</em> your RMDs begin because you cannot roll over any amount already required to be withdrawn in the year you're in. So, if you have $10,000 in a Roth 401(k), and are already supposed to take $1,000 as an RMD in 2018, you can roll over $9,000 into a Roth IRA, but will have to take the $1,000 RMD this year.) Because of its tax-exempt and RMD-free status, a Roth IRA can be left untouched to build completely tax-free income for yourself or your heirs for as long as you like. (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>Taxable savings</h2> <p>To round out your retirement accounts, you may have used a regular taxable brokerage account to invest above yearly retirement contribution limits. When you sell investments in a brokerage account, you may still owe taxes on your earnings. If you sell investments that you've held for more than one year, earnings will be subject to long-term capital gains tax. That rate depends on your tax bracket, but is 15 percent for most taxpayers.</p> <p>By contrast, when you sell investments that you've held for less than a year, any earnings are considered short-term capital gains and will be taxed at ordinary income tax rates. If your investments have lost money, you may be able to claim those losses on your tax return.</p> <p>Even though funds withdrawn from your regular investment accounts are taxable, they're still valuable during your retirement years to cover any large expenses or even to pay the income taxes due on RMDs from your other retirement accounts. (See also: <a href="http://www.wisebread.com/where-to-invest-your-money-after-youve-maxed-out-your-retirement-account?ref=seealso" target="_blank">Where to Invest Your Money After You've Maxed Out Your Retirement Account</a>)</p> <h2>The years between age 59&frac12; and age 70&frac12;</h2> <p>The years between when you turn 59&frac12; and when you turn 70&frac12; can be crucial to your retirement plan. This is the time when qualified distributions are penalty-free, yet it's before you're actually <em>required</em> to take any distributions. If you've left the workforce for full retirement or are working part-time and are now in a lower tax bracket, consider taking distributions from your tax-deferred accounts to both live on and possibly to roll over into a Roth IRA, an account that <em>does not</em> require RMDs.</p> <p>With little to no income coming in, you can withdraw from your tax-deferred and taxable accounts and pay the ordinary income taxes due at a lower tax rate, or convert some of your 401(k) or traditional IRA funds, which will also be taxable at the time of conversion, to a Roth IRA for further tax-free investment growth. Doing so can help prevent you from being in a position where you have an outsized tax-deferred portfolio from which you have to take those RMDs (or risk paying a 50 percent penalty), whether you need the money or not. (See also: <a href="http://www.wisebread.com/6-age-milestones-that-impact-your-retirement?ref=seealso" target="_blank">6 Age Milestones That Impact Your Retirement</a>)</p> <p>Note that while you can convert a tax-deferred account to a Roth IRA if you're not working, you cannot contribute to a Roth IRA outright unless you or your spouse are earning income from a job.</p> <p>Figuring out how to spend your retirement savings can be trickier and more complicated than it was saving all of that money, but understanding the different tax implications of your various accounts can assist you in finding the strategy that works best for your situation.</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%2Fthe-right-way-to-withdraw-money-from-your-retirement-accounts-during-retirement&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FThe%2520Right%2520Way%2520to%2520Withdraw%2520Money%2520From%2520Your%2520Retirement%2520Accounts%2520During%2520Retirement.jpg&amp;description=The%20Right%20Way%20to%20Withdraw%20Money%20From%20Your%20Retirement%20Accounts%20During%20Retirement"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/u5180/The%20Right%20Way%20to%20Withdraw%20Money%20From%20Your%20Retirement%20Accounts%20During%20Retirement.jpg" alt="The Right Way to Withdraw Money From Your Retirement Accounts During Retirement" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/alicia-rose-hudnett">Alicia Rose Hudnett</a> of <a href="https://www.wisebread.com/the-right-way-to-withdraw-money-from-your-retirement-accounts-during-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="https://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-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://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-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/investing-is-great-but-saving-is-even-better">Investing Is Great, But Saving Is Even Better</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="https://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-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/6-age-milestones-that-impact-your-retirement">6 Age Milestones That Impact Your Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement 401(k) contributions conversions drawdown gains income IRA pretax strategies tax deferred taxes withdrawals Mon, 11 Jun 2018 08:00:17 +0000 Alicia Rose Hudnett 2147484 at https://www.wisebread.com Stop Believing These 5 Myths About IRAs https://www.wisebread.com/stop-believing-these-5-myths-about-iras <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/stop-believing-these-5-myths-about-iras" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/ira_theme_with_wood_block_letters_and_piggy_bank.jpg" alt="IRA theme with wood block letters and piggy bank" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Here's an important life lesson you may not have been told in childhood: You will spend your entire adult working years saving for one main goal &mdash; retirement. And one type of retirement account that almost everyone has access to is an individual retirement arrangement, or IRA.</p> <p>IRAs come in two main formats, the Roth and the Traditional. And while both are valuable, they each bring plenty of confusion regarding some of the rules and regulations about saving in these types of accounts. Here are five IRA myths that may be preventing you from using this valuable retirement-savings vehicle.</p> <h2>1. I can't save in a workplace retirement plan <em>and</em> in an IRA</h2> <p>Even if you currently contribute to an employer-sponsored retirement account at work (such as a 401(k)), you can still direct additional funds into a Traditional or Roth IRA. (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> <h3>For Traditional IRAs</h3> <p>Anyone under age 70&frac12; with earned income can make contributions to a Traditional IRA. But if you are covered by a workplace retirement plan, the IRS may restrict the <em>deductibility </em>of your contributions. For 2018, if you are covered by a workplace plan, are single, and make less than $73,000, or if you're married, file taxes jointly, and earn less than $121,000, you can contribute to a Traditional IRA and deduct either all or a portion of your contribution.</p> <p>If you are single and earn $73,000 or more, or if you are married, file taxes jointly, and earn $121,000 or more, you can still make a <em>nondeductible</em> contribution. When you make a nondeductible contribution to a Traditional IRA, you don't receive an upfront tax break, but your money will still grow tax-deferred in the account.</p> <p>Note: As an alternative to putting nondeductible dollars into a Traditional IRA, some advisers recommend putting this money into a brokerage account instead. That's because even though money in a Traditional IRA grows tax-deferred, <em>distributions </em>are taxed at ordinary tax rates. Meanwhile, although you receive no tax break for investing in a brokerage account, you may be able to get the more favorable tax treatment on your capital gains when you withdraw those funds in retirement. Having said that, this still doesn't discount the need for an IRA. (See also: <a href="http://www.wisebread.com/where-to-invest-your-money-after-youve-maxed-out-your-retirement-account?ref=seealso" target="_blank">Where to Invest Your Money After You've Maxed Out Your Retirement Account</a>)</p> <h3>For Roth IRAs</h3> <p>Whether or not you have a retirement plan at work has no bearing on your ability to contribute to a Roth, but the IRS does impose income limits on who can contribute directly to this type of IRA.</p> <p>For 2018, if you are single and make $135,000 or more, or if you are married, file taxes jointly, and make $199,000 or more, you are prohibited from contributing <em>directly</em> to a Roth IRA. There is a workaround to this rule called a &quot;Backdoor Roth,&quot; which involves making a nondeductible contribution to a Traditional IRA, then converting that to a Roth IRA. This is a common and standard practice, but see a financial planner or tax adviser to determine the tax implications for your own specific financial situation.</p> <h2>2. I don't make enough to contribute to an IRA</h2> <p>Every year that you earn income is an opportunity to save for retirement. The government allows you to contribute a certain amount of money each year into tax-sheltered accounts. If you miss a year, you miss saving for that year <em>forever</em>.</p> <p>Anyone with earned income under the age of 70&frac12; can contribute to a Traditional IRA, and anyone, regardless of age, with earned income (but within the income limits listed above) can contribute directly to a Roth IRA. Even if you are unable to contribute the maximum allowable amount, make a contribution count every single year. And remember that you have until Tax Day of the following year to make your contribution for the current year. (See also: <a href="http://www.wisebread.com/5-dumb-ira-mistakes-even-smart-people-make?ref=seealso" target="_blank">5 Dumb IRA Mistakes Even Smart People Make</a>)</p> <h2>3. I can't contribute to an IRA if I don't have my own earned income</h2> <p>Unlike other savings accounts, IRAs must have a single owner and can never be titled as a joint account. And up until now, we've pointed out how the first criteria for contributing to an IRA is having your own taxable compensation. But the IRS does make an important exception to this rule for nonworking or low-income earning spouses by allowing them to piggyback off a working spouse's record of yearly income, whereby all the same rules apply. This is called a spousal IRA. This is a smart way for a couple to continue a diligent savings routine even in a one-income household.</p> <h2>4. I don't need an IRA</h2> <p>Let's get this straight: Everyone needs an IRA. Whether by choice or life circumstances, everyone will retire someday. And retirement is expensive. Even if you are already covered by a workplace retirement plan, an IRA can help you capture and save much-needed excess funds that will help you get by later in life.</p> <p>If you have extra cash sitting in a savings or checking account (not counting your emergency fund), you can begin transferring that money to fund an IRA. As long as you have earned income for the year, it doesn't matter where the contribution money comes from. (See also: <a href="http://www.wisebread.com/6-reasons-every-millennial-needs-a-roth-ira?ref=seealso" target="_blank">6 Reasons Every Millennial Needs a Roth IRA</a>)</p> <h2>5. I can't touch my money until retirement</h2> <p>The whole purpose of saving for retirement involves taking a long-term view and allowing your money to grow untouched. And it's true that when you use a tax-sheltered account to save for retirement, there will be penalties if you don't follow all the rules. While you always have access to your own money, there are a few guidelines to keep in mind.</p> <p>In general, if you are younger than 59&frac12;, any money you withdraw from a retirement account will be considered an early withdrawal subject to income tax and a 10 percent penalty. But there are important exceptions to the rule, including for medical reasons or even to pay for some higher education costs.</p> <p>All direct contributions to a Roth IRA are made with after-tax money, so you always have tax-free and penalty-free access to your <em>original</em> contributions. Note that there are different rules for Roth conversions; but if you follow the rules, you can still gain penalty-free access to your funds after a waiting period and possibly before retirement.</p> <p>Retirement is your most expensive long-term financial obligation, and you'll need to save as much as you can for as long as you can. Don't let myths and misconceptions steer you away from the value of an IRA.</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%2Fstop-believing-these-5-myths-about-iras&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FStop%2520Believing%2520These%25205%2520Myths%2520About%2520IRAs.jpg&amp;description=Stop%20Believing%20These%205%20Myths%20About%20IRAs"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/u5180/Stop%20Believing%20These%205%20Myths%20About%20IRAs.jpg" alt="Stop Believing These 5 Myths About IRAs" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/alicia-rose-hudnett">Alicia Rose Hudnett</a> of <a href="https://www.wisebread.com/stop-believing-these-5-myths-about-iras">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="https://www.wisebread.com/yes-you-can-pay-for-education-with-an-ira">Yes, You Can Pay for Education With an IRA</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="https://www.wisebread.com/how-to-save-for-retirement-when-you-are-unemployed">How to Save for Retirement When You Are Unemployed</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="https://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="https://www.wisebread.com/which-retirement-account-is-right-for-you">Which Retirement Account Is Right for You?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/the-right-way-to-withdraw-money-from-your-retirement-accounts-during-retirement">The Right Way to Withdraw Money From Your Retirement Accounts During Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement backdoor roth contributions misconceptions myths Roth IRA saving money spousal ira taxes traditional ira Thu, 07 Jun 2018 09:00:21 +0000 Alicia Rose Hudnett 2146445 at https://www.wisebread.com 5 Things That Could Wreck an Early Retirement https://www.wisebread.com/5-things-that-could-wreck-an-early-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-things-that-could-wreck-an-early-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/one_gold_and_two_ordinary_eggs_in_the_hay_nest.jpg" alt="One gold and two ordinary eggs in the hay nest" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The Financial Independence/Retire Early (FIRE) movement is hot right now. People working toward FIRE are hoping to retire in their 40s and, in some cases, even their 30s. And while the focus of FIRE is to produce financial freedom and not ascribe to a strict definition of the term &quot;retired,&quot; it is a tantalizing goal many find worth chasing.</p> <p>However, if not properly planned, early retirement can be more of a burden than freedom. The earlier you retire, the longer your money has to last. Your life mitigation plan also has to be more solid and thorough than those who retire at the standard age. Below are some things that could derail your finances if you retire early. (See also: <a href="http://www.wisebread.com/8-things-millennials-can-do-right-now-for-an-early-retirement?ref=seealso" target="_blank">8 Things Millennials Can Do Right Now for an Early Retirement</a>)</p> <h2>1. Health crisis</h2> <p>Proper diet, adequate amounts of exercise, and regular doctor visits are the trifecta of good health. However, genetics and fate are the dynamic duo that can override your diligent efforts of maintaining good health. Failing to properly plan for a health crisis leaves the door gaping open for financial hardship during early retirement.</p> <p>According to a Fidelity analysis, the average couple retiring at traditional retirement age (65) can expect to spend $275,000 on health care during their retirement years. If you retire at 45, you have an additional 20 years' worth of potential expenses for which to plan. You have to factor this additional cost into your overall retirement number.</p> <p>Financial experts strongly advise that you keep health insurance coverage during retirement to help offset the cost of a serious illness or injury. There are coverage options available through private companies &mdash; which can be pricey. You should also explore Affordable Care Act (ACA) special coverage options. The ACA provides income-based premium subsidies which are based on your modified adjusted gross income during retirement. In addition to keeping health insurance, you must also ensure that you've adequately accounted for out of pocket health costs when determining how much you need during retirement.</p> <h2>2. Failing to live on a budget</h2> <p>One of the biggest myths many retirees fall prey to is the notion that you'll spend less money during retirement. The truth is it is rare that your cost of living will decrease as dramatically as you think it might. This is why living by a strict budget is financial life or death for the early retiree. (See also: <a href="http://www.wisebread.com/9-unexpected-expenses-for-retirees-and-how-to-manage-them?ref=seealso" target="_blank">9 Unexpected Expenses for Retirees &mdash; And How to Manage Them</a>)</p> <p>Getting older also comes with hidden expenses. You spend more time engaging in leisurely activities &mdash; which usually comes with a cost. You outsource chores as you age. And of course, health care expenses increase with age. Budgeting and tracking expenses isn't just for working folks. Living frugally, budgeting, and strategic spending are habits that should follow you to your grave.</p> <p>If you find that you are burning through your retirement funds quicker than expected, make sure you readjust immediately. This means you may have to scale back or even cancel some of the leisure activities and find ways to cut day-to-day spending. If an unexpected expense arises which consumes a large chunk of your funds, you may have to consider getting a side gig, working part-time, or rejoining the work force for a few years to replace the loss. You must proactively budget and track your funds to ensure they last. (See also: <a href="http://www.wisebread.com/how-much-can-you-afford-to-spend-in-retirement?ref=seealso" target="_blank">How Much Can You Afford to Spend in Retirement?</a>)</p> <h2>3. Inflation</h2> <p>Piggybacking on point two is failure to properly plan for and adjust for inflation. As you age, your dollar loses its elasticity. Your fixed cost of living expenses are slowly going to creep up over time. Retiring early means you have to deal with that creep a lot longer.</p> <p>Your retirement budget and planning should include a yearly (or at least every two years) cost of living increase. Think about the things you do regularly and plan to spend more on those things as time goes on. Your medication, transportation, food, and clothing are going to cost more and failing to adjust your budget to accommodate the increase can prove to be a costly mistake long-term. (See also: <a href="http://www.wisebread.com/4-ways-to-protect-your-retirement-from-inflation?ref=seealso" target="_blank">4 Ways to Protect Your Retirement From Inflation</a>)</p> <h2>4. Becoming a caregiver</h2> <p>Boomerang children, caring for the grands, and providing for aging parents are some of the unexpected ways you can find yourself burning through your retirement funds. One of the primary purposes for chasing financial freedom &mdash; at least for me &mdash; is to be in a position to help others. Helping becomes a problem when a person's need exceeds your capacity.</p> <p>This is even more true for those retiring early. You really have to be careful to ensure that your money lasts past your life span. If you have children and grandchildren, try to plan for things you know you want to assist with. Do you want to give your children a down payment on their first home? Pay for the grandkids to attend private school or even college? Provide long term-care for aging parents? Whatever you think you may want to do, set money aside for that purpose and don't touch it.</p> <p>It is strongly advisable that you establish a &quot;friends and family fund.&quot; This is money that you set aside specifically to help a loved one out of a financial jam. It can pay for health care, funeral expenses, the added cost of caring for your kids, grandkids, parents, or all of them. Most importantly, it can help offset the heightened cost of living that occurs when loved ones come to live with you for an extended period of time. It's better to live on less in order to set money aside for &quot;just in case&quot; in lieu of trying to adjust when life happens. (See also: <a href="http://www.wisebread.com/how-to-save-for-retirement-while-caring-for-kids-and-parents?ref=seealso" target="_blank">How to Save for Retirement While Caring for Kids and Parents</a>)</p> <h2>5. Incurring debt after retiring</h2> <p>One of the biggest mistakes you can make is to carry debt into retirement. Retiring with no debt can be a bit tougher when you retire early, but it should be your goal. You don't want to waste your precious resources making years of interest payments. You should aggressively work to eliminate all debt before retiring. You could even opt for a partial retirement and work part-time or get a side gig just to pay off your debt. (See also: <a href="http://www.wisebread.com/6-great-retirement-jobs?ref=seealso" target="_blank">6 Great Retirement Jobs</a>)</p> <p>It's also ill-advised to incur new debt while retired. If you need to make home improvements, buy another car, or make another major purchase, try to do it with cash &mdash; and even then, proceed with caution. If you must use credit for any reason, make a deal with yourself to find some other means to finance the purchase. That may mean going back to work temporarily until the debt is paid.</p> <p>You also should avoid taking on debt to help friends and family. Steer clear of co-signing &mdash; always &mdash; but especially during retirement when funds are limited. Helping friends and family members is one thing, but using debt to do it is a bad idea. If you can't afford to give it, you can't afford to lend it. In other words, if you need to be paid back, you really can't afford to loan the money. Consider gifting a portion of the money to the asker in lieu of lending them the whole amount. That way, they are not indebted to you, you haven't financially endangered yourself, and you provide assistance while simultaneously preserving the relationship. (See also: <a href="http://www.wisebread.com/what-to-do-if-youre-retiring-with-debt?ref=seealso" target="_blank">What to Do If You're Retiring With Debt</a>)</p> <h2 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-things-that-could-wreck-an-early-retirement&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F5%2520Things%2520That%2520Could%2520Wreck%2520an%2520Early%2520Retirement.jpg&amp;description=5%20Things%20That%20Could%20Wreck%20an%20Early%20Retirement"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/u5180/5%20Things%20That%20Could%20Wreck%20an%20Early%20Retirement.jpg" alt="5 Things That Could Wreck an Early Retirement" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/denise-hill">Denise Hill</a> of <a href="https://www.wisebread.com/5-things-that-could-wreck-an-early-retirement">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-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="https://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="https://www.wisebread.com/7-signs-youre-financially-ready-to-start-a-family">7 Signs You&#039;re Financially Ready to Start a Family</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="https://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="https://www.wisebread.com/its-so-simple-6-steps-to-a-stable-retirement">It&#039;s So Simple: 6 Steps to a Stable 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="https://www.wisebread.com/why-saving-money-is-harder-today">Why Saving Money Is Harder Today</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement budgeting caregiving debt early retirement financial independence health care inflation sandwich generation Wed, 30 May 2018 09:00:24 +0000 Denise Hill 2144959 at https://www.wisebread.com