Archive for Maryalene LaPonsie

10 Guaranteed Ways to Retire Rich

By Money Talks News
Retiring comfortably – never mind wealthy – may seem out of reach to many people, given current savings rates. Consider that median savings accumulated by workers ages 51 through 60 years is $49,000, while the number for people ages 30 through 40 is $30,000, according to professional services firm Towers Watson.

Don’t let the statistics scare you. With a little advance planning and self-discipline, you can have a golden nest egg at retirement. Here’s how:

Rule 1: Spend less than you earn

The formula for retiring rich starts with you actually putting money in the bank. Social Security alone isn’t enough to have you living the good life during your golden years.

Money Talks News founder Stacy Johnson recommends you spend only 90 percent of the money you make and sock away the remaining 10 percent.

If you have zero savings right now, concentrate on building up an emergency fund in a savings account first. Once your rainy-day fund is full, put that 10 percent you’re not spending into a dedicated retirement fund.

If you’re currently spending more than 90 percent of your income each month, you may want to read about how to save $1,000 by summer.

Rule 2: Start saving early

Thanks to the power of compounding interest, a little money saved now can go a long way at retirement time. But to get the most benefit, you’ll want to start saving as early as possible.

Let’s say you’re 20 years old and can manage to put away only $100 a month into your retirement fund. Assuming you average 8 percent returns, you’ll be closing in on having half a million dollars – $463,806 to be exact – by age 65. Even better, over that 45-year period, you’ll only have invested $54,000 of your money to get all that cash in return.

If you wait until you’re 40 to start saving $100 a month, and get that same rate of return, you’ll put in $30,000 of your money and get $87,727 in return by age 65. Not bad, but wouldn’t you rather have half a million?

Rule 3: If you start late, make up for lost time

Maybe you’re 55 and think you’ve missed your window of opportunity to retire rich. Don’t wave the white flag just yet!

The government allows those 50 or older at the end of the year to make catch-up contributions to their retirement funds. You can contribute an extra $6,000 to your workplace retirement program, such as a 401(k), for a total annual contribution of $24,000. IRA catch-up contributions are $1,000 for a total allowable contribution of $6,500 each year.

You might think there’s no way you’d ever have $6,500, let alone $23,000, to invest in a single year, but you could be surprised at when and how you come into extra cash. You may benefit from a loved one’s estate, downsize your home or sell a boat or other large toy that no …read more

Read more here: 10 Guaranteed Ways to Retire Rich

Category: bugeting, retirement, savings

Why Seniors Have the Greatest Financial Security

By U.S. News...

A recent study from the Stanford Center on Longevity unearthed an interesting anomaly. While the financial security of Millennials and Gen Xers had dropped significantly from 2000 to 2014, it has risen slightly for baby boomers ages 65 to 74, according to The Sightlines Project.

“No change is probably more accurate,” says Steve Vernon, a consulting research scholar for the center’s financial security division. The increase registered only 1 percent, but it was in contrast to the 8 percent drop in financial security measured for 25- to 34-year-olds, the greatest decline among all age groups.

What’s more, seniors have the greatest financial security of any group surveyed. In 2000, 45- to 54-year-olds topped the index, with 75 percent being financially secure. By 2014, that group dropped to 68 percent, while the score for 65- to 74-year-olds increased to 69 percent. The group with the lowest financial security is 25- to 34-year-olds, with only about half (56 percent) being financially secure in 2014. Stanford researchers calculated the financial security index by averaging nine financial metrics including cash flow, emergency savings, assets and insurance coverage.

Social Security, pensions and jobs stabilize finances. The financial security of seniors is likely holding steady for several reasons. “Social Security does a good job of keeping you out of abject poverty,” Vernon says. “People over 65 are also working longer.”

Access to traditional pensions is another factor that helps retirees. “When you look at that older population, a number of them have a traditional pension,” says Kevin Crain, managing director and retirement services executive for Bank of America Merrill Lynch. “There is some predictable income post-retirement.”

Beyond a steady source of income, older Americans may have greater financial security because they typically carry less debt and are more likely to own a home. Many people in their 60s may also find themselves on the receiving end of an inheritance, which could further buoy their finances.

Senior fortunes could change later in life. While 65- to 74-year-olds are experiencing relatively stable financial security now, it may not last. Kathleen Hastings, a certified financial planner with FBB Capital Partners in Bethesda, Maryland, cautions that as seniors age, they may strain their resources.

“If you’re looking at the group that’s 80 and older, their economic security is deteriorating,” Hastings says. She attributes declining financial security among the elderly to increased medical and long-term care costs coupled with Social Security increases that haven’t kept pace with health care inflation.

Financial security tends to decline slightly as people age. The Sightlines Project found that 62 percent of people age 75 and older were financially secure in 2014, compared to 69 percent of people age 65 to 74. While younger seniors may be relatively healthy and able to continue working if needed, the elderly may need expensive care and have dwindling resources to pay for it. “Once you get past age 75, you’ll probably see a shift [in …read more

Read more here: Why Seniors Have the Greatest Financial Security

Category: aging, baby boomers, Generation X, investing, millennials, person finance, savings, senior citizens

10 Guaranteed Ways to Retire Rich

By Money Talks News.

Retiring comfortably – never mind wealthy – may seem out of reach to many people, given current savings rates. Consider that median savings accumulated by workers ages 51 through 60 years is $49,000, while the number for people ages 30 through 40 is $30,000, according to professional services firm Towers Watson.

Don’t let the statistics scare you. With a little advance planning and self-discipline, you can have a golden nest egg at retirement. Here’s how:

Rule 1: Spend less than you earn

The formula for retiring rich starts with you actually putting money in the bank. Social Security alone isn’t enough to have you living the good life during your golden years.

Money Talks News founder Stacy Johnson recommends you spend only 90 percent of the money you make and sock away the remaining 10 percent.

If you have zero savings right now, concentrate on building up an emergency fund in a savings account first. Once your rainy-day fund is full, put that 10 percent you’re not spending into a dedicated retirement fund.

If you’re currently spending more than 90 percent of your income each month, you may want to read about how to save $1,000 by summer.

Rule 2: Start saving early

Thanks to the power of compounding interest, a little money saved now can go a long way at retirement time. But to get the most benefit, you’ll want to start saving as early as possible.

Let’s say you’re 20 years old and can manage to put away only $100 a month into your retirement fund. Assuming you average 8 percent returns, you’ll be closing in on having half a million dollars – $463,806 to be exact – by age 65. Even better, over that 45-year period, you’ll only have invested $54,000 of your money to get all that cash in return.

If you wait until you’re 40 to start saving $100 a month, and get that same rate of return, you’ll put in $30,000 of your money and get $87,727 in return by age 65. Not bad, but wouldn’t you rather have half a million?

Rule 3: If you start late, make up for lost time

Maybe you’re 55 and think you’ve missed your window of opportunity to retire rich. Don’t wave the white flag just yet!

The government allows those 50 or older at the end of the year to make catch-up contributions to their retirement funds. You can contribute an extra $6,000 to your workplace retirement program, such as a 401(k), for a total annual contribution of $24,000. IRA catch-up contributions are $1,000 for a total allowable contribution of $6,500 each year.

You might think there’s no way you’d ever have $6,500, let alone $23,000, to invest in a single year, but you could be surprised at when and how you come into extra cash. You may benefit from a loved one’s estate, downsize your home or sell a boat or other large toy …read more

Read more here: 10 Guaranteed Ways to Retire Rich

Category: 40s, 50s, money, personal finance, planning, retirement, wealth

10 Guaranteed Ways to Retire Rich

By Money Talks News...

Retiring comfortably – never mind wealthy – may seem out of reach to many people, given current savings rates. Consider that median savings accumulated by workers ages 51 through 60 years is $49,000, while the number for people ages 30 through 40 is $30,000, according to professional services firm Towers Watson.

Don’t let the statistics scare you. With a little advance planning and self-discipline, you can have a golden nest egg at retirement. Here’s how:

Rule 1: Spend less than you earn

The formula for retiring rich starts with you actually putting money in the bank. Social Security alone isn’t enough to have you living the good life during your golden years.

Money Talks News founder Stacy Johnson recommends you spend only 90 percent of the money you make and sock away the remaining 10 percent.

If you have zero savings right now, concentrate on building up an emergency fund in a savings account first. Once your rainy-day fund is full, put that 10 percent you’re not spending into a dedicated retirement fund.

If you’re currently spending more than 90 percent of your income each month, you may want to read about how to save $1,000 by summer.

Rule 2: Start saving early

Thanks to the power of compounding interest, a little money saved now can go a long way at retirement time. But to get the most benefit, you’ll want to start saving as early as possible.

Let’s say you’re 20 years old and can manage to put away only $100 a month into your retirement fund. Assuming you average 8 percent returns, you’ll be closing in on having half a million dollars – $463,806 to be exact – by age 65. Even better, over that 45-year period, you’ll only have invested $54,000 of your money to get all that cash in return.

If you wait until you’re 40 to start saving $100 a month, and get that same rate of return, you’ll put in $30,000 of your money and get $87,727 in return by age 65. Not bad, but wouldn’t you rather have half a million?

Rule 3: If you start late, make up for lost time

Maybe you’re 55 and think you’ve missed your window of opportunity to retire rich. Don’t wave the white flag just yet!

The government allows those 50 or older at the end of the year to make catch-up contributions to their retirement funds. You can contribute an extra $6,000 to your workplace retirement program, such as a 401(k), for a total annual contribution of $24,000. IRA catch-up contributions are $1,000 for a total allowable contribution of $6,500 each year.

You might think there’s no way you’d ever have $6,500, let alone $23,000, to invest in a single year, but you could be surprised at when and how you come into extra cash. You may benefit from a loved one’s estate, downsize your home or sell a boat or other large toy that no longer fits your lifestyle. …read more

Read more here: 10 Guaranteed Ways to Retire Rich

Category: money, personal finance, retirement, saving, wealthy

15 Golden Rules to Save on Every Purchase

By Money Talks News
All told, the average American household spent $53,495 in 2014, according to the Bureau of Labor Statistics.

While the bulk of that money went for housing, we still spent more than $1,786 on apparel and services, $2,728 on entertainment, and another $2,787 on food away from home. Then there is that mystery category, “all other expenditures,” where we rang up, on average, $3,548.

Wouldn’t it be nice to spend a little less?

Find the best price on everything you buy on our deals page!

Fortunately, there are a number of tried and true ways to save money on virtually everything you buy. In fact, we call them our 15 golden rules to super savings, and here they are.

1. Never buy new what you can buy used

To start, if you want to save money on everything you buy, you should never buy new. Well, nearly never buy new. You might possibly want to buy new underwear from time to time.

But for most everything else, let someone else take the depreciation hit. The average new car loses 11 percent of its value the moment it’s driven off the lot according to insurance site TrustedChoice.com. After five years, new vehicles typically lose about 63 percent of their value.

Cars might be the best-known example, but virtually everything depreciates over time. Jewelry, furniture, appliances, and even video games and movies can depreciate faster than you can say “impulse buy.” Check out Craigslist, eBay and Half.com for practically new items being sold for a song.

2. Save big with bulk purchases

Let’s say you use a lot of batteries. Why buy four batteries when you could buy 40? Buying in bulk can be an excellent way to lower your per-unit cost. Check out Amazon prices on Duracell AA batteries as an example. As of this writing, you can buy 10 for $8.35, get 20 for $10.10 or splurge on 40 for $14.70. (The 40-pack comes out to about 37 cents per battery compared to the 10-pack, at 83 cents per battery.) Plus, bigger packages come with free shipping. Bonus!

However, not every bulk buy is a steal. If you’re thinking about going the warehouse route, read this article on what to buy at warehouse stores before you start shopping.

3. Tame impulse buys with a list

It’s hard to put a number on how much impulse buying costs us each year, but 84 percent of confess to making a purchase on the fly, according to a 2016 CreditCards.com survey.

Tame the tendency to impulse buy by limiting yourself to what’s on your shopping list. Don’t think that list is only for groceries either. Create an ongoing list of planned purchases. When you notice your shoes are wearing thin, add shoes to the list. When you decide you need a bigger slow cooker, add that to the list.

Then when you are tempted to buy something on the spur of the moment, refer to your list. If …read more

Read more here: 15 Golden Rules to Save on Every Purchase

Category: cash, comparing, coupons, credit card, economy, negotiating, rewards

4 Times It May Pay to Go Into Debt

By U.S. News

Debt is a four-letter word of the bad kind, according to some people. The type of thing that shouldn’t even be considered by responsible adults. However, not all finance professionals agree debt is something to be avoided.

“Not all debt is created equal,” says Gary Poch, vice president of global consumer services for Equifax. “There may be some types of good debt.”

Specifically, experts told U.S. News it may pay to go into debt for one of the following four reasons.

Reason No. 1: To Buy a House

For many people, home ownership is only possible through debt in the form of a mortgage. The average cost of a home sold in November 2015 was $374,900, according to the U.S. Census Bureau. That price makes it impossible for many U.S. families to pay cash for property, unless they save for years or even decades.

That’s not something people should have to do, says Finder.com CEO Fred Schebesta. “I’m a big believer in saving money, but it’s better to do some things while you’re young,” he says. Rather than waiting until the kids are grown and there is cash in the bank, taking out a mortgage at a younger age can improve a family’s quality of life.

Beyond that, a house is an appreciating asset that will grow in value over time. As a bonus, interest payments made on a mortgage can be included in itemized deductions for federal income taxes. Together, these factors add up to mortgages being a smart debt choice for many people.

Reason No. 2: To Get an Education

Despite chatter in some circles about a looming student loan crisis, many experts still say debt for educational purposes can be smart. “It’s an investment in human capital,” says Eric Meermann, a certified financial planner and portfolio manager with Palisades Hudson Financial Group in Scarsdale, New York.

Meermann has personal experience with this type of debt. He took out loans to cover the entire cost of his education at the Stern School of Business at New York University. The debt has since been repaid, and it was money well-spent in Meermann’s mind since it opened up the opportunity for greater income.

Data from the Bureau of Labor Statistics backs up the assertion that higher education equates with higher income. The following are average weekly incomes by education level for adults ages 25 and older in 2014, the latest year for which numbers are currently available:Less than a high school diploma: $488

  • High school graduate with no college: $668
  • Some college or an associate degree: $761
  • Bachelor’s degree only: $1,101
  • Bachelor’s degree and higher: $1,193
  • Advanced degree: $1,386

Even Schebesta, who isn’t sold on the idea that everyone needs a degree, says debt for training or a technical course can be a good investment if it will unlock greater earning potential.

Reason No. 3: To Start a Business

Schebesta feels confident that taking out a loan for business purposes can pay off. “I saved my first company by borrowing $50,000 to …read more

Read more here: 4 Times It May Pay to Go Into Debt

Category: credit cards, interest rates, money, mortgages, personal finance, student loans

The 6 Worst Mortgage Mistakes You Can Make

By Money Talks News...

Is your house your castle? Or an albatross around your neck?

Your answer might depend a lot on your mortgage. Getting an affordable property at a great rate can make you feel as if life couldn’t be any sweeter.

But ask anyone who bought a house with a mortgage they didn’t understand and couldn’t afford, and they will likely tell you their house has brought them nothing but frustration and tears.
If you’ll be in the market for a new place soon, make sure you avoid the following six mortgage mistakes.

1. Not reviewing your credit first

At least six months before you go to your first open house, you need to go to AnnualCreditReport.com. That’s the official site to get free credit reports issued by the big three reporting agencies: Experian, Equifax and TransUnion. You’re entitled to one free credit report from each agency annually.

From our Solutions Center: Find a better mortgage in seconds

In addition to your credit reports, it’s also critical to see your credit score. Some banks and credit cards now offer the most widely used credit score, the FICO score, as a monthly perk for their customers. If you’re not lucky enough to have access to a free score, you’ll have to pay FICO $19.95 to see yours.
You can get free scores at sites like Credit.com and CreditKarma.com, but they won’t be FICO scores.

You’ll need your credit score to be in great shape if you want the best rates. A 2013 study from the Federal Trade Commission found 5 percent of consumers had errors on their report that could result in less favorable loan terms. If you’re among that 5 percent, you want to find any errors and correct them before applying.

And if your credit score simply stinks, you can try these tips for raising it fast.

2. Failing to get preapproved

The next mistake you can make when applying for a mortgage is failing to get preapproved.

Getting preapproved by a bank is one way to avoid the heartbreak that comes from falling in love with a house you can never buy. It may also give you an edge if there are multiple offers for the same property. A seller will feel more confident selecting a bid from someone with a mortgage preapproval rather than a person who hasn’t even begun the process.

However, don’t get carried away by whatever preapproval amount you receive from the bank. Remember, what the bank thinks you can afford and what you can actually afford may be two different things. A lot of people lost their homes in the Great Recession because they were given loans they couldn’t pay back. Don’t make the same mistake.

3. Not shopping around for the best rate

The Consumer Financial Protection Bureau says nearly half of mortgage borrowers don’t shop around, and that’s a big mistake. Seasoned shoppers search for the best deals on soap, furniture and cars, but some …read more

Read more here: The 6 Worst Mortgage Mistakes You Can Make

Category: buying a home, buying a house, first house, mortgage

5 Retirement Planning Mistakes and How to Fix Them

By U.S. News...

The average 65-year-old man retiring this year can expect to have another 17 years of living in front of him, according to the National Institute on Aging. For a woman, that number jumps to 20 years.

That’s a lot of time to travel the world, enjoy hobbies and make memories with family and friends. On the other hand, it can also be a lot of time to stress about rising expenses and dwindling assets.

Fortunately, if you plan correctly, you can minimize the chances of ending up with too many years left and too little money in the bank. However, if you think you’ve made mistakes (or are making mistakes) when it comes to retirement planning, rest assured there is always time to make a correction.

Here are five common retirement planning mistakes and how to do damage control for each one.

Retirement Planning Mistake: Focusing solely on your rate of return.

The Solution: Create a diversified portfolio.

It makes sense that investors want to maximize their returns, but financial advisors say it’s a mistake to take a narrow view of retirement portfolios.

“People tend to chase rates of returns,” says Bob Gavlak, a certified financial planner and wealth advisor with Strategic Wealth Partners in Columbus, Ohio. “[Rates] are not in your control. You need to look at your overall strategy.”

Rather than trying to put all your money in specific funds that did well in previous years, it’s better to spread investments over a variety of fund types – such as index, balanced, equity and global – that offer a combined level of risk appropriate for your age and goals. This approach diversifies a retirement fund so the entire portfolio won’t be in jeopardy should one industry or sector run into economic trouble.

Retirement Planning Mistake: Forgetting about taxes.

The Solution: Have a tax plan for investments and assets.

Thomas O’Connell, president of International Financial Authority Group in Parsippany, New Jersey, says taxes are another area that trip up retirement planning.

“People don’t typically have the same deductions [in retirement], so their effective tax rate is going to be higher,” O’Connell says. “They are ending up paying more in taxes even though their lifestyle hasn’t changed.”

Minimizing taxes in retirement can be achieved through a combination of strategies, Gavlak says. Investing in Roth accounts is one way to ensure withdrawals are tax free. Meanwhile, distributions from taxable retirement accounts can be timed to coincide with low-income, and therefore low-tax, periods. Owning a home, rather than renting, is another way to potentially lower taxes in retirement.

Retirement Planning Mistake: Thinking the start of retirement marks the end of planning.

The Solution: Review finances and goals every year.

It’s tempting to think of a retirement plan as something that runs on autopilot after leaving the workforce. In reality, a plan only remains relevant if it constantly evolves to adjust for market conditions and a retiree’s lifestyle needs and goals.

“Retirement planning is nothing more than a process,” says Stephen Davis, an investment advisor and president of …read more

Read more here: 5 Retirement Planning Mistakes and How to Fix Them

Category: 401k, employment, financial advisors, investing, IRAs, money, savings, taxes

How to Slash Your Monthly Expenses — and Save $1,000 (or More) a Year

By Money Talks News.

“Game of Thrones” may be entertaining, but is it worth the $100 or more you may be shelling out for cable each month?

According to the Leichtman Research Group, the average pay-TV subscription service cost $99.10 a month in 2015, up 39 percent from 2010. Meanwhile, if The NPD Group is right, you may be on track to spend more than $200 a month for the privilege of watching television in 2020.

If that sounds outrageous to you, it’s time to cut your cable bill. And while you’re at it, slash other monthly expenses from your budget as well. In fact, a little bill trimming could put an extra $1,000 in your pocket this year. Here’s how.

Cable or satellite TV

Let’s start with the big one: your television service. Now, I know paying to watch TV seems to be the American way. After all, the Leichtman Research Group found 83 percent of all households pay for some form of TV service.

So I get it if you think pulling the plug is a bit radical. But it is also smart. If you have an HDTV and a roof antenna, you can get free over-the-air channels with a picture quality that puts standard-definition cable TV to shame.

In addition, if you have a newer TV, Blu-Ray player or gaming system and a high-speed Internet connection, you can use these streaming services for a fraction of the price:

  • Netflix
  • Hulu or Hulu Plus
  • Amazon Prime
  • iTunes

There may be a slight delay in watching new shows, but ask yourself whether it is really worth $1,200 a year just so you can be in the know for the office water cooler conversation?

If you are ready to cut the cable, you will be in great company. See: TV Viewers Cutting the Cord in Big Numbers.

And for more information, check out:

  • Three Steps to Cut Your Cable Bill by 90 Percent
  • How to Choose the Right Cord-Cutting TV Service

Internet

Next to television, Internet is the other big monthly expense for many families.

If you are a basic Internet user and simply need service to check your email and Facebook, you may want to check out the ultra-cheap Internet available through FreedomPop and NetZero.

With Freedom Pop, you can get up to 500MB of free wireless service each month at 3G and 4G speeds, while NetZero offers a paid DSL hook-up. Both have pricing plans that vary depending on your location, but they have historically been only a fraction of what you’d pay other providers.

For more, check out this popular post: You Can Now Get Free Internet at Home and Away.

If you have a tiered data plan with Verizon Wireless, you can use your phone as a tethered hot spot for free. The company settled a complaint with the FCC in 2012 and agreed not to charge these customers for hot-spot access. Depending on your plan, you might need to download a third-party app first.

If …read more

Read more here: How to Slash Your Monthly Expenses — and Save $1,000 (or More) a Year

Category: bills, budgeting, monthly expenses

5 Surprising Sources of Debt

By U.S. News..

Unemployment, medical bills, a shopping addiction – these may all be obvious causes of debt, but they certainly aren’t the only ways people end up in the red.

Other forms of debt are more insidious. They arrive looking like a big break or a money-saving option. But instead of getting you out of your financial hole, they actually dig you in deeper.

Don’t let these five hidden sources of debt say “Gotcha!”

Your New Job

The problem: Your new job is supposed to be your ticket out of paycheck-to-paycheck living, but a big boost in income is often accompanied by a big boost in spending.

“When people get a new job, it looks like a limitless amount of money so they splurge on a new car or a buy a lot of clothes,” says Joe Heider, founder of Cirrus Wealth Management in Cleveland.

Cecilia Beach Brown, a certified financial planner at Lincoln Financial Securities in Annapolis, Maryland, says it’s a common trap. “When the money’s there, it’s hard to say ‘no.'” Then people lose their job or are otherwise unable to maintain their new lifestyle.

The solution: Rather than increase your spending, continue to budget based on the amount you previously earned. Then, bank the extra for retirement, travel or a big spending goal, whether that be paying cash for a car or a 20 percent down payment on a house.

A Financial Windfall

The problem: Like a new job, a windfall can be your financial undoing. Whether it’s an inheritance, divorce settlement or lottery winnings, Brown says people notoriously mishandle large sums of money that fall into their laps.

“People tend to spend money more than once in their head,” Brown says. “It’s the mental accounting that gets them in trouble.”

By spending without a plan, people blow through their money and end up financing big purchases they can’t afford that push them into debt.

The solution: Brown advocates that everyone use the one-third rule when dealing with an inflow of cash of any kind. One-third of the money should be set aside for taxes, the second third should be put in savings for the future and the final third can be used for fun.

Leasing a Car

The problem: Leasing seems like a good way to get more car for your money, but contracts can include expensive provisions that make it difficult to simply turn in a vehicle without owing cash.
“When people lease a car, they’re excited and don’t pay attention to what happens when they turn it in,”
Heider says.

Leased cars have strict mileage limits, and people who go over could get hit with fees that run from 10 to 20 cents per mile driven over the limit. In addition, there may be acquisition fees, disposition fees and early termination fees. In many cases, Heider says drivers roll one lease into another to avoid paying fees out of pocket. Then, they never get out from under their monthly vehicle payment. The solution: Think twice before leasing …read more

Read more here: 5 Surprising Sources of Debt

Category: debt, economy, financial literacy, money management, savings

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