Category: Personal Finance

Your 50s are a pivotal decade. You are near enough to retirement to feel its hot breath on your neck, and that can be a good thing.

It sharpens your focus at a time when you may still have 10 or 15 years of work left, so there’s time to fatten your savings and watch the money grow.

If children finally are on their own, household expenses are lighter than they have been in decades. Rather than spend this freed-up money, sock away savings and pay off debt, which will bring you closer to the retirement you hoped for.

Following are some critical financial moves to make in your 50s.

1. Map out your strategy

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Spend a weekend gathering your financial information — savings, investments and other assets as well as your debts and bills. Then, map out your strategy for retirement.

Seeing all of the details of your finances and setting goals for your life beyond work will expose any gap between your plans and savings. It will also spur you to close that gap while you still can.

2. Meet with a fee-only financial planner

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This is a good moment to make sure you haven’t missed any crucial piece of planning. Even people who comfortably manage their own investments can profit from one or two meetings with a fee-only financial planner.

It’s important that the person you see charges an hourly fee with no commissions or products to sell, so he or she can objectively review your numbers, assumptions and plans. For more pointers, check out “3 Steps to Finding the Perfect Financial Adviser.”

3. Use retirement calculators — with caution

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Online retirement calculators are a good, if inexact, way to estimate the monthly or annual income you’ll receive from savings and other sources.

Two problems with calculators: They require you to make impossible guesses about the future rate of return on your investments, and sometimes they fail to accurately account for taxes.

Because of these issues, it’s a good idea to play around with several different calculators. One respected calculator is ESPlannerBASIC, a free tool created by Laurence Kotlikoff, an economics professor at Boston University and the president of Economic Security Planning Inc.

Other calculators include:

4. Supercharge savings

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If life’s demands have made it hard to save for retirement, your 50s offer a good chance to catch up.

Shoot for saving 20% of your income. If that’s too big a change, choose a lower percentage to start with and then increase it over time.

5. Maximize retirement plan contributions

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If your employer matches a portion of your workplace retirement plan contributions, take advantage of the free money — no matter your age. If your employer matches up to 3%, for example, save at least 3% to capture that gift.

Additionally, the Internal Revenue Service has special rules designed to encourage older savers to ramp up their savings for retirement. For example, savers age 50 and older may contribute an additional $6,000 to their 401(k) plan — or an extra $1,000 to an IRA — in 2019.

6. Decide whether to pay off your mortgage

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Money Talks News founder Stacy Johnson says that putting money in a tax-deferred retirement account often offers a better return than putting that money toward paying down a mortgage faster.

At the same time, you can’t discount the psychological value of owning your home free and clear in retirement. For a closer look at the pros and cons, read: “Ask Stacy: Should I Save More for Retirement or Pay Down My Mortgage?“

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After spending decades in the workplace, retirement may sound attractive, but many people develop second thoughts soon after leaving their jobs.

Just because someone is 65 or older doesn’t mean they’re ready to stop working. Some people miss their workplace colleagues and the income that came from holding a job. They also may discover that it was their profession that gave their life meaning.

“If you’re an energetic person who wants to feel alive, you’re not going to feel happy sitting back and watching TV in retirement,” said Liliane Choney, executive director of ReVisions Resources, a nonprofit organization that helps seniors live independently.

If you’re motivated and in good health, returning to work may be the right thing to do. Here are eight ways to tell when it’s time to unretire.

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Job guides and websites will often publish lists of what employers are looking for in the workers they hire. But let’s turn that around: What are employees looking for in an employer?

Some would say that it doesn’t matter, that workers are stuck taking whatever their bosses hand out. But in reality, you probably have more power than you think.

Just about everyone wants a fatter paycheck, of course. But there are plenty of other valuable things that a good employer can offer. So, the next time you hunt for a job, keep an eye out for these 14 things employees want from their employers.

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One scary part of retirement is knowing you could have 30 more years in front of you but only a limited amount of cash available to pay for them. How do you make sure your retirement account doesn’t run dry before you say your final goodbye?

Well, there are no guarantees, but following are numerous smart strategies you can use to stretch your money — however little or much you have — over the decades to come.

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Sure, you regularly clean toilets and kitchen counters — but there is filth, bacteria and even more distasteful things lurking in everyday items you touch daily.

You should clean these, but chances are you don’t. It’s time to turn that bad habit around.

Following are 10 things that deserve a deep cleaning — right now.

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May is here — we’re almost halfway through the year! But there are still eight months of fabulous freebies remaining in 2019.

From no-cost comic books to complimentary ice cream cones, we’ve rounded up some exciting May deals to engage your mind and whet your appetite.

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In an age of digital media, bookstores might appear to be headed for the same fate as the dodo. But millions of us still love to browse for actual books as well as e-books.

If you’re a book lover, Barnes & Noble probably holds a special place in your heart. And the nation’s largest retail bookseller offers several ways to trim the expense of your favorite books and other merchandise.

Following are seven ways to cut the cost of purchases at Barnes & Noble.

Congratulations, 30-somethings: After spending your 20s getting acclimated to adulthood, you finally have your sea legs.

Perhaps you are married with kids. You may have a house. With any luck, you make more money than ever.

Regardless of the particulars of your current life, here are some money moves everyone in their 30s should make during this decade:

1. Revisit your retirement savings

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By this point, you should have a retirement fund, such as a 401(k) or an IRA. If you don’t, getting one set up should be a priority.

If you already have such an account, look at where your money is invested. Over time, a retirement account can fall out of balance. Maybe you’re taking on too much risk — or too little.

Review our article on “7 Tips for Stress-Free 401(k) Investing.” If you’ve changed jobs at any point, you should also look at doing something with your orphaned 401(k).

2. Increase your emergency fund

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In theory, creating an emergency fund is another money move you should have made earlier in life. If you don’t have one, putting money aside for a rainy day is another big priority.

If you already have such a fund, it might be time to add to it. Your emergency fund should have enough money to cover three to six months’ worth of expenses. Add up all your current monthly expenses and see if your fund falls short on covering them.

3. Rebalance the budget

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Revisit your budget at least once a year or every time you have a major life change. If it’s been a while since you crunched the numbers, sit down and do a thorough review.

Does your budget support your current life goals? If not, revise it.

4. Track your spending for a month

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Track your spending for an entire month. Keep tabs on every penny. That sounds like a lot of work, but if you use your debit card or a credit card for virtually everything, it’s not so bad.

We tend to idealize where our money goes. (“Oh, I never eat out!”) But once you start tracking, there’s no denying that you hit the drive-thru once a week or go on a spending spree at the mall once a month.

Compare your actual spending with your budgeted amounts. Depending on where the numbers land, you’re going to either need to rework the budget or rethink your spending.

5. Pay off your debt

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Of course, we all wish we had never gone into debt in the first place. But there’s no use in rehashing past mistakes: Now is the time to take action and correct them.

Cut up the credit cards, and then go read about how to tackle big debts fast.

6. Perfect the fine art of haggling

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In your 30s, you’ll likely make some major purchases. You may also have more discretionary income to buy the things you want.

Stretch your dollars by learning to bargain like a pro. There’s no reason to pay full price when a little negotiating can help you save money on purchases big and small.

7. Consider starting a college fund

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For those of you who have become parents, your 30s are a good time to set up a college fund for your kids. Don’t wait until they hit high school to make a plan for their higher education.

Options range from 529 plans to Coverdell Education Savings Accounts and prepaid tuition plans.

Can a little $5 fee mutate into a $600 monster? Yes, it happened to me — and it could be happening to you.

Some of us need our 220 channels of entertainment bliss, and that’s OK. But if you want to get away from the TV noise, have a little more time or, like me, want some extra cash, then take a good look at your cable bill.

When I studied my bill, I realized that the basic cable subscription that Comcast sold me for $5 a month was costing me $25 a month — $607 over the course of a two-year contract.

Although I’m going to talk about Comcast’s Xfinity service, you can take the same steps I did regardless of what pay-TV service you use.

How my $5 cable fee ballooned to $600

I’m not a big fan of cable programming, but I need high-speed internet for work. When Xfinity offered to add basic cable to my two-year internet contract for $5 a month, though, I didn’t refuse.

What’s $5, a coffee? A cheap hamburger? You might as well add it, right? Well, that $5 ended up costing me hundreds of dollars.

Technically, the addition of basic cable cost $120 over two years. But by subscribing to cable, I was roped into also paying $12.50 a month in broadcast TV and regional sports fees and an extra $7.81 a month in taxes and surcharges.

So subscribing to basic cable for $5 ended up increasing my bill by a total of $25.31 every month. And over the course of two years, a subscription that I thought would have cost $120 ballooned to $607.44 after adding the extra charges.

What happened when I quit cable

In July 2018, the two-year sign-up special ended and the internet /TV bundle that previously costed $94 increased to $110, increasing the extra taxes and surcharges with it. My statement totaled roughly $141. So one year’s worth of this bundle would have cost $1,692.

Here’s the kicker: Xfinity was offering my same internet speed at a lower price to new customers. That’s right — they jacked my bill up while charging new customers less money for the same service.

So after talking with an Xfinity representative, I cut my package down strictly to internet with the new lower price. That brought the total on my statement to about $80. That’s an estimated savings of $732 over one year.

The bottom line

If you’re trying to find some extra cash, look at your cable bill like I did. With the money I saved, my wife and I went to Greece instead of watching it on the Travel Channel.

If you’re not ready to give up TV entirely, check out “Streaming Versus Cable: the Confusing Costs of Cutting the Cord.” It will help you determine whether you could save some money by switching to a streaming TV service.

Adrian Freeman contributed to this post.

If you are fresh out of high school or college, you have an amazing opportunity.

People in their 20s can build a solid financial foundation that will serve them well for the rest of their lives.

Perhaps you plan to live lean and save a pile of cash. Or, if you’ve gotten off to a bad start and made a few money mistakes, take heart: You’ve got plenty of time to reverse those errors and get back on your feet.

To make the most of your fresh start in life, here are 10 money moves you need to put into action:

1. Start a retirement account

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I know, retirement isn’t even a blip on your radar screen. But it will never be easier to start saving than right now.

By putting money in an account in your 20s, you maximize the near-magical phenomenon of compound interest. As Money Talks News founder Stacy Johnson says, it’s far better to start saving small amounts early than to be forced to save a lot late.

Your employer may offer you a 401(k), which is the easiest way to save. The money comes right out of your paycheck, so you’ll never miss it. Plus, many employers will match your contribution up to a certain percentage.

If a 401(k) isn’t available through your job, start an IRA instead.

2. Discover your risk tolerance

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Once you open an account, you’ll have to decide how to invest your money. Most investors need to strike a balance — you don’t want to take too much risk, but it’s also a mistake to take too little.

Being young, you probably don’t have a lot of money — or a ton of investing experience. So, to get started, check out Stacy’s tips in “2-Minute Money Manager: How Do You Start Investing With Little Money?”

3. Write down your goals

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You don’t have to map out your entire life. Heck, you don’t even have to stick with any plans you create. You’re free to change them at any time.

However, having an idea of where you want to go in life will make it easier to make smart financial decisions. Then, you won’t end up at 40, eyeing your friend’s summer home and feeling sorry for yourself that you can’t buy one, too.

4. Consider paying cash for most things

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Personally, I think being able to pay cash for nearly everything is life-changing. Those of you who have been up to your eyeballs in debt — and had the embarrassing experience of your credit card being declined — know what I’m talking about.

Tell yourself you’ll be the type of person who always pays cash. That doesn’t mean you won’t ever take out a loan, and it doesn’t mean you won’t ever get a rewards credit card that you pay off each month. It does mean you might think a little longer and harder about going into debt, and only do so if there are no other options.

5. Create a budget that supports your goals

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I won’t spend too much time on this money move because we already have an excellent article: “Resolutions 2019: Budget Your Way to Financial Goals.”

The key is to ensure your budget supports your goals. If you hope to be married or buy a house in five years, you’ll want to have extra savings built into your budget for those things.

6. Create an emergency fund

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Your budget also needs to include a line-item for emergency savings. This money should be separate from your retirement fund, so don’t think your 401(k) or IRA counts.

And emergency fund is your insurance against unexpected expenses. You should have enough money in your fund to cover three to six months’ worth of expenses. For more, check out “9 Ways to Build an Emergency Fund When Money’s Tight.”

7. Pay off your debt

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In a perfect world, you’d start your adult life with zero debt. But reality is probably different for you. There are student loans to pay, and you may have been suckered into opening a credit card or financing a car somewhere along the way.

Don’t use the excuse that past mistakes give you license to make future mistakes. They also don’t mean you have to resign yourself to living a life burdened by debt.

Start today to pay off what you owe. For more tips, check out “How to Pay Off $10,000 in Debt Without Breaking a Sweat.”