I know quite a few people who are approaching retirement right now. And from talking to them, one thing is clear to me: There's a lot of apprehension about making this transition.
The pressure to make the right decisions doesn't stop just because you're nearing retirement. In fact, from what I can tell, it seems to intensify. There are still a lot of important decisions to make: When should I stop working? How will I spend my day? Where should I retire? What lifestyle changes do I need to make?
There's a lot of advice to take in as well. And with that advice, you need a way to sort through it all and find out what makes the best sense for your situation.
Judging from the comments in Kristin Wong's article “Credit unions vs. banks: Things to consider“ back in January 2014, there was a lot of interest — and a fair amount of skepticism — in what credit unions have to offer.
The sentiments went in a lot of different directions. People were quick to point out that interest rates on deposits at credit unions were usually much higher than at banks and interest rates on loans were generally lower.
A lot of people were very appreciative of the level of service to be found at most credit unions; but quite a few mentioned how difficult it might be to switch from one institution to another, particularly when it came to all their bill-paying information.
This article is by Les Masterson.
Fathers are great at offering advice — in matters of life, love, and, of course, money. And while we've all resorted to clichés at times, the wisdom fathers impart often stays with their children, who in turn pass that guidance on to the next generation.
So in honor of Father's Day, we wanted to ask readers: What did your father teach you about money? What was his best — and worst — advice?
Because Dad Said…
So far, the responses we've gotten back have been every bit as insightful as we had hoped. Readers were given a drive to invest and to work hard. Fathers inspired their children to save for a rainy day, no matter how modest a sum.
It's spring! Don't you just feel like hitting the road? Well, maybe you do if you don't travel for a living.
Either way, luggage. I've had my fair share of experiences with luggage over the years. Lost luggage, broken luggage, matching luggage -- you name it. Currently, I travel with a non-descript, black roller that I can barely distinguish from anyone else's. I bought it for $49 at Target in 2008. It replaced a smaller roller that lasted two trips and cost all of $19. (No wonder, right?)
I can get away (haha) with a $49 roller because I don't travel a lot these days. If anything, it's a weekend jaunt to visit family and friends every six months or so. I expect I will have to buy something new later this year because one of the wheels is shot and it wobbles when I walk too fast. (It doesn't just wobble, actually. It starts to wobble. And then if you don't slow down or stop, the wobbling gets more and more violent until it actually flips itself over! It's really fun when your flight was delayed and you have 10 minutes to get to your next flight on a different concourse.)
Your 20s are filled with milestones and life-changing experiences. It's a time when the things you learn start to become habits and when financial decisions can either lead you to great success or become a problem for you in the future.
It would be great to have perfect foresight so that you knew the best decision to make in every situation — but in the absence of perfect knowledge, even knowing what not to do in your 20s could help you recognize a bad decision in the making or prevent a bad habit from forming.
In addition to money mistakes, there is also the need to save money in college, which is not always easy.
If you are in your 20s (or even your 30s), perhaps you can profit from some advice many people in their 40s and 50s wish they'd had as they started out. Continue reading...
What is the last day to ship before Christmas? Well, that depends, actually. Traditionally — that is, say, prior to 2008 — the last day to ship was around the second week of December. These days, it really depends on how much you are willing to spend. FedEx offers same-day shipping on Christmas Day. Yes, the FedEx SameDay department is open seven days a week, 365 days of the year. And they deliver “door to door within hours, depending on availability” according to their website. Think something in the neighborhood of $48/pound for the SameDay City service plus any surcharges. Wow.
But seriously, what this means is that, if you have been super busy at work or you're just a full-on procrastinator, you still have (expensive) options. Check their websites for all the particulars, but here's how they actually lay out from now until Christmas for the major shippers and retailers:
United States Postal Service
- Continue reading...
- Maximize your retirement contributions: If you have not contributed the maximum to your retirement accounts, now is the time to tighten your financial belt and contribute as much as possible. The 401k, 403b and 457 plans have a $17,500 limit if you are under 50 and a $22,500 limit if you are over 50. IRAs have a limit of $5,500 if you are under the age of 50 and a $6,500 limit if you are over 50. If you are self-employed, you will also need to open your Individual 401k by December 31. You will have until April 15 of next year to contribute, but the account has to be set up by the end of this year. If you are a stay-at-home parent, you can open a spousal IRA and contribute the maximum allowed based on your spouse's income.
- Rebalance your portfolio: Now is a good time to check on your investment portfolio and see if you need to rebalance it. Over the course of the year, due to the changes in the market, the portfolio allocation might not be what you want based on your risk tolerance.
- Start your tax return and decide what moves you can make to minimize your taxes: It is always beneficial to start the tax return (based on your current paystub you can figure out the end of the year number roughly). This will help you decide which tax moves (#4 through #7 below) to make before the end of the year.
- Make your charitable contributions: From a pure financial point of view, will it be beneficial to make most of your donations in the year 2014 or push them to 2015? We take the standard deduction one year and itemized deductions in the next; so for us, pushing the donations to the itemized deduction year will make the most sense for our taxes. If you want to reduce your tax liability in 2014, you have to make your donations by December 31. Also, if you have any stock that has appreciated well over the years and you want to sell that without paying a big capital gains tax bill, consider donating the appreciated stock. You don't have to pay the tax and you can deduct the entire appreciated amount.
- Defer income (and taxes): Similar to the point above, if you are freelancer, you might be able to defer your income if you are trying to reduce your tax liability for this year. If you cannot defer income, can you defer (or advance) paying your other deductible taxes like property taxes?
- Take your minimum required distribution: If you are over 70 ½ years of age, you have to take the required minimum distribution (RMD) from your 401k or IRA before the end of the year -- otherwise, you will get a penalty bill from Uncle Sam. If you reached age 70 ½ this 2014, you have until April 1, 2015, to take 2014's RMD.
- Harvest tax losses: If you have a big capital gains bill, you might be able to reduce your tax liability by getting rid of some of your holdings that are trading well below what you paid for them (if you think they won't recover).
- Declutter your house: With all the entertaining you will be doing, you might already be on a decluttering spree. But it provides more advantages than a clean house. Set the stuff you don't want aside and drop it off at a Goodwill or similar organization to get a tax break by claiming the donations.
- Open a college savings plan: With college costs rising every year, any savings is better than none. Open a college savings plan and contribute as much as you can. As a bonus, you can share the college savings plan information with the grandparents so they can contribute to it as well. As of 2014, 34 states and the District of Columbia offer state tax deductions for contributions to a qualified 529 plan.
- Review the benefits you get via your employer: It is probably open enrollment season for many employers. Now is a good time to check out your HR website to see all of the discounts and savings you are eligible for (other than the major health insurance and retirement benefits). For example, if you are eligible for free gym access, that is something you can eliminate from your budget. Make a list of all the discounts that you can use and put it next to your computer so it's easy to check throughout the year.
- Review your health insurance plan and your 2014 health spending: Open enrollment season is also the best time to review this year's health spending. How much did you have to pay out of pocket? Is there a plan that will better suit your needs? What are the limits of your current plan? Have you taken advantage of those limits and fulfilled all of your medical needs? For example, you might be eligible for an extra pair of glasses before the year ends. Based on the review and your new plan, also see if you are eligible for a Flexible Spending Account. Figure out how much money you can set aside every month for your next year's needs. If you are hoping to get insurance via the Healthcare.gov open marketplace, the open enrollment started on November 15.
- Use up your Flexible Spending Account: Use it or lose it. If you have any money left over in your FSA, depending on the plan, you might have to use it before the end the year. Check you plan's deadline and make a plan to use up all the money.
- Do a self appraisal (career and personal): Even if you don't have to do an appraisal at work, I recommend doing it anyway. It serves three purposes: First, when it is time to ask for a promotion or raise, you will have a list of accomplishments ready; then, when it is time to look for a new job, it will be easy to update your resume by just collecting all the previous year's appraisals. Another thing to consider is whether you are happy with what you accomplished this year at work and make plans to improve next year. As far as a personal appraisal is concerned, evaluate whether you accomplished all the personal goals you set for yourself. If you didn't, can you identify why?
- Change your passwords: While this may not be considered a traditional money move, you may want to do this nonetheless, given all the hacking of bank accounts and credit cards in the news. It is a good idea to change all your passwords regularly anyway, and the end of the year is a good time to do it.
This article is by Suba Iyer, who currently writes for FiveCentNickel.com.
In 2009, I was all excited to start looking for a house to buy. I had been working in a well-paying job for almost five years at that point and I figured I shouldn't be throwing money down the drain renting. Well, reality came crashing down when I finally looked at my savings. It wasn't even enough to be a good emergency fund, let alone a down payment. In 2010, I set out to fix my finances. Month after month, I set up and revised my budget. I failed, month after month. I had the perfect budget and it should have worked. But after six months of this, I still was not saving any money. I had so many excuses for not making it work, too: If I were paid a little bit more, of course, it would be easy; I couldn't have a life being constrained with a budget, etc.
The year I met the man I would marry, we were living in different cities and hadn't spent much time together when Christmas came around. It was difficult to know what to give, how much to give, and how much to spend. I looked for inspiration. I consulted friends. I visited a lot of stores in search of a great gift. I ended up with a few gifts, some that I made myself and a couple that I purchased — a really nice, black sweater and some cologne. They were all warmly received; but later on, it became clear that the cologne would never be used. My guy just doesn't wear cologne. (Drat!)
It took about four years before anything was done about it. It had become part of the décor up on the shelf in the bathroom until one of his sons came to visit. A single hug gave me a whiff of his son's cologne and the wheels started to turn. I found a way to inquire about his cologne and learned that he really likes to wear some kind of scent. I made an inquiry of my fiancé to see if he would be okay with my giving his son the cologne. “Sure!” he said. Before his son left, I asked if he would like the bottle of cologne I had given to his father, and he was more than pleased to receive it. I didn't actually wrap it up and give it to him as a gift, but I was kind of acting like the re-gift broker in that deal. Technically speaking, I don't think it was re-gifting, but it's about the closest I've come to re-gifting anyway.
I can't say that I feel terribly comfortable with the idea of re-gifting. Usually, people put a lot of thought and, of course, their hard-earned money into the gifts they give. It seems like giving their gift to someone else would be very insensitive of their thought and effort. On the other hand, when I realized that my gift wasn't something my future husband would ever want or use, even I wanted to re-gift it to someone that would use and appreciate it. So I can see how re-gifting makes sense in certain circumstances. At least in our family, this felt comfortable and made everyone happier.
It's a really busy time, I know. But when Suba Iyer told me about how she closes out her year financially, I thought it would be of interest to the readers of Get Rich Slowly. So I asked if she would prepare an article and share her list with us - but in reviewing it, it appears she made it even more comprehensive! Suba currently writes for FiveCentNickel.com.
The new year is just around the corner. How was your 2014? Did you get everything you wanted to accomplish done? Are you getting ready to set new resolutions? Before you do that, spend a little time to finish 2014 with a bang. Here are some money moves you can make in 2014, whatever is left of it, to make full use of the current year and get set up to start the new year off on the right foot.
What smart money moves are you making before the ball drops?
The small, rectangular ceramic flower pots I kept in the two window sills of my bathroom had never budged an inch in the 14 years I owned the home, but one day I saw that one was close to falling out onto the counter below. I wondered if a small earthquake had caused it to move as I pushed it back in place. About a week later, I came home to find that the pot had actually fallen completely off the little ledge and onto the counter. This time I stopped to understand why, and I discovered that the small window was separated from the sill. I went outside. From there I could tell that the window had been pried from the house and someone had left a hacksaw on the ground. Evidently, I surprised whoever was trying to make their way into my home.
That day marked the end of my being blissfully unaware of the fact that there were people who were willing to commit crimes in my neighborhood. At the time, I was a single mom with a nine-year-old, and I felt a profound sense of terror. I locked the side gate and alerted my neighbors. The police couldn't lift any fingerprints, so nothing ever came of the incident except how it affected me. It wasn't long before I was interviewing home security companies.
I loved the system I chose. I could open the garage door and unlock the house from my key fob as I arrived home; I could even turn on the lights remotely or program them to come on automatically. If there was an intruder, a piercing alarm sounded and the security company would immediately notify police or the fire department if it was the smoke alarm.