Wednesday, August 25, 2010
Make your retirement dollars last!
By Sara Moore
Once you retire, it’s natural to worry about your finances. Here are 12 tips to help you budget your money so it lasts you throughout your retirement from co-author Eric Tyson of Personal Finance For Seniors For Dummies.
Use the 4 percent rule
Since many retirees need to live off a portion of their investment portfolio’s returns, the 4 percent rule should comes into play to make your money last. Your portfolio should last at least 30 years if you withdraw about 4 percent in the first year of retirement and then bump that amount up by a few percent per year for increases in the cost of living.
Save no more!
After you retire and stop earning employment income, one of the cash outflows that should go away is saving more money. “Some folks early in retirement continue to effectively save by not using all the money coming in,” says Tyson. “For example, from Social Security, pensions, and so on. They scrimp and save and do without when they don’t need to. If your retirement analysis shows that you don’t need to save anymore, then don’t. Use that income; after all, you’ve earned it!”
Consider supplementing your income with a reverse mortgage
If you own the same home during most of the decades of your adult life, you probably will have some decent equity accumulated in it. You may wish to tap that equity to supplement your retirement income. A reverse mortgage enables you to receive tax-free income through a loan on your home’s equity while still living in the home.
With reverse mortgages the lender pays you, and the accumulated loan balance and interest is paid off when your home is sold or you pass away. Here are the basic standards for eligibility:
*You, the homeowner, must be at least sixty-two years of age.
*You must use the home as your principal residence.
*You must have any outstanding debt against the home paid in full.
“Retirees we speak with who have taken a reverse mortgage generally say it has been a good experience for them,” says Tyson. “They often cite that the extra income allowed them to keep up a home’s maintenance, pay medical and other costs, avoid having to scrimp so much on things like eating out sometimes, and gain peace of mind not having to make house payments. However, reverse mortgages aren’t free of their downsides. The effective interest rate can easily jump into the double-digit realm if you stay only a few years into the loan. So as with any financial decision, do some research to determine if it is right for you.” (For more information on reverse mortgages, visit the AARP ebsite at aarp.org/revmort).
Thursday, July 29, 2010
The best way to buy insurance online
By Sara Moore
Insurance expert, Richard Reich of LifeInsure.com, tells us what to look for when buying insurance online. “One giant pitfall is that many companies and broker sites require that people enter their names, email addresses and phone numbers,” he said. “This almost always leads to your email box filling up and your phone ringing off the hook as multiple agents contact you to buy policies. Other sites show customers low quotes that may be unrealistic, and then requote to higher rates as they get more information from the customer.”
Choose a website that has multiple insurance companies
When you get a quote from a single insurance company, all you’re getting is that one insurance company’s idea of what you can pay. There is no competitive analysis that you can do with a single quote. Moreover, you could wind up getting inundated with emails and calls from that company to see you about that one policy. The way to win at online insurance shopping is to get multiple quotes, without having to give up your personal information.
Check financial ratings and strength
The recent financial crisis hit a great number of the major insurance companies, so don’t choose based on reputation alone. Check their financial strength ratings with consumer advocate sites as well as financial ratings companies like A.M. Best. Many of the ratings of reputable firms may have changed during the recession. Also, consumer advocacy sites rate firms based on customer service, which is a key component of buying insurance. Getting a good rate is important, but if the customer service lags, then what are you really paying for?
Tuesday, April 06, 2010
Maximize your tax return
By Julie Wiegan
If you’re looking to get your taxes done by a professional, there are a few simple things your tax preparer should know. Roni Deutch, tax expert and author of The Tax Lady’s Guide to Beating the IRS: And Saving Big Bucks on Your Taxes shares her top 5 tips that will help you get the maximum return.
Family Changes
If you got married, divorced, had a child, had a kid start daycare, had a kid start college, or took in a relative, your tax preparer needs to know! Few things impact your taxes more than a change in your family.
Home Changes
In these unstable times, taxpayers’ housing situations change often. This can impact the deductions you are allowed to claim and could cost you thousands in credits if you forget to bring it up.
Monday, January 04, 2010
The Coupon Mom’s Guide to Cutting Your Grocery Bills in Half
By Sara Moore
Keep your New Year’s resolution to stay on track with your finances by learning how to save on your grocery bills. Stephanie Nelson, creator of CouponMom.com, is out with a new book The Coupon Mom’s Guide to Cutting Your Grocery Bills in Half to show us how we can save big. Here are some money saving tips from her book.
Pick a Day to Shop
Pick one day a week to shop. This will help you make a comprehensive shopping list to plan your week’s meals and snacks carefully. By planning ahead, you will save time and money by not taking unnecessary shopping trips mid-week.
Compare Prices
Compare prices for your common items at a few nearby stores and cherry-pick the deals if necessary. Nelson finds the lowest prices on fresh produce and pantry basics at local discount stores and buys the rest of her week’s groceries at a typical supermarket using sales, loss leaders, “Buy one, get one free” offers and doubled coupons.
Thursday, December 24, 2009
The time to buy a car is now!
In the market for a new car? Well, your timing couldn’t be better, Christmas Eve and New Year’s Eve are two of the best days to purchase a new car at a great price. “December is the best month to buy a car this year and there are almost 60 vehicles with expected discounts over 15% off MSRP in December,” says analyst Jesse Toprak of TrueCar.com.
Hybrid cars such as the 2009 Saturn Aura Hybrid, 2009 Nissan Altima Hybrid, and the 2009 Saturn VUE Hybrid are all expected to sell 17% or more off the sticker price. Family cars like the 2009 Nissan Quest, 2009 Ford Explorer, 2009 Cadillac Escalade, and 2009 Lincoln Navigator L are expected to sell more than 15% off sticker. If you’re into big cars, the 2009 HUMMER H3 is expected to sell at 28% off MSRP.
Here is a full list of expected savings compiled by TrueCar.com (Year/Make/Model; MSRP; % Discount off MSRP):
2009 Saab 9-7X
$43,390
31%
2009 HUMMER H3
$34,170
28%
2009 Mitsubishi Raider
$21,875
27%
2009 Suzuki SX4
$13,994
26%