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When you retire, your income will most probably be lower than when you were working, and while your expenses will be lower in some areas — no more commuting — they'll be higher in others — more prescriptions and doctors' visits.
Home renovations and improvements can be costly, running tens of thousands of dollars. Fortunately, you can borrow against your home’s equity to finance the cost of these projects. And you have two main options when deciding how to best do this, both involving home equity.
When you take out a mortgage loan, you’ll have to pay closing costs, the fees that your lender and other third-party companies charge for originating your home loan. These fees can run thousands of dollars, and you’ll typically have the option to pay them upfront as a single payment or roll them into your total mortgage amount and pay them back with your regular payments. Which choice is best? As usual, it depends on your financial situation.
If you own property and assets or have loved ones who depend on you to provide income or care, you should have an estate plan. However, some people hesitate to create one, fearing that taxes will eat up the lion's share of their estate. But even though estate taxes are real and rates are high, topping out at 40%, only people with estates worth many millions of dollars are affected by federal estate taxes. The few estates that pay estate tax generally pay less than one-sixth the value of their estate in tax. Further, only the wealthiest 0.2% of Americans owe any estate tax because of the high exemption amount — $13.61 million per person.
What's involved in financial planning? Your cash flow, savings, debt, investments, insurance and other such elements of your financial life. Financial planning also impacts estate planning. It's an ongoing process.
It is difficult — but not impossible — to find funding for a business in volatile economic times: Some investors are always looking for new opportunities. These investors might find a business attractive if it is in a sector that is robust or poised for growth. Investors also consider attractive a solid business plan with achievable goals, a talented leadership team and solid financials. Careful planning and preparation may connect investors to your company.
There are two kinds of 529 plans: prepaid tuition plans and savings plans. Prepaid tuition plans (available in only nine states) allow you to pay current tuition rates for future attendance at designated colleges and universities; they are a way to lock in a lower cost for college attendance. The savings plans allow you to save for education on a tax-deferred basis; additionally, withdrawals from the plan are tax free when they are used for qualifying education expenses.
You may have many questions about working after retirement. Can you still contribute to retirement accounts? How does working affect your required minimum distributions?
Accredited investors have special status allowing them to make investments in unregulated securities — an early-stage business or certain commercial real estate opportunities, for instance. A popular example of an accredited investor is a so-called angel investor, one who funds a promising startup. A later stage private company or even a smaller public company seeking liquidity might also seek accredited investors, though they do not usually choose to do so.
Once you reach a certain age, you must take an annual required minimum distribution, which is a payout from your traditional IRA, 401(k) or other retirement account. The required amount is calculated based on your age and the account balance.
The SECURE — Setting Every Community Up for Retirement Enhancement — Act was passed in 2019. After that, SECURE Act 2.0 was passed in December 2022 and went into effect Jan. 1, 2023.
First you need to understand what a cash-out refinance is. In such a refinance, you swap your existing mortgage loan for a new mortgage in which you borrow a higher amount. You use the found cash to pay for whatever you'd like.
The first thing to keep in mind is that in the overall scheme, inevitable short-term fluctuations in the market mean nothing. At the very least, they can make us uncomfortable or downright queasy as well as waste our time. At worst, high-frequency monitoring can lure investors into counterproductive actions that can end up costing them serious money. It is more effective to keep calm, carry on and work with professionals. Don't follow the Dow Jones daily and wonder whether your long-term plans are going off the rails.
You did it. You made it to retirement. That light at the end of the career tunnel is within your reach now, and it's no bad days ahead. Sure, you're ready, you have trips planned in between days of no alarm clocks, and life is good. Before you slice the au revoir cake, here are a few last-minute retirement items to consider before the work party concludes.
One of the big investing stories of 2020 involved Robinhood and similar companies, which offer free or low-cost trades. Although such companies may claim to democratize investing, critics say these apps can "gamify" investing and encourage short-term excitement over long-term plans. For example, when users make their first trades, digital confetti falls in the app. It also includes a watch list of stocks for users to track. Robinhood's investment app stands out for offering a streamlined trading platform and free cryptocurrency trading. Its account minimum is $0.
With age, the focus often turns from planning for the purchase of a bigger home to planning to have enough income to live well after retirement. Many factors contribute to this calculation, but following are four common considerations:
If you need to access your money in the near future, you'll want a good short-term investment. What are the best ways to maximize profits and minimize risk if you want to invest the extra cash you have?
Have you ever worried about medical costs consuming your savings? Rising medical costs and longer life expectancies are making this a concern for many. There are some government programs like Medicaid and Medicare that can help cover some expenses of long-term care. However, there are restrictions on what is covered and qualifying for these programs may only be possible after you have used all your personal savings.
Maybe your job, even your entire sector, has disappeared in 2020's economic turmoil. Or perhaps you are just reaching a point at which you are ready to take the next step in your life. It's possible you want to leave your corporate job for something more creative where you can make your own hours. Or you'd like to focus only on non-income-producing hobbies. Another option is focusing on working in spurts and traveling in between. If you're thinking that early retirement is something that can happen now — or within a few years but before the "magic" age of 65 — consider your options.
Dollar-cost averaging is an investment strategy to build savings over the long term. So, if you are worried about money for retirement, this may be something to consider. Not everyone has money to spare in tough times to put into a 401(k) account, but if you do, you can reap great rewards by staying with the program.
If you're serious about paying off your mortgage quickly, realize that every dollar you add to your regular payment each month puts a bigger dent in your principal balance — and you don't have to double-down to make a difference. Adding even one extra payment each year knocks years off your mortgage.
The COVID-19 pandemic is affecting all aspects of finances, including retirement savings. The CARES Act contains provisions affecting these plans that will remain in effect for 2020. They include the following:
The supply chain issues created by the COVID-19 pandemic are challenging businesses in ways they have never considered. Some of these changes will — and probably should — remain in place after the immediate crisis is over. This means businesses need to react to what is happening today at the same time they are developing steps to be proactive moving forward, after this emergency is over.
Caregiving issues often cause arguments among adult siblings because, after all, it's an emotionally charged issue. Questions like who takes in an elder and whether can they be relied upon to drive are thorny.
As you evaluate your investments, you likely are asking a few essential questions: How close are you to reaching your financial goals? Are you prepared to fund your children's college? Are you ready to take the vacation of your dreams? What about your retirement?
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