Category Archives: Money

Should You Sell Your Home When You Retire?

Should You Sell Your Home When You Retire?

Retirement is the gateway to the golden years. Most of us can’t wait to get there and are busy making plans for that exciting time. One question that often comes up during the planning phase is whether to sell your home when retiring. Benefits include lower costs for a smaller home, less maintenance and upkeep to rent rather than own, and reduced taxes and insurance if you buy a smaller place unless the property is more valuable. While the decision is individualized based on personal circumstances, the following may be helpful in considering this important lifestyle step.

Family Size

Much depends on who will be sharing the living space. A spouse, dependent children, or live-in aging parents will need to be considered in the downsizing decision. Even if the kids are grown, you may continue to need plenty of living area if you plan to care for grandchildren. Hosting parties or family gatherings is another consideration. Although you could meet at someone else’s house or at a public venue like a restaurant if your new residence is too small, this is something to think about before deciding whether to move.

Convenience

If your current home has an attached garage, a main floor laundry room, and comfortable living space, you may not want to move to another place that lacks these amenities. Owning your own home with a private yard and parking area is usually preferable to listening to neighbors squabble and competing for the best parking spots in the adjacent lot. Moving to a new neighborhood is an adjustment, as well, especially if you go from rural to suburban, or suburban to urban, and from a farmhouse to a penthouse. Nearby supermarkets and other shopping areas should also be considered. The transition can be made, but it is worth preparing for to do it well.

Health and Safety

Moving to a lower-income area may entail greater risk of becoming a crime victim through assault or robbery. Look for a community that is secure and relatively crime-free. It is also important to consider factors like air pollution or traffic noise, as well as closeness of the housing units, to maintain your personal privacy, comfort, and well-being. If you plan to walk outdoors for exercise in a new area, you will want to find a level walking area that is safe. Find out where the nearest urgent care center and hospital are located in case they are needed.

Socialization

Most of us prefer to live among like-minded individuals, especially as we age. However, it can be socially stimulating to move to a new area where people are different from us and each other. In addition to friends and social activities you already enjoy, check out the neighbors and available social venues to see if there are any of interest. Decide if friends and family will be able to easily drive to your new location for visits and holidays.

Retirement brings many wonderful opportunities to try new things and even embrace a whole new lifestyle. Selling your current home for another one, usually a smaller one due to a change in income following retirement, requires thought and care. Before listing your home on the market, decide whether you can comfortably adjust to the many changes that will come with apartment living or moving to a smaller home possibly in a different community.

Reasons to Keep Your Finances Separate in a Relationship

Reasons to Keep Your Finances Separate in a RelationshipWhen relationships start to get serious the urge is generally to start merging lives completely. While that works in certain aspects, it might not be the smartest option when it comes to finances. The average age of marrying is later than ever, which means that people are used to having some financial independence. Money can be a hot topic. Here are some reasons to consider keeping your finances separate.

In Case things Don’t Work Out

You never want to assume the worst from the start, but the truth is that many relationships don’t last forever. If for some reason yours doesn’t, it will be easier to part ways without having to untangle all the money. Another side to this is the importance of keeping financial independence. When the money is all shared the concept of getting away from a bad relationship might feel overwhelming. It can be a more empowering choice for each person in the relationship to have their independence in that sense so that decisions to stay or go are more clear-cut and not made out of desperation.

The Freedom to Make Your Own Purchases

Couples should consult each other on major purchases and important financial decisions, but at the same time no one wants to feel like their significant other is their parent. Asking for permission to spend money on smaller things like personal maintenance or clothing might feel unnatural after some time spent being comfortable living a life on your own terms. Even if your significant other isn’t pestering you about your spending, you might start to feel guilty for spending anything at all since it always feels like taking from the shared pot.

If you keep your own accounts you will be free to spend little amounts of money here and there without having to explain it when the bank statement comes. This is also beneficial when you’re trying to plan a surprise or buy a gift. It’s almost impossible to keep something like a birthday trip secret from someone when you’re sharing a joint bank account.

Less Fighting

It’s not uncommon for “spenders” and “savers” to come together in a relationship. While neither of those styles is necessarily wrong they sure can feel like it when it’s the opposite of your belief. Having separate bank accounts with your own money in a relationship is going to allow both parties to be themselves without the constant worry of how it’s affecting the household.

But for that to work, it’s best to have three total accounts, the two individual and then one shared. The shared bank account should be for shared expenses and parties should contribute a fair percentage based on their earnings. That way there’s a stable place in the middle with a little more flexibility on the edges.

Remember that keeping separate money is not intended to keep distance in the relationship, it’s intended to keep the peace. It’s still important to be open and honest about finances overall to avoid any financial mishaps, as well as to promote the habit of authentic honesty in a relationship.

Marriage Is Different

These rules are relevant when you’re dating, but when you get married, you may want to reconsider merging your finances. Personally, we have joint bank accounts and it’s worked out great for us (we didn’t merge until we were married). It keeps us accountable to each other, and know where we stand financially. Every relationship is different, but keep these tips in mind as maybe they’re the key to getting there!

5 Ways to Contribute More to Your Retirement Plan

5 Ways to Contribute More to Your Retirement PlanIt’s never too early to start planning for retirement, but if you haven’t started yet, it’s not too late to contribute to your retirement plan and make up for lost time. Life gets pretty expensive, and the more you’ve padded your retirement fund early on, the less you’ll need to worry about covering your costs as you get older and prepare to retire.

But let’s face it – saving money for retirement can be downright challenging. Still, setting money aside for your retirement fund is crucial and deserves your full attention. Luckily, there are some simple strategies that you can employ to help you save up and beef up your contributions to your retirement fund so you can enjoy a nice financial cushion when you reach retirement.

1. Automate Your Savings To Your Retirement Plan

It’s tough to part with your money, yet setting aside a certain percentage of your income every month is extremely helpful in growing your retirement fund. Rather than manually transferring money from your checking into your retirement account each month, consider automating your savings instead. Most financial institutions allow their customers to make regular contributions every month. This is a great way to stick to your plan, and you won’t have to think twice about it.

2. Contribute to a 401(k)

If your employer offers a 401(k) plan, you can contribute pre-tax money to it. Contributions come out of your paycheck before taxes are taken out. If your company also offers a Roth 401(k), your contributions will be coming from your after-tax income, in which case you would should compare your tax bracket now to what you expect it to be in retirement to determine if this is the right option for you.

3. Meet Your Employer Matches

If the company you work for offers to match your 401(k) plan, take advantage of this perk by contributing! For instance, let’s say your employer offers to match half of your contributions up to 4% of your salary. If you make $60,000 per year and contribute $2,000 towards your 401(k), your employer would throw in another $1,000. This is a great way to get some support in building your retirement fund. Make sure you contribute enough to get the full match or you’ll be throwing money away!

4. Open an Individual Retirement Account (IRA)

Establishing an IRA is another great way to fund your retirement plan. With a traditional IRA, you might be able to get a tax break and grow your investment earnings tax-deferred until it’s time to withdraw the money when you’re retired. Roth IRAs are a great option if you’re young and just getting started in your career. They offer flexibility (withdrawals of principal can be made at any time), and if you’re in a low tax bracket now and expect to be in a higher one in retirement, it could save you big on taxes. Even my baby daughter has a Roth IRA!

5. Make Catch-Up Contributions if You’re 50 or Older

You’re limited in your annual contributions to 401(K)s and IRAs. But after you reach the age of 50, you can contribute more than the standard limit with catch-up contributions. If you did not start saving early, you can take advantage of this offer to help boost your retirement savings.

Understanding the importance of saving for your nest egg is crucial. Calculate how much you need to save up to live comfortably in retirement, and take advantage of creative ways to increase your contributions when you have the chance.