Money Management

Just because you’re retired doesn’t mean you no longer need credit. Here’s why your credit score still matters as a senior. [[{“value”:”

When you become a retiree, a lot changes about your personal finances. But what doesn’t change is the need for a good credit score.

Hard as it may be to believe, your credit score is still going to matter very much, even as you get older. Here are a few key reasons why you still need to care about this three-digit number after leaving the workforce and starting to live the rest of your life without an employer to answer to.

1. Seniors still need auto insurance

As you get older, you’re still going to need auto insurance. Unfortunately, once you reach about age 75, policies start to get more expensive because seniors are statistically the riskiest group to insure, other than very young drivers.

If you don’t have good credit, auto insurance premiums — which are already likely to climb — are going to be even higher. In fact, while the average car insurance premium is $3,017, drivers with excellent credit pay an average of $1,947 and drivers with poor credit pay $4,145 on average. Credit score affects auto insurance premiums because drivers with lower scores are seen as presenting a higher accident risk based on statistics insurers collect.

You don’t want to needlessly increase your auto insurance costs, so it’s best to try to maintain as high of a credit score as possible throughout the entirety of your life — even in your later years.

2. Seniors still need a place to live

You’re still going to need a home as a senior — and your credit can play a role in where you’re allowed to go. Say, for example, you decide to downsize by selling your family home and moving into an apartment. Your would-be landlord is going to check your credit and you may not be approved for your preferred place if you have a low score.

Now, if you’re a homeowner and plan to stay one, your credit could still be important to you as well. Close to 50% of homeowners between 64 and 79 still have a mortgage, and if you have one, you may want to refinance at some point to take advantage of a lower rate. Or you may want to downsize to a smaller home, but still need a loan to afford it. Your credit score plays a crucial role in determining if you can get a mortgage as a retiree and what rate you’ll pay.

You don’t want to be limited in your housing options because of low credit, so keep working on earning and maintaining a solid credit score.

3. Seniors may still need car loans

Auto debt per capita among seniors 70 and older is on the rise, increasing 73% between 2007 and 2017. As people live longer and remain independent longer, many more retirees end up needing to buy vehicles — often because the cars they retire with wear out before they do.

If you don’t want to just take a huge amount of money out of your retirement accounts, you may need an auto loan in order to be able to buy a car at an affordable price. And while there are bad credit auto loans out there, seniors with good credit tend to be able to have more choice of lenders and to qualify for lower rates.

The reality is, your credit score impacts almost every aspect of your budget and overall financial life — and you’ll keep having both in retirement. So pay your bills on time, avoid maxing out your credit cards, and maintain a good mix of credit so you can keep a good score that lets you do more of the things you want as a retiree.

Alert: our top-rated cash back card now has 0% intro APR until 2025

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a lengthy 0% intro APR period, a cash back rate of up to 5%, and all somehow for no annual fee! Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

“}]] Read More 

Based on recent economic data, the Fed might not cut interest rates anytime soon in 2024. See what this means for your savings account and other money choices. [[{“value”:”

Just a few months ago, most financial experts agreed that the Federal Reserve would cut interest rates in 2024. After raising interest rates rapidly in 2022, and keeping rates high throughout 2023, most observers (and even many of the Fed’s decision-makers, apparently) believed that 2024 would be the time for interest rate cuts.

But as of April 10, 2024, the Fed has not cut interest rates. Is anyone else starting to feel like the Fed is just…not going to cut interest rates at all in 2024?

Let’s look at the latest insights on when (or if) the Fed will cut interest rates this year, and what it might mean for your finances.

Why hasn’t the Fed cut interest rates yet?

The latest consensus I’m seeing based on Bloomberg reporting is: Instead of four interest rate cuts of 25 basis points (0.25% each) for a total of 1.00% in 2024, we now might only see three cuts (0.75%) or two cuts (0.50% total). And no cuts have happened yet! June 2024 could be the soonest interest rate cuts happen, but there are no guarantees.

Why is this happening? There are two reasons why the Fed isn’t cutting interest rates; one is bad news and one is good news. First, the bad news:

Bad news: Inflation is still too high

Inflation is still a little too high. The Fed wanted to see price inflation come down a bit further before it started cutting interest rates. But the latest consumer price data is still showing signs of high food prices, high oil prices, and other high prices. Part of the inflation numbers are being driven by larger global economic trends and supply chain uncertainty: the Baltimore port closure and bridge collapse could make it harder (and more expensive) to ship products to America, and ongoing conflict in Ukraine and the Middle East could keep driving up the price of oil.

But there is good news here, too:

Good news: The economy is “too good” for rate cuts

The economy is performing stronger than most analysts expected after such a long time with high interest rates. The Fed was trying to slow inflation without hurting the economy or causing higher unemployment; this ideal outcome is called a “soft landing.”

Despite some ongoing trouble spots and impatience with inflation, the Fed seems to have succeeded in shepherding a “soft landing” for the U.S. economy. Unemployment is still below 4%, and wages are rising faster than inflation — so almost everyone has a job, and lots of Americans are getting a bit richer with each paycheck, even if they don’t always feel that way.

Could the Fed just…not cut interest rates at all, and leave interest rates at their current level of 5.25%-5.50%? Nothing lasts forever in economics or monetary policy. But if you were counting on an interest rate cut to make financial decisions for 2024, you might be waiting a while longer.

Here are a few ideas for money moves you can make now, even if the Fed doesn’t cut interest rates in 2024.

Open a high-yield savings account

The best savings accounts are paying over 5.00% APY, and if the Fed doesn’t cut interest rates in 2024, banks will keep offering those high APYs for your cash. Some people have been curious about opening a CD in 2024, based on the idea that the Fed was about to cut interest rates. But if the Fed doesn’t cut rates anytime soon, that makes opening a CD a less clear-cut “good move.”

There’s nothing wrong with keeping cash in the bank, especially if you’re earning interest that’s almost as high as the best CD rates. If the Fed keeps interest rates “higher for longer,” the best savings accounts are going to look even better.

Buy a home (or car) if the time is right for you

Some potential home buyers and car shoppers were hoping to see rate cuts in 2024 so their costs of borrowing would come down. If interest rates stay high on mortgages and auto loans, consumers will have less buying power. Does that mean 2024 is a bad time to buy a home or a car?

Deciding when to buy a vehicle or home is more complex than just the APR on your loan. Try to make the right decision based on where you are in your life — if you need a more reliable vehicle to get to work, or if you’re ready to move to a new neighborhood or bigger house, “now” could be the best time. Don’t wait for the Fed’s permission to live your life.

Keep investing for retirement

If the Fed doesn’t cut interest rates, could the stock market go down? There are no guarantees either way. Stocks go up and down for infinitely complicated reasons, and investors need to just try to keep investing through all the uncertainty.

If you’re a long-term investor who’s trying to build wealth for the future and save for retirement, the Fed’s latest moves on interest rates should not be a big part of your decisions about when and how much to invest in buying stocks.

Bottom line

The latest interest rate situation makes for constant discussion in the headlines, but unless you’re a bond trader, you shouldn’t let the Fed affect your daily plans. Keep putting money into the best savings accounts (or even some of the best CDs). Keep investing (and borrowing, if needed) based on your long-term goals.

These savings accounts are FDIC insured and could earn you 11x your bank

Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts could earn you 11x the national average savings account rate. Click here to uncover the best-in-class accounts that landed a spot on our short list of the best savings accounts for 2024.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

“}]] Read More 

Women tend to live longer but earn less, putting them at a big disadvantage when it comes to retirement. Find out how you can beat the statistics. [[{“value”:”

It’s never easy to talk about unexpected truths because we all have different expectations and ideas of what is true. For example, you may or may not be surprised to learn that women’s portfolios often outperform men’s. Or that almost half the women in one survey said they aren’t sure how to invest.

Sadly, one all-too-expected truth about women and money is that we have less of it. You can thank the gender pay gap and career interruptions for that. Let’s dive into some truths about women and investing and what you can do about them.

1. Women get better results when they invest

Research by Fidelity looked at the results of over 5 million customers over a 10-year period. It found women’s portfolios performed 0.4% better than men’s. Several other studies show the same thing.

More good news? The number of women who are saving for their retirement is on the rise. Fidelity’s research shows that 68% of women were putting money aside for retirement in 2023. This is up from 66% in 2019.

What this means for you

It’s certainly reassuring to know there are more female investors, and that they do well. Even so, if you’re nervous about investing, you’re not alone. You don’t need a degree in finance to invest. In fact, it may well be easier than you imagine. Try looking for podcasts and books that speak to you — there are more and more of them around. You could also check out this beginner’s guide to investing.

I used to think I needed to be able to analyze stocks and understand charting tools before I could invest. I was wrong. If you don’t have the time (or the desire) to learn how to evaluate stocks, you could instead buy an exchange-traded fund (ETF) or index fund. For example, an S&P 500 index fund will give you exposure to the top 500 companies in the U.S. This is a relatively low-risk way to build a diversified portfolio.

2. Women have less money to invest

On average, women will earn less in their lifetimes than men. This makes it harder to put money aside in a savings account and hampers their ability to invest for the future. Women earn about $0.83 for every $1 a man earns, per data from the Bureau of Labor Statistics.

On top of this, women are more likely to take time out to care for children. Indeed, 44% of women told Fidelity they are caregivers in one way or another. Research by the Urban Institute estimates the average cost of providing unpaid care to children, parents, and others at $295,000 over a lifetime.

What this means for you

We can push for greater wage transparency and equal wages. Unfortunately, none of us can single-handedly change the gender pay gap. One way you can make the most of any money you do invest is to use tax-advantaged accounts. It won’t fix gender inequality, but it could give you a bit more in your bank account in your twilight years.

Find out if your company has a 401(k) plan. Talk to your HR department to find out how it works and how you can contribute. 401(k)s can be a double win — not only are there tax benefits attached to them but many companies will also match the money you put in.

It’s also worth understanding how individual retirement accounts (IRAs) work and which account makes sense for you. Some will save you money on your taxes now, while others let you make tax-free withdrawals in your old age. Most top stock brokers offer different types of IRAs.

3. On average, women live longer

The Centers for Disease Control and Prevention puts the life expectancy for women at 79.3 years and men at 73.5 years. You might assume that living longer is a good thing. It is. The challenge is how you can do it comfortably, particularly if you need to cover medical and care bills.

Put simply, many women will retire with less money and need to stretch what they have for longer. Census data shows that almost half of women aged 55 to 66 have no personal retirement savings. If you live to be almost 80 or more, it may be hard to stay afloat financially if you don’t have money put aside.

What this means for you

Whatever age you are, the sooner you start planning for retirement, the better. Think about what kind of life you want to have and plot out some of the costs involved. Check out this retirement planning guide for more information. Putting finances to one side, healthy eating and regular exercise can go a long way to reducing health issues further down the line.

If your retirement savings aren’t where you want them to be, it can feel like you’re at the bottom of a steep mountain. Don’t let that put you off. Sit down with your budget and see if you can save even a small percentage of your income. Some financial advisors suggest putting 10% to 15% toward retirement. If that feels impossible, perhaps you could start with 1% and build from there.

Key takeaway

The financial deck is stacked against women, particularly when it comes to old age. We earn less, are more likely to take time out to care for others, and may well live longer. It is all too easy to get disheartened and wind up doing nothing. Instead, focus on the steps you are able to take. Set yourself achievable goals and celebrate when you reach them.

Alert: our top-rated cash back card now has 0% intro APR until 2025

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a lengthy 0% intro APR period, a cash back rate of up to 5%, and all somehow for no annual fee! Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Emma Newbery has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

“}]] Read More 

I knew that shopping at Costco provided value, but I was shocked that I managed to save almost $100 on my first trip to the store. Learn how I did it. [[{“value”:”

Folks love Costco. Some are even downright passionate about it. And after purchasing my own Gold Star membership just recently and making my first trip to the store, I’m starting to see why.

I was excited about my first shopping adventure at Costco. So excited, in fact, that I probably went a bit overboard and ended up leaving the store with a total tab of more than $250. Eek. But as it turns out, I managed to save almost $100 in just one visit. That means my $60 annual membership more than paid for itself already. Outstanding! Find out how I calculated my savings and how you can form your own cost comparison to discover how much Costco is saving YOU.

RELATED: Best Budgeting Apps

Per-unit costs are the ticket

Costco is known for selling goods in bulk (though not all of Costco’s perks come in the form of bulk goodies). So while you might pick up a package of 20 to 60 dishwasher tabs at your local grocery store, at Costco you can find packages of more than 100. But it’s not the size of the package that matters, it’s the value you get from buying items in bulk. You can definitely save by stocking up on household goods and shelf-stable pantry items that don’t expire (or at least don’t expire quickly) at Costco.

To illustrate this, I’ve calculated how much a selection of items cost per unit (a single ounce, single sheet, single pod, etc) at Costco and at my usual grocery store (Meijer). Then, I calculate how much the same number of units I got from Costco would cost at my regular grocery store. This determines how much I saved per item by buying in bulk. You can do this for each item on your own grocery list to calculate your total Costco savings.

For simplicity’s sake, I chose just 10 staple items off my receipt (and STILL managed to come out to nearly $100 in savings!). Note that in my comparison, all Costco items purchased were the Kirkland Signature store brand, so when possible, I compared them to Meijer’s store brand item prices.

That’s $96.24 in savings, on just those 10 items! As you can see, my savings on some items – like the rotisserie chicken and extra virgin olive oil – were negligible, but they were savings nonetheless.

Other items are just far and away a better deal at Costco, like laundry pods, dishwasher tabs, and trash bags! You don’t have to worry about these items going bad, so if you’ve got the space, it makes sense to stock up and reap the savings. Any extra cash you save at Costco can go to pad your emergency savings fund or to shore up your savings account.

My final mentionable point from this cost comparison is that while I said above that I compared prices using Meijer-brand items, Meijer does not carry a store-brand laundry pod, so in this case I chose the cheapest option I could find at the store. This turned out to be Tide brand pods in Original scent, 112 count for $27.99, or approximately $0.25 per pod.

Calculate your own cost savings

Figuring out how much you’re saving (or could save) by shopping at Costco is easy. To calculate an item’s per-unit price, just take the item’s total price and divide by the number of units. For example, for 48 ounces of raw honey from Costco, I take $12.99 and divide it by 48. That gives us a per-unit cost of $0.27 per ounce. Meijer charges $11.99 for 32 ounces, so that works out to approx $0.37 per ounce.

Your calculations could stop there, as you can already see that each unit of honey at Costco is cheaper. But to determine how much you saved by buying all 48 ounces of that honey, you’d have to take your number of units (48) and multiply by the per-unit price of your comparison, in this case, $0.37. That tells us that to buy 48 ounces of comparable honey at Meijer, you’d spend the $17.76 you find in our “Meijer equivalent” column in the table above.

If you’re like me, perhaps math is not your favorite subject, nor a particular strong suit. But these calculations are fairly simple to do, and they can be incredibly eye-opening to show you just how worth it your Costco membership can be for your family’s personal finances.

Alert: our top-rated cash back card now has 0% intro APR until 2025

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a lengthy 0% intro APR period, a cash back rate of up to 5%, and all somehow for no annual fee! Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Discover Financial Services is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool recommends Discover Financial Services. The Motley Fool has a disclosure policy.

“}]] Read More 

Your tax refund might help you put different types of essential insurance in place. Read on to learn more. [[{“value”:”

As of March 29, the average tax refund issued during the 2024 filing season was $3,050. And since the season isn’t quite over, that number still has the potential to wiggle a bit.

If you filed your taxes already, you may be anticipating a nice refund check any day now. And if so, it’s important to put that money to good use.

But should you use your tax refund to buy insurance? It depends.

First, take care of your emergency fund

No matter your situation, your primary financial priority should be to have a fully loaded emergency fund. If you don’t have enough money in your savings to cover a minimum of three full months of essential expenses, then any funds you receive in tax refund form should really go directly into the bank.

Without emergency savings, you might quickly end up with costly debt on your hands should something go wrong in your life, whether it’s an issue with your car, your home, or your job. So if you’re sitting on, say, a savings balance of $700 and your refund comes in at $3,000, you should immediately aim to bring that balance up to $3,700.

Consider insurance if you’re set with emergency savings

Recent data from Assurance finds that 29% of tax refund recipients are considering using that money to pay for insurance. So if you’re in a good place with emergency savings, you may want to allocate your tax refund to insurance, too.

Your primary focus there should be medical insurance if you don’t have a policy already. Without health coverage, you could face astronomical costs in the event you’re injured and need hospital care. Plus, you never know when you might fall ill and need a series of expensive diagnostic tests. Without insurance, you may be looking at high costs to get the care you need. Or, worse yet, you might skimp on the care you need, compromising your health.

If you’re set on health insurance, there may be other types of insurance it makes sense to use your tax refund for. If you have people in your life who depend on you financially, for example, then life insurance could offer them a world of protection — and give you peace of mind. And if you only have a small life insurance policy in place already, you may want to use your refund to buy more insurance so your family is adequately covered.

Meanwhile, if you have pets at home, another good use of your tax refund may be to buy pet insurance. Without it, you could end up facing exorbitantly high bills in the event that your pet gets injured or sick.

Don’t just spend your tax refund

It’s easy to look at a tax refund as found money. But actually, it’s money you earned that the IRS withheld from you instead of letting you keep, so now it’s giving it back.

It’s important to use that money to address your financial needs. That could mean using your refund to build yourself a safety net in the form of emergency savings. But if you’re all set on emergency cash reserves, spending your refund on insurance could be a great way to make the most of it.

Our best car insurance companies for 2024

Ready to shop for car insurance? Whether you’re focused on price, claims handling, or customer service, we’ve researched insurers nationwide to provide our best-in-class picks for car insurance coverage. Read our free expert review today to get started.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

“}]] Read More