Money Management

Retirement planning is an important part of preparing for the future. Learn about the unexpected challenges you may face as you plan for retirement. [[{“value”:”

No one wants to struggle with money after they retire. The best way to avoid that is retirement planning. Social Security benefits only replace about 40% of pre-retirement earnings, on average. If you rely on that, then money will be tight. By planning ahead and saving diligently, you can help ensure you have enough to live comfortably.

You may already have a good idea of how to plan for retirement. Even so, there are a few unexpected struggles that could come up along the way.

1. It’s impossible to predict how long retirement will last

The average retirement length in the United States is 18.6 years for men and 21.3 years for women, according to retirement data gathered by The Motley Fool. Based on that, it’d be reasonable to assume you need to save enough for 20 to 25 years.

But maybe you decide to retire earlier than you originally planned. Americans retire five years earlier than they expect, on average. And you could live well into your 80s or even your 90s. It’s possible your retirement could last 30 years or longer.

While that’s a good thing, it increases your risk of outliving your savings. Your retirement plans will need to account for the possibility of an extended retirement. You may need to save more, but it’s better than being forced to fill out job applications at 85.

A popular guideline by Fidelity recommends saving 10 times your annual salary by age 67. That’s just one recommendation, and not everyone needs that much. Still, make sure to plan for a lengthy retirement to play it safe.

2. You may need to financially support family members

The best way to save for retirement is to make it a habit. Contribute a portion of your income to your retirement accounts every month — ideally at least 10% of what you make.

Consistency is key here. But as you get older, you may find yourself juggling other obligations that make it harder to stay on track with your retirement savings. You could decide you want to provide financial support to your parents. Or you could end up supporting your children for longer than you expected. Maybe you decide to help them with grad school or a down payment on a home.

About a quarter (23%) of U.S. adults wind up in what’s known as the “sandwich generation,” according to Pew Research. They provide support to parents 65 or older while either raising children or supporting adult children.

It’s natural to want to help your family. If you choose to do so, don’t let it keep you from saving for retirement. You need to ensure you’re taken care of as well.

3. Lifestyle creep could increase your savings needs

I remember when I first read about the early retirement movement. Many of the people trying to retire early go by the 4% rule, which uses 4% as a safe annual withdrawal rate where your money has a high probability of not running out. For example, if you have $1 million invested in your brokerage account, you can safely withdraw $40,000 per year. The rule was originally based on a 30-year retirement, but some believe it can work indefinitely.

I was extremely excited and started wondering how little I could live on if it meant retiring sooner. Could I do $30,000 a year? $20,000? Then I’d just need to get to $500,000, and I’d be set for life!

As I’ve gotten older and my standard of living has gone up, I’ve realized that I’m going to need quite a bit more. Now, lifestyle creep gets a bad rap, but the reality is that some amount of lifestyle creep is normal. It makes sense to live better, within reason, as you progress in your career and earn more.

The possibility of lifestyle creep is another reason to err on the side of caution with your retirement savings. Don’t aim for the smallest amount you think could work. Aim high so you’ll have enough money even if your standard of living rises.

The road to retirement

You can make the perfect retirement plan, but you’ll still probably run into the occasional issue. You might not be sure how long of a retirement to plan for. Your parents or adult children could need financial assistance. And your savings needs may go up if you decide you want a larger budget in retirement.

The most effective solution is to make saving for retirement a priority. Try to set aside at least 10% of your income for retirement, and if you can save more, that’s even better. The more you’re able to save, the more of a cushion you’ll have to handle any challenges you face.

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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.Lyle Daly 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.

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Sam’s Club is known for its low prices. However, these five clearance deals discount prices even more. Find out what they are. [[{“value”:”

Sam’s Club is well-known for its low prices — so low, that Sam’s prices often beat all local competitors. What some people miss out on, though, are the sweet clearance deals Sam’s Club offers. There’s not much fanfare surrounding these deep discounts, and typically, when the supply is gone, it’s gone. Whether you’re looking for yourself or getting a jump start on 2024 birthdays and holidays, you’ll want to check out these five deals.

Member’s Mark 18-Piece Bamboo Melamine Dinnerware Set

Sam’s Club price: $25 (prices may vary in-club and online)Walmart price: $63

Imagine new tableware that blends renewable bamboo powder and cornstarch to create an attractive yet durable setting. This bamboo melamine dinnerware is crafted in a satin finish and flecked with natural bamboo. Currently, the set is available in navy and cream or pewter and cream. Bamboo melamine tableware works well for indoor and outdoor entertaining and is 100% dishwasher safe.

Using products made of renewable materials is a great way to protect the environment, and finding a bargain like this one is a great way to protect your budget.

Member’s Mark 22-Inch Gas Tabletop Griddle

Sam’s Club price: $80 ($50 off) (available for shipping only)Walmart price: $147

Talk about versatility. This gas tabletop griddle is perfect for cooking everything from pancakes to hamburgers. The pre-seasoned grilled surface offers 352 sq. in. of cooking space, two premium 304 stainless steel burners, and 24,000 BTUs of power for even heat distribution. It’s compact, easy to take with you on the go, easy to set up and light, and easy to clean.

The Member’s Mark 22-Inch Gas Tabletop Griddle is also currently available at a low price that will leave a little extra in your checking account.

Arlo Wire-Free Video Doorbell Bundle (Doorbell + Extra Battery)

Sam’s Club price: $100 ($49 off)Ebay price: $188

The Arlo Wire-Free Video Doorbell Bundle is more than a basic camera. It allows you to see anyone who comes to the door from head to toe, as well as see any packages on the ground. The expansive 180-degree diagonal viewing angle sets it apart from those cameras that only catch the upper portion of a visitor’s body. You can watch live streaming video from a smartphone or tablet, speak to visitors with clear two-way audio, or respond with a pre-recorded reply when you’re too busy to answer the door. Install the Arlo Wire-Free Video Doorbell without wires using the rechargeable battery, or hardwire it to existing wiring — whichever works best for you.

No video doorbell can prevent break-ins, but it would be foolish for a crook to break into a home once their face has been seen. It would be equally foolish for a porch pirate to steal packages delivered to your front door. Home protection is one small factor in protecting your belongings and, ultimately, protecting your personal finances.

Swann ActiveResponse™ Smart Mobile Personal Safety Alarm 2-Pack with Free SMS Alerts and Loud Siren

Sam’s Club price: $40 ($20 off) (Max three per membership)Swann price: $80

While we’re on the subject of safety, take a look at this personal safety alarm. Measuring only 0.74″ x 0.74″ x 2.36″, the ActiveResponse™ personal alarm is discreet yet powerful. If you find yourself in danger, pull the pin for a loud 110-decibel siren or push the button to alert your primary emergency contact of your location for free.

EverlyWell Food Sensitivity at Home Test

Sam’s Club price: $150 (prices may vary in club and online)Everlywell price: $199

Have you ever felt crummy after eating and wondered if you have an allergy or sensitivity to a particular food? The EverlyWell Food Sensitivity at Home Test works by measuring your body’s immune response to 96 foods to help you figure out the types of food you should prioritize in a two-part elimination diet. Common culprits like dairy, gluten, wheat, and yeast are all among the foods tested.

Once you receive the test, you register it at the company’s website and collect drops of blood by puncturing a finger (all supplies are included). Once you’ve done this, you mail the sample to a certified lab using prepaid shipping. You should receive digital results within days.

This test is not intended to take the place of allergy testing through your doctor’s office, but can offer clarity regarding which foods are toughest for your body to handle.

The fun part of checking out Sam’s monthly clearance items is learning more about products you’ve never heard of or considered buying. Given that Sam’s Club offers everything from access to auto insurance to lightbulbs, you’re never sure what you’re going to find. If you find something you’re interested in buying, though, don’t wait too long. There’s no guarantee there will be more once the current stock is sold.

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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.Dana George has positions in Walmart. The Motley Fool has positions in and recommends Walmart. The Motley Fool has a disclosure policy.

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If you bought a starter home recently, it may be hard for you to afford a bigger house now. Keep reading to find out why. [[{“value”:”

If you bought a starter home during the pandemic, or even slightly before, you may find that the value of your home has gone up a lot. Median home prices have increased 33% since January of 2020, which means your house could be worth a lot more than you paid for it, depending on exactly when you bought it.

Home appreciation is a good thing and if your home has gone up in value, you may be excited to think about selling it so you can move onto your next phase of life. This is especially true if you bought the starter home with the goal of staying just a few years before moving up as your family grows or as you make more money.

There’s a problem, though. It may be really difficult for you to sell and move, despite the fact that demand for your starter home could be pretty high.

Mortgage rates have a big impact on your housing costs

There’s a very big problem for people who bought their homes in the past few years. While your home has likely gone up in value, something else has gone up, too — mortgage rates.

After repeatedly hitting record lows during the COVID-19 pandemic, mortgage rates have been steadily climbing to recent record highs. The average rate for a 30-year fixed rate mortgage is 6.87% as of March 21, 2024. This is a huge increase from the below-3% rates that were available in 2021.

If you got a mortgage at 3.00%, or even 4.00% which was common pre-pandemic, then you have a very valuable asset — an affordable home loan that’s locked in for 30 years.

If you sell your house because you want to move out of that starter home and buy a new house that’s a better fit for your current stage of life, it’s going to cost you a lot more — and not just because you’re buying a bigger or more expensive house.

The higher mortgage rates are going to have a huge impact.

Here’s how much high mortgage rates could hurt your efforts to upgrade your starter home

So, how much exactly will higher rates hurt you?

Say you bought a $300,000 home in June of 2021 with a 30-year fixed-rate mortgage for $240,000 at 3.00% and you can sell it for $360,000 in March of 2024. Your remaining loan balance would be $225,851.01. So if you sold your home, after around 6% closing costs, you could walk away with around $126,000.

Now, let’s say you want to upgrade to a $500,000 house with $10,000 in closing costs.

You’d have around $116,000 to put down after covering closing costs so you’d need to take out a $384,000 mortgage.If you could have paid that 3.00% rate again, your monthly payments would go up to $1,619, compared to the $1,012 you were paying before. If your income has gone up, that would probably be doable.But rates are at 6.87% — not 3.00%. And if you borrowed $384,000 at 6.87%, you’d be looking at a monthly payment of $2,521. That’s well over double what your starter home was costing you!

Most people’s budgets simply can’t bear that. Unfortunately, there’s no clear answer for what to do about this — other than staying put and hoping rates do come down in the future. You could also wait until your income goes up enough that you can afford the new home of your dreams.

For most people, staying put for now makes sense, so you may want to just hold on for a while and try to love the home you’re in — your current mortgage rate is at the most affordable level most of us are likely to see in our lifetimes.

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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.

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Closing a credit card frees up space in your wallet, but it can have unintended consequences for your credit score. Find out what you need to know. [[{“value”:”

When you have unused credit cards clogging up your wallet, it’s natural to want to get rid of them. It’d free up space and give you one less account to keep track of.

It’s even more tempting because the process for closing a credit account is so simple: just call the issuer and ask. But deciding whether it’s worth closing the card is a bit more complicated. Here’s what you need to know.

Should you close the credit card at all?

It’s generally not recommended to close a credit card because doing so could raise your credit utilization ratio. This is the ratio between the amount of credit you have available to you and the amount you use each month. For example, if you have a $1,000 balance on a card with a $10,000 limit, your credit utilization ratio is 10%.

This ratio forms an important part of your credit score, and ideally, you want to keep it under 30% to keep your score high. But this can get harder when you close an old credit card because you lose access to a big chunk of your available credit. Closing your card could also reduce your average account age, which also hurts your credit score.

That’s why it’s often best to leave a credit card open even if you’re no longer using it. If you don’t like having it in your wallet, take it out and keep it somewhere safe in your home.

Typically, the only reason to close an unused credit card is if it charges a high fee. You see this with some travel rewards cards. If you’re not earning enough rewards to recoup the annual fee, it’s not worth keeping, even if your credit score will take a slight hit by closing it.

What if you want to close the card anyway?

If your credit card has a high fee or you just want to close it regardless, all you need to do is contact the issuer and request that it close your account. You will still have to pay off any remaining balance on that card.

Those planning to close multiple cards probably want to space them out over time. Consider closing one card every six months or so. This will give you time to adjust to having one fewer credit account in your name, and it will help reduce the hit your credit score takes from the closure.

After closing the card, reevaluate your spending across all your cards and try to keep your credit utilization ratio under 30% if you can. You could do this by using cash or a debit card instead of a credit card for some purchases. Or you could pay your bill off twice monthly. Credit card companies only report your payments to the credit bureaus once per billing cycle, so paying twice makes it appear as though you spent less than you actually did.

Finally, you can try to raise your credit limit on your remaining cards. But it’s best to do this only if you feel pretty confident you’ll be approved. Every time you apply for a credit limit increase, the issuer does a hard inquiry on your report. This drops your score by a few points, but if you’re approved, the reduction to your credit utilization ratio will more than offset this.

Be careful not to apply for a new card or a credit limit increase too often. This sets off red flags with lenders who might think you’ve experienced a major financial downturn. Limit yourself to about every six months with this as well.

By taking these precautions, you can hopefully maintain a high credit score while only retaining the credit cards you want and use. If you’re not sure if closing a card is the right move, go ahead and keep the account open for a while. It probably won’t hurt, and it could even help you.

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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.

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As more businesses order employees back to the office, most of those surveyed say they want to work remotely. Keep reading to learn what they’d sacrifice for it. [[{“value”:”

The pandemic changed the world in myriad ways, big and small. One thing that changed was the way we think of work. As some of us watched friends or family members die of COVID-19, the experience changed the way we think of what we want out of life. Balance has become more desired than ever, with some employees saying they want the freedom to work from anywhere (including home).

At a time when more employers are ordering their workforces back into the office, 75% of those included in FlexJob’s 2024 Work-From-Anywhere Survey said they would “definitely use” a work-from-anywhere policy if their employer offered it. Here’s a sample of what Americans say they’re willing to do to work remotely.

50% are willing to accept a pay cut

Half of those surveyed say they would take a pay cut in return for the option to work from anywhere, which would definitely impact their budget. Here’s how much they said they would be willing to accept:

26% surveyed said they would accept a 5% cut in pay25% said they would accept a 10%–15% pay cut

1 in 5 would work longer hours

A full 20% of survey respondents said they would be willing to work longer hours if they could work remotely. Given that working from “anywhere” likely means always having access to their computer and other work equipment, it makes sense that employees who don’t have to spend time commuting would be more willing to spend that time working.

Some say they’ll give up vacation days

An average of 15% of respondents (across age groups surveyed) say working from anywhere means so much to them that they would be willing to forego some of the vacation time they are owed. The career resource platform Resume.io compiled a report comparing annual paid leave and paid public holidays in 197 countries. The report found that the U.S. comes in at 196, with only one country deemed worse for employees: Micronesia.

To put it in perspective, China, Mexico, Lebanon, the Philippines, and Nigeria offer more statutory days off work than U.S. employers do. Reports like these make it even more surprising that 15% of Americans asked say they would give up even more of their time off to work remotely.

Nearly 1 in 4 say they’d gladly trade professional development for a chance to work remotely

Millions of Americans value work-life balance more than professional development or climbing the corporate ladder. In fact, 23% of those surveyed say they would give up the chance for professional development to work remotely.

4 out of 5 would move for the opportunity to work remotely

A whopping 81% of respondents claim they would be willing to relocate to another city or state for the opportunity to work remotely. Here’s how it broke down:

40% say they would move to another city41% say they would move to another state

That’s not to say they would move just anywhere. Ideally, people would be most excited about moving to a climate they enjoy, a place where the cost of living is manageable and expenses like auto insurance don’t cost an arm and a leg.

Some employees are willing to let go of company-sponsored health insurance

It’s impossible to overstate the importance of health insurance in the U.S. However, 13% of survey respondents would give up their company-sponsored plan in return for a remote job. Those respondents may have insurance through a spouse or partner, or they may earn enough money to purchase a health insurance policy outside their employer.

1 in 10 claims they would be happy to give up company contributions to their retirement account

By now, most adults have heard about the benefits of company-sponsored retirement plans like 401(k)s. Still, 10% say they would give up any contributions made by their company if they could work from wherever they want. They would still have the option to open an IRA.

The generation most willing to give up something of value in return for remote employment

There’s no word on Gen Z (born 1997–2009), but here’s how the responses of three other generations break down:

69% of millennials (1981–1996) surveyed said they would be willing to give up something for a remote job59% of Gen X (born between 1965–1980) surveyed said the same50% of baby boomers (1946–1964) named something they would be willing to give up

Financial incentive

While work-life balance plays a large role in why so many of us want to work remotely, it doesn’t tell the entire story. After all, people still have credit cards, utility payments, and mortgages to pay. Here are some of the most significant financial reasons to want to work from anywhere:

Save money on gas, car maintenance, transportation, and parking feesSave money on meals outFewer distractions can lead to greater productivity, leading to potential promotions (for those interested in promotions)Can save on before- and after-school child care expenses

Anyone who’s ever worked remotely from home, a lake cabin, an RV, or anywhere else can tell you there’s nothing like it. And if the FlexJobs survey is any indication, some employees are willing to sacrifice for another opportunity.

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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.

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A high credit score has all kinds of benefits, but it’s not all good news. Learn about the rarely discussed drawbacks so you know what to watch out for. [[{“value”:”

Except when you’re playing golf, a higher score is normally better than a lower one. That’s the case with your credit score. As you improve it, you’ll get lots of benefits, including access to better credit cards and lower interest rates on loans. In most states, it can even help you save on car insurance.

So a high credit score is a good thing — no argument there. There are still some drawbacks, though, and many people don’t know about them. If you have a high score, or you’re working on getting one, watch out for these potential issues.

1. You’ll have more borrowing power, which could lead to spending more

When you apply for a loan or credit card, the lender checks your credit. It’s not the only factor that matters. Your income, in particular, is also important. But a high credit score allows you to borrow more money.

I still remember when I applied for my first rewards credit card at 21. Until then, I’d only had a basic, no-frills card with a $500 limit — the kind of limit card issuers give to someone they’re not too sure about yet. I was stunned when I got approved for a $9,000 limit this time around. I was making $30,000 a year back then, so my credit limit was nearly a third of my annual income.

Luckily, I’d heard enough horror stories to know that having a $9,000 limit didn’t mean I should go out and spend $9,000. But I could’ve done it and put myself in a difficult situation. If you have a high credit score, you could, too.

Don’t take this as an invitation to spend more. Credit cards have high interest rates, so credit card debt is expensive even with a high credit score. Only spend what you can afford to pay in full.

2. Your credit score will drop more if you do anything wrong

Credit scores follow the old adage of “the bigger they are, the harder they fall.” The higher your score is, the more damage it will take for any missteps.

To give you an example, we can look at info provided by FICO. Its FICO® Score is the most widely used scoring system by lenders. It showed how different actions would affect the credit scores of several hypothetical people in its “Changing the Score” infographic.

Here’s the kind of damage missing a payment by 30 days would do:

If the person has a spotless credit history and a 793 credit score, their score would drop by 63 points to 83 points.If the person has problems on their credit history and a 607 credit score, their score would drop by 17 points to 37 points.

To maintain a high credit score, you need to maintain an excellent credit history. Any negative items, including missing payments and maxing out all your credit cards, can lead to a serious drop in your score.

3. You eventually stop benefiting from raising your credit score

Several types of credit scores exist, but the most commonly used go from 300 to 850. An 850 is considered a perfect score, and it’s rare. Only 1.31% of Americans with a FICO® Score have an 850, according to credit score research by The Motley Fool Ascent.

Now, I did say that higher credit scores are better earlier — but only up to a certain point. That point is a FICO® Score of 760. You don’t need to work toward that elusive 850, or even an 800.

While lenders look at your credit score, what they’re really looking at is your credit score range. The highest range, according to MyFICO’s loan savings calculator, is 760 to 850. At that point, you can qualify for the lowest mortgage rates. It doesn’t matter if you have a 780 or a 770.

Once you’re in that range, you don’t need to worry about building your credit score anymore. It’s smart to maintain your credit score and avoid doing anything that will lower it if you’re about to apply for a loan. But you’re not going to benefit from a higher score.

How to get a high credit score

Even with those drawbacks, a high credit score is still well worth it. If you don’t have one yet, there are only a couple of credit-building habits to follow.

The most important is to always pay your bills on time. Payments that are 30 days late or more can be reported on your credit history and do a number on your credit. Make sure you also have at least one credit card that you use and pay off every month. On-time credit card and loan payments have a positive impact on your credit.

Also, avoid overspending on your credit cards. You’ll stay out of debt, and this is also good for your credit utilization (your credit card balances compared to your credit limits). A popular guideline is to keep your credit utilization under 30%. For example, if you have a $10,000 credit limit, keep the balance under $3,000.

Those are the biggest factors in your credit score, and the only ones I focus on. If you always pay on time and don’t overspend, you’ll be able to build and maintain excellent credit.

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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.

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