Money Management

Women face big disadvantages in the workplace, but they are often better at investing. See how women (and men) can help close the gender investing gap. [[{“value”:”

One of the biggest problems in the global economy is that women get paid less than men. This gender pay gap has created an even larger “gender investing gap,” where women build less wealth than men. Women have about 32% of the average wealth that men have, and receive about $0.70 for every dollar of retirement income that men get.

But the good news is: the gender investing gap is getting better! Women are taking control of their own investment decisions and building wealth for the future. Here are a few ideas for how business leaders, public policymakers, and all of us, men and women, can work to close the gender investing gap.

1. End the gender pay gap

Here in the U.S., women get paid about $0.83 for every dollar that men earn. The gender pay gap is not always a matter of outright wage discrimination: often it’s a result of women doing jobs that the “free market” does not value as highly as men’s work.

Women are more highly represented among lower-paying occupations. According to the U.S. Department of Labor, some of the jobs where workers are most likely to be women, such as home health aides and child care workers, pay below-average wages. Research also shows that when more women start to get jobs in formerly “male-dominated” career fields, average wages in those fields tend to go down. This is why gender discrimination is bad for everyone: when women’s work is devalued, men’s work gets devalued too.

There’s no simple answer for how to end the gender pay gap. Forward-thinking companies (and some state governments) are trying to offer better solutions for pay equity, such as pay transparency. When salaries are secret, this can cause women and other historically disadvantaged minority groups to miss out on opportunities for negotiations and pay raises. Pay transparency makes salary information publicly available, so people can make better-informed decisions about asking for pay raises and building careers.

Another sign of hope for the gender pay gap is that America’s economy is experiencing low unemployment and widespread talent shortages. If labor — from men and women — continues to be in strong demand, it could motivate more companies to offer women better pay and truly equal opportunities for career advancement.

2. Support women as caregivers and in careers

Women are more likely to lose time out of their careers as caregivers for young children or aging loved ones. Leaving the paid workforce for even a few years can cause a long-term gap in retirement savings, as women miss out on years of 401(k) contributions and compounding investment growth.

When women feel as if they cannot have a highly ambitious career and take care of their families, they often drop out of (or get forced out of) the talent pipeline, especially for the highest-paid corporate jobs. For example, only 10.4% of Fortune 500 CEOs are women.

Companies and governments can do more to support women with flexible work options, paid family leave, and other support that helps people manage their caregiving roles while building careers.

3. Help improve women’s investor confidence

One of the worst stereotypes in the financial world is the idea that investing is “a men’s thing,” or something that only men care about or are good at. This is totally untrue! Research from The Motley Fool shows that women are good at investing, and get an average of 0.4%-1.0% higher annual investment returns than men!

If you’re a woman who’s saving for retirement or investing for any other goal, you deserve to be an investor, and you belong in this world. You don’t deserve to be bullied or feel any impostor syndrome; women can be just as good as men (or better) at buying stocks. Too often, the investment media is full of the loudest voices from personal finance gurus who tend to be men. But these guys don’t always pick the right stocks or have the right answers.

There are lots of ways to be successful as an investor, and just buying S&P 500 index funds will often help you make more money in the long run than all the overconfident stock-picking “expert” guys on TV.

4. Connect women with better, fairer financial advisors

Too many women don’t have a good experience with financial advisors. Research from New York Life found that 48% of women feel “patronized” by financial advisors, and 40% said that financial advisors are less likely to listen to women, or even push women out of conversations.

Financial advisors are supposed to listen to you, help you, and offer unbiased, research-based, fiduciary advice that makes your financial life better. But too often, financial advisors act like the personal finance gurus who annoy me so much: they’re arrogant, aggressive, sometimes bullying. This is a terrible way to treat clients, and women tend to get the worst of it.

Financial advisors are predominantly men: for example, 76.2% of Certified Financial Planners® are male. The financial advisory industry has work to do to make sure it’s providing fair, unbiased customer experiences for 100% of the population.

Bottom line

More women becoming investors is good news for all of us. If more women can buy stocks and help guide the direction of economic investment and growth, that can help unleash new innovations and bigger opportunities. Women face disadvantages in the job market, but they also have special strengths as investors. Companies and governments should do more to level the playing field at work and in the financial markets.

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Costco has competitive prices, but it’s still possible to end up overspending there. Keep your Costco bill in check by following these tips. [[{“value”:”

One of the reasons people shop at Costco is to save money. The warehouse giant is, after all, known for low prices and deals on bulk items. Even with the $60 annual membership fee, or $120 for the Executive membership, you could still end up spending much less overall on gas, groceries, and household items.

Not all Costco shoppers end up saving, though. If you’re not careful, it’s easy to waste money during your Costco trips. Here’s what you can do to avoid that.

1. Be careful about buying in bulk

Costco is king for buying in bulk. It’s where you can get giant jars of peanut butter in packs of two, 10 pounds or more of ground beef, and enough toilet paper to last through a pandemic (hopefully we don’t have another one of those).

Buying in bulk is a smart way to save money in the long run, but only if you use everything you buy. This isn’t a problem with nonperishable items. If you stock up on paper towels at Costco, you’ll eventually use them all. As long as you have the space, it makes sense to buy items like these in bulk.

With perishables, it’s important to mind the expiration dates. Only buy these in bulk if you’re sure you’ll use them before they go bad or if you have plenty of freezer space to preserve them.

2. Don’t assume Costco always has the best prices

Costco is an affordable place to shop, but it doesn’t always have the lowest prices. Shoppers have found that other stores often have better prices on certain items, including chicken, bread, milk, and cereal. Supermarkets also sometimes have specials and coupons available — coupon apps are a good way to find these.

If you don’t want to spend time going to multiple stores, it could make sense to just do all your shopping at Costco. But if you have local supermarket options nearby, and you visit them regularly, try comparison shopping. See which items are cheaper at Costco and which are cheaper elsewhere.

3. Make a shopping list and stick to the plan

It’s hard to resist adding extra items to your cart when you’re at Costco. The warehouses are perfectly designed for getting people to make impulse buys. You need to walk through the entire store to get to the grocery aisles, there are free sample stations with tempting treats, and there are always exciting new items to see.

A shopping list can be a big help here. People who use a shopping list buy fewer items and spend less on average, according to a 2020 study by Carleton University. When you know exactly what you need, you’re less likely to add what you don’t.

Now, making a list is only half the battle. You also need to stick to it. To make it easier, avoid going down aisles with items you don’t need and stay away from the free sample stations.

There are plenty of opportunities to save on your everyday expenses by shopping at Costco. If you make a shopping list, compare prices at other stores, and only buy bulk items that you know you’ll use, you’re a lot less likely to overspend.

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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 positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.

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Expert tips can improve your tax season by helping you save money and simplify your filing. Read on to ease your tax season worries. [[{“value”:”

As we edge closer to Tax Day, there’s a whirlwind of changes and updates to keep on your radar. Thankfully, Karla Dennis, a tax expert and founder of KDA, Inc., is here to help us sift through the noise and highlight the most impactful shifts in this year’s tax landscape. Let’s dive into some of the key changes that could have a real impact on your personal finances, explained in a way that won’t make your eyes glaze over.

Retirement Savings Credit: Your ticket to lower taxes

First up, let’s talk about the Retirement Savings Credit, a little gem that could slash your tax bill if you’re stashing cash away for your golden years. This isn’t just any credit; it’s a direct incentive for those contributing to retirement accounts like IRAs or 401(k)s. Depending on your income and filing status, you could knock off up to $1,000 ($2,000 if married filing jointly) from your tax bill. Imagine what you could do with that extra cash!

But here’s the kicker: only some know about it, and even fewer take advantage of it. According to a recent survey, 32% of Americans have no retirement savings, so this credit isn’t just a bonus; it’s a crucial nudge to get us thinking about the future.

Payment apps: Venmo and Zelle users, breathe easy

Now, onto the buzz about payment apps like Venmo and Zelle. The IRS was gearing up to require these apps to report transactions over $600, but it has slowed down that plan. For now, your casual transactions are safe from the taxman’s scrutiny.

This pause is a huge relief for the 76 million Venmo users who split bills, share costs, or send money to friends and family without a second thought about tax implications. It keeps things simple, sparing us the headache of reporting every latte or concert ticket we Venmo’d over the past year.

Interest rates: Steady as she goes

Here’s some good news that’s as refreshing as finding $20 in your pocket: interest rates on owed taxes stay put as we head into 2024. This means if you owe Uncle Sam, you won’t be blindsided by higher interest charges. Stability in these rates, amidst the rollercoaster of economic news, is like a financial security blanket, offering a bit of predictability in how much you’ll owe if you’re paying off tax debt over time.

The Direct File program: Say goodbye to third-party headaches

Lastly, the IRS is rolling out the red carpet for a simpler way to file your taxes directly through their website. The Direct File program is set to make tax filing as painless as possible without navigating through third-party software that often feels like you need a degree in cryptography to understand.

This move could revolutionize tax filing for the 168 million people who file each year, making it more straightforward and, best of all, free. It’s all about cutting out the middleman and making tax filing something you can do from your couch, in your pajamas, with a cup of coffee in hand.

So, as we count down to Tax Day, keep these changes in mind. They’re not just bullet points on a tax form; they’re opportunities to save money, simplify the tax-filing process, and maybe even make tax season a bit less daunting. With insights like these from Karla Dennis, navigating the tax seas might just be smoother sailing this year.

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Considering a move now that the kids have moved out? Read on to find some of the most affordable cities. [[{“value”:”

Housing affordability reached a 40-year low last year, making it harder for empty nesters to find inexpensive places to live. Thankfully, there are still some places across the country where you can find affordable housing; you just need to know where to look.

Here are a few locations that give empty nesters plenty of activities while offering lower-than-average housing and healthcare costs.

1. Youngstown, Ohio

Housing costs: 35% below the national average

Retirees looking for affordable housing and inexpensive healthcare costs will have difficulty beating Youngstown, Ohio. Located right between Pittsburgh and Cleveland, Youngstown’s median monthly mortgage cost is just $653, and healthcare costs are 25% below the national average.

Golfers will appreciate the city’s two Donald Ross courses at the Mill Creek Golf Course. If golfing isn’t your thing, an 11-mile MetroParks Bikeway offers a paved trail for hikers and bicyclists. There are also several award-winning local wineries just outside the city.

2. Jonesboro, Arkansas

Housing costs: 29% below the national average

The home of Arkansas State University is also a great place for empty nesters looking for outdoor activities. Located in the Jonesboro and Delta regions, the city boasts beautiful waterways and nearby Craighead Forest Park is ideal for hiking and biking.

In addition to its low cost of living, empty nesters will love that healthcare costs in the city are 20% below the national average, making Jonesboro a great place to retire.

3. Brownsville, Texas

Housing costs: 29% below the national average

Brownsville, Texas, packs plenty of big adventures into a medium-sized city. Brownsville sits along the border of the Rio Grande river and near the shores of the Gulf of Mexico, offering residents plenty of outdoor recreation, including trails and bike paths that connect communities.

With beautiful beaches and an active birding community, retirees are bound to find something they love in Brownsville. Space enthusiasts will love that SpaceX’s launch site is fewer than 10 miles outside the city limits. Retirees will also appreciate that the city’s healthcare expenses are 11% below the national average.

4. Tuscaloosa, Alabama

Housing costs: 24% below the national average

College football fans don’t need an introduction to the home of the University of Alabama. But for the uninitiated, Tuscaloosa boasts a walkable downtown steeped in history and located along the Black Warrior River.

Empty nesters can stroll through the beautiful University of Alabama Arboretum or shop the city’s river market while enjoying Tuscaloosa’s low healthcare costs, which are 19% below the national average, and average monthly mortgage costs of $955.

5. Lynchburg, Virginia

Housing costs: 22% below the national average

Lynchburg, Virginia, is an excellent location for retirees who love the mountains and the city. Located along the James River, Lynchburg is just a short drive to the Blue Ridge Mountains and near the Appalachian Trail. The city boasts 40 miles of urban trails for those who want to stick closer to town and enjoy its thriving riverfront.

Retirees will love that housing costs are far below the national average and that healthcare costs are 1% lower. You’ll also spend less at the supermarket, with grocery costs 10% lower than the average.

How to save on housing costs no matter where you live

Sticking to a budget is more critical than ever when living on a fixed income. However, many people don’t need to move to a new city to find more affordable housing.

You might be able to stay where you are simply by moving into a smaller home. Homeowners could save an average of $196,000 by downsizing from four bedrooms to two in America’s top 20 metropolitan areas, according to StorageCafe. Empty nester baby boomers own 28% of large homes, which means many of them could downsize and likely pocket some cash.

If that’s not an option, you may consider moving further outside town or to a slightly less convenient location. Doing so may help keep you in the city you love but at a reduced cost.

With housing still in high demand, now could be a good time for empty nesters to consider selling a home they’ve built equity into.

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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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Planning for taxes in retirement may not be fun, but it’s important. Here’s what could happen if you skip the planning phase. [[{“value”:”

Whether you’re nearing retirement or still have decades to go, it’s never too soon to plan for all that retirement entails — including personal finances. One factor that will impact how much you have to spend in retirement is the amount of taxes you pay. Your tax rate depends, in part, on whether you’ve created a plan. Here, we look at what could happen if you don’t plan for taxes in retirement.

You dive into the unknown

Going into retirement without a tax plan is like trying to discover a shipwreck with no idea of where the ship might have gone down. You need direction, and the more concise your direction, the closer you’ll be to your target.

It’s relatively easy to estimate how much income you’ll have during retirement. You factor in guaranteed payments like Social Security and pensions and then add the required minimum distribution (RMD) from certain retirement plans, rental income, annuities, part-time jobs, and other sources of income.

If you haven’t planned for taxes in retirement, it’s much more difficult to estimate how much money you’ll actually have to spend each month. Here’s a small sample of what you may not be aware of:

You’ll receive an extra standard deduction: Once you turn 65, you’ll be eligible for a larger standard tax deduction than younger taxpayers. For example, this year, the standard deduction for single taxpayers age 65 or older is $1,850 higher than the deduction enjoyed by those under 65.It’s possible to earn too much: The U.S. federal income tax is progressive, meaning our tax rates increase as earnings increase. Let’s say you plan to work part-time throughout retirement. Unless you know how close you are to the tax bracket above yours, you won’t know if the money you’re earning pushes you into a higher tax bracket and leads to higher taxes.It’s difficult to budget without hard numbers. Without a tax plan, you won’t know how much to expect to pay in taxes or how much you’ll have left to work with. It’s difficult to plan a realistic retirement budget without those figures.

You may fall short financially

Part of planning for retirement is diversifying your income, so you can invest some of the money in tax-free and low-tax investments. The immediate goal of investing is to make money, but another worthy goal is to invest so that you won’t be slammed with taxes in retirement. These four account types each carry a unique tax advantage.

Tax-deferred account

Tax-deferred accounts include 401(k)s, 403(b)s, and traditional IRAs. Each reduces your taxable income the year you make the contribution and isn’t usually taxed until you withdraw it in retirement. If you’re in a lower tax bracket in retirement than you were while employed, you’ll end up paying less in taxes.

Roth account

Unlike tax-deferred accounts, money contributed to a Roth 401(k) or Roth IRA consists of after-tax dollars (in other words, you’ve already paid taxes on it). However, when you withdraw the money in retirement, you don’t owe taxes.

Health savings account (HSA)

If you’re covered by an eligible high-deductible health plan at work, your employer may offer an HSA.

What sets HSAs apart is that any money you contribute rolls over into the next year and continues to grow tax free. Just as your HSA covers qualified medical expenses tax free while you’re still working, it will cover those expenses tax free at age 65 and beyond. However, money withdrawn for any other reason is taxed as regular income.

One final nice thing about these health savings accounts: HSAs are exempt from RMDs.

Taxable accounts

When you invest in a traditional bank or brokerage account, you do so with after-tax dollars. With a brokerage account, you can contribute or withdraw money for any reason without penalty. You can also sell securities without paying a penalty. While investments sold for a profit are subject to capital gains taxes, if you sell at a loss, you may be able to offset gains up to $3,000 of ordinary income. Taxable accounts are also exempt from RMDs.

Even something as simple as living in the wrong state can cause you to fall behind in retirement — unless you plan for it. While the majority of states do not tax retirement income at the state level, others do. Some states offer reasonable property tax rates, while others are through the roof. Failing to plan for taxes in retirement may mean not knowing what to expect from your home state.

You’re likely to have regret

If you would rather have a root canal than explore retirement tax plans, you’re not alone. However, if you decide not to plan, you’re more likely to regret it. Here are just a few of the regrets you could be stuck with:

Why didn’t I move to another state while I was able to do it?I wish I had more money to leave to my family or the causes I believe in.Think of all the money I could have invested in a 401(k) during my working years!

Planning may point out where you’re falling short, and if you’re still working, give you time to turn things around. After all, it’s about keeping as much money in your checking account as possible.

Is tax planning ever fun? Nope. Will you have a good time buying tax prep software and really digging into it? Probably not. But that’s okay — that’s where a good tax professional can help. A professional can help you identify ways to save money today and throughout retirement. The more planning you do now, the more money you’re likely to have in the future.

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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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