Money Management

Starting to invest in your 60s? You’ll want to be careful with managing risk. Read on to learn more. 

Some people are fortunate enough to be able to start investing in their 20s. Those who land in that boat get to benefit from many years of compounded returns in their portfolios.

But perhaps you’re only first starting to invest in your 60s. If you were a lower earner for most of your life and more recently worked your way up to a higher-paying job, that could explain why you’re first getting started at this stage of the game.

Or maybe you always earned a decent paycheck but just plain had a lot of obligations and expenses. That’s understandable, too.

The good news is that it’s really never too late to start investing. But if you’re in your 60s, you’ll need to be careful about how you go about it.

You don’t want to take on too much risk

The tricky thing about investing for the first time in your 60s is that you may be very close to ending your career. And in general, it’s not a great idea to put money into stocks that you expect to need within seven years.

The reason? The stock market can be very volatile. If you’re investing for a longer period, you have time to ride out market downturns. But if you’re 65 years old and plan to retire at 67 or 68, that’s not a lot of time to sit back and let your portfolio recover following a stock market crash.

As such, you’ll need to be careful not to go too heavy on stocks if you’re first investing in your 60s. But that doesn’t mean you shouldn’t buy any stocks at all.

A good rule of thumb is to subtract your age from 110 when deciding how much of your portfolio should be in stocks. So if you’re 65, that could mean putting 45% of your money into stocks and playing it safe with the rest of your money — namely, by choosing bonds, which tend to be far less volatile.

Of course, you can adjust that percentage depending on your personal appetite for risk. But that rule is a general guideline.

From there, it’s important to diversify your holdings whether you’re talking about stocks or bonds. Load up on stocks and bonds across a range of companies and industries. Or, instead of buying individual stocks, consider investing in an S&P 500 ETF (exchange-traded fund), which effectively lets you invest in the broad market.

How much wealth can you grow if you’re first investing in your 60s?

You may not manage to grow a ton of wealth prior to retirement if you’re first starting to invest in your 60s. But remember, it’s not as if you’re going to withdraw your entire portfolio the moment your career comes to an end. So rest assured that during retirement, your portfolio can continue to grow.

That said, to give you a sense of how much money you can accumulate in time for retirement, let’s assume you’re able to start investing at age 65 with a retirement at age 70. Let’s also assume that during that time, your portfolio generates an average annual 6% return. That’s well below the stock market’s average annual 10% return, but remember, you probably won’t have more than about half of your assets in stocks.

Now let’s say you’re able to invest $600 a month during that time. That would leave you with a portfolio worth about $40,600. However, if you’re not retiring until age 74, that would mean building your portfolio up to about $83,000.

That’s not a ton of money in the context of retirement. But it’s far better than retiring with no nest egg at all.

Of course, if you’re able to invest more money every month, you can kick off retirement with a lot more. Socking away $1,000 a month from ages 65 to 74 at an average annual 6% return will leave you with about $138,000. That’s more than the average 70-something’s retirement plan value today, which is $113,900, according to Northwestern Mutual.

It’s always a good thing to give your portfolio lots of time to grow. But it’s also far better to start investing in your 60s than to never invest at all. So rather than dwell on missed opportunities, look forward — and do your best to pump as much money into your portfolio as you can.

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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.Maurie Backman 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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Celebrating Hanukkah this year? Read on for ways to avoid debt in the course of those festivities. 

It’s kind of hard to forget about a holiday like Christmas, since it comes at the same time every year and the country effectively shuts down for it. But Hanukkah has a way of sneaking up on those who celebrate it, since it falls at a different time every year.

This year, Hanukkah begins on the evening of Thursday, Dec. 7, 2023, which means it’ll be over before Christmas. In a way, that’s a good thing, because if you celebrate Hanukkah, you’ll sort of be forced to not procrastinate too long on your gift list. That could make it less likely that the things you want to buy will sell out.

But let’s be clear — pulling off eight celebratory nights is no easy feat. That’s a lot of presents to buy — and a potentially large credit card balance to tackle afterward.

The last thing you want to do is wind up with a pile of holiday debt following your Hanukkah celebration. So to avoid that, do these things.

1. Set a spending budget

Maybe Hanukkah is something you mostly celebrate with your immediate family. Or maybe your extended family chooses one of those eight nights for a giant get-together with uncles and cousins galore.

If you know you’ll be buying a lot of gifts, set a budget before you begin your shopping. And also, set priorities given that budget. You don’t want to splurge on a gift for your great aunt you see once a year if it means having to skimp on the gift you give to your dad.

Also, make sure to incorporate the cost of groceries into your budget if you’ll be hosting a Hanukkah feast. Luckily, Hanukkah’s most traditional dish — potato latkes — is fairly inexpensive to whip up. And if money is tight, ask everyone coming to celebrate to bring a dish with them.

2. Set realistic expectations

Your kids may be gearing up for eight nights of presents. That’s a tall order. You may want to have a conversation where you explain that while some of those eight nights will feature “bigger” gifts, others will be more low key.

One thing you may want to do is give out your most substantial gifts on the first and eighth night of the holiday, and then give smaller gifts on the nights in between. Another option is to break things up so that, for example, you might give your kids gifts on the first, third, and eighth nights, while your kids give each other gifts on the second and fourth nights.

3. Have a give-back night

Eight consecutive nights of gifts is, well, a lot. Chances are, your kids don’t need that much new stuff, and you only have room for so many things.

One way to really make the most of the holiday is to designate one night a give-back night. Instead of having your kids get presents, have them choose an inexpensive gift to buy for a toy drive. Or, have them go through their existing toy collection, identify items in great shape, and pack them up to be donated.

It’s hard to keep your spending in check when you have an eight-night holiday coming up. But while the story of Hanukkah might center on a small amount of oil lasting eight nights, you don’t want to rack up holiday debt that lasts eight months or longer. So keep these tips in mind. With any luck, they’ll help you keep your spending in check so you can have a joyous, festive celebration with your loved ones without stress.

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Getting a credit card in college could help build credit, but if you make the wrong choices, you could graduate in a worse situation. Find out more here. 

Many credit card companies offer cards targeted towards college students. These student credit cards often come with easier qualifying requirements as well as generous perks like credit card rewards and bonus welcome offers that make them attractive to young people.

However, the Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009, prohibits college students from getting a credit card without a cosigner who is over 21 and has the means to repay the debt — unless the college student can show they’d have sufficient income to pay back what they borrowed.

If you can meet these requirements, getting a credit card could be a smart move — but it could also be a financial disaster. It all depends on what you do with the card. Here’s what you need to know.

Why opening a credit card could be a smart move

Opening a credit card account as a college student could be a great choice because you can start building credit with it.

See, you will need to have access to credit in order to develop a credit history. And you’ll need to use your credit responsibly to earn a good credit score. If you get a card as a freshman in college and use it wisely, by the time you graduate, you’ll end up with a four-year history of on-time payments. Since your payment history is the most important factor in determining your score, this could make a big difference in your ability to build one that makes it easy to get affordable loans after graduation.

The average age of your credit history also affects your score, and having a longer credit record is better. Opening a card early on in life will allow you to start establishing that credit record sooner, which will have a long-term positive effect on your score.

As a bonus, you will also get to take advantage of cardmember perks. Let’s say you charge $500 a month on your card for basic expenses you’d incur anyway and you get 2% cash back as a rewards bonus. At the end of 12 months, you’ll have gotten $120 in cash back. That’s a lot of money for many college students — it could even cover the cost of one or two overpriced textbooks!

How it could turn into a disaster

Unfortunately, getting a card as a college student could also turn into a disaster. That can happen if you don’t use your card wisely.

If you charge too much on the card and can’t pay it back, you could graduate with credit card debt that haunts you for years to come — especially since you’ll have to pay interest on most cards at a high rate (the average interest on a card as of August 2023 was 21.19%).

If you miss a payment, you could also start off with a poor payment history — which would do major damage to your credit. And if you use more than 30% of your available credit (which may not be hard if you have a student card with a low limit), that could hurt your score as well. Your credit utilization ratio plays a big role in determining your credit score.

If you have a cosigner and you charge too much or miss payments, this could hurt their credit as well — which isn’t a great way to repay someone who did you the favor of cosigning in the first place.

You’ll need to take these factors into account and consider whether you trust yourself to use credit responsibly before opening a card as a college student. If you don’t think you can count on yourself to charge only what you can afford to pay back — and to make payments on time, every time — then wait until you’re in a better place before getting a credit card of your own.

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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.Christy Bieber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Target. The Motley Fool has a disclosure policy.

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No matter what type of work you’re interested in, these sites can help you find it. Read on to find the best platforms for freelance and gig work. 

Freelance and side hustle websites have sprung up as demand for this work has increased. Some of the latest data shows that nearly half of all U.S. workers do some sort of gig work or side hustle to earn additional money.

As a freelancer myself, I know it can be hard to find good opportunities that are worth your time. While no website guarantees only quality clients and well-paying gigs, some may be better for you than others based on the type of work you’re looking for.

Here are four of the best platforms to focus your efforts — based on industry — if you’re looking for some extra work to improve your personal finances.

1. Best for creatives: Fiverr

I’m listing this platform first because I have first-hand experience using it and because many websites rank Fiverr as a good place to find creative work. I’ve used it to get freelance writing jobs, but there are many other gig categories on the platform, including voice-over work, animation, video editing, photography, and even artificial intelligence side hustles.

While the platform started with gigs paying at just $5 — hence the company’s name — it’s since evolved into a platform with much higher asking prices. For example, I went through the company’s Fiverr Pro application process, in which I had to prove I have lots of experience writing, and can now charge up to $50,000 for a custom order. I’m still waiting on that one, by the way.

2. Best for technical skills: Toptal

Toptal says its platform has access to the top 3% of freelance talent, so expect to go through a thorough vetting process if you want to get work on this site. Toptal says its site is for software developers, project managers, finance experts, product managers, and web designers.

If you’re thinking of applying to Toptal, there are a few things you should keep in mind. First, the company says the entire screening process takes between two to five weeks, and you’ll be evaluated based on your expertise, professionalism, and communication skills. Through a combination of interviews and skill tests, you’ll have to prove you’re an expert in your field and know how to communicate with clients effectively.

3. Best for a variety of side projects: TaskRabbit

If you’re looking for a variety of work — much of which doesn’t involve sitting behind a desk — then TaskRabbit may be right for you. You can find local projects in 50 categories, including painting, yard work, plumbing, delivery services, and many more.

You’ll have to pay a $25 fee when you sign up for TaskRabbit, but the upside is that you keep 100% of the earnings for your task — while many platforms take a percentage of your earnings — and you keep any tips you receive.

TaskRabbit offers a lot of flexibility for gig workers, because you set your availability and can find many jobs that you may not be able to find on other platforms.

4. Best for nearly anything: Upwork

Upwork is one of the largest freelancing platforms, giving freelancers access to 822,000 active clients and generating more than $2 billion of gig work earned on the platform since 2020.

There are tons of different types of work freelancers can do on Upwork, which is why it’s a great platform for gig workers from a variety of industries. Just a few of the general gig categories include writing and translation, administrative and customer support, finance and accounting, sales and marketing, and creative opportunities.

When looking for jobs on Upwork, you’ll submit a proposal to a prospective client, telling them your pay rate and why you’re the best person for the job. Upwork says that more than 49,000 contracts are signed every week.

A few tips before starting your gig work

I’ve been a freelance writer for about 20 years, so I know both the highs and lows of gig work. If you’re just getting started, here are a few things you should know:

One platform may not be enough: Sometimes, there aren’t enough good projects or clients on one platform, and it may be necessary to use more than one, which is why I’ve used many websites over three years to find work.Create an online portfolio: While I’ve used gig platforms for side projects, I’ve also had plenty of people contact me directly, asking for samples of my work. Creating a simple website with examples of your work will help you quickly show prospective clients what you can do.Plan for an ebb and flow of projects: Even when you’re doing all the right things to market yourself and get new clients, there will be an ebb and flow to how much work you get. Remembering this will help keep you from getting discouraged when work slows down and help you budget for the changes in your income.

While most gig work won’t make you rich, picking up some side projects can be a great way to earn a little extra money to boost your savings or pay off debt. And if you’re looking to hire gig workers, I’ve still got that $50,000 writing project slot wide open.

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These Costco staples will help ensure you’re always ready to whip up a tasty meal or have a delicious snack. How many are missing from your pantry? 

Costco can be a great place to shop for all sorts of products — especially groceries. The warehouse club has a great selection of food products at prices that are friendly to your checking account.

If you want to make sure you always have a well-stocked pantry, but you don’t want to run up big credit card bills doing it, consider stocking up on these Costco staples that are always nice to have around.

1. Olive oil

Costco offers multiple choices of olive oil, including Kirkland Signature, Refined Olive Oil and Kirkland Signature Extra Virgin Italian Olive Oil, as well as an organic alternative, Kirkland Signature Organic Extra Virgin Olive Oil.

At just $9.49 per liter for the regular extra virgin olive oil if bought online and a little less in store, the price is well below what many competitors charge for similar products. With an 18- to 24-month shelf life for most olive oils, you should have plenty of time to use this product up before it goes bad.

It’s convenient to have on hand as a vast majority of recipes require cooking oil, and Costco’s plastic bottle ensures you won’t have to worry about it getting broken on your pantry shelves in between uses.

2. Pancake mix

You can make starting off the day with a good breakfast easy if you keep your pantry stocked with Bisquick Pancake and Baking Mix.

The Costco box makes around 155 pancakes for $10.99 per box sold online. It’s cheaper per ounce than a smaller box purchased at Walmart, and its versatility — including the fact you can make so many things with it, from muffins to bread to waffles to coffee cake and beyond — means you’re very likely to use up the big box once you buy it.

3. Diced tomatoes

Diced tomatoes are a pantry staple because they can be used to whip up a quick soup or sauce for dinner. And the Kirkland Signature Organic Diced Tomatoes from Costco definitely deserve a place in your pantry.

You’ll get eight cans of these organic tomatoes for $7.99 online, which is just under $1 per can. That’s a lower price than many competitors charge, even for non-organic alternatives. The tomatoes have received rave reviews from many online users, so keep them on hand in case you get the urge to make sauce, chili, or a salad.

4. Garlic salt

Garlic salt can enhance many meals, but it can be expensive to buy, with a six-ounce jar priced at $0.623 per ounce at Walmart. You can get a huge jar for less than half that amount at Costco, and will have 33 ounces of garlic salt to enhance your dishes. Meat, fish, soups, and stews can all be made zestier with a few simple shakes, simplifying the process of figuring out what to cook for dinner.

Each of these pantry staples can go a long way toward simplifying your efforts in the kitchen. They’re more affordable from Costco than from many other sources, and they have a long shelf life so you won’t have to worry about buying in bulk. Give them a try today so you’ll be stocked up and ready to make meals at a moment’s notice.

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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.Christy Bieber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale and Walmart. The Motley Fool has a disclosure policy.

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Will closing a bank account hurt your credit score? Read on to find out. 

It’s worth making an effort to build and maintain good credit. The higher your credit score, the more likely you are to qualify for a loan when you need one.

Now, you may be aware that certain actions are apt to result in credit score damage. Being late with a credit card payment or blowing off a mortgage payment could cause your credit score to take a pretty big hit. And you may be surprised to learn that the simple act of closing a long-standing credit card account or paying off a long-term loan, like a mortgage, could cause your credit score to drop, too.

But what about closing a bank account? Will your credit score sustain damage if you decide to move your money out of the bank, or from one bank to another?

Closing a bank account shouldn’t hurt your credit

You may decide to close a bank account if you’re tired of being charged high fees, or if there’s another aspect of your account that isn’t working for you. You may also decide to move your money from one bank to another to snag a higher interest rate on your savings account.

The good news from a credit score perspective is that closing a bank account shouldn’t cause any damage. That’s because it’s just these five factors that go into calculating your FICO® Score:

Your payment historyYour credit utilization, which is the amounts owed on revolving lines of creditThe length of your credit historyYour credit mix (loans, credit cards, etc.)Any new credit accounts you’ve opened

You’ll notice that the length of your credit history plays a role in your credit score, so closing a credit card you’ve had for a long time could cause your credit score to drop. Similarly, paying off a loan you’ve had for a long time could cause a temporary dip in your credit score.

You’d think the opposite would happen, because hey, look at you, you’ve paid off a loan! But unfortunately, it’s common for credit scores to drop when a long-term loan is paid off, since having that loan disappear is likely to shorten the average length of your open credit accounts. It could also change your credit mix.

But a bank account is not the same thing as a credit account. So closing a bank account should not affect the length of your credit history, thereby helping you avoid credit score damage.

How to keep your credit score in good shape

The good news is that you can close your bank account and not have to worry about any resulting credit score damage. But other seemingly innocent moves you make, like opening a few new credit cards in short order, could cause your score to drop.

If you have good credit at present and want things to stay that way, it’s important to focus on your payment history and credit utilization. Those factors have more of an influence than the others above on your credit score. Paying all bills on time and keeping your total credit card balances to 30% of your credit limit or less could help you maintain solid credit.

Also, while it’s OK to close a bank account you’ve had for a long time, think twice before closing out a long-standing credit card account. It’s one thing to pay off a loan and have it removed from your open credit accounts. It’s not as if you can keep making payments on a balance that’s been whittled down to $0. But if you have credit cards that don’t charge an annual fee, hang onto them if they’ve been open for years, so your credit score doesn’t drop due to a closed account.

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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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