Money Management

A visit to Amsterdam will cost more in 2024. The city will increase its tourist tax to 12.5%. Find out how much tourists can expect to pay with this change. 

If you like to travel internationally and spend time in Europe, you’ll want to know about this news. Officials in Amsterdam, a popular tourist destination in The Netherlands, recently approved a measure to increase the city’s tourist tax to 12.5% starting in 2024. Any tourists visiting the city by cruise ship or spending the night will be subject to this tax.

Tourists will soon pay more when visiting Amsterdam

Over-tourism is a continued problem worldwide. Increasing tourist taxes is one way some popular destinations deal with the negative growing impacts of over-tourism. Amsterdam, which sees more than 20 million visitors per year, recently announced its 2024 budget.

In 2024, tourists will help boost funding for the city by paying an increased tourist tax. Visitors will be charged a 12.5% tourist tax starting next year. This additional expense is something that travelers should consider and budget for before visiting.

In a statement about the news, Hester van Buren, Amsterdam’s deputy mayor of finances, said, “Visitors will thus help to pay for the City to carry out its tasks. This allows us to address the consequences of over-tourism and direct additional resources to keeping the streets clean and solving acute problems in neighborhoods and districts.”

Since 2020, visitors have been paying a 7% tax, plus an additional 3 euros per night, per person fee when booking a hotel. But that will soon change. According to a statement from the city, the average room rate is 175 euros per person (about $185). Tourists can expect to pay 15.25 euros to 21.80 euros per night in taxes in 2024 when booking a hotel. A stay that costs about $16 per night in tourist taxes would cost about $23 per night next year.

As mentioned earlier, cruise goers will also be subject to a tourist tax, though they’ll be taxed differently than overnight guests. Cruise ship passengers can expect to pay 11 euros instead of 8 euros per day next year — or about $11.62 instead of $8.45.

Plan for additional costs when visiting international destinations

While the increased tax may not sound like a lot, it will add up if you plan to spend several days in Amsterdam. Before taking a vacation, establishing a vacation budget can help you avoid overspending. You can regularly set money aside in a savings account to prepare for the cost of an upcoming trip so you feel less financial stress when it’s time to depart.

In addition to budgeting for accommodation, transit, food and drinks, and activities, you should research other potential costs. Tourist taxes are one such example. Many European destinations impose a nightly tourist tax when you book a hotel. This non-optional fee may need to be paid separately at check-in.

Another additional cost to consider before leaving the country is foreign transaction fees. If you plan to use a credit card when traveling abroad, you should make sure you have a credit card with no foreign transaction fees in your wallet.

Using one of the best travel credit cards that doesn’t charge foreign transaction fees can be an excellent way to save on extra costs when traveling internationally. Otherwise, you may pay a fee of 3% or more every time you swipe your credit card while adventuring abroad. Every extra charge adds up and could make your credit card bill more costly.

Keep your finances top of mind

Whether you’re going about your everyday affairs at home or traveling the world, it pays to keep your finances in mind. By making the best financial decisions possible, and planning ahead for future costs, you can maintain good financial health. Check out our free personal finance resources to learn more about what you can do to improve your finances.

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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.Natasha Gabrielle 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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You can cut your living expenses dramatically by retiring in another country. Here’s where your retirement savings will go the furthest. 

There are many different factors to consider when deciding where you’ll spend your retirement years. Some people want to be as close to family as possible, some focus on travel, and others may prefer to stay where they’ve always been.

But one thing that influences everyone’s retirement, no matter where they end up living, is how much money they’ve saved. The insurance company New York Life estimates that Americans who retire at 65 can expect 20 years of retirement, on average, and will need $987,000 to cover their expenses.

That’s a hefty sum of money to squirrel away, and it may be out of reach for many American workers. Thankfully, there are several countries where the cost of living is much lower than in the U.S., which is likely why an estimated 15% of Americans say they plan to retire abroad.

If you’re looking to stretch your retirement budget as far as possible, here are some of the cheapest places to consider.

Where your retirement funds will go much further

In the U.S., the average cost of living is $2,317 per month for one person, which is about 2.3 times more expensive than the world average, according to data from LivingCost. If you’re looking to reduce your retirement expenses drastically, here are five places around the world that could be good places to settle down.

1. Brazil

Retirees will fork over just $736 per month on average by moving to Brazil. The cost of living here is 1.3 times lower than the world average.

2. Ecuador

Moving to Ecuador will cut your living expenses by more than half compared to the U.S., considering it costs an average of $779 per person to live there monthly.

3. Mexico

The cost of living just over the border is $911 per month, about 1.1 times lower than the world average.

4. Costa Rica

Moving to Costa Rica could cut your cost of living by 53% compared to staying in the U.S., and will set you back just $1,073 per month.

5. Portugal

Living your retirement years in Portugal could save you nearly 50% off of living in the U.S., considering the average monthly expenses will set you back $1,180.

Of course, everyone’s personal finances are different, so the amount you spend in each of these countries could be different based on your housing costs, food, and other expenses. But in general, these countries offer a far lower living cost for retirees than the U.S.

If you’re planning to live abroad in retirement, you should consider that many countries have visas specifically for retirees. These visas may require you to prove your income and list assets you own to prove that you won’t be a financial drain on the country.

How to build up your nest egg no matter where you live in retirement

Whether you’re just getting started in the workforce or are nearing retirement, there are several steps you can take to put your retirement on track. Here are a few suggestions to help you get started:

Set up an individual retirement account (IRA): Open a brokerage account and regularly contribute to your IRA. You can contribute up to $6,500 into your IRA account — or $7,500 if you’re 50 or older — in 2023. You can also choose between a traditional IRA and a Roth IRA, so be sure to compare the benefits of each beforehand. Sign up for a 401(k) plan: If you have a 401(k) plan through your employer, make sure to sign up for it and contribute as much as possible. If your employer offers a matching contribution plan, it’s a good idea to contribute enough in order to receive the maximum amount your employer offers. Pay down debt: Besides investing, eliminating debt will help put you in a better position to retire. This may mean paying off credit card debt, downsizing to a smaller home, or consolidating your debt to make it more manageable.

While there’s no one-size-fits-all approach to where you spend your retirement years, planning ahead now will give you more options on where and how you retire years down the road.

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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.Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Visa. The Motley Fool has a disclosure policy.

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It can be easy to get a good deal when you shop online. But make sure you land the best deal possible. Find out how to use coupon codes to save more money. 

I’m a big fan of shopping online. It saves me time, I can avoid traffic and long lines of people, and I get to shop in my pajamas without feeling judged. I also find it easier to maximize my savings when I shop online. I can find the best sales and compare prices across multiple retailers.

I take one extra step before I complete the checkout process to ensure I’m getting the best deal possible. You, too, can use this same strategy to ensure you’re not spending more than necessary when shopping online.

This one step could help you waste less money

When I shop online, I’m looking to maximize my savings from the very start. I often pay attention to email newsletters and social media posts to know when my favorite retailers have a big sale. But that’s not all I do to keep more money in my checking account.

During checkout, many popular retailers allow customers to enter a promo or coupon code. Shoppers can get a discount on their order with a valid coupon. If a store I’m shopping at has a place to enter a promo code, I take an extra minute to check for valid codes. This process takes almost no extra effort on my part and is an easy way to get a better deal.

Are you wondering how to find active coupon codes? One way is to review marketing emails from your favorite online stores. Another option is to use Google to search for coupon codes. Alternatively, you can use one of the best coupon apps to discover promo codes.

Saving money with coupon codes is simple. All you have to do is copy and paste an active code and try it during checkout. Sometimes, you may encounter an expired code. But you can always try another one to see if it’s valid. While not every retailer supports discount codes, many do. I’ve saved significant money shopping online by taking this simple extra step. If you are working hard to meet your personal finance goals, this is an easy strategy you may want to consider following the next time you shop online.

Even a small discount can make a difference. The savings will add up as you continue to use online coupon codes. If you shop online regularly, this could be a great way to boost your savings account balance without doing much work.

Don’t miss out on the chance to earn rewards

Here’s one more tip that could be a win for your wallet: Don’t ignore cash back apps.

You can earn cash back rewards when you shop online with your favorite retailers. These apps and browser extensions are easy to use. Many of the best cash back apps offer cash payment once you accumulate enough rewards. These apps offer yet another way to maximize your savings and get rewarded when you spend money.

My favorite cash back app is Rakuten. I use the browser extension regularly, and many of my favorite retailers are partners. If I’ve accumulated at least $5.01 in cash back earnings every quarter, a payment is sent directly to my PayPal account. I have been a Rakuten fan for years.

Don’t miss out on the chance to earn rewards when you shop. Whether you use cash back apps or pay for purchases using a rewards credit card, you can benefit by making extra cash. Check out our list of the best cash back credit cards to find the right rewards card for your needs.

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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.Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Discover Financial Services is an advertising partner of The Ascent, a Motley Fool company. Natasha Gabrielle has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and PayPal. The Motley Fool recommends Discover Financial Services and recommends the following options: short December 2023 $67.50 puts on PayPal. The Motley Fool has a disclosure policy.

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There’s no perfect answer to the question of how much retirement income is enough. Read on to learn how to determine your own retirement number. 

If you earn a six-figure salary, how much will you need in savings in order to retire comfortably? $1 million? $2 million? More?

Unfortunately, there isn’t a one-size-fits-all answer to this question. There are too many variables that should be included from your personal situation, and there’s absolutely no way to predict how factors like inflation and investment performance will affect your nest egg after you retire.

With that in mind, there are some steps you can follow to determine how much you should aim to save. Using a $100,000 annual income, let’s walk through the process and look at an example of how someone at this income level might determine their retirement target.

It’s all about income

Many people think of a dollar amount they want to save. $1 million is a common retirement goal, just to name one example.

However, you shouldn’t think of how much money you need. Consider how much money will provide the level of sustainable income you’ll need in retirement.

Most financial planners (including myself) suggest that the average person will need about 80% of their pre-retirement income to maintain the same lifestyle after they retire. The idea is that you won’t need quite as much, as you’ll no longer need to save for retirement and there are some expenses you might no longer have — such as costs involved with commuting to work. So, someone with a $100,000 salary should anticipate needing about $80,000 per year after they retire.

Of course, this is based on the average person, so adjust your income target higher or lower accordingly. For example, if you plan to travel extensively, you may need more. If you anticipate paying off your home and car before you retire and generally plan to live a modest lifestyle, you may be perfectly comfortable with less.

The 4% rule of retirement

The 4% rule of retirement says that in order to minimize the chance you’ll run out of money, you should withdraw 4% of your savings in your first year of retirement and adjust the amount each year for cost-of-living increases. So, if you have $1 million in retirement accounts, $40,000 per year would be a safe withdrawal rate.

Admittedly, this rule isn’t perfect, but it’s a great starting point for ballpark estimates of your retirement needs.

Consider other income sources

Before we go any further, it’s important to consider other income sources. Social Security is the one virtually all retirees have, and there are other things like pensions, annuities, etc.

Let’s start to put this together. With a $100,000 salary, the average person will need $80,000 in retirement income. If you anticipate $30,000 in annual Social Security income, this lowers the need from your savings to $50,000.

How much do you need to save?

We can easily estimate your income needs using the 4% rule. You can do this by simply multiplying your income goal by 25, and this will help estimate how much you’ll need in savings to retire comfortably.

Continuing our example, someone who needs to sustainably withdraw $50,000 in annual income from their retirement savings would need $1.25 million in order to produce it.

How much should you save every month or year?

This is a much more complicated question than coming up with a savings target. There’s no way to know how your investments will perform between now and when you retire, and your age plays a big factor. After all, someone who is 25 and wants to retire with $2 million will have a completely different savings need than someone who is 40 if both are starting from zero.

Having said that, a general goal for someone who is on track for retirement is to aim to save 10% of pre-tax income, not including any matching contributions your employer makes. If you have fallen behind or are getting a late start on retirement savings, it might be wise to bump that up a few percentage points.

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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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When I was shopping for a mortgage, there was one thing I prioritized above all other criteria. Here’s why. 

Recently, I shopped around for a mortgage loan. I am buying a home and I’m borrowing to do it, so I wanted to get the best loan for my situation.

When I was comparing lenders, there was one factor I focused on above all else. (And if you’re buying a home in the near future, don’t forget to prioritize this factor yourself.)

My most important criteria for picking a mortgage lender

When I picked my mortgage lender, what I focused on most was the interest rate that I would be charged for the loan.

There are a few reasons why this mattered so much to me:

The interest rate determines how much my loan will cost me over time. I wanted to make sure I was paying the lowest amount possible.Customer service isn’t a big factor. I know many mortgage lenders end up re-selling the loans — sometimes multiple times. Even if I spent time looking for a bank or mortgage company with a great reputation for taking care of its customers, there was no guarantee it wouldn’t sell the loan quickly to a lender I didn’t like at all. I knew I could qualify for a loan with any lender. I have good credit, was making a large down payment, and my payment is well within the allowable limits based on my income, so I didn’t really have to worry whether I would meet my lender’s criteria.

For these three reasons I had the luxury of being able to focus on interest rates. If you are applying for a government-backed loan (such as an FHA loan) or if your financial credentials aren’t perfect, you may need to prioritize picking a lender that provides the type of loan you need and that will actually loan money to someone in your specific circumstances.

But if you are well-qualified, you’ll likely want to focus on the interest rate as the most important factor as well.

Why does interest matter so much when you’re picking a mortgage lender?

The rate of interest you end up paying on a mortgage loan makes a huge difference in monthly payments and total costs over time — especially since you are likely borrowing hundreds of thousands of dollars over many decades.

If you have even a small difference in the rate you’re offered from one lender to another, it can have a big impact. Check out the table below. It shows how much your monthly payment and total interest costs would be over time at different rates for each $100,000 in mortgage debt you take on:

You don’t want to waste money if you can get a lower rate, so be sure to make this a key criteria when you look for a home loan of your own. Get several quotes from different kinds of lenders, including banks, credit unions, and online mortgage companies, and be sure you’re focused on rate and total borrowing costs over time so you can get the right loan for 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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