Money Management

Making a quick assessment of your retirement savings needs is tricky. Check out an approach that could be the way to go. 

You need to have at least some retirement money in a brokerage account or dedicated retirement savings plan if you want a comfortable life as a senior. The sad reality is, Social Security is only meant to replace about 40% of pre-retirement income, and you’re going to need to replace about 80% or more. That means the rest is going to have to come from your savings.

But how much do you need saved so you can have a secure retirement? Figuring that out may seem complicated, but there’s a quick shortcut you can use.

A simple way to estimate your retirement savings needs

Here’s a fast, easy way to determine the amount you’re going to need to save for retirement: Assume you’re going to need 10 times your final salary. So if you expect to be making about $80,000 when you retire, you’d need $800,000 invested for your future.

If you’re a long way away from retirement, your final salary will probably be more than you’re making right now. But you can get a good idea of what it will be by adding 2% to your salary each year until retirement. For example, let’s say you’re making $50,000 right now and are 10 years away from retirement. Here’s what that would look like.

Based on this calculation, you’d need to have around 10 times your ending salary of $59,754 or about $597,540 saved for your future. If you did that, and you followed the 4% rule, which says to take 4% of your balance out in your first year of retirement and adjust for inflation each year thereafter, your retirement balance would give you about $23,910.00 per year.

That’s just about 40% of your pre-retirement income, so when combined with the 40% Social Security replaces, you’d be in good shape.

How to make sure you hit your savings goals

Having an easy way to estimate your retirement nest egg is the first step. Next, you need to make sure you’re actually saving enough money to hit this target. To do that, it’s helpful to break big goals down into small ones.

For example, if you need a $597,000 retirement nest egg, you could use the calculator at Investor.gov to figure out how much to save each month so you ended up with that amount. To find out your monthly savings target, you’d input:

Your current savings balanceYour desired ending amountYour projected rate of returnThe number of years to retirement

As soon as you know how much to save each month, set up an automated transfer of that amount into your 401(k) or other tax-advantaged retirement plan. Your money will be invested automatically, your nest egg will grow, and you’ll hopefully find yourself ready to retire with the cash you need to live in comfort during the later portion of your life.

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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 Target. The Motley Fool has a disclosure policy.

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Open a Fidelity Bloom account as a new customer and you can earn a sweet bonus. Learn the details here. 

I’m a sucker for a deal, and my credit history would tell you as much. I treat “hard inquiries” like tokens and take out new credit cards with lucrative welcome offers when an inquiry parts ways with my report after two years. I even look forward to the month it’ll disappear. I think of it as an annual bonus.

So when I see a super-easy, no-strings-attached deal, I can’t help but be overly enthusiastic. Recently, I stumbled upon one of the best bank bonuses I think I’ve ever come across. Better yet — I actually like the account. It’s Fidelity Bloom, and if you’ve never used it before, here’s how you can earn $100 on a $50 deposit.

How to get a $100 bonus on a $50 deposit

The beauty of this $100 bonus is its simplicity: Quite literally all you have to do is download the Fidelity Bloom app, deposit $50 in your Fidelity Bloom Spend or Fidelity Bloom Save account, and make sure your net deposit is $50 at the end of seven calendar days. In other words, keep $50 in your new Fidelity account for seven days, and you’ll qualify for the bonus.

To be clear, this is for new customers who have never opened a Fidelity Bloom account. If you have a Fidelity brokerage account — in other words an account that’s not Bloom — rest assured you still qualify for the $100 bonus.

Once you’ve downloaded the app and linked an external bank account, deposit $50 into either your Fidelity Bloom Spend or Fidelity Bloom Save account. Then keep the $50 in your account for seven calendar days. Fidelity will look at your net deposit seven calendar days after you open your account. If that net deposit is $50, you get the bonus.

After seven calendar days, the bonus will be deposited into your Fidelity Bloom account within 10 more calendar days.

Sounds great. But what am I getting myself into?

Fidelity Bloom is a financial app designed to help you save money. It isn’t a checking account. Rather, it’s a brokerage account that’s covered by SIPC insurance. Like FDIC insurance, SIPC insurance covers your Fidelity Bloom account if Fidelity were somehow to fail, up to $250,000 for cash ($500,000 total including your securities).

The app’s features are pretty neat. It comes with a debit card that earns $0.10 for every purchase you make. That’s not super impressive — most cash back credit cards will give more value for your purchases — but also not terrible considering it’s a debit card linked to a free financial app. You also get a 10% annual match on your savings, up to $300 in deposits, or $30 extra per year.

When you open your Fidelity account, you’ll notice you have two accounts: Spend and Save. This is designed to bring greater awareness to your spending. By putting some resistance between savings and spending, you might feel less compelled to let go of it. Who knows if it works — you be the judge — but it’s a cool concept nonetheless.

All in all, this is an easy way to earn $100. Just keep in mind any rewards you earn through Fidelity Bloom will be considered taxable income and could be reported on a 1099. Prepare for the tax bill by setting aside some money in your savings account, and this reward can be a nice little bump for your personal 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.The Motley Fool has a disclosure policy.

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It’s time to put your Prime membership to good use. Read on for some great Amazon deals you’ll find right now. 

At this point, Amazon customers are no doubt gearing up for the online retail giant’s October Prime Day event. Dubbed Prime Big Deal Days, the two-day shopping extravaganza will take place on Oct. 10 and 11. During that time, you can expect numerous deals to drop.

But you don’t necessarily have to wait until Oct. 10 to enjoy big savings on Amazon. Here are some great deals you’ll find right now.

1. Bose Headphones 700, Noise Canceling Bluetooth Over-Ear Wireless Headphones

A lot of people have finally returned to office life after years of working remotely. If you need a way to drown out the sound of chattering colleagues so you can focus on your work, you may want to consider investing in these Bose headphones.

With 11 levels of active noise cancellation, you can adjust your settings to create a distraction-free environment. You might also want a great set of noise-canceling headphones if you’re still working remotely and tend to set up shop at local coffee houses or public spaces.

These headphones normally sell for $379, but right now, they’re marked down to $299. That’s a sweet 21% discount.

2. Amazon Essentials Men’s Lightweight Water-Resistant Packable Hooded Puffer Jacket

In some parts of the country, cool weather is already upon us. And in other parts, it’s right around the corner. So now’s a good time to purchase a jacket that’ll keep you warm on those blustery days.

Amazon is selling this men’s jacket for $35.60, which is 20% off the regular price of $44.50. And as a Prime member, you can use the try before you buy program for this item so your credit card won’t be charged until you confirm that it’s a good fit. What makes this such a great buy is that it’s a warm jacket that also packs down easily, so you can fit it into a backpack without breaking a sweat.

3. WANNTS Pumpkin Carving Kit

Halloween will be here before you know it. If your kids are excited about the idea of carving pumpkins, this kit could be your ticket to a seamless process. It features a pumpkin scooper, carving knife, and other helpful tools. And you can snag it for $16.96 right now, which is 15% off the normal price of $19.98.

4. Amazon Fire HD 8 Kids Pro tablet

The holidays are right around the corner, and your kids might have tablets on their wishlists. If that’s the case, you may want to snag this Fire HD tablet now, while it’s on sale for 50% off. That means you’ll pay $74.99 instead of $149.99.

The tablet features an 8-inch display and 13 hours of battery life. It’s the sort of purchase that could be a lifesaver for long plane rides or car trips.

5. MAIPOR 13 in 1 Food Chopper

If you’ve been pledging to eat more vegetables and do more cooking at home, this vegetable chopper is a good tool to invest in. It comes with eight interchangeable blades so you can dice and slice your way to healthy meals in your kitchen. You can mince garlic, grate carrots, and more for just $17.97, which is 46% off the normal price of $32.99.

You may be planning to save your money for Prime Big Deal Days and stay off of Amazon until then. And that’s fine. But if these items appeal to you and you have the cash, then you may want to scoop them up while they’re available at a discount.

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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.John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Maurie Backman has positions in Amazon.com. The Motley Fool has positions in and recommends Amazon.com. The Motley Fool has a disclosure policy.

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CD rates are unbelievably high right now — and could rise even higher. Find out here if a CD is the best investment for your money. 

Certificates of deposit (CDs) have made a major comeback this year. Whether you were a fan of fixed-income investments before, it’s hard to ignore them now, what with top-paying CDs earning at least a 5% APY. This past August, in fact, one credit union even boasted a 7.19% APY on a 7-month CD. That’s getting close to the average annual growth rate on the S&P 500 index over the last 30 years — about 10.7%, not counting 2023 — on a bank product with few of the same risks.

All this CD craze may have you wondering if now is the time to invest in them. From a certain perspective, yes, now is the best time in over two decades to invest in CDs. But that doesn’t mean CDs will be right for you. With that in mind, let’s look at the pros and cons of CDs, as well as some ways to buy them.

Why CDs are a strong financial product

CDs are uber-safe places to store savings, and they have none of the volatility of stocks or mutual funds. In fact, CDs appeal to many investors and retirement savers simply because they guarantee you’ll earn money at a fixed rate over the duration of your CD term. If your CD has a term of two years and a 5% APY, then you’ll earn 5% on your money for two years — no matter what happens to CD rates over those two years.

Combine this security with today’s top-paying CD rates, and you have a compelling financial product. In fact, if you’re really passionate about earning the most interest, you could build a CD ladder. This would involve investing in different short- and long-term CDs — “rungs” — with varying maturity dates. The idea is that you can earn interest broadly across your money while also ensuring you’re never too far from a CD maturing.

For instance, if you had $20,000 to invest, you could split your money like this:

$4,000 in a 3-month CD$4,000 in a 6-month CD$4,000 in a 1-year CD$4,000 in an 18-month CD$4,000 in a 2-year CD

When the 3-month CD reaches maturity, you could reinvest the money in another CD, creating another rung on your ladder. Or, if a more lucrative opportunity presents itself, you could invest in that. Either way, a CD ladder lets you access portions of your savings early and make choices that could boost your overall earnings.

Why you should be cautious about CDs

CDs are great for money you won’t need for the near term. But they’re not the same as savings accounts, and they won’t let you withdraw money easily.

In fact, most CDs have early withdrawal penalties to discourage you from pulling out your money too early. These penalties can range from paying three months of earned interest to as much as 12 months or higher. And yes — you could pay three months’ worth of interest even if you haven’t had the CD for three months. That would result in a loss, and this issue is one of a CD’s major drawbacks.

How to buy CDs

If you’re sure a CD is the right product for you, take a look at today’s top-paying CDs. Look closely at the fine print and understand conditions like minimum deposits, early withdrawal penalties, and what happens to your money when the CD matures. You’ll then need to create an account with the CD provider, which will involve verifying your identity and making an initial deposit.

All in all, now is a great time to buy CDs. While the Federal Reserve could push interest rates even higher, it likely won’t push them so high as to eclipse today’s top-paying CDs. Take a look for yourself and see if it’s worth locking up a portion of your savings in exchange for a high APY.

These savings accounts are FDIC insured and could earn you 12x your bank

Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts can earn you 11x the national average savings account rate. Click here to uncover the best-in-class picks that landed a spot on our shortlist of the best savings accounts for 2023.

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 positions in and recommends Uber Technologies. The Motley Fool has a disclosure policy.

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