Money Management

Early retirement can be risky. Read on to see what it might mean for your savings. 

Some people dream of an early retirement. And if you save well and invest savvily during your career, you may wind up in a position to wrap up your career at an earlier age than average.

A good 32% of workers say they plan to retire before age 65, according to the Employee Benefit Research Institute. But the term “early retirement” can mean a lot of things. It can mean retiring at age 60, 55, 50, or earlier.

The earlier you retire, the sooner you might end up tapping your nest egg and shrinking your savings balance. So it’s important to put a lot of thought into early retirement — and figure out a way to make your money last if you decide to go that route.

The danger of early retirement

It’s easy to see why early retirement is appealing. You’re likely to have more energy to travel and enjoy life when you’re in your 50s or early 60s than when you’re in your late 60s or early 70s. So it makes sense to want to stop working at an earlier point in time.

The problem, though, is that the earlier you retire, the longer your savings might need to last. And if you start tapping your savings at an earlier age, you might end up running out of money before you reach your later years.

Let’s say you’ve managed to build a $1 million nest egg. That’s quite impressive. But there’s a big difference between needing that money to last 20 years, which may be the case if you retire in your mid-60s or beyond, versus needing to last 30 years or more, which may be the case if you retire early.

Plus, if you stop working at an early age, you won’t be contributing to your IRA or 401(k) any longer. So not only will you potentially be drawing down your savings, but you also won’t be putting in more money in the absence of earning a salary from a job.

Remember, too, that age 62 is the earliest age to sign up for Social Security. If you stop working completely at age 58, you might have a few years where you have to dip into your savings heavily because you have no other income at your disposal.

Should you retire early?

If you have a lot of savings, then you may be inclined to retire early. And why not, if you can afford it?

Let’s say you start taking $50,000 a year out of a $2 million nest egg in your 50s so that by the time you reach age 65, you’re down to $1.6 million. That still leaves you with a nice sum of money at a more traditional retirement age, so the fact that you took those withdrawals may not be problematic.

However, if you’re only starting out with $800,000 and you get down to $400,000 by age 65, that’s a little more precarious. Granted, it still may not be a problem if you plan, from that point on, to collect Social Security benefits and live more frugally.

The point, however, is that retiring early puts you at risk of spending down your savings in your lifetime and reaching a point where you’ve run out of money. So you’ll need to make sure early retirement is something you can afford, and also, come up with a withdrawal plan rather than just tapping your savings at random.

In this regard, sitting down with a financial advisor could be a smart bet. Someone with those skills can look at your needs, goals, and savings to help you not only determine whether early retirement is financially feasible, but how to manage your savings in light of it.

Our best stock brokers

We pored over the data and user reviews to find the select rare picks that landed a spot on our list of the best stock brokers. Some of these best-in-class picks pack in valuable perks, including $0 stock and ETF commissions. Get started and review our best stock brokers.

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.

 Read More 

Have access to both savings and investments as a retiree? Here’s your game plan for deciding which funds to access at different times. 

The average 60-something today has $112,500 in retirement savings, according to Northwestern Mutual. But ideally, you’ll end up starting off your retirement with a higher IRA balance than that. In fact, ideally, you’ll have not just an IRA at your disposal, but also, an emergency fund.

Workers are often advised to sock away three months’ worth of essential living expenses in a savings account in case unplanned bills arise. That three-month recommendation also stems from being able to cover a period of unemployment in the event of unexpected job loss.

If you’re retired, it means you don’t have a paycheck from a job you need to worry about replacing. But you might still encounter your fair share of surprise bills, like home and car repairs. So it’s a good idea to have an emergency fund to tap on top of an IRA.

It does raise the question, though — which account should you withdraw from first once your career wraps up?

Your IRA is usually your best bet for everyday expenses

Once you stop working, you’ll likely still need access to money to pay your bills. That’s what your IRA is for.

Your IRA is an account you should expect to tap regularly in retirement. Your emergency fund, by contrast, is an account you should generally reserve for unplanned bills.

The reason is that in an emergency, you might need access to actual cash in a pinch. You can get that from your bank. With an IRA, you have to go through the process of selling investments first, and you may not get access to your money as quickly.

Your emergency fund can step in when the stock market tanks

While it’s generally best to tap your IRA for everyday expenses, there’s an exception to that rule, and it’s during periods when the stock market is going through a major slump. While your emergency fund is supposed to sit in cash, your IRA is supposed to stay invested in stocks and other assets that can help your balance continue to grow during retirement.

But let’s say the stock market takes a dive and the assets in your IRA lose value. If you were to take an IRA withdrawal, you’d be locking in a loss by liquidating an asset to free up that money. So in that specific situation, it’s usually best to tap your emergency fund first, especially if it’s pretty robust.

In fact, for people who are still working, the general convention is to save enough money in an emergency fund to cover three months of bills. But retirees are often advised to keep at least a year’s worth of expenses in the bank. That way, if the stock market experiences an extended period of decline, you can avoid locking in losses by tapping your savings instead of your investments.

All told, entering retirement with a nice-sized IRA and emergency fund gives you the best of both worlds. But it is important to know which account to tap first under different circumstances.

Our best stock brokers

We pored over the data and user reviews to find the select rare picks that landed a spot on our list of the best stock brokers. Some of these best-in-class picks pack in valuable perks, including $0 stock and ETF commissions. Get started and review our best stock brokers.

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.

 Read More 

Homeownership can be expensive. Read on to see what neighborhood perks to look out for that could help offset your costs. 

Owning a home is expensive. You have to cover the cost of a mortgage, property taxes, insurance, maintenance, and repairs. And even when you do your part to keep your housing costs down, such as making repairs yourself and putting a larger down payment on your mortgage loan to lower your monthly payments, you might still end up spending an uncomfortably large chunk of your paycheck to put a roof over your head.

That’s why it’s so important to approach the home-buying process strategically. And part of that means being conscious of neighborhood perks with the potential to help you save money in other ways. Here are some perks worth looking out for.

1. Parks

Having access to great parks could benefit you in a few ways. First, it’s instant entertainment for your kids. Rather than have to spend money on play spaces or amusement parks, you can shuttle your kids over to a local playground and let them burn off as much energy as they need to.

Plus, if you buy a home that has several nice parks within walking distance, you’ll save yourself money on gas. And if you’re able to meet new people at the park, it might spare you from having to sign up for things like music and art classes simply to broaden your network and make sure your child socializes.

2. Libraries with great programming

If your local library has great programs for constituents, it may not just benefit your kids. You, too, might get to take advantage of classes that keep you busy and help you grow your knowledge.

Some libraries, for example, offer courses on things like web design and coding. If that’s a skill you need to further your career, taking a free class at your local library might set you up for a better job and higher salary — one that makes your home easier to afford.

3. Free pre-K

Parents of children younger than 5 years old often struggle to pay for child care. So if you’re able to move to a town that offers free pre-K for children aged 3 and 4, you could save yourself a bundle on the cost of daycare or preschool.

Of course, pre-K won’t give you full-day care. Depending on where you live, it might be a half-day of school or a full day. But even a full day of school is generally not eight hours, or the equivalent of a classic workday.

However, BabyCenter reports that the average cost of preschool for kids between the ages of 3 and 5 is about $10,000 per year. So if you’re able to get your child into a pre-K program that doesn’t cost anything, you can save a bundle.

And to be clear, even if you don’t work, many parents find that it’s important to put their kids into some sort of educational program prior to kindergarten, which commonly begins at age 5. So while you can argue that preschool isn’t an absolute necessity, it’s something a lot of parents feel compelled to pay for.

There’s no getting around the fact that homeownership is expensive. But perks like these might not only save you money, but help make you feel as if the home you’re paying for is more than worth it.

Our picks for the best credit cards

Our experts vetted the most popular offers to land on the select picks that are worthy of a spot in your wallet. These best-in-class cards pack in rich perks, such as big sign-up bonuses, long 0% intro APR offers, and robust rewards. Get started today with our recommended credit cards.

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.

 Read More 

Pets are family, and it’s important to have a solid source for their food and other supplies. Keep reading to learn why one writer is a fan of Chewy.com. 

If you’ve got pets, you know how important it is to source the best food, toys, and supplies for them so you can give them the best life possible. I have a few regular sources for everything I need to keep my three very spoiled cats happy and well fed, and one of them is Chewy.com. If you’ve never ordered from Chewy before, you’re missing out — this pet supplier has great deals and superb service, and is well worth the credit card charge. Here’s why you should give Chewy a look.

1. The deals available

Chewy offers a lot of great deals on select items, and at any given time, your order might qualify for a free gift card, free bag of pet treats, or a free toy. I hopped over to the Chewy site to see what deals might be available right now, and I found a “buy three, get the fourth free” sale, with hundreds of items eligible. This included dog and cat toys, treats, and even cleaning supplies (always necessary when you have pets).

And a free gift card with an eligible order is always welcome — one of the orders I placed last year came with a $25 gift card. Shopping at Chewy means getting the chance to take advantage of these deals.

2. Helpful product reviews

If you’re anything like me, you’re always on the lookout for new pet products to make your life easier as well as spoil your pet. Chewy is a great place to learn about new treats, toys, and more, because of the product reviews left by other pet owners just like you. When you’re searching inventory, you can sort the list to view products by rating, and this can be a timesaver.

And Chewy staff members read the reviews on the site, at least to some degree. I ordered some cat litter bags that were unfortunately not up to snuff, and I left a review stating just that. A few days later, I had an email from Chewy’s customer service, apologizing for the product quality and noting that my money would be refunded!

3. Free and automatic shipping

Here’s where I admit that I don’t use Chewy’s Autoship service, which functions a lot like Amazon’s Subscribe & Save (and I don’t use that either). This isn’t because the service stinks — I have a lot of friends with pets, and many of them swear by Autoship. With Autoship, you choose the products and how often you want them sent to you. You save 35% off your first Autoship order and 5% on subsequent orders.

But I prefer to order items when I need them, and Chewy has my back here, too. Until recently, you needed to spend at least $49 to get free one to three day shipping from Chewy, but when I was researching this article, I found that the threshold has been lowered to $35! And if you only need, say, $20 worth of items, you can get fast shipping for the flat rate of $4.95.

Wait, what about the prices!?

I’m the first to admit that I enjoy saving money on my purchases, but I don’t base my buying decisions entirely on how much a given item costs at a certain retailer. The shopping experience counts alongside the hit to my checking account. I did some price checking for things I buy frequently for my three cats, to see how the costs shook out at Chewy, Amazon, and PetSmart:

For two of my items, Amazon and Chewy priced them the same. For the third, Amazon was cheaper, but not by a lot. And in all cases, PetSmart was the most expensive. For individual items I buy frequently, I have a look at Amazon or Chewy to see which is cheaper, and generally buy from there. PetSmart is often my third choice, and not just because of price — I have a PetSmart store in my area, but it’s easier to order pet supplies, so I tend to default to one of the online-only options.

While Chewy does sometimes have the cheapest prices, my reasons for using it go beyond just saving money. I like the fast free shipping, finding deals on different products, and reading helpful reviews so I know I’m getting products my cats will like. Give Chewy a try and see what you think.

Alert: highest cash back card we’ve seen now has 0% intro APR until nearly 2025

If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR for 15 months, an insane cash back rate of up to 5%, and all somehow for no annual fee.

In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.

Read our free review

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. The Motley Fool has positions in and recommends Amazon.com. The Motley Fool has a disclosure policy.

 Read More 

Great customer service is important. Read on to see which stores are excelling at it in my book. 

I tend to do a lot of my shopping on Amazon, as opposed to hitting the stores. I’m generally not a fan of navigating crowds and having to deal with actual humans when I’m in a hurry to get things done. I’d usually rather point and click my way to the things I need, enter a credit card number at checkout, and be done with it.

But sometimes, I have no choice but to shop in person. And when I do, I prefer to give my business to stores that offer great customer service. Here are three winners in that category based on my experience.

1. Costco

Groceries are the one thing I really don’t like to buy online. So I tend to go to Costco on a weekly basis to stock up on food for my family. And while I don’t love the throngs of people at Costco, I do appreciate the fact that the store offers great service.

Costco says on its website, “We guarantee your satisfaction on every product we sell.” And every time I’ve had to take an item back to Costco due to a quality issue, I’ve gotten a full refund — no questions asked.

I’ve even gotten refunded for partially eaten food. What happened was that I’d purchased a two-pack of cheese and one pack grew mold ahead of its expiration date (and before I’d even broken the seal). When I asked for a 50% refund at Costco (logic being that I’d consumed 50% of the cheese), the customer service rep said something like, “Nope, we don’t do that. Here’s 100% of your money back.”

2. Trader Joe’s

Being friendly is practically a requirement to work at Trader Joe’s. In fact, only two stores beat Trader Joe’s in a consumer popularity survey this year.

What I like about Trader Joe’s is that not only are the customer service folks friendly, but they’re super helpful. A while back, my kids and I discovered that their favorite Trader Joe’s granola bar was no longer on the shelves — or in production.

The Trader Joe’s employee who had to break the news then proceeded to start opening boxes of different granola bars so my kids could sample them and find an alternative they liked. When I offered to pay for those boxes, I was told no.

3. Home Depot

Home Depot isn’t a store I visit often. Usually, when there’s a home repair to tackle, my husband is the one to take charge. But when it’s a design or home improvement project, I’ll come along. And I’ve always been impressed by how helpful Home Depot employees are.

When we were painting our kids’ rooms, an employee took the time to walk me through my options for paint finishes. Another time, I was looking at faucets trying to figure out the best choice for our kitchen sink, and an employee was kind enough to open up several boxes for me to get a better look.

Customer service or a lack thereof can make or break your shopping experience. While I still prefer to shop from the comfort of home whenever possible, I don’t dread heading to Costco, Trader Joe’s, or Home Depot by any means.

Alert: highest cash back card we’ve seen now has 0% intro APR until nearly 2025

If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR for 15 months, an insane cash back rate of up to 5%, and all somehow for no annual fee.

In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.

Read our free review

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. Discover Financial Services is an advertising partner of The Ascent, a Motley Fool company. Maurie Backman has positions in Amazon.com. The Motley Fool has positions in and recommends Amazon.com and Costco Wholesale. The Motley Fool recommends Discover Financial Services. The Motley Fool has a disclosure policy.

 Read More 

There are many credit card issuers out there. Keep reading to learn why it could make sense to have more than one card with the same issuer. 

Since credit cards are such an accessible way to build credit and earn rewards on your everyday spending, it sure is convenient that they’re available from so many different companies. This includes big-name banks as well as your neighborhood bank. With so many options, why would you ever bother getting more than one credit card with the same issuer?

Well, doing so can come with some pretty sweet perks. Let’s take a look at why you might want multiple credit cards with the same company.

You can earn rewards on different kinds of spending

A given credit card issuer might have multiple card options, but those credit cards won’t all earn the same kind or rate of rewards, and they likely won’t all be for the same categories. For example, an issuer might have a card that earns 3 points per $1 spent on dining and travel purchases, but a paltry 1 point per $1 for other spending categories.

If you like the company (and its customer service, mobile app, and so on), you might consider opening another card that earns more points for other purchases. Then you can use both and stack rewards. It’s unlikely that you’ll find one credit card that offers a good rewards rate for every single thing you buy, but having more than one card can help you maximize all your purchases. And when it’s time to redeem points (say, to pay for hotel stays on an upcoming vacation), you have more to use.

You can transfer credit limits

One of the cooler perks of having multiple cards with the same issuer is that you can sometimes transfer your credit limits. To give an example, I recently decided to add a third credit card with a particular issuer to my wallet. While I was approved for the card, I was given a very low credit limit, likely because I already had high limits with the two other cards.

I called the card issuer’s customer service line and reached a representative who was happy to help me, and ended up taking some of the credit limit from another card and adding it to my new card. This helped me out, as I got the new card with the hope of using it for more of my everyday spending (based on the rewards categories). Now I can use it without easily maxing it out or worrying about my credit utilization on any one card creeping too high (which would have been likely based on my initial credit limit).

You can more easily manage your credit card accounts

Another great perk of having multiple cards with one issuer is the ease of managing those accounts. Think about it — you can sign into one credit card company’s website and have all those accounts in one place. You can see how much you owe and easily make your payments all in one fell swoop. This makes it a lot less likely that you’ll forget you owe money on a card and accidentally pay late, or miss a payment altogether (this is decidedly no bueno for your credit score).

If you really like a particular credit card issuer, or wish you had a way to earn more points on all your purchases, see what other cards are offered. Having multiple cards with one issuer can make it easier to earn rewards, move credit limits around, and simplify managing your personal finances.

Alert: highest cash back card we’ve seen now has 0% intro APR until nearly 2025

If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR for 15 months, an insane cash back rate of up to 5%, and all somehow for no annual fee.

In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.

Read our free review

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.

 Read More