You likely have the skills for one or more of these jobs. BearFotos / Shutterstock.com
Editor’s Note: This story originally appeared on FlexJobs.com. Ah, the golden years. For many, it’s a time to sit back, relax, and enjoy life. But what if you want to work a little bit during retirement too? There are many jobs for retirees that could supplement your income and enhance your overall happiness. And the best news — there are more work-from-home jobs for seniors to consider than ever…
It’s hard to build wealth if you’re overspending on this monthly expense.
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The amount you spend on bills plays an important role in building wealth. And there’s one bill, in particular, that often ends up being a wealth killer for Americans: cars. Personal finance influencer Humphrey Yang explained in a video what makes car expenses so problematic and what you can do to save on this expense.
If you’re planning to buy a car soon, or your car is taking up a big chunk of your budget, Yang’s advice will help.
Transportation costs are one of the largest monthly expenses. In fact, they’re second only to housing in the average American household’s monthly expenses. Cars and their associated costs, such as gas and insurance, make up the vast majority of this transportation spending.
The reason Yang calls this the wealth killer that “sits in plain sight” is because not only are cars a major expense, they’re the major expense that varies most from person to person. Your car costs will be vastly different depending on the car you buy and whether you get it new or used.
Yang also points out that cars are status symbols. Because of that, many people buy nicer cars than they can reasonably afford. That status comes at a serious cost, though. If you have a large portion of your income tied up in a car, that’s money you can’t use to improve your financial situation by saving or investing.
Let’s say you’re one of the many Americans with a car payment that’s $1,000 per month or more. If you had invested that money in the stock market and gotten an 8% annual return, you’d have $76,031 after five years, instead of having put $60,000 into a car.
Another danger with car costs is that people rarely consider the total cost of a car when they buy it. They only look at the price of the car, or even worse, the monthly payment. But cars = include a whole host of other expenses as well.
To demonstrate this, Yang pulled up the five-year true ownership cost of a used 2018 Honda Civic. Here are the ownership costs he found through Edmunds:
Price: $21,648Depreciation: $10,657Taxes and fees: $2,426Financing: $3,275Fuel: $12,807Insurance: $6,949Repairs: $2,854Maintenance: $5,365
The grand total is $43,993, more than double the price of the car. That comes out to about $8,800 per year. Even a reasonably priced, non-luxury vehicle can still take up a significant portion of your budget.
If you work remotely, live close to your work, or can rely on public transportation, going car-free could save you a ton of money each month. This isn’t a realistic option for everyone, though, so let’s look at other ways you can save on car costs.
The most important piece of advice here is to not overspend on a car. Don’t get caught up in thinking you need a flashy ride to impress people. The rush of having an awesome car will disappear a whole lot faster than the auto loan will. Figure out how much car you can afford and set a firm spending limit.
Here are a few more tips on managing car costs that Yang provided in his video:
Buy a used car that’s about three-to-five years old. Yang refers to this as the sweet spot, where a car has already gone through much of its depreciation, but it’s still reliable. To avoid cars with too much wear and tear, look for one that has about 30,000 to 40,000 miles.Go rate shopping with the top car insurance companies every year. Insurance carriers will often undercut each other to get your business. That means you could get a much better rate by shopping around.Don’t finance a car with a low credit score. You’ll end up with a high interest rate, making your loan much more expensive. Instead, focus on improving your credit score before financing a car.Reduce the number of cars you have. If your household can get by with a single car, you’ll save big.
Even if you need a car, that doesn’t mean you need to break the bank for it. Be careful about how much you spend, follow the tips above, and your car costs won’t take up too much of your income.
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A big change should give you more flexibility.
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One of the primary benefits of saving and investing in an IRA account is getting to enjoy tax-deferred growth on your money. When you invest in a regular brokerage account and sell stocks or other assets at a profit, you’re liable for capital gains taxes the year you make that sale. With an IRA, you can defer your gains until retirement age so you’re not paying taxes on them year after year. That allows your money to grow in a tax-advantaged manner without burdening you along the way.
But you can’t grow your IRA forever — at least not in full. Seniors today have to start taking required minimum distributions, or RMDs, from their traditional IRAs starting at age 72.
RMDs are based on your account balance and life expectancy. But not taking one has severe consequences — a 50% penalty. So if your RMD this year is $5,000 and you don’t take it at all, you’ll effectively throw away $2,500 in penalty form.
One big change, however, will allow younger IRA savers to benefit from a longer period of tax-deferred growth in their accounts. And that’s a huge plus.
You may have heard about a recently passed set of rules called SECURE 2.0 that impacts savers in different ways. Under SECURE 2.0, RMDs will not come into play for younger retirement savers until a later age.
Anyone who turned 72 in 2022 or earlier must follow the old rules. This means taking their first RMD no later than April 1, 2023.
But those turning 72 between 2023 and 2033 (in other words, those born between 1951 and 1959) won’t have to start taking RMDs until age 73. And they have to take their initial RMD by April 1 the year after they turn 73.
Meanwhile, anyone born in 1960 or later won’t have to take an initial RMD until age 75. And once again, that initial RMD doesn’t have to be taken until April of the following year. That means younger savers get a few extra years to allow their IRAs to keep gaining value without having to remove a portion of their money.
Right now, the penalty for failing to take an RMD is pretty harsh. But going forward, that penalty will be reduced to 25%. And in some cases, quickly making up a missed RMD might knock the penalty down to 10%.
Now, the reality is that it’s best to avoid RMDs in the first place. Any penalty represents forfeited money, and that’s really just a waste. But savers can take some comfort in knowing they won’t be penalized to the same degree if they botch their RMDs.
For many people, RMDs are actually no big deal. That’s because they end up needing their retirement savings to live on, so the amounts they’re forced to withdraw are amounts they’d be removing independently of any requirement.
But if you like the idea of avoiding RMDs completely, you can do so by housing your retirement savings in a Roth savings account. It used to be that only Roth IRAs let you off the hook for RMDs. But starting in 2024, Roth 401(k)s will no longer require RMDs, either. So now, you have multiple options if you’d rather keep your money invested and allow it to enjoy tax-advantaged treatment for as long as you’d like it to.
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Make sure that potential employers see your best side with these steps for maintaining your online presence. ImageFlow / Shutterstock.com
Editor’s Note: This story originally appeared on FlexJobs.com. Do you feel you’ve got a good handle on professional behavior? As a considerate coworker, you acknowledge the boundaries that are appropriate for your workplace and you steer away from any subjects or comments that might make someone else feel uncomfortable. What about outside of your work environment? Have you ever posted comments or…
The economy may have a soft landing, and that’s good news for investors.
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It’s hard to know what to expect as an investor in 2023. Last year was one of the worst in recent history, with inflation and a bear market hitting portfolios hard. For 2023, there are still worries of a recession, and Morgan Stanley is warning that the stock market could fall by 26%.
One big name who doesn’t share those worries is Kevin O’Leary. He thinks that stocks are going to do well in 2023. He said in an interview with Fox Business, “We’ve already had many high-flying stocks correct. I’m amazed by this economy.” Here’s why he isn’t buying the doom and gloom, and if you should invest in stocks right now.
O’Leary thinks there’s a possibility that the economy could have a soft landing, where it avoids a recession entirely. If so, he says that could mean “an 8% return, probably 6% in capital appreciation and 2% dividend yields this year.”
The Shark Tank star gave several reasons why he’s optimistic about the economy and the stock market:
Consumer spending is still strong even with high inflation. Retail sales and consumer spending reports both beat expectations in January.Employment numbers are also strong, with the unemployment rate hitting its lowest point in 54 years.Large companies went to a direct-to-consumer model, which has much higher margins, coming out of the pandemic.
O’Leary also bases his opinion on the results he’s seeing with his portfolio of 54 private companies. He says those companies are “just killing it. We haven’t seen the slowdown yet.”
While O’Leary used to have a 60:40 portfolio (60% stocks to 40% bonds), he has since shifted that to 70:30. In particular, he likes healthcare and energy stocks.
There’s no sure way of knowing what’s going to happen with the economy or the stock market in 2023. O’Leary makes some good points, but inflation remains high. It’s still possible that we have a recession instead of a soft landing.
However, regardless of what happens over the next year, stocks are a good long-term investment. There have been plenty of recessions, and the stock market has bounced back from each one.
That means if you’re already investing in stocks, continue to do that. If you aren’t already, it’s always a good time to start. Here are a few of the best ways to invest in stocks:
Exchange-traded funds (ETFs): These pool investor money and put it in a large basket of stocks. The best ETFs have low fees and diverse holdings, with S&P 500 index funds being a popular choice.Target-date funds: Each target-date fund has a specific retirement year, and asset allocation is based around that year. This means you don’t need to worry about having the right mix of stocks and bonds, because your target-date fund does that for you.Stock picking: Some investors prefer building their own portfolios. A portfolio of at least 25 companies is recommended.
There are a couple of things not to do during a volatile market. Don’t try to time the market; it’s almost impossible to do this with any degree of accuracy. If you jump in and out of the market, you’re much more likely to lose money.
Also, don’t sell or stop investing because you’re worried about market volatility. Even if the naysayers are right and the market falls in the coming months, don’t panic. The worst thing you can do is sell low when that happens. Continue your normal investing strategy, weather the storm, and your investments will likely recover in the long term.
Hopefully, O’Leary is right with his expectations for the stock market. Whether he’s correct or not, stocks are a fantastic way to build wealth over long time periods, so they’re worth having in your portfolio.
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.Lyle Daly 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.
Knowing some simple rules could help you avoid being a victim.
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Through the years, the use of technology has allowed criminals to get increasingly efficient at stealing consumers’ identities and robbing them out of their hard-earned money. There were around 8 million potential tax fraud alerts in 2022 alone, according to IRS data. And Mark Steber, Chief Tax Information Officer at Jackson Hewitt, knows full well that tax scams are a major problem. That’s why he has some key advice for consumers that could help many people avoid becoming a victim.
The IRS has, for many years, been sorely underfunded. The good news, says Steber, is that’s changing. But because the IRS has been a bit slow to adopt certain technologies, its go-to method of communication is, and has long been, paper mail.
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When it comes to sending out payments for refunds, thankfully, the IRS is able to do direct deposits into checking accounts. But actual communication is done by mail. You might get an IRS notice in the mail, for example, seeking out more information about your taxes.
But Steber wants to make it clear that unless you receive an IRS notice in the mail, you should assume that anyone contacting you claiming to be a representative of the agency is trying to defraud you. As Steber says, “The IRS never calls, the IRS never texts, the IRS never emails.”
So let’s say you’re going about your day when you get a call from someone claiming to be an IRS agent asking you to verify your banking details so they can finish processing your refund. That alone is a red flag, because the IRS doesn’t make those sort of calls.
Similarly, you might get a text with a link asking you to click to verify your Social Security number so your tax return can be processed. Again, this is something the IRS just plain does not do. So that’s the sort of text you’ll want to delete or ignore.
Criminals are notorious for trying to steal other people’s tax refunds. But there are steps you can take to protect yours. First, follow Steber’s rules and never respond to so-called IRS communication by phone call, text, or email. Next, try to file your tax return ahead of the April 18 deadline.
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If a criminal already has your Social Security number, they may try to file a tax return in your name and divert your refund to a bank account only they have access to. But the IRS is set up to flag tax returns with the same Social Security number as duplicates. So if you get your return in before a criminal files one with your name, the IRS will flag theirs as a duplicate. And chances are, from there, that criminal will back off.
It’s unfortunate that consumers today have to worry about tax-related scams and financial fraud. But following Steber’s guidance could help you avoid becoming a victim — and potentially letting someone steal your tax refund in the process.
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