Money Management

When you’re retired, your savings needs to last you the rest of your life. Learn about the safest places you can put your money to make that happen. [[{“value”:”

For most of your career, you focus on growing your retirement savings. Retirement itself is a big adjustment, because at that point, your new goal is making that money last.

This is one of the top concerns for U.S. retirees — 40% worry that they’ll outlive their retirement savings, according to a survey by Clever. And about 1 in 5 (19%) say that their savings have already run out.

How long your savings lasts depends on where you put it. Below, you’ll find the safest options that also provide a reasonable return on investment.

1. Treasury bills, notes, and bonds

The federal government raises money by issuing Treasury marketable securities. These securities are backed by the U.S. government, so they’re as safe as it gets. They earn a fixed income rate, and rates are high right now. Some of them are earning over 5%.

There are a few popular types of Treasuries:

Treasury bills (T-bills) are short-term options with terms ranging from four to 52 weeks.Treasury notes (T-notes) are mid-term options with terms of two, three, five, seven, and 10 years.Treasury bonds (T-bonds) are long-term options with terms of 20 and 30 years.

If you’re interested in Treasuries, you can buy them from the U.S. government on the TreasuryDirect website. Many stock brokers also sell Treasuries, so if you have a brokerage account, you may be able to buy them through that.

2. Bond ETFs

There are many organizations that issue bonds to raise money. We’ve already covered how the federal government does this. Local governments and corporations also issue bonds that you can buy in exchange for a fixed interest rate.

Exchange-traded funds (ETFs) invest your money in a large number of securities. Many of the most popular ETFs invest in stocks, but there are also bond ETFs. These make it easy to invest in bonds, without needing to pick and choose all of them yourself.

Maybe you’d like to invest in Treasuries and some low-risk corporate bonds. Finding and buying all those bonds yourself would be time-consuming. A simpler option would be to invest in a bond ETF that does the work for you.

This is another type of investment you can make through a brokerage account. Quite a few stock brokers offer bond ETFs.

3. CDs

Certificates of deposit (CDs) are accounts available through banks and credit unions. Here’s how they work:

You choose a CD for the length of time you want. Most CD terms range from six months to five years, but there are also longer and shorter options.You decide how much money you want to deposit. Some CDs require a minimum deposit amount, while others have no minimum.You must leave your money deposited for the entire CD term. If you need to take it out early, you’ll pay an early withdrawal penalty. This is normally a portion of the interest you’ve earned.

In exchange for agreeing to keep your money locked up, your CD will earn a fixed interest rate. You can currently get excellent rates with this type of account, as some earn over 5%.

Before you open a CD with your bank, make sure you compare what it’s offering to the best CD rates. You might find a higher-paying option.

4. High-yield savings accounts

Last but not least, there’s the trusty savings account. This is a good choice if you want to be able to access your money at any time. With the other options on this list, you can’t withdraw your money whenever you want.

But you shouldn’t go with just any savings account. To earn more back on your savings, open a high-yield savings account. These are the accounts that have the highest APYs. Most of them are offered by online banks — they can pay better rates, because they don’t have the overhead costs of operating physical branches.

Like CDs, some of the top high-yield savings accounts are offering over 5%. Now, those rates could go down at any time. You’re not locking in a rate with a savings account. But you have the flexibility of being able to take out money whenever you want.

Plenty of safe places exist to put your money as a retiree. If you don’t mind keeping it locked up for a specific time period, Treasuries and CDs are great ways to get a competitive return. Bond ETFs work well if you want to invest in a variety of bonds. And if you want easy access to your money, go with a high-yield savings account.

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A high credit score could help you get a better mortgage. Read on to find out how to improve yours. [[{“value”:”

Credit scores are a key factor in whether you’re approved for a home loan and what mortgage rate you receive. So it’s not surprising that many people looking to buy a home want to boost their score before they apply for a mortgage.

But what’s the most effective way to increase your credit score in a short amount of time? One way to do it is to pay off some of your current debt, like a credit card, to show lenders you’re not maxing out your credit utilization.

Here’s how paying off some debt increases your score and one bonus tip that can potentially raise your score in minutes.

Pay off some of your debt

Your credit score is determined by a handful of factors. Some of them you may not have immediate control over (like how long your credit history is), but the most important ones are, generally, within your control.

Here are the top factors and the weight given to each to determine your FICO® Score (the one most commonly used by lenders):

Payment history: 35%Amounts owed: 30%Length of credit history: 15%Credit mix: 10%New credit: 10%

While payment history is technically the most important factor, let’s focus on “amounts owed” because this might have the most immediate impact.

Lenders typically want you to see a credit utilization ratio of no more than 30% of your available credit. For example, if you have three credit cards with a total line of credit of $25,000, lenders want to see a total balance of less than $7,500.

Remember, 30% is the high end, so the lower your credit utilization, the better. Lowering your credit utilization by paying off a credit card could quickly improve your credit score. Research shows that paying off your credit card could increase your score by 10 to 50 points.

How to do it: Focus on your debt with the lowest balance, like a personal loan or a credit card. Comb through your monthly budget and pare back any extra spending that could go toward the debt. Consider growing your income to help you reach your goal, such as by taking on a side hustle or working as a freelancer. The goal is to push your credit utilization as low as you can, and definitely below 30% if possible.

One bonus way to boost your score

Experian offers a free online tool for connecting some of your billing accounts to your credit profile, which can potentially increase your score.

It’s called Experian Boost, and it works by looking at two years of qualifying bills (like rent, utilities, streaming services, insurance payments, internet service bills, etc.) to see which ones you’ve paid on time. If you have a good history of on-time payments, your score could go up. Experian says that when scores increase, the average jump is 13 points.

I recently signed up for Experian Boost, connecting four of my bills to my credit file, and my score increased by 28 points.

It’s worth mentioning that your credit score could potentially decrease as a result of trying this, but Experian says if that happens, you can disconnect your bill information from Experian Boost, and your score should go back up.

While there’s no guaranteed way of boosting your credit score before buying a home, paying down your debt and trying the Experian Boost tool are two excellent options.

Lowering your credit utilization will show mortgage lenders that you’re responsible with the credit you already have. And linking some of your past billing information to your credit file through Experian Boost can potentially show lenders all of the on-time payments you’ve made.

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It’s possible to get a credit card in retirement, but reporting your income is a little trickier. Here’s what you need to know. [[{“value”:”

We think of retirement as a time of financial freedom, but it brings plenty of new financial challenges as well. All of a sudden, you’re living on a fixed income, and you have to make your money last for an indeterminate amount of time. You find yourself asking questions you hadn’t considered before.

Changing spending habits might create a need for a new credit card in your wallet, but can you even get a new card without a job? Fortunately, the answer is yes, but there are a few things you should know before applying for one.

Do you need a new credit card?

First things first, it’s worth thinking carefully about whether you actually need a new credit card in retirement. All the credit cards you already have will still work, so you probably won’t be starting from zero. If you’re content with the cards in your wallet, you can carry on as normal.

But there are a few reasons you may want an extra card. If you don’t have access to any credit, you may want one so you can earn rewards and put a little distance between your purchases and payments. If you only have one card, you might like the idea of having a second so you have a backup in case your primary card is lost or stolen.

You might also want a new credit card to help you maximize your rewards if your spending habits are changing. For example, those who plan to travel a lot in retirement could benefit from a travel rewards credit card. This could earn them perks like free airfare and checked bags or free hotel stays that a cash back rewards card wouldn’t offer.

Can you open a new credit card when you’re retired?

Credit card issuers look at your income when considering your credit application to determine whether you’re likely to be able to pay back any money you borrow. This doesn’t change once you retire. Fortunately, a salary from a 9-to-5 job isn’t the only thing that counts.

You can also report income from part-time, freelance, or seasonal work as well as withdrawals from your retirement accounts and Social Security benefits. Earnings from investments, like dividends, count too.

Those in relationships, whether married or otherwise, can also report income their partner makes as long as they’re at least 21 and have a reasonable expectation of access to those funds. Basically, if you believe you could use your partner’s earnings to pay your credit card bills if you had to, you can count it on your credit card application.

How do you open a credit card when you’re retired?

Other than reporting different types of income, applying for a credit card in retirement is the same as applying for one at any other point in your life. First, you have to choose the credit card you want. The card’s perks play a big part in this, but so does your credit score.

Credit card issuers don’t reveal the credit score you need to have to get approved, but most cards require at least a score of 670 or higher. There are cards open to those with poor credit, though.

Once you’ve found one you’re interested in, fill out the application form online. You’ll need to provide your name and contact information as well as your Social Security number, so the card issuer can check your credit report. This is also when you’ll report your income. You don’t need to break down how much comes from which sources. Just give your total estimated annual income.

Most of the time, you’ll get an answer as soon as you’ve submitted your application form. But in some cases, the credit card issuer can take up to 30 days to review your application before making a decision.

If you’re approved, the credit card issuer will send you a new card in the mail, usually within a few business days. You can begin using it right away. If you’re denied, you should get a letter explaining why. You might be able to appeal a denial, but if not, you’ll have to explore other credit card options until you find one willing to work for you as a retired spender.

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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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Amazon Prime costs $139 a year. Read on to see when that fee is worth paying. [[{“value”:”

These days, many consumers are continuing to struggle with higher living costs. In March, annual inflation was measured at 3.5% as per that month’s Consumer Price Index. So you may have reached the point where you’re eager to start cutting expenses from your budget rather than taking on additional bills.

If you’re of that mindset, then you may not be particularly interested in signing up for Amazon Prime. But here’s why the $139 a year it costs to maintain a Prime membership may be more than worth it for you.

1. You’ve moved to a rural part of the country

There can be big benefits to living in a rural area, like peace and quiet and, in some cases, more square footage for less money. The downside, however, may be that you’re no longer conveniently located to supermarkets and big-box stores like you once were.

That’s why you may want to consider an Amazon Prime membership if you’re new to country living. A Prime membership could spare you the time of having to drive long distances to the store. And it could also save you money.

In fact, let’s say that your closest big-box store to offer a comparable selection to Amazon is 30 miles away, each way. A 60-mile round trip that uses three gallons of gas might cost you $10, depending on prices. So a weekly big-box store visit could leave you spending $520 on gas in the course of a year. If you can cut out a lot of those trips by placing Amazon Prime orders, you stand to reap nice savings even when you account for your $139 fee.

2. You just got rid of your car

AAA says it now costs an average of $12,182 a year to own a car. You may have come to the decision that between auto insurance costs, loan payments, and maintenance, you’d rather just rely more on public transportation and, as needed, use ride-hailing apps like Uber.

But if you’re now without a car, then you may find an Amazon Prime membership to be more than worth paying for. After all, it’s a hassle to have to wait for the bus each time you need to pick up a few items at the store. And you may not be able to justify the cost of an Uber over to Target and Walmart for a few non-perishable grocery and personal care items.

A Prime membership could have those items at your door in no time. And if you’re no longer covering the costs of owning a car, you might easily manage to afford the $139 fee.

3. You’ve recently gone back to work and are struggling to find time for errands

Returning to the workforce after a career break can be a huge adjustment. If that’s the situation you’re in, and you can afford the $139 annual fee, then you may want to consider joining Prime for the express purpose of making your transition back to work easier on yourself.

Think about it — we all pay for conveniences and time savings here and there. When you order takeout because you’re in the middle of a hectic week and don’t have time to cook, it’s an expense that’s easy to justify. So you might feel similarly about an Amazon Prime membership if you’re suddenly tasked with running a household while also commuting to work and holding down a full-time job.

Amazon Prime isn’t for everyone. If you live down the block from Target and have a flexible schedule, you may not need to rely on a service like Prime. But if any of the above situations apply to you, then you may want to consider signing up for a membership this year.

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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 and Target. The Motley Fool has positions in and recommends Amazon, Target, Uber Technologies, and Walmart. The Motley Fool has a disclosure policy.

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Parents commonly fall victim to certain blunders. Read on for three you’ll want to avoid. [[{“value”:”

Becoming a parent is a life-changing experience. And while there are ups and downs to contend with, many parents find raising a child to be emotionally rewarding.

But let’s face it — bringing a child into the world has the potential to upend your budget and finances in a big way. To minimize that hit, do your best to avoid these big mistakes.

1. Buying everything new

There’s a lot of gear you might need to get your hands on as a new parent. But that doesn’t mean every single item you bring home has to be brand new. If you can buy a secondhand crib or stroller, why not save the money?

Not only might you be able to snag a discount at a secondhand store, but you can also post on your town’s social media page to see if any local parents have items to sell. Some might even be willing to give you things they don’t need anymore at no cost.

That said, the one thing you want to be careful about getting secondhand is a car seat. Car seats tend to have short expiration dates, and you don’t want one that’s been in an accident. Even if it’s intact, it may have hidden damage. That said, if a friend of yours offers up a car seat their child just grew out of for free, and it’s not expired or damaged, then there’s no reason not to take that offer.

2. Not securing child care early enough

Care.com puts the average weekly cost of infant daycare at $321 in 2023. But you might end up spending more than that if you don’t secure child care early on.

Since there are strict caregiver-to-infant ratios that generally need to be upheld at licensed daycare centers, slots tend to fill up quickly. If you wait too long to secure a spot, you may get shut out of the more affordable daycare centers in your town, leaving you no choice but to go with a more expensive one.

How early do you need to secure child care? It depends where you live and what demand looks like. But it’s not unusual to have to put down a deposit for infant care before that infant is even born.

3. Not saving for college early on

You might think that it’s silly to start saving for college when your child isn’t even capable of holding up their own head. But if your child goes directly from high school to college, that gives you roughly an 18-year window to build up an education fund. And if you wait until your child reaches elementary school to start saving for college, you might end up falling short.

Let’s say you start putting aside $200 a month for college when your child is 8 years old, and that your investments generate an average annual 10% return, which is in line with the stock market’s average over the past 50 years. That takes you to about $38,250.

But U.S. News puts the average cost of tuition and fees for a public in-state college at $10,662 a year. That’s $42,648 for four years of studies without accounting for room and board. It also assumes your child stays in state or doesn’t choose a private school.

On the other hand, if you start saving $200 a month for college when your child is first born and snag that same 10% in your portfolio, by age 18, you’ll have a little over $109,400. That might easily cover an in-state education or most of an out-of-state education (the average annual cost there is $23,630 for tuition and fees).

As a new parent, you may not get everything right. And that’s totally okay. But do try your best to avoid these financial blunders and the financial stress they might cause 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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Want more money at work? Read on for ways to rock your salary negotiation. [[{“value”:”

A higher salary could do a lot of great things for your personal finances. A raise might make it easier to meet your savings goals, pay off debt, and make other moves that improve your fiscal outlook. Plus, having access to more money could allow you to add some expenses to your budget that improve your quality of life, like hiring a cleaning service so you don’t have to spend half of your weekend scrubbing toilets and vacuuming.

Data from Empower finds that 34% of Americans will seek a raise in the year ahead. If that’s something you plan to do, too, then it’s important to take the right approach. These tips could set you up for success.

1. Go in armed with data

You may have an easier time landing a raise if you can show your employer that you’re not paid as much as your peers. Use sites like Glassdoor and Salary.com to dig up salary data showing what people in your position tend to earn.

But don’t just do a blanket search. Search by geographic region, since it’s common for employers to adjust pay based on local living costs.

So let’s say you’re a junior accountant in Missouri. If the typical junior accountant in your state earns an annual salary of $64,000, and you’re only earning $58,000, you can put that data in front of your employer and argue your case for a $6,000 bump.

2. Make a list of your wins

You’ll often hear that it’s a good thing to be humble — but not in the context of fighting for a raise. If you’re looking to get your salary boosted, talk up your wins. Make a list of them and present it to your manager. And the more specific you can be, the better.

Let’s say you’re in tech support and the average time to troubleshoot a problem in your department is 15 minutes. If you can show that you’ve managed to get your personal average time down to seven minutes, that’s something that could go a long way to showing your worthiness for a raise.

3. Get your timing right

When you’re seeking out higher pay, it’s important to ask for it at the right time. To that end, be mindful of happenings at your company. If large projects were recently scrapped due to financial constraints, then you may want to wait a few months before asking for a raise.

On the other hand, let’s say your company announces a new benefit for employees — say, a gym membership subsidy. That’s an indication that its financial situation may be positive. So you may want to piggyback on that generosity by scheduling your salary talk shortly thereafter.

Another thing it could pay to do is ask for more money at the start of your company’s next fiscal quarter (if you’re not sure when that is, someone in the accounting department should be able to tell you). Sometimes, a new quarter could mean a fresh hiring budget.

A higher paycheck could do you a world of good. Follow these tips to increase your chances of success when you sit down to talk money with your employer.

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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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