Money Management

Life insurance can offer more than peace of mind for seniors. Dive in for hidden benefits and financial strategies. [[{“value”:”

You might have heard that life insurance is all about giving your family a financial cushion when you pass away. But hold up, there’s another side to it for seniors.

Think of life insurance as the Swiss Army knife in your financial toolkit. Its features do much more than pay out when you’re gone. These extra perks often fly under the radar, offering a safety net and some solid benefits you can use right now.

1. Living benefits are a financial safety net for the unexpected

One of the most compelling yet underrated features of life insurance is “living benefits.” This provision allows policyholders to access a portion of their death benefit under certain conditions, such as terminal illness or the need for chronic care.

A study by the American Association for Long-Term Care Insurance (AALTCI) indicates that 52% of individuals over the age of 65 will require some form of long-term care services in their lifetime. With the average annual cost of private nursing home care soaring to over $108,405 (as reported by Genworth’s 2020 Cost of Care Survey), the ability to tap into living benefits can be a financial lifesaver for many seniors.

2. Provides a source of retirement income

Perhaps surprisingly, life insurance can also serve as a supplemental source of retirement income. Policies with a cash value component, such as whole life or universal life insurance, can grow over time, offering policyholders the option to borrow against this cash value or withdraw from it directly.

Approximately 90 million American families depend on life insurance for financial and retirement security. This approach provides a cushion that can help seniors navigate the financial uncertainties of retirement, from healthcare costs to unforeseen expenses.

3. Creates estate planning and wealth transfer efficiency

In estate planning, life insurance shines as a tool for efficient wealth transfer. The death benefit from a life insurance policy is typically paid out tax free, offering a clear advantage over other inheritance methods. Plus, because these proceeds bypass probate, beneficiaries can access funds much more quickly.

4. Allows you to give to charity

For seniors keen on philanthropy, life insurance presents an avenue for impactful charitable giving. By designating a charity as a beneficiary, they can achieve their philanthropic goals posthumously, often contributing more significantly than would be feasible through direct donations. This method not only secures a legacy of generosity but can also offer tax benefits, enhancing the donor’s financial strategy.

Proceeds from life insurance policies often represent some of the most substantial donations a nonprofit will get, typically ranging from 20- to 100-times larger than their annual gifts. That’s a testament to the power of these policies in facilitating charitable contributions.

With its diverse array of benefits, life insurance stands as a cornerstone of financial security and flexibility for seniors. From mitigating the financial burden of healthcare through living benefits to enhancing retirement income, facilitating efficient wealth transfer, and enabling substantial charitable donations, the utility of life insurance extends well beyond the death benefit. By embracing these underrated benefits, seniors can maximize their financial well-being, ensuring their peace of mind and that of their loved ones and chosen causes.

Our picks for best life insurance companies

Life insurance is essential if you have people depending on you. We’ve combed through the options and developed a best-in-class list for life insurance coverage. This guide will help you find the best life insurance companies and the right type of policy for your needs. Read our free review today.

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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Eager to save extra money at Costco? Read on to see how. [[{“value”:”

Many people see a lot of value in a Costco membership, which explains why an impressive 73 million people now have one. But whether you’re new to Costco or have been a member for years, knowing the ins and outs of the store could lead to huge savings. Here are three Costco secrets that could benefit you financially.

1. The Executive membership can save you more despite costing more

A basic Costco membership currently costs $60 a year, while an Executive membership costs $120. It may seem counterintuitive that spending more on a membership could lead to more savings, but the numbers don’t lie.

The Executive membership at Costco gives you 2% cash back on your Costco purchases. If you spend $3,000 a year at Costco, you make back your $60 upgrade fee. If you spend even a dollar more than $3,000, you technically come out ahead financially (though admittedly not by much if your annual Costco tab comes to just $3,001).

It’s a good idea to review your Costco spending from the past year, because if it was above $3,000 and your circumstances haven’t changed, then chances are, this year’s spending total will be comparable. And in that case, you might enjoy more savings with the costlier membership.

2. You won’t pay full price for gift cards

You can load up on a variety of gift cards at Costco, from restaurant chains to movie theaters. But the beauty of buying gift cards at Costco is that you can purchase them for less than their face value.

Let’s say your family orders pizza from Domino’s once a week. At Costco, you can buy $100 worth of Domino’s gift cards for $80. So if you spend, say, $25 a week there, you’re automatically reducing one expense in your budget.

Now, as a warning, because Costco’s gift cards are often heavily discounted, it can be tempting to load up on them. But don’t snag $100 in Domino’s gift cards for $80 when you can’t remember the last time you ordered from there. In that case, you risk wasting $80.

It’s basically the same rule as any sale item. You’re only going to benefit from the discounted price if it’s an item you were already planning to buy or you’re certain you’re going to use.

3. Your tire purchases come with a host of money-saving perks

Need new tires for your car? Purchasing them at Costco might save you money — and not just because of Costco’s generally lower base price compared to buying your tires elsewhere. Rather, the big savings come into play when you take advantage of Costco’s lifetime tire maintenance program.

When you buy and have your tires installed through Costco, you’re eligible for services for the life of those tires. Those services include inflation pressure checks, rotations, and even repairs when you get a flat. Costco will also inflate your tires as needed. And better pressure can lead to better gas mileage, which could save you money at the pump.

It’s easy to justify the cost of a Costco membership via the savings you reap on groceries and everyday essentials. But it especially pays to read up on Costco to learn more about ways you can save money and truly make the most of the $60 or $120 you’re paying for the privilege of being a member.

Top credit card to use at Costco (and everywhere else!)

If you’re shopping with a debit card, you could be missing out on hundreds or even thousands of dollars each year. These versatile credit cards offer huge rewards everywhere, including Costco, and are rated the best cards of 2024 by our experts because they offer hefty sign-up bonuses and outstanding cash rewards. Plus, you’ll save on credit card interest because all of these recommendations include a competitive 0% interest period.

Click here to read our expert recommendations for free!

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.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.

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It can be scary to tap your emergency savings. But read on to see why doing so is generally your best move financially. [[{“value”:”

Building an emergency fund is not an easy task. If it were, perhaps more people would have several months’ worth of bills in savings. But recent SecureSave data found that 63% of Americans are ill-equipped to cover a $500 financial emergency.

However, you may be in a very different boat. Maybe you have many thousands of dollars sitting in your savings account in case disaster strikes. Or maybe you at least have $1,000 or so, which might cover a minor home repair or an issue that arises with your car.

Such was the case for my friend Susan last year when she ran into a $6,000 home repair. She had the money in savings, but she was hesitant to take a withdrawal. So instead, she charged her repair on her credit card and paid it off over a year. But that’s a move that cost her extra money for no good reason.

When you defeat the purpose of having an emergency fund

It’s not a secret that building savings can be a tough thing to do. But it may surprise you to see just how tough it is to tap your savings when surprise bills pop up.

My friend fell into this trap last year. She didn’t want to lower her savings by $6,000, because that was more than half of her balance. And also, she’d worked hard to save that money and didn’t want to just kiss it goodbye.

So instead of paying for her repair outright, she charged it on a credit card. And it wasn’t a 0% interest credit card — it was a card with an 18% interest rate attached to it.

Now thankfully, she had her balance paid off in a year. She pulled that off via a combination of cutting expenses, picking up a side gig, and eventually taking some of money out of her savings when she got nervous about her lingering balance and associated interest.

But all told, taking a year to pay off that $6,000 cost her about $600 in interest. Had she just taken the money out of savings, she could’ve saved herself $600.

Furthermore, I didn’t want to pry into Susan’s credit score, but carrying that large a balance for months may have done it a disservice. Maintaining a large balance relative to your total spending limit across your credit cards has the potential to negatively impact your credit score, even if you’re making your monthly minimum payments on time.

Raid your savings and rebuild

Taking a large withdrawal from savings to cope with a financial emergency can be a mentally difficult and painful thing. But remember, the whole purpose of having an emergency fund is to be able to avoid debt — and the expense of interest that comes with it — when unplanned bills pop up.

So generally speaking, you’re better off tapping your emergency fund to cover unanticipated expenses and then working your hardest to rebuild your cash reserves as soon as possible. It’s not an easy thing to part with savings, but it’s preferable to racking up credit card interest when you have the money sitting right there.

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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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Having kids makes it harder to travel due to the cost. Read on for tips to save. [[{“value”:”

Travel has long been a popular hobby for many people. And data from Forbes Advisor found that Americans took an average of 2.1 trips in 2023, with 36% of respondents traveling three or more times for leisure purposes.

Last year, my husband and I took our children on two trips — a weekend getaway in Vermont and a longer 10-day visit to Northern Michigan. And while those trips weren’t inexpensive, we found ways to lower our costs. Here are the tricks we used last year, and the ones we pretty much use all the time, to make travel more affordable at the family level.

1. We drive whenever it’s feasible

Driving to Vermont from our home state of New Jersey wasn’t so bad. It was roughly six hours on the way there, and eight on the way back due to traffic.

Driving to Michigan was a much lengthier endeavor, requiring us to make a stop at a hotel along the way. But it was also worth it to drive, because when we priced out flights for our destination, we were looking at roughly $500 a ticket. Plus, we would’ve needed a rental car on top of that.

Our Michigan drive was about 2,000 miles round trip. Even my clunky minivan gets a good 25 miles to the gallon on highways, so that was about 80 gallons of gas at a little over $3 a pop for a total of about $300 when you factor in tolls. Add in the cost of two nights of hotels and some extra meals on the road, and getting to and from our destination cost us about $800. Compare that to $2,500 in airfare (since there are five of us) plus a rental car, and this move made sense.

But this isn’t the first time we’ve driven someplace within the U.S. to save money on airfare. We’ve done the 16-hour trek to Florida several times and have even driven as far as Montana.

Now if you have limited time off, sometimes flying is your only choice. But if you have a few extra days to spend on a trip, opting to drive over flying could result in really big savings.

2. We stay at rental homes where we can prepare a lot of our own meals

Most of the time, when my family travels, we pay for a private rental instead of a hotel. This not only gives us room to spread out, but gives us access to a kitchen and full-sized fridge.

Now I’ll admit that when we’re on vacation, I don’t always want to spend my nights cooking. So usually what we do is have breakfast at our rental, use our kitchen to prepare something for lunch, and then treat ourselves to dinner at a restaurant to close out the day. It’s a good compromise, so we’re not buying every single meal out.

Of course, when we do dine out, I make a point to swipe a credit card that gives me extra cash back at restaurants. And we also tend to favor casual dining options since, well, there are kids in the mix. But that tends to help keep our costs down, too.

3. We favor no-cost activities

When we go on vacation, my family tends to do things like hike and visit beaches. These activities are often free, which works out really well. Sometimes, there will be a small fee to get onto a beach or park somewhere with access to the scenery we want, but usually, the cost there is pretty low.

If your family has historically taken theme park vacations that have cost a fortune, consider researching different parts of the country where you can enjoy nature at a minimal cost to no cost at all. You may be surprised at how much fun it is to spend a few days relaxing on the beach or exploring amazing hiking trails you never knew existed.

It’s not easy pulling off travel when you have to pay for your kids to go along for the ride. But the above tips make it possible for us to keep exploring, and they may work for you, too.

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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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The average credit score is 714. Linking a few accounts to your credit file could improve yours. [[{“value”:”

I know firsthand how a low credit score can ruin a person’s buying power. I was once denied buying a $400 couch on credit because my credit was in such bad shape.

That was many years ago, and I’ve since rebuilt my score, but it took a long time. That’s why I was curious recently when I saw Experian Boost®, which says it can potentially instantly raise your credit score for free.

While the results of using the service vary, I boosted my score by 28 points in just minutes. Here’s how.

How Experian immediately increased my score by 28 points

The Experian Boost® process is relatively simple. You have to link your bank account to Experian, which may be a dealbreaker for some people, and then the company looks at two years of payment history for specific bills.

Experian looks for qualifying bills with at least three payments in the last six months. These bills may include phone bills, rent payments, utility bills, insurance, internet, and even video streaming payments.

Once Experian finds them, you can choose which bills you’ll connect. In my case, I connected my water, electricity, and internet bills to my credit file. The entire process took about two minutes, and my score jumped 28 points from 752 to 780.

If your score improves, Experian says the average increase is 13 points. It’s worth mentioning that your score can go down using Experian Boost®. But Experian says on its website that if this happens, you can unlink your bill accounts, and your score should return to its previous number.

How your score is calculated

Credit reporting agencies use five main categories to calculate your credit score, and the top three account for 80% of your score. The categories include:

Payment history (35%)Amounts owed (30%Length of credit history (15%)The types of credit you have (10%)Account inquiries (10%)

Your FICO® Score can range from 300 to 850, with everyone’s score falling into a category of poor (300 to 579), fair (580 to 669), good (670 to 739), very good (740 to 799), and exceptional (800 to 850).

The best thing you can do to improve your score

One of the best things you can do to improve your score is to pay your bills on time. Payments over 30 days late may be added to your credit report and can last up to seven years. The good news is that the influence a late payment has on your credit score decreases over time.

One way to avoid late payments is to set automatic payments through your bank account. If you think you might miss a payment, it’s important to contact your creditor immediately and talk to it about a payment plan. Contacting the creditor before you miss a payment and working out a schedule may help keep a late payment off your credit report.

Additionally, reducing the money you owe on your credit accounts can dramatically improve your credit score. For example, if you have three credit cards, each with $3,000 on them, paying down one of those accounts — or, ideally, paying it off entirely — will help raise your score because you’ve lowered your debt.

No matter what your credit score is right now, if you have on-time payments you want linked to your credit file, Experian Boost® may be worth trying. If your score doesn’t improve, you can always unlink your accounts for now and try again later when your on-time payments have improved.

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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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