6 Ways to Be More Resourceful

Once you have created your budget, if you haven’t already, you will be able to see exactly how much you need to pay your bills at the very least. Budgets are the road map to your goals. It will show you your areas of opportunity so you can then decided how to spend your money.

  1. Try Bartering

If bartering sounds scary to you because you have to negotiate then you should definitely try it! Bartering is coming back. Try it at the local farmers market, Facebook Marketplace or craft fairs near you during holiday season.

2. Negotiating For a Raise

Negotiating sometimes scares people too but I say put yourself out there and know your worth. Negotiating should be about you being more valuable than they assessed you previously.

3. DYI Projects

Go on Pinterest or YouTube and check out some Do It Yourself projects that you can do instead of purchasing something for a significant amount more.

4. Meal Prep

Buy groceries instead of eating out and plan out your weekly menu. If you don’t like meal prepping then cook every night. Make it fun with the kids or a bonding thing for you and your significant other. Make your coffee at home and take your lunch to work. Every dollar has a purpose and those areas of opportunity are only taking away what you could be saving towards your long term goals.

5. Use Cash Back Apps

One that comes to mind is Ebates.com. You get a percentage of your purchases back in cash. My mom loves that app and uses it everywhere. She’s an online shopper and she says there is usually a coupon for every place she wants to shop at. Might want to check it out.

6. Eat More Meatless Meals

Meat is at a ridiculous price right now because of the pandemic and I definitely try and substitute it if I can. I love bacon and chicken but I am not so much a red meat eater. Things I substitute my meat for are eggplant, beans, or mushrooms.

These are just a few ways I can recommend looking into. Living below your means doesn’t have to be gross. It can actually be quite satisfying getting a good deal.

7 Sinking Funds You Should Have

Sinking Fund: a fund formed by periodically setting aside money for the gradual repayment of a debt or replacement of a wasting asset. In other words, a savings account for certain holidays or events you need money for.

Everyone’s “savings” accounts will be for their own unique mixture of life. These are some examples of what mine look like.

  1. Christmas/Holidays

I personally go crazy during holiday season. I LOVE buying gifts for my friends and loved ones. I enjoy making people happy. This is something that is important to me.

2. Important Birthdays/Events

Once again, I LOVE buying gifts for my friends and family so this is an important category for me.

3. Car Mainenance

I had a Toyota Corolla for 10 years. Towards the end of its time with me I was having to do a lot of maintenance on it and I didn’t have a sinking fund for this. It was coming straight out of my checks.

4. Home Repairs

I am currently in a situation where I am going to need to buy a new washer and dryer and my fence needs to be re-done. I have funds for these things because I set it aside when I receive income. I save for this goal out of every dollar I earn.

5. Pet Expenses

I have a 14 year old dog who has had 3 surgeries and needs medication daily. I have a 9 year old dog who also needs medication on a daily basis. I save up for this so I can cover it on a monthly basis.

6. Travel/Lifestyle

Me and my family travel a lot under normal circumstance. I plan each trip out and set a goal for how much I plan on saving for it. Each trip is separate.

7. Medical Costs

I have this as a savings account because you just really never know. I have small children who love to play outside and we have a jungle gym so I like to be prepared.

These are MY emergency funds. These make MY life easier. I love categories. You chose your priorities.

8 Questions To Ask Yourself Before You Purchase

Question Everything

Questioning yourself is a must in times like these. People are stuck at home everyday buying things online throwing their money away because they are bored. Here are some questions to ask yourself before making any major purchase for sure:

  1. Can I Really Afford It?
    • Can you? If you can’t pay cash for it, don’t buy it.
  2. What Will I Do With It?
    • Are you buying this item because you are bored or because you actually have a plan? What is your plan?
  3. How Often Will I Use It?
    • Is it going to just get shoved into a cupboard and be forgotten about?
  4. Do I Really Even Want It?
    • Are you just bored? Is there an emotional trigger behind this purchase?
  5. Can I Borrow It?
    • When ever I go to buy something I really want I check in with myself and make sure I don’t know anyone I can borrow this item from. Bartering or trading is a great way to be resourceful as well.
  6. Is This In My Budget?
    • I always check in with my budget before making ANY purchase no matter how big or small. My budget is like a guiding light.
  7. Will I Have To Sacrifice Elsewhere?
    • You never want to purchase something with money that’s supposed to be for something else that may be important. Use funds accordingly and make smart choices.
  8. Will I Have To Finance This?
    • Using credit should never be an option unless you are fully prepared to pay the bill in full each month.

Setting yourself up for financial success means answering the easy money questions, as well as dealing with the harder ones. Being in this industry my entire life has enabled me to see different phases people go through when making money decisions. Even those who have financial advisors have their doubts about how trustworthy their advisor really is.

It seems like it should be simple: pay off debt, save money, live happily ever after, the end. But life tends to get in the way. The refrigerator breaks or an unexpected medical issue comes up. Taking those setbacks in stride isn’t easy. Especially when you don’t have anyone to answer your money questions. Most money questions tend to be very personal and specific. These questions above are baby steps in the right direction to keeping your finances under control. Getting personalized advice can be helpful, but it’s not the only way to set yourself up for long-term financial success. Answering these basic questions will go a long way toward making sure you’re on the right track.

Master Bedroom Project

Master Bedroom: a principal bedroom in a house or apartment, usually the largest, typically occupied by the person or persons who head the household.

I started really wanting to redecorate our bedroom about a year ago. I had acquired new decor and I wanted a whole new vibe. Me and my husband were using my great-grandmothers dresser that I’ve had for more than a decade. Every time I would walk by it I would think to myself, “What, am I 12? Why am I still using this dresser? There is literally no room for our dresser items”. I then set my goals to redo my bedroom and make it my place to relax.

Cluttered Hot Mess (Before)

I had to set goals for this because I wanted to purchase a new dresser (#1 priority), picture frames, new pictures, new art, and some cute little decorative stuff here and there. I purchased certain items when I felt comfortable with it over the span of a few months. I am on top of my budget so I know when its okay or not ideal to purchase anything major.

It took me about a month to actually get an idea of what the vibe would be. Then, it took about 6 months going back and forth with myself over which dresser would match close enough with my night stands. I bought my picture frames and shelving on Amazon and I ordered my pictures from Costco. Everything was relatively cheap.

When I received some gifts for my birthday, I put them on the shelves along with two fowl balls Chris caught one from AT&T Park (which was the same day Chris and I became Facebook Official) and the other being from Fenway Park (He’s an avid Boston Fan). The main purchase was, the dresser on sale over Black Friday at Wayfair.com and it is perfect! It matches and it was affordable!

Simple. (After)

I hung up all of our photos from the places we have traveled together; a map of the world and a painting of Buddha. Just looking at this wall gets me excited to travel with my family again. That painting makes me feel things so I really enjoy the decorative choices I made.

I love how everything turned out and it makes me feel at peace when I am in here. I also really love that I purchased everything at really affordable prices to ensure I met my financial goal. I am currently writing this blog post in my room because it makes me feel centered. I have a little more work to do on this project over time. Changing pictures out and adding new ones. It’s all about ambiance. Good Vibes Only.

Dave Ramsey’s 7 Baby Steps for Your Budget

Baby Step #1: Save $1,000 for Unplanned Expenses

I love this step. I always tell my clients to AT LEAST have $1,000 in their savings for emergencies. You SHOULD have 3-6 months worth of bill money saved as well to be very secure in your financial wellness. I personally, have a years worth of bill money saved just in case because you never know what could happen. I do not like being caught off guard. Having this money set aside gives me a sense of security and freedom.

Baby Step # 2: Pay Off All Debt Except for the House

This makes so much sense. I am very proud of my finances and even I am still in debt. There is good debt and there is bad debt. Having a mortgage is good debt. Especially if you are making those payments on time. Now, credit card debt is bad debt. This is something you should pay off before making any major money decisions. I would recommend reaching out to the company you have the credit with and negotiating a lower interest rate. Also, student loans and/or personal loans are debts you should work towards paying off before you make major money decisions. Lets say you wanted to start trying to buy a home, you need to pay off the debt to increase your credit score therefore having a better chance at a larger loan. It will also lessen your debt to income ratio. You can claim student loan interest on taxes. Paying off debt is something everyone should do as soon as possible.

Baby Step #3: Save 3-6 Months Worth of Expenses

This! I love this! As mentioned in Baby Step #1, I have a years worth of bill money saved for no other reason than my own personal standard. It is something everyone should do. Maybe not a years worth but definitely 3-6 months worth. This is always a goal for my clients because typically when they come to me they didn’t even think about having an emergency savings so adding this into the mix is mind blowing. This is a game changer for your stress. Imagine having this money saved so if in the case something comes up and you cant work for 3 months, you’ll be covered. That sense of security is what helps me stay on tops of my finances. I want to always feel like I am secure.

Baby Step #4: Invest 15% of Your Household Income

Investing is so crucial to your future life. Lets say you bring in $3,000 per month, you would need to put $450 into your investments. I know, $450 can sound like a lot right now in these pandemic times but it’s realistically the best thing you could do for yourself even though the market is bearish currently. It will come back into a bull market. Your future self will love you come retirement time. that $450 will add up and grow. When you invest you have to make smart money decisions, and also come to terms with the fact that your money might be lost at one point or another. In the end if you gain money you will be happy and if you lose money you will be wise.

Baby Step #5: Save for Your Children’s College Fund

According to data reported to U.S. News, in an annual survey last year, the average tuition for the 2019-2020 school year ranged from $41,426 (for private colleges) to $11,260 (for state colleges). That’s the average tuition per year. And unless something changes in how people pay for education, college costs in the future are going to be even worse. Here are some ways you can start saving for them now:

  • Open a 529 Plan
    • They are savings plans, usually sponsored by state governments, that encourage saving for future education costs. They often are tax-friendly, in the sense that many states will let you deduct your contributions from your state income tax – and when you withdraw the money for college, the money won’t be taxed. You can put money into your own state’s 529 – or any other state’s plan. So if you live in Idaho but like Indiana’s plan better, go for it.
  • Put Money Into Eligible Savings Bonds
    • Some of the advantages of putting money into savings bonds is that they’re guaranteed by the government and extremely low to no risk. On the downside, the interest you’ll earn is pretty low. Right now, individual Series EE savings bonds are earning an annual fixed rate of 0.10%.
  • Try a Coverdell Education Savings Account
    • This is a tax-deferred trust account that can be used to pay for elementary, secondary and higher education expenses – room and board is permitted. Earnings accumulate tax free, and distributions are free of income taxes as long as the funds are used for educational purposes.
  • Start a Roth IRA
    • A Roth IRA is an excellent vehicle for many taxpayers to invest after-tax dollars while shielding earnings and future growth from taxes forever, as long as appropriate distributions are made. As with any investment, you want to look at the pros and cons carefully – for instance, other relatives can contribute to a 529 but not a Roth IRA. If you have one, you’ll obviously want to discuss this with your financial advisor. With a Roth IRA, should a child decide not to attend college, the parents already have those funds invested for their retirement.
  • Put Money Into a Custodial Account
    • In other words, savings accounts called UGMAs and UTMAs (Uniform Gift to Minors Act and Uniform Transfers to Minors Act). They’re both virtually the same thing but UTMAs can hold assets beyond cash, stocks, mutual funds and so on, like a UGMA – but also real estate. There’s no limit in how much money you can put into a UGMA or UTMA, but this is best with a child whom you believe is responsible. Your child will legally be able to use the money in the account – for college or anything else – when they turn 18.
  • Invest in Mutual Funds
    • There’s no limit on what you can invest, and of course, you don’t have to use the money for college. But what you earn will be subject to annual income taxes, capital gains will be taxed when shares are sold and the mutual fund’s assets can reduce financial aid eligibility.
  • Take Out a Permanent Life Insurance Policy
    • A permanent life insurance policy is a conventional life insurance policy, but some of the money from your premium goes into the death benefit, and some of the money goes into a tax-deferred savings account. One of the pluses of doing this is that the money you save can be accessed at any time for any reason, so it is not limited to college expenses. It provides additional benefits such as a death benefit, and other living benefits, and there is no adverse impact if it is not used for education expenses. There are upfront and recurring fees that might make you think twice before doing this.
  • Take Out a Home Equity Loan
    • Of course, you probably weren’t intending to use your home equity to pay for your kid’s college – and with a loan, you’ll have to pay that back. So as a college fund for kids strategy goes, it’s not really the best approach – if you still have years in which you could be saving money for future education costs. But if you haven’t saved enough and are looking for a way to pay for tuition, not to mention room and board, it may work out well. But that’s why you want to start early – so you don’t have to take out as many loans – and as with any investment but especially with college savings plans, it’s always best to begin putting aside money as soon as you can. You always want to try to start your investments yesterday as opposed to tomorrow.

Baby Step #6: Pay Off Your Home Early

Remember this is good debt? Paying it off early doesn’t hurt though. It will boost your credit score when you make more than the minimum payment on any debt and this is included. Even if you pay $100 more than required it will keep you on the right track to paying your home off earlier than expected. Once you have your home paid off you can put those funds into savings or retirement and get you closer to that goal. Basically, eliminate the monthly amount going toward your mortgage, freeing up cash flow that can be useful, especially during retirement. Save money on interest, potentially thousands of dollars. Receive a predictable rate of return, equal to the interest rate on the debt you’re paying down.

Baby Step #7: Build Wealth & Give

Generous People Are More Prosperous. There is a common misconception that in order to get wealthy you have to be stingy, and not be very giving. Giving to others makes you less selfish, and less selfish people have more of a tendency to do better in both relationships and in wealth building. Building wealth is the process of generating and maintaining long-term income through multiple sources. This includes your savings and any assets that generate income, such as your investments.

  1. Stay away from debt.
  2. Make a zero-based budget each month. (every dollar has a job)
  3. Save money.
  4. Live on less than you make.
  5. Be a giver.

Brows Are Life

Isn’t it crazy just how much brows change a persons face?

I used to have VERY blonde eyebrows. You could barely see them. I literally looked like I had zero brows. I felt extremely self conscious about my face so I decided in 2009 to start penciling them in. Boy was that insane. I thought I looked SO great though. Back then I was 19 at the time and partying was my only hobby. I really felt like I needed to look a certain way to attract the right guy. I was so naive. I was so broken. I was so reliant on other peoples approval. Even though I was very much opinionated and not afraid to express myself I was also sitting at home crying, wishing I had someone to love me thinking if only I had a different face, body, or personality that maybe then my prince charming would come take me away.

The struggle was real for a very long time. I went through so many different types of ways to fill my brows in. I had found only 2 ways I loved and then they discontinued the make up I was using way back in 2010 so then I had to venture out and find a new way to do them. I originally used a light brown pencil. I then moved onto dark brown powder eye shadow. After that I found a brow fill kit in I want to say 2011. I was kind of over powder at that time though because I would also have to wipe the excess under my eye and it was just annoying that I had to do that extra step. I am all about efficiency.

It was taking me around 45 minutes to do my make up in the mornings and I wanted something less extensive. I finally found a brow PEN! My life was made because all I had to do was draw them on. Color matching has always been harder for me since I am a redhead. I went from dark brown to light brown because I felt I looked harsh with such a dark brow. My hair color is a darker red almost auburn so I have always just gone with browns. I honestly had major chola vibes at this point. Not gonna lie. At this stage in my brow journey, I was even keeping my make up on while I slept so it would be less work in the morning plus I was seeing someone and I didn’t want him to see my naked mole rat face. There was so much I didn’t see in myself back then.

I started looking into microblading in 2018 because I was done. I was over the time it took to do my make up. I still hadn’t embraced my natural beauty. I thought how could my natural beauty be anything special. I was married with a daughter by now and I was still too self conscious to just be me. Then, I started thinking what am I teaching my daughter? To make sure her face looks great 24/7? That she can’t be herself because society has a certain standard? It was a realization I had to come to before really accepting myself. I needed to ACCEPT MYSELF. Who cares what others think about my face. My husband would tell me all the time how beautiful I was without my make up on.

Eventually, after setting some money aside, I mustered up the courage to go see a microblading specialist. It was a goal I had in mind for a very long time. I planned out how much I needed to save per month and I achieved this goal because I wanted this so badly. I had followed Katie on instagram for about 6 months before making my appointment. I was so excited to finally be free. I was excited to finally not have to do my make up if I didn’t want to. When arrived to my appointment she told me her name was Jessica. I had been following a woman named Katie. It didn’t register until my appointment was over and I saw the damage.

To say I was enraged would be putting it lightly. I was sad, frustrated, angry, and most of all my self esteem was shot. I was so brutally heartbroken by the outcome of what was supposed to be my life altering microblading appointment. How could I have done this? I had read about horror stories because I wanted to make sure I didn’t get in one of those situations. I thought I was prepared. I thought I had done my research and chosen the perfect person to do the job. I had made my appointment with the wrong person and I felt so ridiculous. I was just so excited to get this service done that I didn’t even realize I went to the wrong person. Microblading was just becoming popular when I had my first appointment and everyone was telling me how brave I was. I was talking about how I was going to be so low maintenance after this. I was STILL concerned with my outer appearance and the approval of society.

I ended up making an appointment with the real Katie about a month after the first horrific experience I had gone through. Katie was so personable right off the bat. She had been an RN before starting her microblading training and she told me all that she wanted to do was make people feel beautiful. There are so many people out there in my situation but with very different circumstances. There are burn victims that want to reconstruct their brows, cancer patients who want to just look like everyone else, and older women who have had hair loss and just want to feel attractive again. She even does microblading on men! Regardless of the reasoning behind wanting to do microblading it is a very important decision to make considering its basically a tattoo on your face. Even though its semi-permanent, it’s still going to be there for a while. Katie transformed my brows into something manageable and I was going to have to go see her a few times to correct them completely. I have been on my brow game now for over a decade so whats another couple of years… After my first appointment, I could already see a significant difference.

Her way is the best way. I felt the most beautiful I ever have. I didn’t feel the need to fill them in anymore. I saw my face without any make up and I felt beautiful. I would still fill them in if I was going somewhere with a bunch of people because I felt like I had to. Everyone knew me with these dark brown brows that were always on point. How could I just stop filling them in.

I ended up seeing Katie a total of 4 times before reaching my goal of complete satisfaction. I now know that beauty is within and I don’t need make up. Sometimes I like to put make up on to enhance the beauty I already have but other than the occasional mascara I don’t do ANYTHING. Its such a relief to not feel the need to “put my face on” everyday. Yes, I have enhanced brows and I have to do a touch up every year to maintain them not because I have to but because I WANT to. I feel good about myself now without trying to seek approval within society. Now, I love me.

I would love myself even if I was still brow-less. I have gone through many other things during this brow journey that has made me see myself in a different light. Positive self-talk and realizing I am a badass happened along with self reflection and hiring a lifestyle transformation coach. I checked in with myself and asked myself really important questions like, do I care what others think of me? My answer was no.

Glow Up!

Creative Ways to Increase Income

Know Your Worth

Times are tough right now during a global pandemic and you are not the only one trying to increase your income. Know your worth. You are worthy of money. Repeat that to yourself right now. Just because times are tough now doesn’t mean they always will be. It is up to you to get off that couch and look for new beginnings or new opportunities. There are new challenges now of course but that just means we adapt to the changes. I’m going to give you some creative ways to increase your income TODAY!

Sell Stuff Online

Everyone has a closet filled with clothes they bought a decade ago, unless you are a minimalist then you have nothing. Move along… Anyway, Like I was saying… Everyone has junk laying around that they can easily create an eBay account or poshmark account to sell these items on. There are many other sites you can utilize to sell things on for cheap.

  1. Ebay
  2. Poshmark
  3. Amazon
  4. Craigslist
  5. ThredUp
  6. Facebook Marketplace
  7. Offerup
  8. Letgo
  9. Cash4Books
  10. Decluttr

Other ways to generate more income include:

  1. Rent a room
  2. Drive people around
  3. Deliver food
  4. slicethepie.com—- Review unsigned artists and get paid for it
  5. Negotiate salary

Popular Side Hustles

  1. Driver
  2. Coach
  3. Sales Rep
  4. Virtual Assistant
  5. Blogger
  6. Freelancer

Everyone is capable of increasing their income. You just have to get creative and start with a plan. Planning doesn’t come naturally to some people but it might be worth it to try. If you have been laid off and can’t even fathom driving people around why not dive deeper and consider turning a hobby that you really enjoy into a new small business. If it’s crafting you enjoy why not channel your feelings and emotions into creativity and open an Etsy shop to sell these items. There is always a way, you just have to find what works for you.

7 Retirement Rules to Live By

Rule No. 1: Have a plan — and Follow it

You absolutely need a plan — otherwise you’re leaving things up to chance, which is never a good idea. Take the time to figure out how much money you’ll need to live on in retirement and how you’ll save it.

One rule of thumb is that you’ll need 80% of your pre-retirement income in retirement, but you should do your own calculations. You can also work backwards, using the 4% rule of thumb, which tells us you can safely withdraw 4% of your nest egg in your first year of retirement, and adjust upward for inflation thereafter. Many people wind up spending far more money in retirement than they did working, due to pricey retirement activities or unexpected health conditions, which don’t come cheap.

Try this simple online compounding calculator to jumpstart your planning. Start by putting in your expected investment growth rate for the interest rate, and try out different savings levels. For example, if you start with $10,000, you save $10,000 each year in a tax-advantaged retirement account, and you expect it to grow an average of 8% annually, over 20 years, you’ll end up with about $540,000. Try different scenarios that are realistic for you and keep track of a few estimates to create a range to shoot for. The 8% growth comes in when you invest your savings in the stock market wisely, combined with the power of compounding.

Remember that your money might need to last a long time if you’re lucky to live longer than average, so plan conservatively. If you retire at 62, for example, and then you live to 100, you’re retired for 38 years. Don’t assume that you’ll be able to retire exactly when you want to, either. According to the 2016 Retirement Confidence Survey, 46% of retirees left the workforce earlier than planned, with 55% citing health problems or a disability as the reason and 24% citing changes at work such as a downsizing or workplace closure.

Rule No. 2: Save aggressively and invest effectively.

There’s a good chance that you, like most Americans, are behind in your retirement savings. Of Americans aged 55 or older, 28% have less than $25,000 saved, according to the the 2018 Retirement Confidence Survey. Younger folks are in worse shape — more than half have less than $10,000 socked away — but fortunately, they have plenty of time to gain ground. As long as you have a few years before you retire, there’s still time to significantly improve your financial condition by your retire date.

Start by maxing out your IRA contribution each year (most of us can contribute $6,000 for 2019, and those aged 50 or older can contribute $7,000) — and try to max out your 401(k) contribution, too (with 2019 contribution limits of $19,000 for most folks and $25,000 for those 50 or older).

The below table shows how much a lump sum accumulates over various periods when your investments grow by an average of 8% annually. (The stock market has averaged annual gains of close to 10% over long periods, but over your specific period, it could be much less, or more.)

Growing at 8% for$10,000 invested annually$15,000 invested annually$20,000 invested annually
5 years$63,359$95,039$126,719
10 years$156,455$234,682$312,910
15 years$293,243$439,864$586,486
20 years$494,229$741,344$988,458
25 years$789,544$1.2 million$1.6 million
30 years$1.2 million$1.8 million$2.4 million

The 4% rule is flawed, but it is helpful in figuring out how well your savings will serve you in retirement. It suggests withdrawing 4% of your nest egg in your first year of retirement and then adjusting for inflation in subsequent years. Here’s how much income various-sized nest eggs will generate in year one:

Nest Egg4% First-Year Withdrawal
$250,000$10,000
$300,000$12,000
$400,000$16,000
$500,000$20,000
$600,000$24,000
$750,000$30,000
$1 million$40,000

How should you invest your dollars? For most people, it’s best to just stick with an inexpensive broad-market index fund like one tied to the S&P 500 index, that will deliver roughly the same returns of the overall stock market. Index funds have tended to outperform managed stock mutual funds over long periods, so don’t allow yourself to be enticed by a sweet-talking mutual fund pusher.

Rule No. 3: Tend to your physical and mental health

Planning for retirement and living well in it might seem to be largely about money — saving enough, keeping it allocated properly, spending the right amount, and not running out of money. Those are indeed important considerations, but there are other important components of retirement — such as your health, both physical and mental.

Consider this: A 2014 MassMutual survey found that 10% of retirees were surprised to find themselves lonely, bored, with a lost sense of purpose, and/or depressed in retirement. So plan to stay active and social in retirement, too. Being physically active can keep your bones and heart strong, while being socially active keeps you mentally and physically healthier and could even keep dementia at bay. Think about getting a part-time job, a side hustle, joining a club, or taking up a new hobby. It’s not a bad idea to start looking into possibilities well before you retire.

Rule No. 4: Don’t forget healthcare costs

Speaking of health, don’t forget to factor healthcare costs into your planning. A 65-year-old couple retiring in 2019 will spend, on average, a total of $285,000 out of pocket on healthcare, according to Fidelity, of course, that’s an average so you’ll probably spend more or less.

Rule No. 5: Remember your RMDs

If you have any money in traditional IRAs or 401(k)s, remember to take your required minimum distributions (RMDs) at the right time — when you reach age 70 1/2.

If you fail to take these annual withdrawals on time, you’ll face a hefty penalty — 50% of the sum you should have withdrawn as your RMD. These are annual deadlines, so set yourself a reminder on the calendar each year so you never forget.

Rule No. 6: Don’t cash out, and don’t exit completely from stocks

If you’re thinking that once you approach or enter retirement, you’ll need to sell all your stocks and buy bonds or just move that money into CDs, think again. Yes, it can make sense to keep a portion of your retirement war chest in a “safer” place than the stock market. But remember, for funds you won’t need for at least five or ten years, the stock market is one of the best ways to grow that money. If you have 20 or more years of retirement ahead of you, a big chunk of your nest egg can keep growing for more years before being moved. You might reduce your risk by favoring stable, established blue chip stocks, including dividend payers, instead of would-be highfliers.

Learn what a bond ladder is and be smart about aligning your portfolio allocation with your timeline. Meanwhile, don’t cash out retirement accounts early. That stops the money from growing more, and it can mean penalties and taxes, too. Many people cash out when they change jobs, a move that short-changes their financial future.

Rule No. 7: Be smart about Social Security

Finally, the last important retirement rule: Find out how much money you can expect to receive from Social Security and incorporate this monthly income source into your retirement planning.

First, visit to the Social Security website to set up a “my social Security” account. Here, you can view records of your past earnings and estimates of your future benefits. The average monthly Social Security retirement benefit was recently $1,467, or about $17,600 annually, while the maximum  monthly benefit for those retiring at their full retirement age (FRA) in 2019 is $2,861 — $34,000 for the year. If those sums seem too small to sustain your retirement, remember that if your earnings are above average, you’ll collect bigger checks, and there are ways to increase your Social Security benefits, too.

The more you read up on retirement issues and the better you plan for your financial future, the more comfortable and low-stress your golden years are likely to be.

The $16,728 Social Security bonus most retirees completely overlook

If you’re like most Americans, you’re a few years (or more) behind on your retirement savings. But a handful of little-known “Social Security secrets” could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $16,728 more… each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we’re all after. 

Retirement Plans for the Self-Employed

 SEP IRASolo 401(k)/Solo Roth 401 (k)SIMPLE IRAPayroll Deduction IRAProfit Sharing
Best forSelf-employed people; employers with one or more employeesSelf-employed people with no employees other than a spouseSelf-employed people; businesses with up to 100 employeesSelf-employed people; employers with one or more employeesSelf-employed people; employers with one or more employees
Funded byEmployer; individual, if self-employedSelf or qualified spouseEmployee deferrals; employer contributionsEmployee, via payroll deductionEmployers, at their discretion; might be linked with employer’s workplace retirement plan
2018/2019 EMPLOYEE contribution limitsContributions for employees made solely by employer (or sole proprietor); limit of 25% of net self-employment income, to a maximum of $56,000 Lesser of $19,000 or $25,000 for those age 50 and older and 100% of earned income$13,000; $16,000 for those age 50 or older Based on employee’s IRA eligibility; maximum of $6,000; $7,000 for those age 50 and olderBased on employee’s IRA eligibility; maximum of $6,000, or $7,000 for those age 50 or older
2018/2019 EMPLOYER contributionsThe lesser of up to 25% of compensation or $56,000 As both an employee (of yourself) and employer, up to $56,000, or $62,000 with catchup contribution Mandatory matching contribution of up to 3% of an employee’s compensation or fixed contribution of 2%N/AThe lesser of up to 25% of employee compensation or $56,000
Taxes on contributions and earningsContributions and investment income are tax deferred; earnings grow tax-deferredContributions and investment income in a traditional Solo 401(k) are tax deferred; contributions to a Solo Roth 401(k) are taxable; earnings grow tax-freeContributions and investment income are tax-deferred; earnings grow tax-deferredContributions to a traditional IRA might be deductible; contributions to a Roth are taxable; earnings grow tax-deferredNo taxes on contributions; earnings grow tax-deferred
Taxes on withdrawals after age 59 1/2Taxed at ordinary ratesTraditional Solo 401(k) withdrawals are taxed at ordinary rates; Solo Roth 401(k) withdrawals aren’t taxedTaxed at ordinary ratesTraditional withdrawals are taxed at ordinary rates; Roth withdrawals aren’t taxedTaxed at ordinary rates
ProsSimpler for employers to set up than Solo 401(k)s; employers get tax deductions on contributionsAllows small business owners to make both employee and employer contributions for themselves; has higher contribution limits than some other plansEmployees can contribute up to 100% of compensation, up to limitEasy to set up and maintain; no minimum employee coverage requirementsEmployee might be able to borrow penalty-free from vested balance before retirement age (although borrowed amounts are subject to income tax)
ConsLower contribution limits for sole proprietor than a Solo 401(k); doesn’t allow catchup contributions; employer contributions are discretionaryMore complicated to set up than a SEP IRA; only allows withdrawals before age 59 1/2 for disability or plan termination25% penalty on distributions made before age 59 1/2 and within the first two years of the plan; no loans allowedEmployees subject to Roth and traditional IRA eligibility requirementsVesting period is generally required; no diversification, tied to employer earnings
Good to knowThere is a different calculation to determine allowable SEP contributions if you’re both the employer and employee   Employer contributions might be subject to vesting termsDistribution rules penalize rollovers to another account within the first two years of plan ownership; a SEP IRA or 401(k) might be better for the self-employedThe employer chooses the providerContributions are at employer’s discretion and can vary based on salary and job level

7 Retirement Options You Should Consider

WE’VE ALL HEARD THE warnings and are well aware that we should save more for retirement. The new year is a good time to resolve to find the best retirement plan to build wealth for the future. Uncle Sam wants you to save for retirement so much that the federal government has created a number of tax-advantaged retirement accounts, including popular choices such as the 401(k) and individual retirement account.

Types of retirement accounts to consider:

  • 401(k) or 403(b) offered by your employer
  • Solo 401(k)
  • SEP IRA
  • Simple IRA
  • IRA
  • Roth IRA
  • Health savings account (HSA)

For most people, especially young people, the best place to start is with the 401(k) program at work. This is a particularly enticing option if your employer matches a portion of your contribution. That’s essentially free money. “If you’re working at a company that offers a 401(k) and they match contributions, you should really save in that plan,” says Wei-Yin Hu, vice president of financial research at Financial Engines, an independent investment advisory firm in Sunnyvale, California. “It’s a great way to get a really good head start on building your retirement savings.”

If you’re self-employed, you have even more options, some of which allow significant tax savings. Exactly which retirement plan, or combination of accounts, is best depends on your personal financial situation. “There’s a category of people who are self-employed or own their own businesses and have more complicated choices to make,” Hu says.

You may want to consult an accountant or engage a financial planner to discuss the best strategy. Not only do you need to figure out which kind of account to use, you also need to pick a financial services company to handle your accounts, unless your employer picks one for you, and then choose investments. If you can’t afford a financial advisor, see what free advice is offered by the company that holds your money. Be aware that all accounts come with fees, and higher fees can eat into your returns. “If you have a very long-time horizon, you can afford to take some risk for higher growth,” Hu says. But you want to select “the right funds so your exposure to the market is diversified.”

More people are being offered something that they may not recognize as a retirement savings tool: a health savings account. These accounts are only available to those with a high-deductible health insurance policy. Not only can a health savings account lower the cost of your insurance plan, it can also help boost your retirement savings. “What a lot of folks don’t realize is both of these tools can help you save for retirement,” says Steve Christenson, executive vice president of Ascensus in Brainerd, Minnesota.

You can use the money in your HSA for doctor visits, contact lenses and medications not covered by insurance. But that’s not your only option. You can also pay those expenses out of pocket and leave the money in your HSA to grow. If at some point you need money, you can be reimbursed for past expenses. “Essentially, those dollars grow on a tax-deferred basis,” Christenson says. “It can actually turn itself into a very good retirement account.”

The Internal Revenue Service has its own set of complex rules for each type of retirement account. Some tax breaks are only available to people at certain income levels.

All these retirement accounts provide a tax incentive to retirement savers. Some accounts allow you to defer paying tax on your contributions until retirement, while others accept after-tax dollars and no tax is due at withdrawal. If you withdraw money before you reach age 59 1/2, in most cases you will have to pay a 10 percent penalty in addition to regular income tax.

Here are seven types of retirement savings accounts to consider:

401(k) or 403(b) Offered by Your Employer

For most people, a 401(k) plan is the easiest and best place to start investing for retirement. The money is withheld through payroll deduction, and you can save up to $19,000 of your pre-tax income in 2019 ($25,000 if you are 50 or older). If you leave your job, you can roll the account over into a new employer’s 401(k) or your own IRA. A 401(k) is usually offered by a for-profit company, while teachers and other employees of nonprofits may be offered a 403(b) instead.

Solo 401(k)

A sole proprietor can set up an individual 401(k) and make contributions as both the employee and employer, up to a total of $56,000 in 2019 (or $62,000 for someone 50 or over).

SEP IRA

SEP stands for simplified employee pension, and this kind of account is used primarily by the self-employed or small business owners. As the employer, you can contribute up to 25 percent of your income or $56,000 in 2019, whichever is less. These accounts are easier to set up than a solo 401(k). If the business has employees, the employer must contribute for all who meet certain requirements.

Simple IRA

This plan allows small employers (fewer than 100 employees) to set up IRAs with less paperwork. Employers must either match employee contributions or make unmatched contributions. An employee can contribute up to $13,000 in 2019, with an extra $3,000 allowed for those over 50.

IRA

You can contribute up to $6,000 a year to an IRA ($7,000 if you’re 50 or older). The money grows tax-deferred until you take withdrawals. You can contribute to both an IRA and a 401(k), but if you’re covered by a retirement plan at work, you can’t deduct your IRA contributions from your taxable income if you earn more than $74,000 (for single filers) or $123,000 (married filing jointly) in 2019. After earning $64,000 and $103,000, respectively, you get only a partial deduction. If you’re not covered by a retirement plan at work, you get the full deduction no matter what your income, unless you file jointly with a spouse who has a retirement plan at work.

Roth IRA

With a Roth IRA, you are contributing after-tax dollars, and you get no tax deduction for your contribution. However, the money you earn grows tax-free, and you pay no tax on withdrawals after you reach age 59 1/2. Plus, unlike with regular IRAs, there are no mandatory withdrawals after age 70 1/2. You can also withdraw the amount you contributed (but not your investment earnings) at any time with no penalty and no taxes due, which is not the case with traditional IRAs. To contribute to a Roth IRA, you must make less than $137,000 (if you’re single) or $203,000 (if you’re married filing jointly) in 2019. If your income is more than $122,000 (single) or $193,000 (married filing jointly), your allowed contribution is reduced. You can contribute to both a Roth IRA and a traditional IRA, but the contribution limits apply to your total deposits. Some people who make too much to contribute to a Roth IRA contribute to a conventional IRA and convert it into a Roth later.

Health savings account

Those with certain high-deductible health insurance plans can save money tax-free in an HSA. You can contribute up to $3,500 a year for an individual or $7,000 for a family. If you’re 55 or older, you can contribute $1,000 more. You can withdraw money from your account to pay allowable medical expenses, including copays and items such as eyeglasses. If you don’t spend the money, it rolls over indefinitely. Once you’re 65, you can withdraw money for any reason without penalty, but you have to pay income taxes on money you withdraw. Or, you can use it for retiree medical expenses tax-free. If you withdraw the money before you’re 65 for any reason besides medical expenses, you have to pay taxes and a 20 percent penalty. But as long as you save your receipts, you can withdraw money to reimburse yourself for expenses you paid years ago. If you don’t need the money for medical expenses, you can invest it as you would other retirement savings.