Early 2016 might seem like a bad time to start investing for retirement. With headlines like “Wall Street Shattered” and “Dow Plunges,” most investors aren’t exactly excited about contributing to their retirement funds. However, if your household is one of the 38 million in America without any retirement assets, this is exactly what you should start doing.
And with the help of a new retirement product from the U.S. Treasury Department, you can now invest without worrying about your account losing value.
How is this possible? Say hello to a brand-new retirement account called MyRA. MyRA was specifically designed for the 45% of working Americans who are not saving for retirement. MyRAs provide a place for individuals to grow a $15,000 asset base, while avoiding many of the hurdles and risks and all of the expenses that IRA investors typically face.
MyRA accounts abide by IRA income and contribution limits. That means single filers with incomes under $131,000, and married couples filing jointly with incomes under $198,000, can contribute. The maximum contribution amount is $5,500 for 2016, or $6,500 if you’re 50 or older or will turn 50 by the end of the year. Once a MyRA account balance reaches $15,000, the investor rolls it over to a Roth IRA.
Like contributions to a Roth IRA, MyRA contributions are made with after-tax dollars, and withdrawals in retirement are tax-free.
If you have yet to start saving for retirement, here are five reasons why you should consider opening a MyRA:
1. They’re safe. Your contributions are FDIC-insured, so you won’t lose a penny.
2. They’re cheap. With no minimum contributions, no loss in share value, no trading fees and no broker commissions, MyRAs are an affordable way for new investors to build wealth.
3. They’re easy. You can sign up online in just a few minutes at myra.gov. Once you do, choosing how to invest is simple. In fact, you don’t have to choose at all. All contributions are invested in the Government Securities Investment Fund. The goal of that fund is to give you a return that is higher than inflation and shield your investment from risk. Not a bad place to start building your nest egg.
4. They’re accessible. MyRA contributions can be made from your paycheck, checking account, savings account or even your tax refund. And while you shouldn’t touch money you have set aside for retirement, you can withdraw your MyRA contributions — but not the interest — any time, without penalty. (Seriously, though, just leave those contributions in there.)
5. They’re a good start. We all know winning Powerball is not a viable retirement funding strategy. You’ll need real money to pay for real expenses when you’re too old to work. So if you don’t have retirement benefits through your employer, start building the retirement assets you’ll need in a safe space with a MyRA.
After all, no one ever saved a million dollars without first saving $15,000.
This article was originally published on NerdWallet.com.
I would like to wish you all a happy, healthy and prosperous new year!
May 2016 be your best year ever!
Today, in the spirit of Resolution, I’d like to throw my hat into the ring and reveal that this year’s resolution here in The Yankee Saver land is going to be a big one…I mean… “Huge”!
This year's resolution is designed to tackle one of the biggest budget -busters of them all! This expense gets all of us, sometimes multiple times a day! Are you ready? Here it is:
This year at The Yankee Saver we resolve to stop paying other people for what we can make or do ourselves.
YIKES! I know, its a biggie! We are looking at some serious DIY action in the coming months! This means we pay ourselves for things we normally pay someone else for, like take out dinners, salon services, home repairs, drive-thru coffee, cleaning services, dog grooming, painting, and who knows what else ! Now I am not talking shabby substitute work here, I am talking "Wow, this is amazing, I am so psyched that I did this myself" quality DIY. A daunting task I know, but we're enthusiastic and excited for the challenge, right? OK, so maybe some of us are so tired right now that its seriously ridiculous, but here's the thing to remember: We can't always control the amount of money we make, but we can control the amount of money we spend paying people to do stuff for us. So, at the very least, this resolution is guaranteed to save us buckets of money! Even if its just take-out coffee a few times a week we still save about $520 in 2016. Think about how much could that grow if we add more! Its CRAZY good, all in cash, tax free!
So here we go! Who's with me?
I will, quite literally, keep you posted!
I love our American holiday season and all of its wonderful customs — the whole carol-singing, candle-lighting, tree-decorating, stocking-hanging, dreidel-spinning, manger-staging thing. There is one holiday activity, though, that we should stop treating as a tradition and start treating as the mistake that it is.
I’m not talking about serving Turducken. I’m talking about getting a “Holiday Helper” loan.
As scores of consumers prepare for a busy holiday shopping season, the first stop many make is at their credit unions, for a 12-month personal loan. Consumer debt is at an all-time high, and most American households have little or no savings, so why are shoppers so excited about borrowing even more money for non-emergency spending? Simple. It’s holly jolly marketing.
Credit unions give these loans North Pole-inspired names, such as “Holiday Helper” and “Jolly Dollars,” but they’re really a way to cash in on cash-strapped shoppers. These loans have “low” interest rates — if by low, you mean often 20 times higher than what you’d get in your savings account. And they’re payable over 12 months, so there’s no threat of long-term indebtedness. You’ll finish paying yours off just in time to need another one!
We all know credit card debt is bad. Holiday shopping just isn’t fun when you have to think about how much money you already owe every time you swipe your plastic. But give that debt a fun, festive name and hand it to us in cash, and boom, everything changes! It just feels better, like the loan isn’t really “debt” debt. So it’s OK, right?
Wrong. Holiday loans are not good. They’re designed to keep you in a very expensive and unnecessary debt loop. They’re Grinch-bad.
Instead of funding your festivities with new debt dressed up in an elf suit, do these three things:
Ask yourself ‘the question’
No matter your financial history, decide right now to get smart about your money. Before you make any financial decisions, ask yourself this question: “Will doing this with my money help me to financially protect and serve myself and the people I love?”
If you need extra time to get your cash together, but don’t want to miss out on this year’s hot gifts, give these three little syllables a try: lay-a-way. Now available at major retailers, such as Wal-Mart, Kmart, TJX companies, and even Best Buy stores in some markets, layaway plans let you pick out your items in the store and have them held for you until you pay them off in mid-December. Plans vary by store, but generally require a $10 down payment.
Start a ‘holiday loan’ savings plan
Start your own savings program with the money you’d spend repaying a loan. Here’s how it works: At the beginning of the year, determine how much you’ll need for the holiday season. Take that amount, add 20% for “interest,” divide by 12 and transfer that amount into your savings account each month.
At the end of the year, withdraw your “holiday loan” from your account, but leave the interest. After five years, the interest will completely pay for your next holiday loan.
Now, those are some dollars that will really make you jolly!
This article was originally published on Nerdwallet.com.
My Country, 'tis of thee, Sweet land of liberty, of thee I sing;
Land where my fathers died, Land of thy pilgrims' pride, From every mountainside,
Let freedom ring.
My native country, thee, Land of the noble free, thy name I love;
I love thy rocks and rills, thy woods and templed hills, my heart with rapture thrills,
Like that above.
Let music swell the breeze, and ring from all the trees, sweet freedom's song;
Let mortal tongues awake, Let all that breathe partake, Let rocks their silence break,
The sound prolong.
Land where my fathers died, Land of thy pilgrims' pride, From every mountain side,
Let freedom ring!
Just a quick post to remind everyone to check your electricity supply rates. Believe it or not we are inching out of winter, and prices are starting to fall. So if you were among the many residents who switched suppliers and opted for a low cost 3-4month rate, make sure you check in now with suppliers before your rate expires, to avoid falling into a high priced variable rate.
In New England, the ideal strategy is to lock into a low 12 month rate in early spring or early fall. That way you set yourself up to renew each year when demand for heating and cooling, and therefore energy, is at its lowest levels and sells for the lowest price.
...My Fair Lady...
Isn’t it funny how cold and snowy Decembers make spirits bright, while cold and snowy Januarys make them so darn sluggish? With the holiday lights, music and decorations long gone, and store shelves full of Valentines and Cupid Pez dispensers, it’s certainly tempting to adopt a "What happened in December stays in December" attitude and push through to Spring.
But don’t seal that lid on the holiday season just yet, or you might miss out on something sure to put a little pep in your weather-proofed step. I’m talking about cash, in the form of Manufacturer’s rebates.
January is the month when some of last year’s spending pays you back a bit, via Manufacturer’s rebate checks and cash cards. Whether you bought appliances, mattresses, razors, coffee makers or even switched electricity suppliers, January is the time to make sure those rebate forms get in before they expire. It is also the time to call any manufacturers who owe you a check, to make sure it’s on the way.
Not sure if any of your holiday purchases came with a rebate? Think about the purchases you made from Black Friday until the end of the year. If you bought any gifts for a kitchen, there is a good chance you have a rebate coming your way. Manufacturers like Kitchen-Aid, Waring, Cuisinart, Bella, Oster, Sunbeam, Black and Decker and Faberware, to name just few, all offered rebates this holiday season. Additionally, some Keurig and Nespresso coffee brewers came with rebates valued between $50 to $100, FitBits with $10 rebates, and even some Beats headphones, on this year’s hot list for gift items, offered a $50 rebate. Once you identify which of your purchases qualify for a rebate, go to the website of the store where you made your purchase for further details, then print out the forms and mail them in. In about a month your check should arrive in your mailbox.
Rebates vary by manufacturers and stores, and they only count if you get them, so take a few minutes now to see if your purchases qualify. It is common for manufacturers to require rebate forms be postmarked within less than 60 days after the purchase date, which makes now the time to get that rebate form mailed in, before your cash back window closes.
If you switched electricity suppliers this fall, now is the time for you to be seeing that rebate check in your mailbox. If you have not seen it yet, be sure to call your new supplier and let them know. Rebates are only good if you get 'em, and businesses have a tendency to make the getting part a lot harder on consumers than it should be.
Why not take a few minutes right now to follow-up on that rebate? You'll be glad you did!
A few weeks ago I was on hold with one of my favorite credit unions. Normally a call of this nature would yield a three, maybe four second wait time, but to my surprise a voice on the other end told me that my expected wait time was over 60 minutes, and to leave a number for a callback. When I finally spoke to someone at the credit union, hours later, I was told the long wait time was due to the enormous response of their annual holiday program.
I was intrigued! What's so special about this program that folks are lining up on the phones for hours? Are they giving the money away? Cuz I'm up for waiting for free money too, no problemo!
Alas, as it turned out, its not a free money deal, its not even a good deal! It is a 12 month loan of up to $1200 with a whopping 18% interest charge, and it has become a holiday tradition for the masses. Families who otherwise find the holidays pinching their pocketbooks can get the cash they need upfront, and then spend the rest of the year paying it off. Then they get another one the next December, and another the year after that, and on, and on, and on.
So every month of every year families who are already struggling get a little visit from the Ghost of Christmas Presents, in the form of that 18% interest. All this to pay for gifts that most likely have long been forgotten.
For all of those who turn to loans to get through the holiday season, I have a better plan for you. Let"s call it the "Buy Five Get One Free" plan. Here is how it works - Starting in January, put $118 a month away (100 for the holiday savings, $18 for the interest you pay yourself). At the end of the year you will have $1416 set aside. Take out $1200 for your Personal Holiday Loan, and keep the rest in the bank. Do this every year for the next four years, and guess what? At the end of the fifth year you will have enough money left over to pay for an entire holiday loan. Your sixth year is free! Now that is a buy five get one free plan to make you and your budget merry.
So tell me, how do you manage your holiday spending? I'd love to hear other strategies that work for you!