Three Spending Habits That Could Affect Your Retirement
Motley Fool recently identified three spending mistakes that are common in retirement.
Many retirees have a trend for falling into financial traps that could reduce their retirement income significantly, according to Motley Fool. These traps include buying things just because they’re on sale, not paying attention to the little things, and spending extra money just because they have it. Find out more below.
1. Buying things just because they're on sale
S-A-L-E! Who doesn’t love that word? The psychology of the sale makes it easy to get caught up in it. According to Psychology Today, sales shift our focus toward what we’re saving rather than what we’re spending.
If the item is something you really need and will use, of course it’s logical to take advantage of the discount. But if you’re purchasing it with the hope of using it later, then you’re spending extra money that could add up quickly.
According to a survey by Slickdeals, the average American spends around $450 per month on impulse purchases. That's around $5,400 per year, or $324,000 over the average lifetime (and assuming you become financially independent at age 18). Nearly 2/3 of those who shop impulsively said they do so because they got a good deal on the item, and 40% said they have purchased something on impulse simply because they had a coupon.
According to Motley Fool, if you put that $5,400 per year you may be spending on impulse purchases toward your savings, that money could dramatically affect your retirement. For example, if you save $5,400 per year in a retirement account earning a 7% annual rate of return, then in about 30 years, you'd have saved around $510,000.
2. Not paying attention to the little things
You may justify spending money each month on "little" costs, thinking that $10 here and there won't hurt. But these costs can quickly add up, and before you know it, you're spending hundreds of dollars per month on "little" things.
If you could save an additional $100 per month by cutting out the little things that you don’t really need, then that money could go further than you may think when you invest it in your retirement fund. By saving just $100 per month earning a 7% annual return on your investments, you’d have accumulated around $113,000 in savings over 30 years.
3. Spending extra money just because you have it
It’s tempting to want to treat yourself to a special vacation or the newest technology gear when you get extra money from a tax return or a bonus at work. There may be no harm in occasionally splurging, but be mindful that you’re possibly doing so at the risk of your retirement.
It’s not easy to save for a comfortable retirement regardless of how much money you earn. The more you make, the more you spend, according to Nielson Insights—so making a lot of money doesn’t always equal a secure retirement. But if you're consciously wasting money on things you don't need, these bad habits could end up costing you thousands of dollars and an uncertain financial future. You can read the completeMotley Fool article here.
Climate change activists are not just interested in reducing carbon emissions in order to "save the planet." Their underlying desire is to overturn capitalism and replace it with socialist governments worldwide.
Our story starts with the IPCC, or the Intergovernmental Panel on Climate Change, a U.N. organization. "And any settlement of the Global Warming issue by the UN would entail massive transfers of wealth from the citizens of wealthy countries to the politicians and bureaucrats of the poorer countries." (1)
In 1992, at the first U.N. Earth Climate Summit in Rio de Janeiro, Brazil, Program Executive Director Maurice Strong stated, very candidly:
"We may get to the point where the only way of saving the world will be for industrialized civilization to collapse. Isn’t it our responsibility to bring this about?" (2)
Former U.S. Senator Timothy Wirth (D-CO), then representing the Clinton Administration as U.S. undersecretary of state for global issues, join…
Individual Retirement Accounts (IRAs) can be a great way to save for retirement because of the tax benefits they can provide. If you’re eligible, you can choose a traditional IRA for an up-front tax deduction and defer paying taxes until you take withdrawals in the future. Or, if eligible, you might opt for a Roth IRA and contribute after-tax money in exchange for tax-free distributions down the road.
So, what's the catch? There are a few. If you run afoul of some of the IRS rules surrounding these accounts, the penalties can be quite stiff—all the way up to a disqualification and taxation of your entire account.
Ignorance of the law is no excuse, and with few exceptions, the IRS isn’t very forgiving of mistakes. Knowing the rules can help you navigate the many potential IRA tax traps you might encounter on your way to retirement.
Keep in mind that when we discuss taxes and penalties, we’re referring to those at the federal level. In most states, you will also…
As expected, the Democrats took control of the House, the Republicans kept the Senate. This is what the market expected, so there is no longer any uncertainty. Markets hate uncertainty.
While I can't predict the future, I think we can expect markets to return some gains over the next several months. Today may be the confirmation that the correction has changed to another uptrend. I added to my equity holdings Monday in anticipation of this event.
But having said that, make sure you have a plan to exit (sell) if the market should decide otherwise.
Really, I don't think anything is going to happen as far as Washington D.C. is concerned. With a split government, there'll be a lot of talk, but little action. No changes in taxes, immigration, health care, etc. Just the status quo. Which also may be good for the markets. With Democrats in control of House committees, expect more investigations, grandstanding and plenty of theatrics. But this will go nowhere, and just waste time …