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Didn’t Save Enough For Retirement? Here Are 7 Things You Can Do.

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OK, so you are among the many who can’t pull off saving $1 million, or 5 times your annual salary, or whatever the current amount is that’s supposed to provide you with a comfortable lifestyle once you stop working.

What should you do about it besides fret? Instead of trying the unrealistic path of saving a mountain of money at the last minute, try bringing the mountain to you: Adjust your expectations of what your retirement will look like if you have less to spend than you thought you needed. It’s not all bad.

Here are a few ideas for living on less in retirement:

1. Move to Expatria, the largest country you’ve never heard of.

Expatria, as the “nation” of expats is known, is flourishing, thanks in part to U.S. retirees looking for places to live for less and still scratch that itch for adventure. There are plenty of parts of the world where the cost of living is less than in the United States and where U.S. citizens in their retirement are welcome. As a general rule, other countries are quite happy to have you come and spend your money there ― just not to come and work, taking jobs away from their own citizens. They are also less keen on paying for your health care, even when they have a universal plan. Yes, Canada, we are talking about you.

About 500,000 American retirees are now living abroad, according to the Social Security Administration, which delivers checks to them around the globe each month. One heads-up if you want to join their ranks: Check the rules of the country where you want to settle to see what the local tax liabilities will be on your income ― including Social Security.

While Social Security has you covered (with a few exceptions) anywhere in the world, Medicare benefits come to a screeching halt at the U.S. border. This means as a retiree living abroad, you’ll either need to re-enter the United States to have your medical care covered by Medicare, or pay for care yourself.

One of the more popular places for retired Americans to live is Costa Rica, which has a thriving expat community of more than 20,000 U.S. citizens. A retiree can live there for about $1,300 to $1,600 per month, according to SmartAsset. Oh, and it’s gorgeous, and they have universal health care for citizens and permanent residents.

The publication Live and Invest Overseas picked Algarve, Portugal, as the best spot to retire overseas in 2017, based on a combination of natural beauty, weather and affordable housing. The publication estimates a retired American couple could live comfortably there for about $2,160 a month, including pool maintenance.

International Living is a great site to begin an investigation into what it’s like to live in Expatria. (For starters, you will likely have plenty of company: InterNations estimates that 20 percent of all U.S. expats are retirees.) AARP also offers a list of the best places to retire abroad.

2. Work part-time.

Social Security, which was signed into law in 1935, was intended to provide a financial safety net for lower-income workers when they retired. It helps if we all keep that in mind, because it isn’t ― and never was ― intended to meet anyone’s full retirement needs. Still, the SSA estimates that 21 percent of couples and 43 percent of single seniors count on Social Security for 90 percent or more of their total income. Other sources of income include any pensions you can collect ― increasingly rare ― and drawing income from what you have managed to save.

However, you won’t be alone if you consider taking on a part-time job in retirement.

The rule of thumb for retirement savings is that you need to have saved $240,000 for every $1,000 you expect to need per month in retirement. So if you haven’t saved that much, one alternative is to replace that income through a part-time job. Remember, $1,000 a month is roughly just $250 a week. Heck, some teenagers make that much babysitting in the summer. (The current baby-sitting rate is about $15 an hour. Here is a calculator to see what you could earn in your ZIP code.)

3. Consider home-sharing.

While paying for health care may be a retiree’s boogeyman, don’t dismiss housing expenses as a walk in the park. They are very much a budget-crippler.

But remember what the Golden Girls did? Sharing a home with like-minded friends not only reduces housing expenses, but also provides a built-in support network.

Or if you love your friends but living with them just isn’t your thing, rent out an unused bedroom to someone and enjoy the extra monthly income. Think broadly: Can you turn the garage into a studio apartment and collect a monthly income from it? How about moving into a granny shack in the yard and renting out your home for even more money?

You can also use your home to reduce your spending. Consider trading some space for live-in help. Giving up an unused bedroom for someone who will do light housekeeping, cut the grass and drive you where you need to go beats paying for those services.

4. Unload your car.

When you eliminate your commute to work, there’s a good chance you will be eliminating one of the primary reasons you even had a car. You’ll certainly be driving less. Figure out what it costs you to own and operate a car for a year ― purchase or lease price, insurance, gas, oil changes, tires, repairs and parking ― and divide that by 12.

Owning and operating a personal vehicle in 2017 cost an average of $8,469 annually, or $706 each month, according to AAA. Depending on where you live, it may cost less to call an Uber or take public transportation to get around. You can always rent a car when you need it.

Plus, your heart will thank you for walking places or getting around with a bicycle.

5. Embrace the sharing economy.

Swap homes with someone who lives where you want to vacation. Form a neighborhood co-op for Costco memberships and buy in bulk. When you travel, stay in Airbnbs, which tend to be less expensive and often have small kitchens in which you can make your breakfast to save even more money.

Sign up to be a home- or pet-sitter with a service like Trusted House Sitters. For $119 a year, this service finds and vets pet-sitters who want to vacation by staying in someone else’s home. You can become a pet-sitter yourself, or use one to save money on a pet-sitter while you’re away from home.

6. Rethink travel.

The beauty of not being tied to a work schedule is that you are free to move about the cabin, so to speak. Travel gets a whole lot less expensive once you aren’t wedded to peak travel times. Travel off-season and fly midweek when the fare is lower. Spend weekends in hotels that cater to weekday business clients.

You can also stay longer and get to live more like a native than a tourist. Think about renting out a whole apartment or house and using it as your base. Access to a kitchen means fewer meals out.

7. Downsize and declutter.

There really is gold in “them thar hills” ― and probably in your attic, basement and the storage unit you pay for each month.

Retirement is a good time to shed the excess stuff you’ve accumulated. And you might as well shed it for money. Here is a starter list of places where you can sell things online. And don’t forget the tried and true unloader of junk: the humble garage sale.



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This Is How Much You Should Save In Your Emergency Fund

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You might say Matt Matheson is the perfect picture of stability.

As a full-time educator, he enjoys great benefits and job security. He also runs a successful freelance writing and blogging business. He’s married with two healthy children, “one who’s potty training right now, which is the biggest ‘emergency’ I typically have to face on a daily basis,” he said. And yet, Matheson is no stranger to financial disasters.

Over the last seven years, Matheson estimates his family has averaged one $1,000 emergency every year. “One time it was the water heater, and another it was an unfortunate incident involving our laptop and some piping hot coffee (it didn’t end well for the laptop),” he said. “We’ve had unexpected deaths in the family requiring expensive flights, car repairs that went way beyond what we had budgeted for and an iPhone die an untimely death in a mug of hot tea.”

The one thing that saved his family’s finances each time? An emergency fund.

Matheson said having emergency cash on hand made covering these expenses way less stressful. “It also gave me a sense of financial empowerment and pride knowing that I had planned and executed a strategy to protect my family from financial hardships,” he said.

But despite the many benefits of having an emergency fund, many people don’t. In fact, nearly a quarter of Americans have no emergency savings at all and only 39 percent could cover an emergency of $1,000.

“It’s not a question of if you’ll have an emergency, it’s a question of when.”

– Rachel Cruze

Maybe that includes you. If so, don’t worry ― it’s never too late to build up an emergency savings account. Here’s how much you should aim to save.

What’s the right amount for an emergency fund?

Depending on whom you ask, the “perfect” emergency fund can come in different sizes. But one thing all experts agree on is that you need something set aside for unexpected expenses. “It’s not a question of if you’ll have an emergency, it’s a question of when,” said Rachel Cruze, a New York Times best-selling author and personal finance expert. “It’s important to build an emergency fund so that you’re not tempted to rely on debt when life happens. And trust me, it will happen!”

The generally accepted principle for an emergency fund is three to six months of after-tax living expenses, according to Mike D’Andrea, a financial planner and chartered financial consultant. He also said those funds should be saved in a stable, liquid interest-bearing account. That means you shouldn’t tie up your emergency savings in the stock market or illiquid assets like property; it should be readily available in a savings account that still lets you earn a bit of interest, too.

And although three to six months of expenses is the general standard, that might not be the right amount for everyone. Often, the size of your emergency fund should be based on your particular lifestyle and financial situation.

Here’s a look at how much you should have socked away if you fall into one of these circumstances.

How much to save if…

Digging yourself out of debt can be a vicious cycle. You put every dollar you have available toward paying it off, and just when you’re about to become debt-free, a major expense hits. Now you have to borrow money again to cover the cost.

That’s why you should focus on building a small emergency fund before you think about tackling your debt. “If you have debt, the first thing you need to do is build a $1,000 starter emergency fund,” Cruze said. “Having this emergency fund in place will help to avoid the temptation to go further into debt to cover any surprise expenses.” Once you’re truly debt-free, you can go back to focusing on fully funding your emergency fund.

You’re the sole earner

If you have a partner or family member who contributes to the household income, financial emergencies can be easier to manage. But if you’re the sole breadwinner, “that income is more vulnerable,” D’Andrea said. “Six months would be the ideal minimum liquidity reserve in this situation.”

Your income is inconsistent

If you work seasonally, on commission, a contract or freelance basis, or rely on bonuses for compensation, your income likely fluctuates month to month. It can be harder to predict your income and expenses. In this case, it’s a good idea to have a bit more set aside for emergencies. “Some of those individuals may feel more comfortable with six to 12 months of accessible funds,” D’Andrea said.

You’re self-employed

“The benefits of self-employment are vast and for another letter, but one of the benefits that are typically lacking are, well, benefits,” D’Andrea said. Working for yourself can make it more difficult and expensive to get the same benefits you would under a group plan, such as disability insurance and life insurance. “Also, you are likely to be responsible for other people’s income and may have to forgo paying yourself to pay staff.” For these reasons, D’Andrea recommends setting aside at least six months’ worth of living expenses so you have more flexibility and peace of mind while running your business.

How to get your emergency fund started

Building up an emergency fund from scratch might seem overwhelming at first. But if you focus on taking small steps, your fund will grow over time. After all, the longer you wait, the longer it will take. Here are a few things you can do to get started right away.

1. Follow a zero-based budget. According to Cruze, the easiest way to build up your emergency fund is by having a solid budget. “I recommend doing a zero-based budget, which means that your income minus your expenses equals zero each month,” she said. “Tell every dollar where to go.” By following this method, you’ll quickly see the areas where you’re overspending and could be doing something better with your money, like building an emergency fund. Cruze uses an app called EveryDollar to manage her budget; you can also try others such as Mint, YNAB or Mvelopes.

2. Increase your income. There’s only so much scrimping and saving you can do, but there’s no cap on how much you can increase your income. “Maybe you work a little overtime, pick up a part-time job or start a side-hustle,” Cruze said. “There are probably household items you don’t need that you could sell for some quick cash, too!” Remember that you don’t have to hustle forever. The situation can be temporary as you work to build up your fund.

3. Create a separate account. Cruze said it’s important to separate your emergency fund from your day-to-day checking and savings accounts. “You’ll be tempted to spend it for non-emergencies and take a little bit here and there.” Instead, she recommends setting up a completely different savings or money market account. “That way it’s accessible, but not so accessible that you’re tempted to dip into it when you don’t really need to,” Cruze said.

4. Automate your savings. The physical act of transferring money from your checking account to your emergency savings account can be mentally painful. So painful that you might be tempted to skip a transfer when money is looking tight. But if you automate the process, either by setting up a direct deposit from your paycheck to your savings or an automatic transfer between bank accounts, you won’t have to watch it happen. In fact, you may not even miss the money.



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This Is How Much You Should Save In Your Emergency Fund

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You might say Matt Matheson is the perfect picture of stability.

As a full-time educator, he enjoys great benefits and job security. He also runs a successful freelance writing and blogging business. He’s married with two healthy children, “one who’s potty training right now, which is the biggest ‘emergency’ I typically have to face on a daily basis,” he said. And yet, Matheson is no stranger to financial disasters.

Over the last seven years, Matheson estimates his family has averaged one $1,000 emergency every year. “One time it was the water heater, and another it was an unfortunate incident involving our laptop and some piping hot coffee (it didn’t end well for the laptop),” he said. “We’ve had unexpected deaths in the family requiring expensive flights, car repairs that went way beyond what we had budgeted for and an iPhone die an untimely death in a mug of hot tea.”

The one thing that saved his family’s finances each time? An emergency fund.

Matheson said having emergency cash on hand made covering these expenses way less stressful. “It also gave me a sense of financial empowerment and pride knowing that I had planned and executed a strategy to protect my family from financial hardships,” he said.

But despite the many benefits of having an emergency fund, many people don’t. In fact, nearly a quarter of Americans have no emergency savings at all and only 39 percent could cover an emergency of $1,000.

“It’s not a question of if you’ll have an emergency, it’s a question of when.”

– Rachel Cruze

Maybe that includes you. If so, don’t worry ― it’s never too late to build up an emergency savings account. Here’s how much you should aim to save.

What’s the right amount for an emergency fund?

Depending on whom you ask, the “perfect” emergency fund can come in different sizes. But one thing all experts agree on is that you need something set aside for unexpected expenses. “It’s not a question of if you’ll have an emergency, it’s a question of when,” said Rachel Cruze, a New York Times best-selling author and personal finance expert. “It’s important to build an emergency fund so that you’re not tempted to rely on debt when life happens. And trust me, it will happen!”

The generally accepted principle for an emergency fund is three to six months of after-tax living expenses, according to Mike D’Andrea, a financial planner and chartered financial consultant. He also said those funds should be saved in a stable, liquid interest-bearing account. That means you shouldn’t tie up your emergency savings in the stock market or illiquid assets like property; it should be readily available in a savings account that still lets you earn a bit of interest, too.

And although three to six months of expenses is the general standard, that might not be the right amount for everyone. Often, the size of your emergency fund should be based on your particular lifestyle and financial situation.

Here’s a look at how much you should have socked away if you fall into one of these circumstances.

How much to save if…

Digging yourself out of debt can be a vicious cycle. You put every dollar you have available toward paying it off, and just when you’re about to become debt-free, a major expense hits. Now you have to borrow money again to cover the cost.

That’s why you should focus on building a small emergency fund before you think about tackling your debt. “If you have debt, the first thing you need to do is build a $1,000 starter emergency fund,” Cruze said. “Having this emergency fund in place will help to avoid the temptation to go further into debt to cover any surprise expenses.” Once you’re truly debt-free, you can go back to focusing on fully funding your emergency fund.

You’re the sole earner

If you have a partner or family member who contributes to the household income, financial emergencies can be easier to manage. But if you’re the sole breadwinner, “that income is more vulnerable,” D’Andrea said. “Six months would be the ideal minimum liquidity reserve in this situation.”

Your income is inconsistent

If you work seasonally, on commission, a contract or freelance basis, or rely on bonuses for compensation, your income likely fluctuates month to month. It can be harder to predict your income and expenses. In this case, it’s a good idea to have a bit more set aside for emergencies. “Some of those individuals may feel more comfortable with six to 12 months of accessible funds,” D’Andrea said.

You’re self-employed

“The benefits of self-employment are vast and for another letter, but one of the benefits that are typically lacking are, well, benefits,” D’Andrea said. Working for yourself can make it more difficult and expensive to get the same benefits you would under a group plan, such as disability insurance and life insurance. “Also, you are likely to be responsible for other people’s income and may have to forgo paying yourself to pay staff.” For these reasons, D’Andrea recommends setting aside at least six months’ worth of living expenses so you have more flexibility and peace of mind while running your business.

How to get your emergency fund started

Building up an emergency fund from scratch might seem overwhelming at first. But if you focus on taking small steps, your fund will grow over time. After all, the longer you wait, the longer it will take. Here are a few things you can do to get started right away.

1. Follow a zero-based budget. According to Cruze, the easiest way to build up your emergency fund is by having a solid budget. “I recommend doing a zero-based budget, which means that your income minus your expenses equals zero each month,” she said. “Tell every dollar where to go.” By following this method, you’ll quickly see the areas where you’re overspending and could be doing something better with your money, like building an emergency fund. Cruze uses an app called EveryDollar to manage her budget; you can also try others such as Mint, YNAB or Mvelopes.

2. Increase your income. There’s only so much scrimping and saving you can do, but there’s no cap on how much you can increase your income. “Maybe you work a little overtime, pick up a part-time job or start a side-hustle,” Cruze said. “There are probably household items you don’t need that you could sell for some quick cash, too!” Remember that you don’t have to hustle forever. The situation can be temporary as you work to build up your fund.

3. Create a separate account. Cruze said it’s important to separate your emergency fund from your day-to-day checking and savings accounts. “You’ll be tempted to spend it for non-emergencies and take a little bit here and there.” Instead, she recommends setting up a completely different savings or money market account. “That way it’s accessible, but not so accessible that you’re tempted to dip into it when you don’t really need to,” Cruze said.

4. Automate your savings. The physical act of transferring money from your checking account to your emergency savings account can be mentally painful. So painful that you might be tempted to skip a transfer when money is looking tight. But if you automate the process, either by setting up a direct deposit from your paycheck to your savings or an automatic transfer between bank accounts, you won’t have to watch it happen. In fact, you may not even miss the money.



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The Dos and Don’ts Of Holiday Tipping, According To An Etiquette Expert

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’Tis the season for giving. But how much? And to whom?

According to a recent Consumer Reports survey, 60 percent of respondents gave holiday tips to one or more service providers last year. The average tip was $45 ― up $5 from the prior year ― and housekeepers received the highest gratuities.

Even so, holiday tips aren’t necessarily expected. And your budget might not allow for a ton of extra spending around Christmas time.

We spoke with Heather Wiese-Alexander, an etiquette expert and founder of luxury stationer bell’INVITO, about who should get a holiday tip and how much you should give.

Holiday Tipping Etiquette

Wiese-Alexander said that when it comes to holiday tips, there are usually a couple of common concerns. One occurs when you have the cash available to be generous this holiday season, but you aren’t sure what tip amount is considered too little versus way too much. The other crops up when your budget is pretty tight and you need to know what the absolute musts are, as well as what you can skip.

“Be realistic about who you tip,” Wiese-Alexander said. “Who makes your life easier on a daily, weekly or monthly basis?” In other words, you don’t necessarily need to give a holiday tip to the stylist who trims your ends every six months. But your child’s nanny? Probably.

Holiday Tips Guide

Wiese-Alexander explained that as a general rule of thumb, an appropriate holiday tip is one week’s pay or one extra session, depending on the service. Gift cards can also be a solid choice, as long as they’re for a place the receiver actually frequents, such as Target or Starbucks. Below is a list of common service providers and the typical range tippers can expect to pay if they so choose:

Your doorman: If you live in a building with a doorman, you should base the tip on the value of your living space, according to Wiese-Alexander. Usually, that’s around $25-$100. “If you’re in a penthouse, go big or go home, so to speak. This person puts up with a lot more than you may realize.”

Maintenance workers: If you want to extend a tip to the maintenance workers in your building, office or home, a cash gift of $25 along with a hand-written note of appreciation goes a long way, said Wiese-Alexander. Someone like the building superintendent should get more: around $100-$200, taking into consideration the price of your home.

Outdoor help: For those who work on your lawn, garden or pool, a tip of $25-$50 is appropriate.

Janitorial service providers: Trash collectors and workplace janitors can receive $10-$20.

Gift wrappers, luggage porters and baggage handlers: Tip $1-$2 per person at minimum, up to $5 per person if you’re feeling generous.

Personal care providers: If you regularly visit a personal trainer, hairstylist, barber, nail technician, massage therapist or other one-on-one specialist, you should tip the value of one extra session.

Dry cleaners: “Here is where a gift card or homemade goods feels more thoughtful,” Wiese-Alexander said. Many are business owners, which are traditionally not tipped, so cash can seem impersonal.

Assistant: If you work with an assistant who’s gone above and beyond their day-to-day duties ― and they’re not already receiving a bonus ― a holiday tip of $50 minimum or up to a week’s pay is much appreciated.

Child care providers: “A personal gratitude moment here means the world to most people caring for your little ones,” Wiese-Alexander said. A tip of $50 to $75 per person is great. An added note of appreciation is even better.

Pet care: “Yes, they are children, too, but they usually don’t carry the same attitude or maintenance (unless they do—you know who you are),” Wiese-Alexander said. A $20 holiday tip is nice, while $50 is lovely.

Mail and package carriers: There are rules around what mail carriers can and can’t accept. Generally, they’re not allowed to accept cash tips or gifts worth more than $20. “Hand-written notes and goodies are perfect here … think warmth: maybe a hat, gloves, scarf or something thoughtful you baked,” Wiese-Alexander said.

Who Should Not Receive A Holiday Tip?

Before you get too generous, know that it’s inappropriate ― sometimes even illegal ― to tip certain people. Salaried professionals such as doctors, therapists, dentists and other medical care providers should not receive any cash. If you really want to show your appreciation, “edible goodies for the medical field are usually welcome. Notes are always appreciated,” Wiese-Alexander said.

The same goes for your your boss or supervisors. You should really avoid gifts of any kind. “Appreciation in the form of a hand-written note is most appropriate,” Wiese-Alexander said. “If you know of a thoughtful small token, feel free to give, but anything more can be perceived as sucking up.”

Tips Are Appreciated, But Not Expected

Admittedly, the difficulty in these types of general guidelines is that it’s hard to adjust for different financial situations. At the end of the day, you should tip relative to where you fall on the lifestyle meter, according to Wiese-Alexander. “It may be tougher on your mind, but it’s much easier on your wallet.”

Giving tips during the holidays isn’t about the money. It’s about showing appreciation for the people who provide you invaluable services throughout the year. Tips are appreciated, of course, but if you don’t want to spend a lot on holiday tips, “the simple gesture of writing a heartfelt note with a couple of genuinely personal references is pure gold,” she said.



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