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Because you work hard for your money, you should be able to fund your lifestyle both now and in the future. However, inflation impacts the amount of money you will need to set aside to provide your desired standard of living during retirement.   Fortunately, you can take steps to inflation-proof your retirement plan. The following strategies can help.   Reevaluate Your Investment Portfolio Revisit your investment portfolio and asset allocation to determine whether they still

Inflation is an increase in prices over time. The cost of products and services, such as food, housing, and healthcare, rises during periods of inflation. Therefore, an item that cost $1 in the 1920s might cost $19 today.   The negative effects of inflation include: As prices increase, purchasing power decreases. When inflation surges, each unit of currency is worth less than it was a few months ago. Even without changes to your lifestyle and purchases, your expenses increase

Changing jobs can be stressful. Not knowing what to do with your 401(k) or 403(b) account when leaving an employer can increase your stress level.   You have four options for your 401(k) or 403(b) account when leaving a job or retiring. Two of these options include penalty-free rollovers. Understanding each choice helps determine which is right for you.   The following four options include two penalty-free methods to roll over your 401(k) or 403(b) account when leaving your j

An annuity is a contract between you and an insurance company for a financial product that provides a steady income during retirement. The amount and duration of your payments are typically based on your life expectancy.   Types of Annuities The three main types of annuities include: Fixed:  A fixed annuity  provides a guaranteed payout regardless of market conditions. An investor desiring a predictable income during retirement favors this type of annuity. Variable:  A varia

Purchasing a home is an exciting process. Careful planning and hard work can help you secure the best deal.   Understanding the 4 Cs for purchasing a home facilitates the process. Showing lenders what they want to see increases the odds of securing a mortgage and buying your home.   Demonstrating the 4 Cs can help you secure a loan with better terms and a lower interest rate. The stronger your financial profile, the more negotiating power you have with lenders.   The followin

Many people struggle with personal finance. Because not enough schools teach personal finance, most of us learn by trial and error.   Understanding the most common personal finance issues and how to fix them can help improve your financial standing. Taking action now impacts your financial position in later years.   The following are common personal finance issues and how to resolve them.   Lack of a Spending Plan A spending plan  is a guide for where you want your money to g

A Roth IRA conversion transfers funds from a pretax retirement account, such as a traditional IRA or a 401(k), to a Roth Individual Retirement Account. The process requires paying taxes on the funds the year they’re transferred, but future growth and withdrawals are tax-free.   What Are the Pros and Cons of a Roth IRA Conversion? The following pros and cons of a Roth IRA conversion impact whether a conversion might be right for you:   Pros of a Roth IRA Conversion Investment

Dollar-cost averaging involves regularly investing a fixed dollar amount, regardless of the share price. For instance, you might invest $100 on the 1 st  and 15 th of every month.   Maintaining consistency is key to developing disciplined investing habits. Increasing investment efficiency can lower your average cost per share.   For instance, if you invest $200 every month, you will purchase fewer shares when the market is up and more shares when the market is down. Over tim

I’ve worked for a few companies that offered retirement plans. I also chose to save in a Roth IRA to prepare for retirement.   Understanding what a Roth IRA is and how it works lets you determine whether this investment product is right for your retirement goals. The following information can help.   What Is a Roth IRA? A Roth Individual Retirement Account (IRA) lets you invest after-tax dollars for retirement. The investment options include stocks, bonds, mutual funds, and e

Purchasing a home is an exciting experience! I’ve co-owned three condos – one I lived in, one I rented out, and one I helped flip – and am in the market to purchase and live in one on my own.   The thought of purchasing a home can be daunting. Having gone through the experience three times, I know it can get stressful.   Understanding the steps to purchasing a home can ease the process. The following guidelines can help.   Step 1: Evaluate Your Personal Finances and Credit Sc

An emergency fund is essential for building wealth. This account has money set aside to cover large, unexpected expenses such as: Major car or home repairs Home appliance repair or replacement Surprise medical expenses Job loss   What Is the Purpose of an Emergency Fund? An emergency fund helps you pay surprise expenses without using credit cards or loans. Having money set aside for unexpected events helps you avoid borrowing to cover the additional bills and increasing your

When you leave your job, you have four options for rolling over your 401(k) account. The option you choose should depend on your financial situation and retirement goals.   Understanding your options and potential results impacts the tax advantages you receive. The following information can help.   These are your four options for rolling over your 401(k) account.   1. Cash Out Your 401(k) Account Cashing out your 401(k) account is NOT recommended. The distributions typically

Many individuals purchase variable annuities as part of their investment strategies. Reading the prospectus and talking with a licensed financial professional is important. Understanding what a variable annuity is, how it works, and the relevant charges helps determine whether a contract is right for you.   What Is a Variable Annuity? A variable annuity  is a contract between you and an insurance company. You make a single payment or a series of payments, and the insurer make

Buying your first home is an exciting experience. Seeing your hard work result in homeownership is empowering.   Like most people, you likely will need a mortgage to finance your home. Understanding the requirements helps make the process easier.   Most lenders are willing to work with first-time homebuyers on credit requirements and down payments. This flexibility makes homeownership more accessible for more people.   The following are requirements for buying your first home

Financial literacy is essential for lifelong success. Understanding how money works increases the likelihood of achieving your financial goals.   Now is the time to begin establishing good money habits. Educating yourself in the following areas helps you make effective financial decisions and attain your objectives: Banking Budgeting Saving Using credit Creating good debt Investing       What Is Financial Literacy? Financial literacy is the ability to understand and apply div

Do you know the difference between a savings account and an emergency fund? Although they are similar, they serve different purposes: A savings account  is for reaching goals, such as purchasing a car, taking a vacation, or putting a down payment on a home. An emergency fund  is for covering unexpected expenses, such as a car or home repair.   Whereas a savings account is for planned spending, an emergency fund is for surprise expenses. Having both accounts helps you stay on

A variable annuity is a type of insurance contract that combines investment with retirement income protection. Because the contract is invested in subaccounts tied to underlying investments, such as stocks, bonds, and mutual funds, it can offer higher returns than fixed annuities.   A variable annuity might be a good option if you want to stay ahead of inflation and increase the value of your retirement savings. The following information can help determine whether one might b

An emergency fund protects you when you face unexpected expenses. Conversely, a savings account helps you attain your financial goals.   Understanding the differences between an emergency fund and a savings account demonstrates the importance of funding both. Because each serves a different purpose, having both can help you stay financially secure while reaching your goals.   Emergency Fund vs. Savings Account Emergency Fund : An emergency fund is your financial safety net.

If most of your paycheck is gone within days of being deposited into your account, you’re not alone. Many people at all income levels are living paycheck to paycheck. Even with a steady full-time job, increasing expenses and debt can make getting ahead difficult.   Fortunately, making small changes can help create financial security. Adjusting your spending habits, building an emergency fund, and managing debt can stop you from living paycheck to paycheck. These steps can hel

An individual retirement account (IRA) is a personal savings plan with tax advantages for retirement: You can set up an IRA yourself or through a licensed financial professional at a bank, brokerage firm, mutual fund company, or other financial services company. You fill out an application and make an initial contribution. The company becomes the account custodian.   You must have earned income from a part-time or full-time job to open an IRA. You can contribute to an account