By: Christy Bieber |
Updated
– First published on July 30, 2023
Once you leave the workforce, Social Security benefits are going to cover about 40% of your pre-retirement income. You’ll have to come up with the remainder of the money you need for a comfortable retirement. Typically, you’ll be taking money out of your 401(k) or other brokerage account to help fund your retirement. But you obviously don’t want to sell stock and wait for a withdrawal from your brokerage account every time you have an expense. As a result, you’ll need to keep some money in your checking account so you can pay bills and cover everyday living expenses. Just how much money should you have though? Here’s how to figure it out. This is how much you should have in checkingYour checking account is the place where you should keep your day-to-day funds. This is the account you’ll use to pay bills like rent or a mortgage and utilities. You’ll also be paying for expenses like doctor copays and grocery costs out of this account.Typically, you’ll have your Social Security check deposited into checking as a retiree, as well as money from a pension that comes in monthly, if you’re receiving one. And, when you take a distribution from a retirement account or get money from an annuity, you’ll usually put it into checking as well. Since you’ll likely have money coming into and out of this account each month, you don’t necessarily want to keep a ton of extra cash in it. After all, these funds are meant to be spent and you’ll access them regularly. You don’t want to keep a ton of money in your checking account that isn’t meant to cover your routine expenses.Typically, it’s a good idea to have enough in your account to cover the upcoming month or two of expenses, along with a cushion to avoid getting hit with overdraft fees. This cushion could be around an extra $500 to $1,000, so even if you forget about a check you wrote or a payment that’s being withdrawn, you won’t go into negative territory in your account.Don’t forget to keep some money in savings as wellWhile you don’t want to keep a lot of money in your checking account where there is a risk the funds could be spent, you do want to have a pretty substantial amount of money outside of brokerage or investment accounts. This is where a savings account comes in. In fact, retirees should aim to have about two to five years of living expenses in a savings account, so they don’t have to take withdrawals from the stock market during a downturn. This money can help see you through until the market recovers. A savings account is a better place for this money than a checking account, because you won’t be tempted to just spend the money if it’s earmarked for living expenses in case of a bad market year. Plus, you’ll earn a higher interest rate in a savings account than in a checking account in most situations. By carefully considering how much to have in reserves and choosing the right account for it, you can ensure you don’t end up with too much — or too little — in your checking account when you need the cash after you’ve retired and your paychecks have stopped coming.
By: Christy Bieber |
Updated
– First published on July 25, 2023
When buying homeowners insurance, most people expect that they will be protected against losses that they face with their property. After all, the point of buying insurance is so a disaster does not empty a property owner’s bank account and destroy their financial security.Unfortunately, while home insurance policies cover lots of possible sources of loss — including things like fires and theft — there are some hazards that are not typically covered by a standard policy. And many of these exclusions could come as a big surprise.In particular, homeowners may be shocked to discover their insurance will not protect them from the following disasters.1. FloodsWater can do a tremendous amount of damage to a home in a short period of time. And, some water damage is covered. If a fridge or tub leaks, for example, your homeowners insurance will likely pay for the resulting consequences.Unfortunately, insurance won’t cover the water issue most likely to cause you problems. That’s because rain and storm flood damage are typically excluded from a standard homeowners insurance policy. This means if a hurricane brings torrential rains or a major rainstorm causes a creek beyond a home to flood, insurance won’t be there to help you.Homeowners who are located in a designated flood zone will typically be required by their mortgage lenders to purchase add-on flood coverage (which is available through FEMA’s National Flood Insurance Program). Even those not in a designated flood zone may wish to look into a policy, though, if they have water near their home and they are concerned about a bad rainstorm leading to uncovered losses.2. EarthquakesMost natural disasters are not covered by a standard homeowners insurance policy either. This includes earthquakes.There are standalone earthquake policies that can be purchased, though. This includes traditional earthquake insurance that would provide reimbursement for the value of lost items if a covered event happens, as well as parametric insurance that covers only specific events such as when an earthquake meets a certain intensity level.3. SinkholesSinkholes can be a frightening experience, sometimes opening up to swallow whole buildings. Unfortunately, homeowners insurance is not going to provide coverage for them if homeowners have only a standard policy.Sinkholes are more common in certain states than others, with an elevated risk existing in Alabama, Florida, Kentucky, Missouri, Pennsylvania, Texas, and Tennessee. Those who face a risk of losses caused by a sinkhole may be able to get add-on coverage for their existing insurance policy. Many insurers offer sinkhole riders that will pay for both repair or replacement of the building as well as repair or replacement of any property damaged by a sinkhole.It is important to understand the different options that exist to provide coverage for hazards excluded from a standard insurance policy. But, it’s only possible to find and buy the right protection if homeowners know what isn’t covered.Homeowners can’t afford to wait until a disaster happens to understand the limitations of a standard homeowners insurance policy. Anyone who owns a property should review their insurance contract carefully, and consider talking with their home insurer if they aren’t sure if something is covered. It’s better to find out before the flood, earthquake, or sinkhole that the disaster won’t be covered than to learn this after the fact and be left with devastating financial loss.
By: Dana George |
Updated
– First published on July 25, 2023
Costco has a faithful legion of fans — otherwise known as members. There are 123 million of them, to be precise. Throughout the years, Costco has added new membership benefits, some less well-known than others. Here are four that members may not realize exist.1. RV parkingWhether you spend part of each year visiting the highways and byways of North America or you’re hoping to rent an RV for your next vacation, it’s good to know that some Costco locations allow RVs to park overnight in their lots. Free overnight parking can certainly cut down the cost of travel.Consider the convenience. You arrive near closing time, pick up all the items you’ve already burned through or forgotten to bring, and spend the night in a well-lit lot. Granted, pulling an RV into a (typically) packed Costco lot may not be the easiest thing you’ve ever done, but once the lot clears out, you may even hear the sound of crickets.Notice we said that some Costcos permit overnight parking for RVs. When a store does not, it’s often because local ordinances don’t allow it. However, with so many Costcos scattered across the country, you should have options.The easiest way to determine which Costcos allow overnight RV parking is to check this Costco locations finder. Once you see one near where you plan to stay, call that store and ask to speak with the manager. Once you have them on the line, ask about their overnight policy. If the store does permit overnight parking, ask for permission to stay. According to the Camper Report, Costco has rules for campers, so you may want to ask where you can get a copy of those.2. Home, auto, renters, and specialty insuranceIn the back of our minds, most of us realize that Costco offers insurance, but we’re not sure of the details. Partnering with CONNECT, powered by American Family, Costco members receive discounted rates on many of their insurance needs. Beyond the initial discount, CONNECT allows you to add more. For example, you may qualify for a safe driving, multi-policy, or student discount.And if you’re an Executive member, CONNECT sweetens the pot even more by providing you with benefits like roadside and lockout assistance.At a time when many people are unhappy with the insurance industry, 9 out of 10 members who sign up for CONNECT coverage go on to renew their policy with the insurer.3. Home and business suppliesWhile it may occur to you to pick up envelopes and printer paper at Costco, have you ever taken advantage of the low prices on items like checks, ink stamps, and address labels? Many of the supplies you need to take care of business — at home or in the office — are available for up to 50% off.Executive members enjoy an even deeper discount.4. Floral deliveryOnce you factor in delivery costs, sending a lovely bouquet of flowers to someone can cost a small fortune. That’s not the case at Costco. Costco’s online floral department offers everything from anniversary and graduation bouquets to bulk flowers. And here’s where the real savings come in: Delivery is free. The price you see listed on the site, plus tax, is the price you pay.Few things are more frustrating than typing your credit card number into a florist’s site, only to learn that delivery costs nearly doubled your purchase price.As Costco layers on new perks, keeping track of them may become even more difficult. It’s a good idea to check periodically to see if there are any you’re not taking full advantage of.
By: Christy Bieber |
Updated
– First published on July 28, 2023
If you want to keep your credit card bills low, buying items that cost only $0.01 could be a great way to do it. After all, paying a penny for something allows you to use the spare change you find in your pocket or sofa to make a purchase rather than having to take money out of your bank account.It may seem impossible to believe you could actually get something for a penny. But, it could be possible at Dollar General if you know one simple fact about how the store works.This is what penny day is and how it can help you score deep bargainsAt Dollar General, like at most stores, items are sometimes marked down. The official policy is that items are supposed to be priced as low as 90% off. After that, any remaining items that have not sold are supposed to be removed from the store.When the products are supposed to be removed, they are priced at just $0.01. This is meant to alert employees that they’re supposed to be taken from the shelves. Often, however, employees are busy, the items don’t get removed, and they should ring up for a cent.While not all clerks will sell these items to you for a penny, many will. If your store does, you can walk away with an unbelievable bargain on the item.How to score items for a pennyIf you want to take advantage of penny day, there are a few things you should know.Markdowns usually occur on Tuesday, so that can be the best day to try to find penny items.Updated lists are published online each week detailing which products are for sale for a penny. Do not ask a store clerk, as these items are supposed to be pulled from the shelves, so employees will remove them rather than assisting you with locating them.If you want to buy multiples of an item on sale for a penny, bring all of them up at one time. Once a store clerk has been alerted to the fact that penny items remain on the shelves, they’ll remove the rest of them.If an item happens to ring up for more than a cent, you can always just ask to have it removed from your cart. This can be better than price-checking it first, which would alert the clerk to the fact it should have been removed from the shelf.You’ll also need to be prepared for the fact there’s no guarantee the clerk will actually sell the item to you. So, you may end up disappointed depending on your store’s policy. And, different stores may mark down items at different times or pull items at different times, so if an item doesn’t ring up for a penny when you go, try to check back later on and see if the discount comes up.The good news is, taking advantage of penny day at Dollar General is just one of many ways you can save by being a smart shopper. Use coupons and cash back apps, compare prices, and maximize your credit card rewards to help you get more for less.
