The regular income you can expect from Social Security and a defined benefit pension depends on your work history. In general, the longer you work and the higher your salary, the more income you can anticipate, up to the annual ceilings. Realistically, though, neither of these sources is likely to be as important a provider of retirement income in the future as it has been in the past. Social Security faces an imbalance between what it collects and what it pays out. And fewer employers are offering defined benefit plans. The retirement income you can expect from investments you’ve made depends on three things: how much is invested, where it’s invested, and the long-term return those investments provide. You have much greater control over these choices, so much greater responsibility for the outcome than you may realize. That’s why it’s critical to put basic investment principles to work, including asset allocation and diversification, across your tax-deferred, Roth, and taxable portfolios. It’s also why you want to start thinking seriously about retirement income before you start thinking seriously about retiring. When you retire, you’ll share a common experience with everyone who has already made the change: You won’t get a paycheck   Read more…

When compounding is involved, time is money. The more years that you add contributions to your plan, and the more years that any earnings increase your principal, the larger your account balance has the potential to grow. Of course, there are no guarantees about either the rate or the regularity of the earnings. They may be outstanding one year and dismal the next, or they may go through longer, but still alternating, periods of growth and decline. That’s the reality of investing. Having time on your side means that bumps in the road, like a period when investment prices go down and your account value shrinks, may be setbacks. But they don’t have to be fatal. 401(k) plans are the most common, and best known, employer sponsored salary reduction plans. But they’re not the only ones. If you work for a not-for-profit organization such as a school
or college, a hospital, a cultural institution, or a charitable organization, your employer may offer a 403(b) plan, sometimes known as a tax-deferred annuity (TDA). Similarly, the plan a state or municipal government offers may be a 457 plan, while federal government departments and agencies provide a thrift savings plan. And if you work   Read more…

Building a good credit history means developing good credit habits:
 Get a credit card and use it responsibly
 Make purchases every billing period, and pay them off in full and on time
 Apply gradually for additional credit You can keep up to date
on what the credit reporting agencies know about you by checking your credit report three times a year—once at each of the three major bureaus. It’s free. All you have to do is log on to www.annualcreditreport.com and follow the instructions. You’ll also find out how to correct errors or add explanations.  The three major national credit bureaus—Equifax, Experian, and Trans Union—collect two types of information about you. The first is how you use credit, from how much you owe on car loans, mortgages, and credit cards to the timeliness of your monthly payments. There’s an incredible amount of data that falls into this category— about two billion items a month, which breaks down to an average of 11 items per credit user. Did you ever wonder why it takes a retail store or an online credit card company just a minute or two to approve your application for credit? Did you know that you may be quoted   Read more…