No matter what strange noise your car is making, it almost always turns into the ca-ching of your mechanic's cash register gobbling up your savings. Because car repairs are expensive, it's tempting to let them slide. But putting off or skipping certain repairs can be a costly and even dangerous game.
Here are six car repairs you might be tempted to skip to save a little cash. But we'll show you how making that call could cost you a lot more in the long run.
1. Brake Pads
It seems like common sense: Don't neglect your car's brakes. Still, when it's time to replace your car's brake pads, it's easy to look the other way. For one thing, brake pads tend to wear gradually, so you might not notice changes in your braking performance right away. Secondly, a car with worn brake pads will still stop -- just not as well. So what's the harm in saving some money and holding off?
It turns out the harm in not replacing your brake pads is about $400. When your brake pads are worn, they can cause damage to brake rotors. As the rotors rub against the worn pads, they become warped, which makes it tougher to stop the car (if you feel your car shudder as you brake, you probably have warped rotors). Fixing the rotors requires that they be turned or smoothed out -- something that requires a mechanic and can run over $100 per rotor. If the rotors need to be replaced, you'll end up spending four times what it would have cost to replace the brake pads.
2. Oil Change
An oil change should cost you around $40 at most quick oil change stations. And that same station will probably tell you to come back in three months or 3,000 miles. But do you have to? It depends. That old rule of thumb still applies to some cars, but others can go much longer between oil changes. To find out how long your car can go between changes, read your owner's manual.
After you've found out the oil change interval for your car, follow it. Oil is like your engine's blood. But unlike your blood, all sorts of impurities build up in unless your oil is changed regularly -- not to mention that all engines lose some oil. Too much buildup and not enough oil lead to your engine seizing up. Sure, you can save $40 by putting off an oil change, but you could end up spending $4,000 on a new engine.
3. Air Filter
Changing an air filter is cheap. It's even easy enough for most people to do themselves. Not changing your car's air filter, on the other hand, is expensive. According to the EPA, a dirty air filter can reduce fuel economy by up to 10 percent simply because your engine won't breathe as efficiently. By not changing a dirty air filter, you'll save about $15. But, if your car is supposed to get 25 miles per gallon, and gas is $2.50 a gallon, those savings have evaporated by the time you've driven about 150 miles.
Even worse, if the air filter isn't clean and that means enough air isn't getting to the engine, you could foul your spark plugs and might have to replace them. Depending on your engine, that can cost anywhere from $100 to $300. Now, spending $15 for a new air filter doesn't sound so bad, does it?
4. Transmission Fluid Leak
One of the most common problems associated with your transmission is a fluid leak. You'll likely first notice it when you see drops of red fluid on the pavement where you usually park your car. Ignore it for long enough, and you'll definitely notice it when the leak leads to your transmission shifting roughly, or the gears slipping.
Transmission fluid is what cools and lubricates your transmission. If it's leaking, you need to fix it, and fast. Resealing a transmission is a relatively easy job and should usually only cost a few hundred dollars. Ignoring the leak can lead to the transmission seizing up and a subsequent transmission replacement --which costs several thousand dollars.
5. Burned Out Lights
Here's one car repair on our list that is really easy to ignore. After all, a burned-out tail light won't eventually lead to engine failure or to your transmission falling out. While that's all true, you should still fork over your hard-earned $5 for new tail light bulb if yours is burned out.
Believe it or not, failure to keep your rear lights working can be an expensive proposition. First, if a police officer sees you with broken tail or brake lights, you're going to get a ticket. In some states, the fine for a broken tail light is $150, which makes paying for a new bulb seem like chump change. Second, broken lights increase your risk of being on the receiving end of a rear-end collision. And while the other driver's insurance should cover any damage (assuming they have insurance), you still have to deal with the headache of getting your car fixed.
6. Clogged Fuel Filter
An important part of maintaining your car is keeping impurities out of the engine. While the air filter does part of the job by keeping airborne impurities out, the fuel filter keeps impurities from the fuel out of the engine. Like the air filter, if it gets clogged and you don't fix it, you're looking at some major problems.
On older cars, a fuel filter is relatively easy to replace because it's easy for mechanics or car owners themselves to get to. On newer cars, it's a more complex job. More complexity means more money, which makes this repair tempting to skip -- despite the fact that it can lead to the car stalling or refusing to start altogether.
Don't skip it. At its most expensive, replacing a fuel filter will be a few hundred bucks. Let it go too long, and not only are you looking at dealing with a car that will barely run, you could also have dirt in your fuel injectors -- causing them to need replacing. Replacing just one fuel injector can cost over $500. But if they all need replacing, you're looking at least $1,000 in repair bills.
By Jamie Page Deaton
Monday, June 29, 2009
Tuesday, June 23, 2009
How to Save a Million Dollars
It's easy enough to save a million dollars if you come into a large inheritance, win the lottery or strike oil on your property. It's a great idea to simply stick one million of your windfall into the bank. Yet, it's not that simple or quick for most of us. Don't let that fact discourage you. It is possible to save this much money over the course of your lifetime. You can even do so within a decade if you are careful with your money. Yes, you can save a million dollars with a bit of forward thinking and some financial restraint.
1.Spend less than what you earn. This is the fundamental principal of personal financial success. No matter how much money you make, you can blow it all if you don't make a conscious effort to spend less than what you earn. Socking the difference away in savings and investments can make all the difference.
2.Diversify your income sources. Keep your income high. Insure yourself against job loss by creating multiple sources of income. In addition to your primary job, consider consulting on the side, working a home-based business or getting a second part-time job. Save all of your secondary income, and put it into interest-bearing accounts or investment vehicles.
3.Establish and maintain residual income and semi-passive income sources to free up your time to make more money. Consider buying and renting out apartments, or perhaps start a business that can be outsourced in large amounts.
4.Set goals for your savings, and track your progress each month. Challenge yourself to save money that you would otherwise spend on things you don't really need. Watching your progress each month can really inspire your efforts.
5.Continue to earn, save and invest your income over your working years to save a lot of money. How hard you work, how dedicated you are to saving and how successful you become financially can add up to a million dollars before you are thirty, forty or fifty. Perseverance is your biggest asset in this journey.
By Maria O'Brien, eHow Editor
1.Spend less than what you earn. This is the fundamental principal of personal financial success. No matter how much money you make, you can blow it all if you don't make a conscious effort to spend less than what you earn. Socking the difference away in savings and investments can make all the difference.
2.Diversify your income sources. Keep your income high. Insure yourself against job loss by creating multiple sources of income. In addition to your primary job, consider consulting on the side, working a home-based business or getting a second part-time job. Save all of your secondary income, and put it into interest-bearing accounts or investment vehicles.
3.Establish and maintain residual income and semi-passive income sources to free up your time to make more money. Consider buying and renting out apartments, or perhaps start a business that can be outsourced in large amounts.
4.Set goals for your savings, and track your progress each month. Challenge yourself to save money that you would otherwise spend on things you don't really need. Watching your progress each month can really inspire your efforts.
5.Continue to earn, save and invest your income over your working years to save a lot of money. How hard you work, how dedicated you are to saving and how successful you become financially can add up to a million dollars before you are thirty, forty or fifty. Perseverance is your biggest asset in this journey.
By Maria O'Brien, eHow Editor
Thursday, June 18, 2009
The 12 Worst Job Hunting Mistakes
1. Having a bad attitude. Interviewing while still angry at a former employer. Being, acting, or thinking negative. The problem with negative people is that they seldom realize how terribly negative they really are. They may have good business skills, but they stay unemployed a long time and can't figure out why. Motivate yourself with FranklinCovey!
2. Thinking "something will come along." Waiting for something to happen. As a rule, good things don't "just happen." Successful people make them happen. Effort usually equals results (E=R). As a rule, the harder you work at a job search, the sooner it ends.
3. Thinking someone else will find me a job: a recruiter, a counselor, my neighbor, my employer, my spouse, my pastor—anyone. Even with counseling and support, this is really a "do-it-yourself" project.
4. Thinking they're more marketable than they are. Declining job offers that pay less than the last job or are somehow inferior. It's often best to accept a weaker offer and leverage up from there. I call it "kicking a career field goal."
5. Taking rejection personally. The best way to cope with rejection is to have so many balls in the air that one loss doesn't matter much. Having your entire future riding on one potential offer is clearly a red flag.
6. Acting desperate. You may feel desperate. Just don't let them see you sweat.
7. Shooting too high (or too low). It's essential to know where you're marketable. You learn that through networking, and by asking others where they think you're competitive. Ask college professors, experts in the field, and especially those in jobs similar to the ones you want.
8. Looking for "a job" rather than for a good fit where you'll be happy. Sometimes it's necessary to take the first job that comes along. Most of the time, it's not. Whenever possible, hold out for the right fit.
9. Launching a job campaign before you know who you are and what you want to do. (The cart before the horse.) This is like building a custom home without a blueprint. Usually, the result is a short-term fix. Then you're back in the job market with fewer resources and more anxiety. It's better to begin with structured testing and assessment like the Birkman Method®, and with time-tested paper-and-pencil exercises.
10. Asking for "a job" instead of asking for advice, ideas, and referrals. Business contacts-especially strangers—are generally willing to point you in the right direction, but they dislike being asked directly for a job, because they're uncomfortable turning you down.
11. Not preparing for interviews. Your competitors will be prepared. They will have rehearsed the answers to difficult interview questions—sometimes even on videotape. Why shouldn't you? Also, don't interview half-heartedly. Go for the job offer. You can always turn it down later.
12. Hard-selling. Coming on too strong. Pushing people to give you names. Sometimes called NFL networking. Hard selling creates bad feelings about you and is actually counter-productive.
2. Thinking "something will come along." Waiting for something to happen. As a rule, good things don't "just happen." Successful people make them happen. Effort usually equals results (E=R). As a rule, the harder you work at a job search, the sooner it ends.
3. Thinking someone else will find me a job: a recruiter, a counselor, my neighbor, my employer, my spouse, my pastor—anyone. Even with counseling and support, this is really a "do-it-yourself" project.
4. Thinking they're more marketable than they are. Declining job offers that pay less than the last job or are somehow inferior. It's often best to accept a weaker offer and leverage up from there. I call it "kicking a career field goal."
5. Taking rejection personally. The best way to cope with rejection is to have so many balls in the air that one loss doesn't matter much. Having your entire future riding on one potential offer is clearly a red flag.
6. Acting desperate. You may feel desperate. Just don't let them see you sweat.
7. Shooting too high (or too low). It's essential to know where you're marketable. You learn that through networking, and by asking others where they think you're competitive. Ask college professors, experts in the field, and especially those in jobs similar to the ones you want.
8. Looking for "a job" rather than for a good fit where you'll be happy. Sometimes it's necessary to take the first job that comes along. Most of the time, it's not. Whenever possible, hold out for the right fit.
9. Launching a job campaign before you know who you are and what you want to do. (The cart before the horse.) This is like building a custom home without a blueprint. Usually, the result is a short-term fix. Then you're back in the job market with fewer resources and more anxiety. It's better to begin with structured testing and assessment like the Birkman Method®, and with time-tested paper-and-pencil exercises.
10. Asking for "a job" instead of asking for advice, ideas, and referrals. Business contacts-especially strangers—are generally willing to point you in the right direction, but they dislike being asked directly for a job, because they're uncomfortable turning you down.
11. Not preparing for interviews. Your competitors will be prepared. They will have rehearsed the answers to difficult interview questions—sometimes even on videotape. Why shouldn't you? Also, don't interview half-heartedly. Go for the job offer. You can always turn it down later.
12. Hard-selling. Coming on too strong. Pushing people to give you names. Sometimes called NFL networking. Hard selling creates bad feelings about you and is actually counter-productive.
Thursday, May 28, 2009
How to Spend Like a Frugal Millionaire
Saving thousands while still spending.
Millionaires make up just 2 percent of the population. They get a bad rap during recessions for being wasteful with their money and are frequently used as examples of excess. It's the millionaires that you don't see that you can learn from in times like these. I call them the frugal millionaires and interviewed 70 of them to uncover ways we can all be smarter with money.
Nearly 70 percent of the economy is based on consumer spending. To keep the economy going we need to keep spending but not waste money in the process. This is where the frugal millionaires come in. They've been smart with their money all along and haven't lost it all and had to remake it. These are the kind of people you want to learn from when it comes to spending your money.
Spending philosophy.
Frugal millionaires are unique thinkers when it comes to spending money: 1) they can easily delay their need for gratification when purchasing; 2) they are resourceful in getting what they want by carefully timing their consumer purchases; 3) they make living below their means painless; 4) they don't like wasting anything (especially money); 5) their sense of "self-entitlement" is highly minimized: and 6) spending is OK with them...depending on what they are buying (think: appreciating vs. depreciating assets).
Buying tips.
These millionaires keep more money than they spend, that's why they are rich. Their tactics work for them so they'll work even better for you. Key Point: They don't view shopping as a sport. They shop efficiently and spend their time doing more important things with their lives. Here are their tips that will help you save while spending:
Cars: Buy used (or off lease) fuel-efficient cars, often with "certified pre-owned" warranties. This warranty can be better than a new car, plus the initial depreciation hit is avoided. Drive the car for a long time and never lease it.
Eating Out: Bring half of a meal home to eat later (this also saves the waistline). Eat at happy hours. Bring wine from home and skip dessert. Value food quality over expensive ambience.
Eating In: Eat better and less expensively by cooking at home. Make it a friends and family event. Get your kids involved. Bonus: You can have that extra drink without worrying about getting busted for driving under the influence. Also: buy day-old bread at the best bakery in town and freeze it. Eat oatmeal, because it's the most cost-effective breakfast food. Get a supermarket "club card" and buy food on special. Play the game of trying to see how much of a discount can be saved off the total food bill.
Clothes: When you buy something new donate something used to charity. Buy traditional clothes, but wait for the off-season to acquire them. Go for high quality - not high price. Buy vintage clothing and avoid logo clothing and keep people guessing who the designer might be. Hint: There shouldn't be one!
Consumer Electronics: Buy low-end gear that has the basic functionality of the more expensive stuff. Don't be the first to buy new technology. Wait at least one lifecycle so the bugs are worked out. Buy refurbished electronics whenever possible.
Computers: Buy more mainstream computers with proven technology. Select higher capacity hard drives, a decent amount of RAM (the memory that the program runs in) and a cost effective processor. Super fast doesn't always equal super good...unless you are building airplanes or bridges. Laptops are a good compromise between desktops and netbooks. Don't go through the pain of upgrading operating systems on existing computers, it's not time efficient and you will probably go insane trying.
Going green: Being green and frugal go hand-in-hand. Yet frugal millionaires don't readily fall for the trendy green hype machine. They typically buy green if it helps the environment and lowers their costs. They look at the timeframe when a product can pay for itself. They do use compact fluorescent lighting, turn off lights and equipment that isn't being used, monitor AC and heat usage (with programmable thermostats), drive efficiently, live in "right-sized" homes and turn off the water when they aren't brushing their teeth or washing dishes. Because they have trained themselves to not waste money they won't waste anything else either. They get into good habits and keep them going. You can, too.
Taken from: http://finance.yahoo.com/news/How-to-Spend-Like-a-Frugal-usnews-15357371.html
Millionaires make up just 2 percent of the population. They get a bad rap during recessions for being wasteful with their money and are frequently used as examples of excess. It's the millionaires that you don't see that you can learn from in times like these. I call them the frugal millionaires and interviewed 70 of them to uncover ways we can all be smarter with money.
Nearly 70 percent of the economy is based on consumer spending. To keep the economy going we need to keep spending but not waste money in the process. This is where the frugal millionaires come in. They've been smart with their money all along and haven't lost it all and had to remake it. These are the kind of people you want to learn from when it comes to spending your money.
Spending philosophy.
Frugal millionaires are unique thinkers when it comes to spending money: 1) they can easily delay their need for gratification when purchasing; 2) they are resourceful in getting what they want by carefully timing their consumer purchases; 3) they make living below their means painless; 4) they don't like wasting anything (especially money); 5) their sense of "self-entitlement" is highly minimized: and 6) spending is OK with them...depending on what they are buying (think: appreciating vs. depreciating assets).
Buying tips.
These millionaires keep more money than they spend, that's why they are rich. Their tactics work for them so they'll work even better for you. Key Point: They don't view shopping as a sport. They shop efficiently and spend their time doing more important things with their lives. Here are their tips that will help you save while spending:
Cars: Buy used (or off lease) fuel-efficient cars, often with "certified pre-owned" warranties. This warranty can be better than a new car, plus the initial depreciation hit is avoided. Drive the car for a long time and never lease it.
Eating Out: Bring half of a meal home to eat later (this also saves the waistline). Eat at happy hours. Bring wine from home and skip dessert. Value food quality over expensive ambience.
Eating In: Eat better and less expensively by cooking at home. Make it a friends and family event. Get your kids involved. Bonus: You can have that extra drink without worrying about getting busted for driving under the influence. Also: buy day-old bread at the best bakery in town and freeze it. Eat oatmeal, because it's the most cost-effective breakfast food. Get a supermarket "club card" and buy food on special. Play the game of trying to see how much of a discount can be saved off the total food bill.
Clothes: When you buy something new donate something used to charity. Buy traditional clothes, but wait for the off-season to acquire them. Go for high quality - not high price. Buy vintage clothing and avoid logo clothing and keep people guessing who the designer might be. Hint: There shouldn't be one!
Consumer Electronics: Buy low-end gear that has the basic functionality of the more expensive stuff. Don't be the first to buy new technology. Wait at least one lifecycle so the bugs are worked out. Buy refurbished electronics whenever possible.
Computers: Buy more mainstream computers with proven technology. Select higher capacity hard drives, a decent amount of RAM (the memory that the program runs in) and a cost effective processor. Super fast doesn't always equal super good...unless you are building airplanes or bridges. Laptops are a good compromise between desktops and netbooks. Don't go through the pain of upgrading operating systems on existing computers, it's not time efficient and you will probably go insane trying.
Going green: Being green and frugal go hand-in-hand. Yet frugal millionaires don't readily fall for the trendy green hype machine. They typically buy green if it helps the environment and lowers their costs. They look at the timeframe when a product can pay for itself. They do use compact fluorescent lighting, turn off lights and equipment that isn't being used, monitor AC and heat usage (with programmable thermostats), drive efficiently, live in "right-sized" homes and turn off the water when they aren't brushing their teeth or washing dishes. Because they have trained themselves to not waste money they won't waste anything else either. They get into good habits and keep them going. You can, too.
Taken from: http://finance.yahoo.com/news/How-to-Spend-Like-a-Frugal-usnews-15357371.html
Handling exam fever
THERE are indeed parents, yours truly included, who feel and act as if they are the ones taking exams instead of their children.
While it is good that parents remind their children to be well prepared, there is a need to be conscious of the line between encouraging and nagging; between sharing the importance of good grades and demanding they meet your high expectations.
Being a first-timer with my child’s school exam, I recently got into gear to prepare for the exams much earlier than my daughter.
It’s not surprising since I am the one with 17 or more years’ of examination experience while my seven-year-old only knows exams as “a test to see how much you remember and have learnt so far”.
As the days drew closer, Mama started harping about doing revision, getting extra workbooks for practice, giving tips on the do’s and don’ts when answering questions, and turning every conversation with the carefree daughter into mini revision sessions.
Was I subconsciously thinking that how well my child does in school is a reflection of my parenting skills?
Taking a step back for a personal check, I told myself that it is more important for a child to progress academically and morally in the long term than achieving short-term success in exams.
It is more valuable for them to learn from the consequences of their actions when they fail to heed your advice to read their textbooks instead of comics. It is also good that they know it is all right to make mistakes and that they can learn from them.
Young children need patience, encouragement and support from parents when preparing for exams.
They have shorter attention spans, so break their revision times into shorter periods to make it less daunting for both parent and child.
Never compare their performance with those of another classmate, as this would put undue pressure on them. Not all children develop at the same pace. Neither are their interests and talents alike.
While it is important to get good grades, especially when they are older and grades are significant for their future, perfect exam scores alone do not a successful young adult make.
And what, I need to ask, is my definition of “success”? What are the values, morals, general knowledge and life skills that I want my child to possess? What good is it to be a millionaire but go through life without compassion or humility? Can she be a rocket scientist yet possess conversational skills fit for the Queen of England or the regular Joe?
Children, even those as young as five or six I believe, do have some idea of how they should and want to go about things in their lives. When we let go and trust them, we may be surprised at how they come through.
Love them for who they are, and not for how many A’s they score. I may have dreams of my daughter winning the Nobel Prize but if she chooses to be a rock drummer (not that it is more inferior a vocation), that would be great too.
As for taking exams these few early years, I shall be mindful not to nag at her to revise, or to check that all her pencils have been sharpened.
Tuesday, May 26, 2009
8 Marriage-Busters to Give Up Today
1. Nagging, nagging, nagging. We know about the squeaky wheel, but complaining loud and long gets you only short-term gains and builds up powerful discontent on your spouse's side.
2. Blaming, criticizing, and name-calling. These tactics belittle the person you promised to love, honor, and cherish; let you play angel to his or her devil; and don't address the responsibility you both share for your marital happiness.
3. Bullying, rudeness, and selfishness. These ugly power plays tell your partner that he or she doesn't count at all in your eyes.
4. Peacekeeping and passive placating. A "whatever you say, Dear" attitude may keep your home quieter but leaves you in the martyr's role. You'll end up angry, defensive, and a drudge. What fun is that?
5. Deploying logic all the time. Life isn't the starship Enterprise; playing the dispassionate Mr. Spock not only cuts you off from your feelings but also subtly tells your spouse that his or her feelings don't count either.
6. Throwing up distractions. You're just having fun, right? Think again. Being hyperactive, fooling around all the time, and refusing to focus -- in conversation or in life -- often is an attempt to avoid intimacy or difficult issues, which can be horribly frustrating for your mate.
7. Stonewalling. Another stall maneuver, stonewalling stops arguments and constructive discussions cold. Not much can happen when one spouse just won't talk about it.
8. Making unilateral decisions about the big things. Sometimes you have to pick the bathroom paint color on your own. But if you're making major decisions about your money, your time, your kids, and your family life, you're acting without accountability and cutting off the possibility of joint decision-making and deeper intimacy.
2. Blaming, criticizing, and name-calling. These tactics belittle the person you promised to love, honor, and cherish; let you play angel to his or her devil; and don't address the responsibility you both share for your marital happiness.
3. Bullying, rudeness, and selfishness. These ugly power plays tell your partner that he or she doesn't count at all in your eyes.
4. Peacekeeping and passive placating. A "whatever you say, Dear" attitude may keep your home quieter but leaves you in the martyr's role. You'll end up angry, defensive, and a drudge. What fun is that?
5. Deploying logic all the time. Life isn't the starship Enterprise; playing the dispassionate Mr. Spock not only cuts you off from your feelings but also subtly tells your spouse that his or her feelings don't count either.
6. Throwing up distractions. You're just having fun, right? Think again. Being hyperactive, fooling around all the time, and refusing to focus -- in conversation or in life -- often is an attempt to avoid intimacy or difficult issues, which can be horribly frustrating for your mate.
7. Stonewalling. Another stall maneuver, stonewalling stops arguments and constructive discussions cold. Not much can happen when one spouse just won't talk about it.
8. Making unilateral decisions about the big things. Sometimes you have to pick the bathroom paint color on your own. But if you're making major decisions about your money, your time, your kids, and your family life, you're acting without accountability and cutting off the possibility of joint decision-making and deeper intimacy.
Retirement: Getting Ready
Don't retire too early. "Working longer will become a necessity for many people," says Andrew Eschtruth, a spokesman at Boston College's Center for Retirement Research. "If you can work into your mid to late 60s, it will make a huge difference." For one thing, your savings and 401(k) can grow without your drawing on them for everyday expenses. That extra time can improve your chances of maintaining a comfortable retirement lifestyle.
Waiting also gives your Social Security benefits time to build up. To see how much you can expect to receive from Social Security, go to socialsecurity.gov. Remember, if you start collecting government checks at age 62, when you become eligible, your monthly payments will be smaller for the rest of your life. For each year that you work beyond your full-benefit retirement age (that's 66 or 67, depending on your year of birth) up until age 70, your Social Security benefit rises 8 percent.
Know how much money you'll really need. Some retirees, like teacher Pat Forest, 65, are having the time of their lives. Forest made sacrifices throughout her career to stretch her income and is now spending time with her grandkids between trips to dream spots like Egypt and Italy. But in an environment where nearly $2 trillion in 401(k) and IRA assets evaporated in the 12 months after October 2007, how do you know when you're ready to start the retirement chapter of your life?
One traditional rule of thumb: Expect to spend about 70 percent or 80 percent of your final working salary each year you're retired. But planners like Mackey McNeill say that's an oversimplification; after all, people tend to underestimate their expenses and overestimate how well their investments will perform. Instead of working toward an abstract number, she suggests, make yet another budget for yourself to uncover how much you'll really spend. Consult a fee-only planner -- napfa.org has a list -- or work with calculators like the one at choosetosave.org for a guide.
Think carefully about health care. This is especially true if you're planning to retire before you're eligible for Medicare, at age 65. Even then, Medicare won't pay for everything, so look into the Medicare Advantage program or private Medigap insurance, which covers the difference (a typical policy costs $100 to $300 a month).
Stay conservative. Keep cash you absolutely can't afford to lose in government-insured bank accounts, even though their rates aren't very high right now. Bank deposits are insured for up to $250,000 this year, but the rules may change in 2010, so check with the FDIC (fdic.gov) for the latest updates.
Waiting also gives your Social Security benefits time to build up. To see how much you can expect to receive from Social Security, go to socialsecurity.gov. Remember, if you start collecting government checks at age 62, when you become eligible, your monthly payments will be smaller for the rest of your life. For each year that you work beyond your full-benefit retirement age (that's 66 or 67, depending on your year of birth) up until age 70, your Social Security benefit rises 8 percent.
Know how much money you'll really need. Some retirees, like teacher Pat Forest, 65, are having the time of their lives. Forest made sacrifices throughout her career to stretch her income and is now spending time with her grandkids between trips to dream spots like Egypt and Italy. But in an environment where nearly $2 trillion in 401(k) and IRA assets evaporated in the 12 months after October 2007, how do you know when you're ready to start the retirement chapter of your life?
One traditional rule of thumb: Expect to spend about 70 percent or 80 percent of your final working salary each year you're retired. But planners like Mackey McNeill say that's an oversimplification; after all, people tend to underestimate their expenses and overestimate how well their investments will perform. Instead of working toward an abstract number, she suggests, make yet another budget for yourself to uncover how much you'll really spend. Consult a fee-only planner -- napfa.org has a list -- or work with calculators like the one at choosetosave.org for a guide.
Think carefully about health care. This is especially true if you're planning to retire before you're eligible for Medicare, at age 65. Even then, Medicare won't pay for everything, so look into the Medicare Advantage program or private Medigap insurance, which covers the difference (a typical policy costs $100 to $300 a month).
Stay conservative. Keep cash you absolutely can't afford to lose in government-insured bank accounts, even though their rates aren't very high right now. Bank deposits are insured for up to $250,000 this year, but the rules may change in 2010, so check with the FDIC (fdic.gov) for the latest updates.
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