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A Checklist for Your Retirement Money

By U.S. News & World Report

Retirement readiness

Retirement money is a tricky subject since there are so many variables. Some people have all the resources they need, but others struggle to pay for retirement. The age when workers leave their job might range from 55 to 75. And some retirees can reasonably expect to live into their 90s, while others may be lucky to get to 60. Nevertheless, there are a number of financial issues common to all of us. Here is a checklist to help you assess where you stand.

When do I retire?

Many people retire early simply because they can afford to, they’re sick of their jobs or they want an alternative lifestyle. But some early retirees find that they can’t afford the new lifestyle they hoped for. And once you retire, it’s often hard to go back. Your skills become outmoded, your contacts dry up and hiring managers might discriminate against older workers. So be careful about the timing of your retirement.

When do I sign up for Social Security?

You can start Social Security benefits anytime after age 62. There are legitimate reasons to take Social Security as soon as you can, but most financial experts recommend waiting, since your monthly payment will continue to grow. If you wait a few years, the difference in your monthly payout could easily be $1,000 or more. And if you end up living a long time, you will eventually get more money from Social Security.

When do I tap into my IRA or 401(k)?

You can start withdrawing IRA funds at age 59 1/2 without penalty. However, the longer you let your investments grow, the more you’re likely to have to spend.

Can I risk being in the stock market?

If you have retirement savings, you almost have to be in the stock market to protect your spending power. Savings kept in cash earn virtually nothing. Money invested in bonds barely keeps up with inflation and is exposed to losses if interest rates go up. A person entering retirement might live for several decades, and keeping a portion of your retirement assets in stock mutual funds or exchange-traded funds is likely to provide continued investment growth. However, you may want to decrease the percent in the stock market as you get older.

Do I have too much in the stock market?

Many retirement accounts have grown over the last 10 years as the stock market has more than doubled since the Great Recession. Check your balances. If too much money has accumulated in stocks, it may be time to pare down in case there’s an economic downturn sometime in the next few years.

Don’t forget to account for taxes.

You can check the Social Security website for a projection of your monthly benefit. But don’t take this number at face value. If you earn a relatively modest retirement income — over $25,000 for individuals and $32,000 for couples — the federal government taxes part of your benefit. Similarly, you will likely have to pay income taxes on IRA and 401(k) withdrawals.

Should I consult a financial advisor?

If turning your retirement savings into a stream of income seems too complicated, it may be time to discuss retirement options with a professional. Some companies offer advice to employees nearing retirement. Some financial firms offer a portfolio analysis, often for free. If you want an independent opinion, it may be worthwhile to hire an outside professional. Tip: Use a fee-based advisor, not one who gets paid on commission.

How much can I spend?

You can safely spend whatever you take in from Social Security, pensions and other ongoing sources of income. According to one rule of thumb, you can also spend down 4 percent of your savings every year in retirement. But the key to spending assets is flexibility. You might be able to spend a little more than 4 percent if your accounts are growing at a healthy clip, but less if they’re not growing at all.

Can I take out a new loan?

The short answer is: no. Taking on new debt in retirement is typically not a good idea. But there are exceptions if the loan is part of an overall financial strategy. For example, you may sell your house and buy a new one, then take on a new mortgage to allow you to use some of your equity for living expenses.

What if I haven’t saved enough?

Retirees typically enjoy a lot of free time, but remember, you are now on a fixed income, so you may have to scale back expenses. That may involve downsizing your home, moving to a less expensive neighborhood or selling off possessions that require expensive upkeep, such as a boat, horse or second home.

More from U.S. News

10 Tax Breaks for People Over 50

8 Popular Part-Time Jobs for Retirees

10 Ways to Reduce Your Housing Costs in Retirement

A Checklist for Your Retirement Money originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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