Debt Should Retire When You Do

,

These days, having a credit card is practically a necessity, even when you are retired. It’s hard to do things like buy airline tickets, rent a car, or place an order online without one. And, while monitoring your credit card use is important anytime, making sure you avoid credit card mistakes that could affect your finances is essential once you retire.

It’s a Credit Card, Not a Paycheck

Although it sometimes may be difficult to live on a fixed amount, using credit to supplement your income will only make it harder to live within your means. Avoid using your card to pay for groceries or other necessities unless you can pay the balance in full when the bill comes due. If you can’t pay the balance and continue to charge purchases, you risk having a larger credit card bill than you’re comfortably able to pay each month. And you could be incurring hefty finance charges on the unpaid balance, making it even harder to reduce your debt.

Pay Attention to Features

Think about how you intend to use the card. Cards that earn travel or other rewards may be appropriate if you’re disciplined and pay off your card balance each month. But make sure any fees for a rewards card don’t outweigh the benefits. If there’s a strong possibility that you’ll carry a balance on a high-rate card, forget the rewards and look for a card with a low interest rate.

Nurture Your Credit Score

You’ll get the best deals on credit cards if you have a high credit score. Don’t hurt your score by paying bills late or getting into too much debt.

If You Do Have Debt

If you still have credit card debt as you begin retirement, make sure you have a plan for paying it off. Once it’s gone, using credit responsibly will help keep your finances on track.

Required Attribution
Because of the possibility of human or mechanical error by DST Systems, Inc. or its sources, neither DST Systems, Inc. nor its sources guarantees the accuracy, adequacy, completeness or availability of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. In no event shall DST Systems, Inc. be liable for any indirect, special or consequential damages in connection with subscriber’s or others’ use of the content. 
AR Tracking Number: 1-909497 Expiration Date: 11/2020 

Common Investment Pitfalls and How to Avoid Them

Only about 17% of American workers say they are “very confident” they will have enough money to live comfortably throughout retirement. (1) To help reduce such uncertainty in your life, consider these five common investment pitfalls — and how you might avoid them.

Mistake #1: Waiting to Maximize Your Contributions The sooner you start contributing the maximum amount allowed by your employer-sponsored retirement plan, the better your chances for building a significant savings cushion. By starting early, you allow more time for your contributions — and potential earnings — to compound, or build upon themselves, on a tax-deferred basis.

Mistake #2: Ignoring Specific Financial Goals It is difficult to create an effective investment plan without first targeting a specific dollar amount and recognizing how much time you have to pursue that goal. To enjoy the same quality of life in retirement that you have become accustomed to during your prime earning years, you may need the equivalent of up to 80% of your final working year’s salary for each year of retirement.

Mistake #3: Fearing Stock Volatility It is true that stock investments face a greater risk of short-term price swings than fixed-income investments. However, stocks have historically produced stronger earnings over the long term.(2) In general, the longer your investment time horizon, the more you might consider adding stock funds to your portfolio.

Mistake #4: Timing the Market Some investors try to base investment decisions on daily price swings. But unless you have a crystal ball, “timing the market” could be very risky. A better idea might be to buy and hold investments for several years.

Mistake #5: Failing to Diversify Investing in just one fund or asset class could subject your investment portfolio to unnecessary risk. Spreading your money over a well-chosen mix of investments may help reduce the potential for loss during periods of market volatility. Diversification may offset losses in any one investment or asset category by taking advantage of possible gains elsewhere. (3) Now that you are aware of these five common investment errors, consider yourself lucky: You are ready to potentially benefit from other people’s experiences — without making the same mistakes.

 

 

Source/Disclaimer:
(1)Source: Employee Benefit Research Institute, “The 2018 Retirement Confidence Survey,” March 2018.
(2) Source: DST Stsyems, Inc. Stocks are represented by total returns from Standard & Poor’s Composite Index of 500 Stocks, an unmanaged index generally considered representative of the U.S. stock market. Fixed-income investments are represented by annual total returns of long-term (10+ years) Treasury bonds. Indexes do not take into account the fees and expenses associated with investing, and individuals cannot invest in any index. Past performance is no guarantee of future results. With any investment, it is possible to lose money.
(3) Diversification does not assure a profit or protect against a loss in any market.
Required Attribution:
Because of the possibility of human or mechanical error by DST Systems, Inc. or its sources, neither DST Systems, Inc. nor its sources guarantees the accuracy, adequacy, completeness or availability of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. In no event shall DST Systems, Inc. be liable for any indirect, special or consequential damages in connection with subscriber’s or others’ use of the content. 
AR Tracking Number: 1-909500 Expiration Date: 11/2020