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Yahoo
4 days ago
- Business
- Yahoo
4 Wealth-Building Mistakes Retirees Keep Making
Once you hit retirement, it can be tempting to sit back and enjoy the benefits of your years of hard work. For some, this can seem like a good time to turn the focus away from building more wealth. Read Next: For You: On the contrary, actions like stopping investing all together can seriously hurt your financial future. GOBankingRates talked to financial experts to learn about four of the worst mistakes they see retirees make that inhibit the ability to build additional wealth. Going Conservative Too Quickly Chris Heerlein, CEO of REAP Financial, said one of the most common mistakes he sees is retirees going too conservative too quickly. 'It's natural to want stability, but many people forget that retirement can last 25 to 30 years or longer,' he said. 'Shifting entirely into fixed income or cash equivalents may feel safe, but over time it can shrink your purchasing power and limit your ability to respond to inflation, healthcare costs or changes in lifestyle. Heerlein added that he always reminds clients that retirement isn't the finish line for investing; it's a new phase where smart growth still matters. Consider This: Having the Wrong Focus 'Another issue is focusing too much on income today and not enough on opportunity tomorrow,' Heerlein noted. 'Retirees often want predictable distributions, but they overlook how reinvesting a portion of their returns or keeping exposure to long-term trends can unlock greater financial flexibility.' Heerlein noted that some of his most successful retiree clients maintain a 20% to 30% allocation in assets tied to innovation or equity-based growth, giving them the ability to adjust, gift or reinvest later without draining principal. The goal isn't to chase risk, he noted, but to stay in the game with the right mix. Sitting on Too Much Cash According to Christopher Stroup, founder and president of Silicon Beach Financial, another big mistake retirees make that stops them from building more wealth is sitting on too much cash. 'Retirees often keep large sums in savings accounts 'just in case,' while inflation quietly erodes that value,' Stroup said. 'A smarter approach balances liquidity with growth through diversified investments.' Underestimating Tax Requirements Stroup said another mistake retirees make is underestimating taxes in retirement. He said too many retirees ignore how required minimum distributions, Social Security and investment income interact. 'Strategic tax planning can help stretch your nest egg further and reduce future tax burdens,' Stroup noted. More From GOBankingRates 3 Luxury SUVs That Will Have Massive Price Drops in Summer 2025 10 Used Cars That Will Last Longer Than the Average New Vehicle 5 Cities You Need To Consider If You're Retiring in 2025 This article originally appeared on 4 Wealth-Building Mistakes Retirees Keep Making Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
29-06-2025
- Business
- Yahoo
I'm a Financial Expert: This Is the No. 1 Mistake Americans Make When Planning for Retirement
When it comes to planning for retirement, most of us are just trying to do our best — juggling advice from financial gurus, our instincts, and maybe a sprinkle of wishful thinking. Read More: Find Out: According to the U.S. Department of Labor, only about half of Americans have calculated how much they need to save for retirement. But even with the best intentions, there's one common mistake that trips up a lot of Americans. And the worst part? It's often hiding in plain sight. GOBankingRates spoke with Andrew Lokenauth, money expert and owner of Be Fluent In Finance, and Chris Heerlein, CEO of REAP Financial, to discuss the top mistake Americans make when planning for retirement. Here's what they had to say. In his years as a financial advisor, Lokenauth has seen one massive mistake come up over and over –waiting too long to start saving. And he's not just talking about waiting until your 40s or 50s. 'I've watched countless people in their 20s and 30s push off retirement planning, thinking they've got all the time in the world. Trust me, they don't.' Here's what drives him crazy: People constantly tell him, 'I'll start saving when I make more money' or 'I'll get to it after I pay off my student loans.' But he explained that mindset costs them hundreds of thousands in lost compound interest. 'I had a client who waited until 45 to start saving — he needed to put away 3x as much monthly compared to if he'd started at 25,' said Lokenauth. So here's what he tells his clients: Start now, even if it's small. Put away $50-$100 per month into your company's 401(k), at a minimum, enough to get any employer match (that's free money). At the same time, open a Roth IRA and set up automatic monthly transfers. 'Even $25-$50 helps build the habit. I've seen this strategy work countless times.' Discover Next: According to Heerlein, the biggest mistake is thinking retirement is all about hitting a savings number, rather than creating a reliable income strategy. He noted that too many people fixate on reaching $1 million or some other target without asking what that money needs to do for them. 'I've worked with clients who had large balances but no plan for how to take income efficiently, how to manage taxes, or how to handle health care costs over 20 or 30 years,' said Heerlein. The better solution, he explained, is to treat retirement like a paycheck replacement plan. Build out your expected monthly spending, then identify which sources will cover which parts — Social Security, annuities, investments, Roth income, and so on. Also, layer in tax planning, inflation projections, and a clear withdrawal order. 'That's where confidence comes from, not a single number but a system that supports your lifestyle no matter what the markets are doing,' he said. Anyone can start this by tracking their current spending and building a retirement budget around it. That's the foundation of a real plan. More From GOBankingRates 4 Affordable Car Brands You Won't Regret Buying in 2025 This article originally appeared on I'm a Financial Expert: This Is the No. 1 Mistake Americans Make When Planning for Retirement Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
16-06-2025
- Business
- Yahoo
5 Things the Middle Class Won't Be Able To Afford After 4 Years of Tariffs
The Trump administration is implementing tariffs on virtually every country from which the United States imports items. This shift means consumers will be spending a lot more money on everyday goods. By the end of Trump's term, many things could become unaffordable to the middle class. Be Aware: Find Out: It will be helpful for the middle class to understand what's coming, so they can better prepare and adjust for it. To that end, GOBankingRates interviewed a few experts for insight. There's a reason this one might not kick in immediately. Appliances aren't items people need to buy every day, every month or even every year. By the time Trump's term ends, the middle class may realize that appliances have simply become unaffordable. 'Appliances like refrigerators, washers and dryers could jump in price,' said Chris Heerlein, CEO of REAP Financial. 'Many parts are imported, so even if the final product is assembled in the U.S., tariffs on components raise the total cost.' So, while the middle class may not feel the immediate impact, and indeed they may still be able to buy their next washer, dryer or refrigerator in just a few years, they will no longer be 'affordable' items. The middle class will now have to save up, pull money out of investments, or buy used. That's not something they're used to, and we may see a backlash as a result. Read Next: Electronics are a lot like appliances. Again, they're often not an absolute necessity. They're not daily items. Most people can function with their smartphones or laptops for several years. And because most electronics come from outside the U.S., the financial hit will be a big one on these already high-priced items. 'Electronics like smartphones and laptops are also at risk. These aren't luxury items anymore; they're tools for work and school,' Heerlein said. 'I've worked with families who had to delay school tech upgrades because the cost pushed them outside of what they could pay upfront. If tariffs continue, these kinds of purchases will move from essential to unaffordable for many middle-class households.' If they're already unaffordable, tariffs on these items may affect the middle class a few years from now in a big way. Inflation has already seen a steep incline in the price of vehicles, even used ones. What once was $20,000 is now $30,000, and what once was $30,000 is now $50,000. It's getting to the point where younger people are moving into cities and avoiding purchasing a vehicle altogether. And that was before the tariffs. Now, tariffs on imported cars are going to become pricier than ever. Even domestic cars will see price hikes because commodities like steel and aluminum, the materials used to make the cars, are going to become more expensive to import. 'The combination of steel and aluminum tariffs, as well as the supply chains that rely heavily on outsourcing, will potentially make the purchase of new automobiles cost-prohibitive for many Americans. It is likely that many Americans will hold onto their vehicles longer or purchase used cars as an alternative,' explained Dr. Brandon Parsons, an economist at Pepperdine Graziadio Business School. As a result of this enormous shift, the American automobile industry may falter significantly with fewer domestic consumers and foreign markets uninterested in buying American. Much like automobiles, new homes are going to become much more expensive to build. Wood, metal and other materials will be cost-prohibitive, which means housing prices are going to skyrocket once again. 'The cost of buying a new home will go up since many of the products that go into new homes, such as metal and wood, are exposed to tariffs,' Parsons noted. The housing market is already ridiculously overpriced and unaffordable to even the wealthiest middle-class families. The American Dream that imagines homeownership as essential is likely going to be dead within a decade if things don't turn around. Seann Malloy, founder and managing partner at Malloy Law Offices, reminds us there are smaller, everyday items that will quickly become unaffordable to the middle class, as well. The middle class has gotten to the point in life where they can enjoy the finer things in life, like good wine, coffee, seafood, and even the finest olive oil. Yes, those items may be a bit more expensive, but now they're within reach for the middle class. But Malloy said that won't last. 'Taxing imports of things like seafood and coffee could mean significantly higher grocery bills. According to the Center for American Progress, middle-income households are set to lose between $2,500 to $3,900 a year,' he explained. 'Stock up on non-perishables and explore local farmers' markets to mitigate costs.' Is there a way out? Yes, of course there is. Middle-class families could start living well below their means and prepare for an economy that won't allow for the usual items to be affordable anymore. You may need to buy a less expensive, smaller home. Perhaps you'll need to cut corners in luxury items, and you may even have to buy a used appliance or a refurbished computer. More From GOBankingRates How Much Money Is Needed To Be Considered Middle Class in Every State? This article originally appeared on 5 Things the Middle Class Won't Be Able To Afford After 4 Years of Tariffs
Yahoo
12-06-2025
- Business
- Yahoo
3 Surprising Financial Benefits of Unretiring (It's More Than Just a Salary)
Retirement isn't always the final chapter — sometimes it's just a pause. One survey conducted by T. Rowe Price, found that millions of retirees have returned to work in search of financial and emotional benefits. Whether you miss the structure, the sense of purpose, or want to boost your bank account, more people are choosing to 'unretire' and reenter the workforce. And it turns out, the financial upsides go far beyond a steady paycheck. Explore More: Read Next: 'I've seen so many compelling benefits from unretiring in my work with clients — and experienced them myself,' said Andrew Lokenauth, money expert and owner of BeFluentInFinance. 'The money aspect goes way deeper than just getting a paycheck.' Here are some other surprising benefits of unretiring that might make you rethink staying on the sidelines. Plus discover several signs you should unretire this year. Chris Heerlein, CEO of REAP Financial, said working part-time or consulting can often provide access to employer-sponsored health insurance, reducing the need to purchase expensive private plans or rely on Medicare. Additionally, staying physically and mentally active is linked to lower healthcare expenses, as retirees who remain engaged in work tend to experience fewer health problems, keeping their overall costs lower. 'Let me tell you about my client Sarah. She went back to consulting work after two years of retirement and saw her healthcare costs drop by [over] $400 per month,' said Lokenauth. Just by staying mentally engaged and physically active at work, he said she needed fewer medications and doctor visits. And she's not alone. He's consistently noticed that working retirees tend to have lower medical expenses. Check Out: The tax benefits are pretty significant, too. When Lokenauth unretired, he was able to keep contributing to his Roth IRA since he had earned income again. 'Plus, delaying Social Security meant my monthly benefits grew about 8% each year,' he added. The compound effect really adds up. Working just a few extra years can open up more tax-efficient strategies that aren't available once you're fully retired — and those perks can stretch your savings a lot further down the line. By earning income, retirees can reduce the amount they need to withdraw from their savings, allowing those funds to last longer. This extended longevity of retirement assets, according to Heerlein, can make a huge difference over time, especially as longer lifespans and unexpected medical expenses increase the financial burden on retirees. 'The ability to contribute even a small amount to savings while still working part-time can help balance finances and provide peace of mind,' he said. Beyond the financial benefits, Heerlein noted that staying engaged in work can have emotional and social advantages that reduce potential future costs. Remaining active in a work environment helps reduce isolation and contributes to a better overall mental health, which can lead to fewer medical issues and reduced spending on healthcare. 'Staying engaged in work is not only financially beneficial but also supports a healthier, more fulfilling retirement,' Heerlein added. More From GOBankingRates Mark Cuban Warns of 'Red Rural Recession' -- 4 States That Could Get Hit Hard 6 Hybrid Vehicles To Stay Away From in Retirement Here's the Minimum Salary Required To Be Considered Upper Class in 2025 This article originally appeared on 3 Surprising Financial Benefits of Unretiring (It's More Than Just a Salary) Fehler beim Abrufen der Daten Melden Sie sich an, um Ihr Portfolio aufzurufen. Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten
Yahoo
11-06-2025
- Business
- Yahoo
4 Non-Emergencies Where a Personal Loan Makes Sense
Not every financial need is a full-blown emergency. Sometimes, life just throws you a curveball — or an opportunity — and you need a little extra cash to handle it smoothly. Read More: Find Out: That's where a personal loan can come in handy. From covering big life moments to tidying up your finances — here are some non-emergencies where taking out a personal loan might actually make a lot of sense. According to Lending Tree, Americans have an absolute mountain of credit card debt — $1.18 trillion, to be exact. Chris Heerlein, CEO of REAP Financial, noted that a personal loan can make sense when used to consolidate high-interest credit card debt. He worked with a client carrying multiple cards with rates above 20%. 'We used a personal loan with a lower fixed rate to wipe that out,' said Heerlien. It immediately reduced their monthly interest burden and simplified their payments into one. It wasn't an emergency, but it gave them breathing room and helped improve their credit score over time. Dennis Shirshikov, professor of finance at City University of New York and head of growth and engineering at Growth Limit, similarly agreed. He said that among the most common overlooked examples is taking out a personal loan to pay off higher-interest credit card debt. What's frequently overlooked is that the psychological effect of going from multiple high-interest revolving uses of debt to a single fixed monthly payment can be transformative. 'It's not just a loan, you're not just refinancing — you're resetting your theoretical money model,' said Shirshikov. Discover Next: According to Shirshikov, most traditional banks will not issue a business loan for a $5,000 idea, but a personal loan can be a bridge within reach. He's personally seen new entrepreneurs borrow small sums to purchase equipment or inventory for their Amazon FBA (Fulfillment by Amazon), mobile detailing business or Etsy storefront. 'The trick is to see the loan as a short-term shot in the arm, not a crutch,' he said. Another example? Medical procedures that are not emergencies but are life-altering. Think dental implants or fertility services. These aren't luxuries; they're delayed necessities that don't easily come under insurance coverage. Personal loans, Shirshikov explained, especially those with clearly defined repayment terms, can give people the chance to take charge of their health without capsizing their financial lives. Even spending money on professional development — like an executive master of business administration (M.B.A.) class, a coding boot camp, or a specialized certificate — may be reasonable. 'You're borrowing against your future earning potential, essentially, and when the return on investment (ROI) is clear, the math usually adds up,' said Shirshikov. More From GOBankingRates 7 Luxury SUVs That Will Become Affordable in 2025 This article originally appeared on 4 Non-Emergencies Where a Personal Loan Makes Sense Sign in to access your portfolio
