When it comes to saving money, a little know-how, some commitment, and practice all make the task easier as time goes on. Setting your child up with the opportunity to start saving money from a young age is an awesome way to ensure that they are prepared to make smart saving and investing decisions once they start working as an adult in the real world. Assigning paid tasks around the house and using jars as “bank accounts” for saving and spending is an effective foundation to start with. Here, you’ll learn tips, tricks, and techniques that can be implemented as your little one ages to accommodate their learning abilities and maximize their chance of saving success in the future.
Teaching Your Little one to Save Like a Pro
Investing Options For People Nearing Retirement Who Are Seeking Stable Income
Claudia Bravo
When it comes time to re-balance your financial portfolio when you are close to retirement, it is important to consider where you will get stable income when you are no longer working. In addition to drawing on Social Security and any pension you might have set up, it's prudent to set up a stable income source. If you have the majority of your holdings in stocks, then it is time to seek out an advisor that will help you tailor your investment strategy. Below are a few suggestions to look at before you speak to your adviser.
High-Yield Savings Account
One popular way to store money and generate stable income is to allocate a portion of your investments to a high-yield savings account. There are a few benefits to this. First, you will be able to withdraw the funds at any time without penalty, which is not the case with things such as certificates of deposit (CDs). This is important if you need to have a sizable emergency fund but would still like to generate income. High-yield savings accounts are not available at all banks, so you will need to ask your adviser where you can find one.
Tax-Free Municipal Bonds
Another investing option is to choose tax-free municipal bonds. These investments are designed to reduce the amount of tax that you have to pay, which effectively improves your return on investment. These bonds are designed to raise money for municipal projects such as transportation, sewage, or schools. You can ask your tax-free municipal bond adviser about funds instead of single bonds. The bond funds will be composed of many different single municipal bonds, so you will have much less risk. You will oftentimes want to choose a municipal fund that is comprised of bonds from your city. So, for instance, if you live in New York, you would be more advantaged to purchase New York City municipal tax-free bonds than funds that are made up of California bonds.
Certificate of Deposit
These are savings instruments where your initial investment is locked up for a period of time. This is fine for people who do not need to keep their savings liquid. You will be able to get a higher return on CDs with longer maturity dates. So, a 12-month CD will offer a better rate than a 3-month one. However, one option to discuss with your adviser is to stagger a series of CDs so that you have a portion of your money in long-term CDs and then others in short-term options. This will prevent the majority of your funds from being locked up for too long.
Contact a financial advisor like Alan Z Appelbaum for more information on investment options like tax-free bonds.
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