Living Your Best Life After 50 All-in-One For Dummies E-Book
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- Herausgeber: John Wiley & Sons
- Kategorie: Ratgeber
- Sprache: Englisch
- Veröffentlichungsjahr: 2024
Get inspired -- and prepared -- for your best life at 50+ Living Your Best Life after 50 All-in-One For Dummies is your guide as you explore new opportunities and make the most of your fifties and the decades that follow. Find a new job, travel for weeks or months at a time, boost your health with yoga routines, take up pickleball--whatever it is you want to do, this book will inspire you to improve your life and show you how to get there. You'll also find timely information about planning and budgeting for retirement, withdrawing money from IRAs and 401(k)s, and taking Social Security. With this fun- and information-packed Dummies resource, you can look forward to your future with enthusiasm and purpose. * Change jobs, move up in your career, or get ready for retirement * Get tips for travel, living like a nomad, cooking after the kids leave home, downsizing, and other handy topics for this time of your life * Stay in tip-top shape with fun activities like yoga and pickleball * Get your finances in order and make sure you can live the life you want on Social Security and retirement income This book is a great choice for readers looking to make the second half of life the best half.
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Table of Contents
Cover
Title Page
Copyright
Introduction
About This Book
Foolish Assumptions
Icons Used in This Book
Beyond the Book
Where to Go from Here
Book 1: Handling Your Finances
Chapter 1: Managing Your Money
Seeing Where Your Money Goes: Your Expenses
Knowing Where Your Money Comes From: Your Income
You Gotta Have Dreams: Financial Goals
Creating Your Budget
Chapter 2: Investing for the Long Term
Finding the Right Advisor
Making the Most of Your Investments
Participating in Retirement Accounts
Chapter 3: Collecting Social Security Retirement Benefits
Paying Attention to Your Full Retirement Age
Looking at Life Expectancy When You Claim Benefits
Considering Your Spouse When You Claim Social Security
Recognizing the Potential Payoff of Working Later in Life
Putting It All Together: The Right Time to Begin Collecting Benefits
Chapter 4: Financial Matters: Wills, Trusts, and More
Sharing Control of Your Money
Where There’s a Will …
Settling the Estate with Probate
Reviewing the Rules on Estate Taxes
Establishing a Trust
Considering Guardianship
Book 2: Getting the Job You Want
Chapter 1: Scoping Out Your Prospects
Recognizing the Need for and Value of Experienced Workers
Tallying the Benefits of Staying in the Workforce
Reorienting Yourself to Today’s Job-Search Realities
Deciding What (Else) You Want Out of Work
Pursuing Your Passion and Finding Purpose
Putting Proven Success Strategies into Practice
Dealing with Ageism
Chapter 2: Using Skills to Your Advantage
Recognizing the Skills Employers Value
Making the Most of What You Have
Beefing Up Your Skill Set
Chapter 3: Marketing Yourself on LinkedIn
Knowing How LinkedIn Can Help You in Your Job Search
Putting Yourself on LinkedIn
Getting Connected on LinkedIn
Finding Job Postings on LinkedIn
Chapter 4: Checking Out Promising Job Markets
Exploring the Possibilities and Gathering Ideas via Job Boards
Investigating Opportunities by Category
Furthering Your Research
Chapter 5: Rehabbing Your Résumé and Cover Letter
Constructing a Winning Résumé
Writing a Killer Cover Letter
Lining Up Your References in Advance
Chapter 6: Acing Your Job Interview
Making a Positive Impression
Preparing to Answer and Ask Questions
Avoiding the Most Serious Missteps
Managing Alternative Interview Formats
Following Up Post Interview
Chapter 7: Negotiating for What You Want
Evaluating Monetary Compensation: Salary and Benefits
Exploring Flexible Work Options
Looking at Special Considerations for Women
Settling on a Starting Date
Book 3: Getting Started with Downsizing
Chapter 1: Deciding Whether Downsizing Is Right for You
Recognizing Common Reasons People Downsize
Weighing the Pros and Cons of Downsizing
Analyzing Your Situation and Mindset
Considering Your Loved Ones
Settling a Major Dilemma: To Sell or Not to Sell Your Home
Chapter 2: Envisioning Your Future: Lifestyle and Location
Building Your Vision
Choosing a Location: Factors to Consider
Researching Locations
Test-Driving a Location or Lifestyle
Chapter 3: Laying the Groundwork
Developing a Positive Mindset
Consulting with Family Members (or Not)
Tabulating Your Net Worth and Monthly Income
Distinguishing between Essentials and Extras
Drawing Up Preliminary Plans
Chapter 4: Sorting Your Belongings
Mastering Decluttering Basics
Stopping Yourself from Cluttering
Decluttering One Room at a Time
Sorting Your Stuff into Six Categories
Chapter 5: Gimme Shelter: Choosing a Home
Finding Your Place in the World: Location, Location, Location
Deciding Whether to Buy or Rent
Deciding Whether to Build or Buy
Estimating the Living Space You’ll Need
Considering Mobility and Accessibility
Exploring Your Housing Options
Accounting for Additional Costs
Chapter 6: Executing a Successful Move
Changing Your Mailing Address
Making the Move: Transportation, Movers, and More
Switching Your Utilities
Unpacking: Decluttering, Round 2
Book 4: Living the Nomad Life
Chapter 1: Getting a Taste of the Nomad Lifestyle
Defining Nomads
Seeing Who’s Adopting the Nomad Lifestyle
Understanding Truths about the Nomad Life
Deciding Whether the Nomad Lifestyle Is Right for You
Chapter 2: Seeing Yourself as a Nomad
Defining Your Passion and Purpose: Establishing Your Why
Envisioning Your Future as a Nomad
Traveling with a Group
Discussing Your Vision with Family, Friends, and Colleagues
Chapter 3: Setting a Realistic Budget
Considering Expenses and Income Needs When You’re a Nomad
Calculating Your Cost of Living
Analyzing the Cost of Switching Sites
Creating a Nomad Budget
Chapter 4: Choosing a Destination
Dreaming of the Ideal Destination
Considering Key Factors
Deciding Where to Go and When
Chapter 5: Creating Your Relocation Plan
Finding Your Travel Flow
Getting Your Finances in Order
Accounting for Taxes at Home and Abroad
Deciding What to Do with Your Stuff
Getting Your Affairs in Order
Applying for Travel Documents, Visas, and Permits
Tying Up Loose Ends
Chapter 6: Finding Housing
Checking Out Different Housing Types
Planning Your Housing Search
Searching for Housing
Reserving and Booking Your Housing
Book 5: Eating Healthy
Chapter 1: Starting the Day Right with Breakfast
Understanding the Importance of Breakfast
Whipping Up Some Tasty Breakfast Recipes
Chapter 2: Fueling Up for Lunch
Making Smart Lunch Choices
Healthy Lunch Recipes
Chapter 3: Delicious Dinners
Making Dinnertime a Pleasant Time with a Few Simple Tricks
Whipping Up Yummy Dinners
Chapter 4: Salads and Sides to Swear By
Serving Up Healthy Salads and Sides
Mixing It Up with Salad and Side Recipes
Chapter 5: Snacks, Desserts, and Nibbles
Satisfying the Hunger with Healthy Snacks and Desserts
Putting Together Tasty Desserts and Snacks with Some Easy Recipes
Book 6: Staying Active After 50
Chapter 1: Staying Active as You Age
Getting a Late Start: How to Begin
Adjusting Your Program if You’re an Experienced Athlete
Chapter 2: Yoga Over 50 Is Just Smart
Understanding the Benefits of Yoga
Finding Your Place in the World of Yoga
Selecting the Right Place and the Right Teacher for You
Practicing without Injury
Playing It Safe
Chapter 3: Preparing to Practice Yoga
Keeping Yoga Equipment Simple
Preparing Proper Sequencing
Chapter 4: Breathing through Your Yoga Poses
Benefiting from Breathing in Yoga
Leveraging Your Breathing
Trying Three Ways to Breathe When Moving
Chapter 5: 20 Great Postures for the 50-Plus Yogi
Remembering Function over Form
Asymmetrical Forward Bend
Bent Leg Supine Twist
Boat Pose
Bridge Pose
Child’s Pose
Cobra Pose
Corpse Pose
Downward Facing Dog
Easy Pose
Great Seal
Half Chair Pose
Half-Standing Forward Bend
Knees-to-Chest
Locust Pose
Mountain Pose
Revolved Triangle
Seated Forward Bend
Standing Forward Bend
Supported Shoulder Stand
Warrior I
Chapter 6: Welcome to Your New Favorite Sport: Pickleball!
Who’s Playing Pickleball? Everyone!
Looking at Pickleball in a Nutshell
Getting Everyone in on the Pickleball Act
Discovering the Benefits of Pickleball
Chapter 7: Playing by the Pickleball Rules
First Things First: Safe Pickleball Is No Accident!
Looking at the Layout of the Court
Order on the Court: Learning the Basic Rules
Knowing the Score
Making Line Calls
It’s in the Rule Book! More Rules to Know
Chapter 8: Pickleball Equipment and Apparel
You Can’t Take the Court without a Paddle
Pickleball Is Nothing without Pickleballs
Pickleball Fashion (an Oxymoron?)
Going Gaga for Gadgets and Accessories
Buying Equipment Locally and Online
Chapter 9: Heading to the Pickleball Courts
Comparing Different Courts
Wanna Play? Finding Courts and Players Near You
Picking Up on Pickleball Etiquette
Index
Publisher’s Acknowledgments
Connect with Dummies
End User License Agreement
List of Tables
Book 1 Chapter 3
TABLE 3-1 Full Retirement Age Based on Year of Birth
TABLE 3-2 Increase for Delayed Retirement
TABLE 3-3 Primary and Spousal Benefits at Age 62
*
Book 2 Chapter 4
TABLE 4-1 Fastest-Growing Occupations (2021–2031)
Book 3 Chapter 6
TABLE 6-1 Estimating Moving Truck Size
Book 4 Chapter 1
TABLE 1-1 Types of Nomads
Book 4 Chapter 3
TABLE 3-1 Compare Costs of Living
Book 6 Chapter 8
TABLE 8-1 Comparing Outdoor and Indoor Balls
List of Illustrations
Book 1 Chapter 1
FIGURE 1-1: Spending categories that are considered fixed expenses.
FIGURE 1-2: Spending categories that are variable expenses.
Book 1 Chapter 3
FIGURE 3-1: The amount of your monthly benefit depends on the age you start rec...
Book 6 Chapter 2
FIGURE 2-1: Hip circles prepare the hip joints.
FIGURE 2-2: PNF with isometric resistance.
FIGURE 2-3: PNF using isotonic resistance.
Book 6 Chapter 3
FIGURE 3-1: Triangle pose with no block.
FIGURE 3-2: Triangle pose with a block.
FIGURE 3-3: Easy pose with a blanket.
FIGURE 3-4: Blankets help a tilted chin.
FIGURE 3-5: Child’s pose with a bolster.
FIGURE 3-6: Using a wedge.
FIGURE 3-7: Making fists.
FIGURE 3-8: Yoga abdominal crunches.
FIGURE 3-9: Bridge pose.
FIGURE 3-10: Supported shoulder stand.
Book 6 Chapter 5
FIGURE 5-1: The spine becomes less erect.
FIGURE 5-2: Forward fold (traditional and modified).
FIGURE 5-3: Asymmetrical forward bend (traditional and modified).
FIGURE 5-4: Bent leg supine twist (traditional and modified).
FIGURE 5-5: Boat pose (traditional and modified).
FIGURE 5-6: Bridge pose (traditional and modified).
FIGURE 5-7: Child’s pose (traditional and modified).
FIGURE 5-8: Cobra pose (traditional and modified).
FIGURE 5-9: Corpse pose (traditional and modified).
FIGURE 5-10: Downward facing dog pose (traditional and modified).
FIGURE 5-11: Easy pose (traditional and modified).
FIGURE 5-12: Great seal pose (traditional and modified).
FIGURE 5-13: Half chair pose (traditional and modified).
FIGURE 5-14: Half-standing forward bend pose (traditional and modified).
FIGURE 5-15: Knees-to-chest pose (traditional and modified).
FIGURE 5-16: Locust pose (traditional and modified).
FIGURE 5-17: Mountain pose (traditional and modified).
FIGURE 5-18: Revolved triangle pose (traditional and modified).
FIGURE 5-19: Seated forward bend (traditional and modified).
FIGURE 5-20: Standing forward bend pose (traditional and modified).
FIGURE 5-21: Supported shoulder stand (traditional and modified).
FIGURE 5-22: Warrior I pose (traditional and modified).
Book 6 Chapter 7
FIGURE 7-1: The names and locations of the lines and zones of the court.
FIGURE 7-2: The path of a serve into the correct service box.
FIGURE 7-3: The typical positions of the players when starting a point.
FIGURE 7-4: Don't hang out in the kitchen!
FIGURE 7-5: A legal volleying example (left) and illegal volleying example (rig...
FIGURE 7-6: A ball that should be called in (left), versus a ball that can be c...
Book 6 Chapter 8
FIGURE 8-1: Some different paddle shapes.
FIGURE 8-2: How to measure your hand for the right paddle grip.
FIGURE 8-3: An indoor ball (left) versus an outdoor ball (right).
Guide
Cover
Table of Contents
Title Page
Copyright
Begin Reading
Index
Publisher’s Acknowledgments
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Living Your Best Life After 50 All-in-One For Dummies®
Published by: John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030-5774, www.wiley.com
Copyright © 2024 by AARP. All rights reserved. AARP is a registered trademark.
Published simultaneously in Canada
No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without the prior written permission of the Publisher. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748-6011, fax (201) 748-6008, or online at http://www.wiley.com/go/permissions.
Trademarks: Wiley, For Dummies, the Dummies Man logo, Dummies.com, Making Everything Easier, and related trade dress are trademarks or registered trademarks of John Wiley & Sons, Inc. and may not be used without written permission. AARP is a registered trademark of AARP, Inc. All other trademarks are the property of their respective owners. John Wiley & Sons, Inc. is not associated with any product or vendor mentioned in this book.
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Library of Congress Control Number: 2024930742
ISBN 978-1-394-23696-1 (pbk); ISBN 978-1-394-23697-8 (ebk); ISBN 978-1-394-23698-5 (ebk)
Introduction
Have you turned 50 yet, or will you be turning 50 soon? Reaching this milestone means that you’re heading into an exciting second act of your life. If you’re ready to make the most of your new chapter, Living Your Best Life After 50 All-in-One For Dummies is here to help.
About This Book
Living Your Best Life After 50 All-in-One For Dummies is chock-full of tips for taking charge of your finances — including investing and getting Social Security benefits — so that you can pay your bills and still have money to do the things you enjoy. This book will help you get the work you really want, whether paid or unpaid. You’ll also find loads of pointers for downsizing and decluttering, and even hitting the road for weeks or months at a time as you consider a nomad lifestyle. And experts offer advice on eating healthy (yummy recipes included) and staying active. Have you thought about trying yoga or pickleball? Now is your chance!
A quick note: Sidebars (shaded boxes of text) dig into the details of a given topic related to living your best life after 50, but they aren’t crucial to understanding it. Feel free to read them or skip them. You can pass over the text accompanied by the Technical Stuff icon, too. The text marked with this icon gives some interesting but nonessential information about making the most of your later years.
Within this book, you may note that some web addresses break across two lines of text. If you’re reading this book in print and want to visit one of these web pages, simply key in the address exactly as it’s noted in the text, as though the line break doesn’t exist. If you’re reading this text as an e-book, you’ve got it easy — just click the address to be taken directly to the page.
Foolish Assumptions
This book assumes that you want to explore new opportunities as you make the most of the decades ahead. You can find help in these pages if you want to do any of the following:
Manage your money, invest for the long term, collect Social Security benefits, and put together a will or a trust
Find a new job and negotiate for what you want (and deserve)
Downsize from your current home
Travel around the country or the world and try a nomad lifestyle
Whip up delicious and nutritious recipes (including some that are gluten-free)
Boost your health by trying new activities like pickleball and yoga
Icons Used in This Book
Icons are those fun drawings you see in the page margins now and again. Here’s what they mean.
The name says it all! This icon indicates something really important to take away from this book.
Information marked with this icon is interesting but not crucial to understanding how to live your best life in your 50s and beyond. Skip it or read it; the choice is yours.
This icon highlights helpful strategies for handling your finances, downsizing, eating healthy, and much more.
This icon indicates potentially territory when it comes to making the most of your later decades. Skip this information at your own peril.
Beyond the Book
In addition to the material in the book you’re reading right now, this product also comes with some access-anywhere info on the web. Go to www.dummies.com and type “Living Your Best Life After 50 All-in-One For Dummies Cheat Sheet” in the search box to discover some additional life-after-50 pointers.
Where to Go from Here
You don’t have to read this book from cover to cover, but if you’re an especially thorough person, feel free to do so! If you just want to find tips in a specific subject, take a look at the table of contents or the index, and then dive into the chapter or section that interests you. For example:
Want to get a better grip on your finances so that you can afford the lifestyle you choose? Start with
Book 1
.
Eager to find a new job? Check out
Book 2
.
Thinking about downsizing? Want to declutter?
Book 3
shows you the way.
Curious about traveling more and even living like a nomad, either domestically or abroad? Get the scoop in
Book 4
.
Interested in eating healthy, trying new recipes, and staying active in your later years? You’ll find lots of tips in
Books 5
and
6
.
The future is bright — good luck!
Book 1
Handling Your Finances
Contents at a Glance
Chapter 1: Managing Your Money
Seeing Where Your Money Goes: Your Expenses
Knowing Where Your Money Comes From: Your Income
You Gotta Have Dreams: Financial Goals
Creating Your Budget
Chapter 2: Investing for the Long Term
Finding the Right Advisor
Making the Most of Your Investments
Participating in Retirement Accounts
Chapter 3: Collecting Social Security Retirement Benefits
Paying Attention to Your Full Retirement Age
Looking at Life Expectancy When You Claim Benefits
Considering Your Spouse When You Claim Social Security
Recognizing the Potential Payoff of Working Later in Life
Putting It All Together: The Right Time to Begin Collecting Benefits
Chapter 4: Financial Matters: Wills, Trusts, and More
Sharing Control of Your Money
Where There’s a Will …
Settling the Estate with Probate
Reviewing the Rules on Estate Taxes
Establishing a Trust
Considering Guardianship
Chapter 1
Managing Your Money
IN THIS CHAPTER
Tracking your expenses
Calculating your income
Exploring your financial goals
Putting together a budget
A budget is the first step to living within your means and, even more important, living the life you choose. Knowing your expenses, your income, and your financial goals is the foundation. In this chapter, you grab a notebook — or create an easy spreadsheet on your computer — to find out just where you stand financially so that you can move forward with financial awareness and stability.
Start by taking a look at expenses. How much do you spend each month? What are fixed expenses — those bills you pay regularly? What about variable expenses — those that fluctuate? Think about the difference between basic necessities and luxuries — needs versus wants.
The next step is looking at income. How much do you earn? Do you have investments? Other streams of income? Do you have retirement income?
The final step is setting your sights on the future. What are your financial goals? Going out to dinner more often? Fixing the roof? Visiting family more often or going on that dream vacation?
These are the types of questions you look at in this chapter. And, with the answers to these questions, you can begin to create a budget. When you become financially aware, your life can change in ways small and big. You can make room for things that matter so you’re living life on your terms.
Seeing Where Your Money Goes: Your Expenses
Tracking your expenses for a month or longer can show you exactly where your money is going. Write down what you spend in cash, by check, and through payment services such as CashApp, PayPal, and Venmo. Review your debit and credit card expenditures. Then look at periodic — including quarterly and annual — expenditures such as taxes, homeowners or renters insurance, and vacations. You’ll most likely discover spending patterns, some of which may surprise you. Perhaps you realize you’re spending way too much in a category, like takeout meals or multiple streaming services. Or maybe you find that your medications are depleting your income, and you want to look at discount cards or different insurance options.
Identifying fixed expenses
Fixed expenses are approximately the same amount of money every billing period, such as your rent or mortgage and car payments. Fixed expenses are paid weekly, monthly, quarterly, or annually. For example, you may pay for your car registration every year or two and your car insurance monthly or quarterly. Weekly fixed expenses may include things like a parking or commuter pass. Figure 1-1 shows various examples of fixed expenses.
Allowing for variable expenses
Variable expenses, or variable costs, unlike fixed expenses, vary from month to month and may be items you regularly purchase or ones you buy only occasionally (see Figure 1-2). Common variable expenses include areas like the following:
Groceries
Gas for your car
Food for your pets
Items for any hobbies
Personal care items like hygiene products or makeup
© John Wiley & Sons, Inc.
FIGURE 1-1: Spending categories that are considered fixed expenses.
Variable expenses can be more challenging for you to track. Depending on the time of year or stage of your life, your spending in these categories can fluctuate. You may spend nearly nothing in a category like household items one month and then easily spend a few hundred dollars there the next month. You may spend a lot more money during the holiday season between vacations and gifts.
Once you’ve tracked variable expenses for a few months, you’ll have an easier time assigning a monetary value to them. A category may occasionally spike, initially throwing everything you had planned off course. You’re going to figure this all out.
© John Wiley & Sons, Inc.
FIGURE 1-2: Spending categories that are variable expenses.
Calculating your total spending
After you know your fixed and variable expenses, you’re ready to evaluate what you spend every month. Grab your notebook or open up your spreadsheet and follow these steps:
Make a list of your fixed expenses.
In addition to your housing expenses, list car payments and fun things like gym memberships, subscription boxes, and streaming services. Divide these into categories. For instance, under housing you’d put mortgage or rent, homeowners or renters insurance, and utilities.
Make a list of your variable expenses.
Just as you did for fixed expenses, put your variable expenses in categories.
Add up the total monthly costs for fixed expenses each month.
You now clearly see how much you spend every month on your fixed expenses. Once you’ve done this for a few months, compare your fixed expenses month over month.
Add up the total annual costs for variable expenses.
Because these are periodic, not monthly, you’ll need to gather your expenses over time to see your annual costs. To get a monthly estimate, divide by 12.
Evaluate whether you need those expenses.
Consider whether all your expenses are necessary. Do you need to spend money on a gym membership every month, or can you find a cheaper way to work out, such as walking on local trails? If you’ve signed up to get monthly items or deliveries, do you have the option to pause them and work through your current supply instead?
Assess your larger expenses, too — not just the minor ones. For example: You realize rent may be costing you more of your take-home pay than you’re comfortable with. Moving can be expensive, but make a note to research other living arrangements when you get closer to the end of your lease.
Understanding needs versus wants
Fixed and variable expenses can include both needs and wants:
Generally speaking,
needs
include categories such as rent or mortgage payments, food, gas to get to and from work if you commute, and healthcare, including medicine.
Wants
are things like eating out, getting a new cellphone when your current one works fine, and going to concerts and movies.
Consider ways to save on both needs and wants. For instance, on needs, look for weekly specials at the grocery store. For wants, get on listservs for discounts on entertainment.
The difference between needs and wants can get murky quickly, especially because one person’s want may genuinely be another person’s need. Spending money on your wants is perfectly okay; you just need to figure out how to budget for them.
Be realistic when determining your wants and needs. Suppose you have a specific life situation that requires you to spend a bit more on your variable expenses. If so, budget for it. Perhaps you have a busy, stressful job. Maybe getting a massage once a month and ordering takeout a few times a week makes your own and your family’s life manageable. Perhaps you pay more in a specific category, like eating out, than people say you should. But being realistic about your spending will help keep you on budget.
Knowing Where Your Money Comes From: Your Income
Your income is an essential component of your budget. Knowing how much money you have coming in helps you make sure your expenses don’t exceed your income. It can also help you set realistic goals for all areas that relate to your finances and perhaps even quality of life. When tracking your income, you may realize you have more than you initially thought you had. On the other hand, when you look at your income and expenses, you may find you have a spending deficit, which means you need to find ways to either cut back or earn more.
When discussing your work income, one dollar amount you need to keep in mind is your net pay. Net pay is the amount of money left after any withholdings you may be subjected to, such as federal and state taxes, FICA taxes (supporting Social Security and Medicare), health insurance, and any wage garnishments you may be paying off. Your net pay is the money you have to pay your fixed and variable expenses and put toward savings and your goals.
Your income may also include earnings from your investments and other sources such as retirement income.
The most important type of income you should consider is what you earn monthly to cover all your expenses. Monthly income can come from various sources. While it can be consistent, it can also be different from month to month. Here’s a list of different types of monthly income you can earn:
Income from full-time and/or part-time employment:
This is income you receive from an employer that has you on its payroll. Some jobs pay a
salary
— a flat amount of money per paycheck — and others pay an hourly
wage.
Unlike a salary, hourly income can fluctuate because the number of hours you work may vary.
Income as a self-employed freelancer or consultant:
Freelancers and contractors are considered self-employed, but the main difference is that
freelancers
generally balance more than one client and work on projects with a short timeline.
Contractors
often work with one main client on a longer time frame. (For tax purposes, there is no distinction between the two. Both should pay estimated taxes quarterly because they are not deducted from paychecks automatically.)
Pensions and other paid retirement plans:
A
pension
is a type of retirement program that an employee, an employer, or both pay into. The plan pays a fixed sum to the employee at regular intervals upon retirement. Some pensions require you to work for the company for a certain number of years before you’re eligible (or
vested
). Federal, state, and local government or other public sectors also allow for paid retirement plans.
Self-funded retirement plans:
Outside of traditional pensions or government-paid retirement plans, you may receive payments from retirement accounts, such as 401(k)s, 403(b)s, and IRAs. These types of retirement accounts allow you to save for retirement by investing.
Social Security retirement benefits:
When people talk about receiving Social Security, they’re usually referring to retirement benefits. Every year you remain in the workforce, you can receive up to four work credits. After you’ve earned 40 credits, you’re eligible to collect benefits. When you can start receiving Social Security retirement benefits depends on when you were born. The longer you wait to receive benefits, up to age 70, the larger your payments. For up-to-date information, visit
www.ssa.gov/retirement
or see AARP’s
Social Security For Dummies
(published by Wiley).
Chapter 3
in Book 1 also has information on Social Security retirement benefits.
Social Security Disability Benefits, Supplemental Security Income, and survivors benefits: Social Security has three other benefits. If you’re disabled, you can receive two different types of benefits:
Social Security Disability Insurance (SSDI)
benefits are granted when you meet the Social Security Administration’s definition of having a disability and you have earned enough workforce credits, depending on the age you become disabled.
If you’ve never worked due to a disability, you can qualify for
Supplemental Security Income (SSI)
.
Last but not least, if you’re a child, spouse, or parent who relies on someone in the workforce to support you and that person dies, you may be eligible for survivors benefits.
You can create a Social Security account at www.ssa.gov/myaccount. Doing so allows you to check your workforce credits and the money you’ve paid into Social Security and to get an estimate of your retirement benefit payment. You can also check to see what other Social Security benefits may be available to you, such as disability insurance or survivors benefits, along with the amount you or a loved one would qualify for. This information can help you budget better for life circumstances and save for retirement.
You Gotta Have Dreams: Financial Goals
You’ll want to set aside money for emergency expenses. But you’ll also want to set financial goals. Goals can be simple, like going to a concert once a month. They can be moderate, like treating the family for dinner every Sunday or saving enough so you can retire comfortably. They can also be ambitious, like taking a dream vacation. After you’re clear on your financial goals, figuring out the steps to get you there is easier.
Setting financial goals can help you live a better quality of life, which can mean the difference in where you can afford to live, what you do in your free time, whether you can take a leave of absence due to a life-changing emergency, and when you can retire.
Saving for your future
Life is short, and putting money aside for your future sets you up for long-term financial security — and happiness. In addition to retirement accounts, you may need a new car. Maybe the perfect home of your dreams hits the housing market, and you see yourself establishing some roots! You may have kids or grandkids heading off to college — or you may want to go back to school yourself to pursue a passion or make more money so you can have an even sounder budget than before. Somedays can turn into your current day, so you may as well plan for them.
Saving for the future can also include fabulous trips you want to experience, like visiting a national park. Maybe it’s establishing a scholarship fund in someone’s name at a local nonprofit, or taking an art or music class. Your future can include fun, and your budget helps you do just that.
Make sure your goal is actually yours. You may hear, for example, that the way to make the most money is to become your own boss. It may not be as easy as some people claim. Many people quit their jobs to become entrepreneurs but don’t have a clear plan or realize they aren’t suited for self-employment at all. Make sure whatever financial goal you choose is one that you want to achieve, so you’ll put in the hard work to make it your reality.
Paying down your debt
Another financial goal you may want to set is paying down your debt. Debt isn’t evil if you use it strategically. But having even strategic debt can cost thousands of dollars in interest and financing fees. Setting a financial goal to pay your debt down, no matter how slowly, can help in the long run. Because as soon as you pay off that debt, you have more cash flow to do things that are important to you.
Putting your financial goals in place
Setting financial goals doesn’t have to be complicated. Just follow these steps:
Establish what your goals are.
For example, maybe you want to buy a house.
Make the goal as clear as can be.
Decide precisely how much money you’ll need to buy that house and when you want to be able to make the purchase.
Take actionable steps toward completing it.
Examples of actionable steps may be slowly paying off your credit card so that eventually you can open a high-yield savings account for the house you want. Every little bit adds up, so don’t be discouraged if you have to start small. With every action, you move the needle closer to your goal.
Creating Your Budget
After you’ve set out your expenses, income, and financial goals, it’s time to put it all together. In your notebook or on your spreadsheet, you’ve set out your three components:
Expenses (how much money you spend), both fixed and variable
Income (how much money comes in)
Financial goals (things you want to accomplish, such as retiring, paying down debt, and saving for something in the future)
Now you probably see that all three are equally important. Your expenses can affect how much income you need to bring in, which determines whether you can accomplish your goals by working one regular full-time job or also getting a side gig. Your income determines how much money you can spend on your lifestyle or put toward your future, like vacations or retirement. It’s all related, so the sooner you figure out what you need to pay and what you want to accomplish, the faster a budget will work for you.
Add up your income and subtract your expenses. Perhaps as you see your budget in full, you realize your net pay doesn’t cover all your monthly expenses or the goals you’ve set for yourself. In these cases, you have to either cut your spending or increase your income.
Finding ways to cut your expenses
Here are some ideas for trimming your expenses:
See whether you can get a better rate by paying for certain things, like insurance, annually rather than monthly.
Call your providers, such as cellphone or internet, to see whether you qualify for any discounts or loyalty rates. Sometimes saying that you’re preparing to move to another provider will prompt the offer of a discount.
Research competitors for insurance policies: healthcare, automobile, renters or homeowners, and life.
Consider switching to different tiers of subscription services, such as home streaming networks.
Discuss options with your landlord or mortgage company.
Nothing is off the table; the more money you can free up, the more you have to save for your goals or spend on things that bring value to your life. For more ideas, see 500 Great Ways to Save For Dummies (John Wiley & Sons, Inc.)
Identifying additional sources of income
The economy can be volatile. A job may be here one day and outsourced the next. Or your needs and circumstances can change. This section offers a few ways you can earn additional income.
Earning rental income
Renting out a room is a common way to break even on your living expenses. Collecting the monthly payment from a roommate is considered rental income. You can also earn rental income if you’re a landlord or have investment properties you collect earnings on.
Another way people earn this type of income is by renting their residences as short-term vacation rentals. With websites such as Airbnb and Vrbo, you can rent out a room in your home or the entire house for a nightly fee.
Taking part-time gigs
You can earn extra income by doing odd jobs or selling stuff. Here are some common side hustles:
Shop and deliver groceries or restaurant meals.
Sell items you have laying around or buy items for a lower price and then sell them for a profit on sites like Amazon, eBay, and Facebook Marketplace.
Create content online as a writer.
Make crafts and sell them on a site like Etsy, Handmade Artists, Facebook Marketplace, or other social media.
Put together furniture.
Babysit kids.
Be a companion for older people.
Dog-walk and pet sit, either at your house or theirs.
Drive for rideshare services.
Setting aside money for taxes
Income from side gigs may be considered earned income depending on the source, so check with the IRS to see whether you need to put money aside for taxes. If so, save 25 to 30 percent of any income earned from side hustles in a checking account. Pay your estimated taxes quarterly and save anything left over for business expenses. You may be able to deduct certain expenses on your taxes. For more information on self-employment taxes, visit www.irs.gov.
Like anything in life that you’re trying to improve, things may feel uncomfortable in the beginning. Finding out you spend far more than you earn, for example, can be discouraging. But keep this in mind: Knowing your expenses and income and creating a realistic budget can have a cascading effect and improve all areas of your life.
Celebrate the small wins, and know your future is more financially stable every day.
Chapter 2
Investing for the Long Term
IN THIS CHAPTER
Working with a trustworthy advisor
Investing in different funds
Using retirement accounts
When considering investment advice, keep in mind that your financial situation is unique. The tips in this chapter may suit your circumstances, but consult an expert for individualized guidance. Here, you find out about working with financial advisors, adding different funds to your portfolio, and preparing for your later years with retirement accounts.
Use AARP’s free online tools to estimate your income taxes, find out how to maximize your Social Security benefits, see whether you’re saving enough for retirement, and more. Visit www.aarp.org/tools.
Finding the Right Advisor
Just as there’s a medical specialist for most every ailment, there’s a financial specialist for most every money-related problem or need. The Financial Industry Regulatory Authority (FINRA), Wall Street’s self-regulatory organization, lists more than 200 different credentials or designations, ranging from AAI (accredited advisor in insurance) to WMS (wealth management specialist). All those abbreviations can confuse more than inform. Bottom line: You want someone who can help you protect and grow your money.
When the time comes to seek professional help to rethink investments, plan retirement finances, deal with debt, or take on any other money-related task, your first move is to find the right expert. How?
Check that the advisor is permitted to sell securities or give investment advice and has a clean record. Visit
brokercheck.finra.org
or call FINRA at 800-289-9999. Insurance sellers need a state license.
If the advisor uses a title, find out who awarded it and what it required. Some titles take little effort to obtain. FINRA has a directory of designations at
www.finra.org/investors/professional-designations
.
Watch for red flags when you first meet, such as promises of above-market returns or risk-free investing, a hard sell on certain products, or failure to ask about your specific financial needs and goals.
For help in finding a financial advisor, use AARP’s Interview an Advisor tool at
www.aarp.org/interviewanadvisor
.
Making the Most of Your Investments
You have a wealth of investment choices (pun intended!): mutual funds, stocks, and more. The following sections give you the scoop on funds and show you how to steer clear of fraud.
Looking at different funds
Where should you begin when you want to invest in funds? Consider the following to maximize your profits:
Keep investing costs low.
This is one of the most important things you can do to boost your returns. That’s why index funds are good. What’s more, Standard & Poor’s research indicates that over time, index funds consistently outperform actively managed accounts.
Buy mutual funds, not individual stocks.
Have both stock funds and bond funds in your portfolio to balance growth and safety.
Sell what isn’t working for you.
If you’ve got some old dogs — investment losers, that is — sitting in your portfolio, selling them for a loss could provide a tax benefit.
Buy a target-date retirement fund.
These funds are especially useful for those who are confused and intimidated by the prospect of investing. They’re a simple way to own a diversified portfolio of stocks and bonds that gradually gets more conservative as you near retirement. Choose funds with low fees. You can find low-fee choices at major brokerages, including Fidelity, Schwab, T. Rowe Price, and Vanguard, or do some comparison shopping at
www.morningstar.com/target-date-funds
.
Use FINRA’s fund analyzer to check the fees in your mutual funds and compare the costs.
Just a 1 percent annual fee on investments can cost you thousands by the time you retire. Visit
tools.finra.org/fund_analyzer
.
Watching out for fraud
The phone rings, and a friendly, energetic-sounding stranger is on the line asking if you have a minute to discover how to triple your money in just six months by investing in gold and silver mines. Or maybe you get an email urging you to buy shares of a company whose stock price is sure to go through the roof. It sounds too good to be true — because it is too good to be true.
Each year, fraud siphons billions from investors, according to the North American Securities Administrators Association. This isn’t new. In the early 1920s, to name one famous example, a con artist named Charles Ponzi fleeced scores of Americans by promising lavish returns from a strange scheme to speculate in international coupons used by people in different countries to send each other return postage. In reality, Ponzi was using new investors’ money to pay off existing investors.
It’s a trick that criminals still employ. But in today’s world, they have more — and more powerful — ways to reach ordinary people (robocalls, email, TV, social media) and convince them to hand over their money.
Fraud criminals target people of all ages, education and socioeconomic levels, gender, and racial/ethnic backgrounds with phony investment schemes. Watch for the following warning signs:
A caller who pressures you to send money right away to take advantage of a supposedly once-in-a-lifetime opportunity.
A caller who uses phrases such as “incredible gains,” “breakout stock pick,” or “huge upside and almost no risk!” The U.S. Securities and Exchange Commission (SEC) says such claims suggest high risk and possible fraud.
Recommendations of foreign or “offshore” investments from someone you don’t already know and trust. Once your money is in another country, the SEC cautions, it’s more difficult to keep watch over it.
Protect yourself with these do’s and don’ts:
Do ask plenty of questions before you make any investment, including the following: Is the financial product registered with the SEC or state securities agencies? What are the fees? How does the investment company make money? What factors could affect the value of the investment?
Do your homework. If you’re considering investing in a publicly traded company, look up information about its finances and operations in the SEC’s EDGAR database (
www.sec.gov/edgar/searchedgar/companysearch
).
Do get advice from a person you trust and respect before making any decisions.
Do know who’s handling your investment. Conduct a background search in BrokerCheck, an online database maintained by FINRA. Visit
brokercheck.finra.org/
.
Do be wary of free investment seminars, especially ones that include free meals. The SEC says scammers often figure that if they do you a small favor, you’ll feel obligated to invest.
Do have an exit strategy. FINRA recommends rehearsing some stock lines to cut short a caller’s high-pressure pitch, such as “I'm sorry, I’m not interested. Thank you.”
Don’t make investment decisions based on ads, TV commercials, phone calls, or email solicitations.
Don’t believe anyone who guarantees returns on your investment, quick or otherwise. Con artists like to dangle the prospect of fabulous wealth to distract you from realizing the whole thing is a scam.
Don’t jump on “inside” information posted to social media, chat rooms, or forums promoting shares of a company that are certain to go up. It may be a “pump-and-dump” — a ploy to drive up the price artificially, enabling scammers to sell their shares for a big profit before the stock crashes and the remaining investors take a loss.
Don’t believe someone claiming to represent FINRA who offers an investment guarantee — the organization says its officers and employees never do this. Some particularly audacious scammers pose as FINRA executives to create a false sense of security about an investment and secure an advance fee.
Don’t judge an investment opportunity by a company’s professional-looking website. These days, crooks can easily create a convincing online facade.
Don’t make an immediate impulse-buying decision. Wait at least 24 hours to allow emotions to subside before making a purchase.
Participating in Retirement Accounts
Invest in your company’s retirement accounts, such as a 401(k), a 403(b), or, for federal workers, a Thrift Savings Plan. Your employer will deduct your pretax contributions from your paycheck, and your savings will be tax-deferred until you take withdrawals during retirement. (The exception is Roth accounts, which are funded with after-tax dollars and from which withdrawals in retirement are tax-free.) As of 2023, the contribution limit is $22,500, or for people aged 50-plus, $30,000.
If you can’t afford to contribute the maximum, invest what you can and then try to increase that amount each year. You may find that putting pretax money into your account doesn’t affect your paycheck as much as you’d think, because of the tax savings.
Be sure to contribute enough to take advantage of your employer’s match. Many employers automatically match a percentage of your contributions, which is essentially free money and can make a big difference in the amount of money in your account at retirement.
Say you’re 50 years old and you earn $50,000 a year. You put 5 percent of your salary a year into your 401(k), and you get 3 percent raises each year until you retire at 65. You’ll have $87,376 in your account when you retire, factoring in a 7 percent annual rate of return. Now say your employer matches 50 percent of your contribution up to 5 percent of your salary. You’ll have $131,064 in your account, according to AARP’s 401(k) calculator. Visit www.aarp.org/calculators.
Finally, consider tax diversification in your retirement account. Many plans have added Roth options — which allow you to contribute dollars you’ve already paid taxes on and then withdraw the money in retirement tax free. If you think your tax bracket will go up in the future, stashing some contributions here can be smart.
Chapter 3
Collecting Social Security Retirement Benefits
IN THIS CHAPTER
Recognizing that when you claim affects what you get
Considering your life expectancy
Remembering your spouse
Working for greater security
Making your decision on when to start collecting
You probably know people who are sick of their jobs, fed up with the demands of the work world, and ready to begin collecting Social Security the very first day they can get it. You probably also know people who love their jobs, see themselves as forever young, and are pained even to think about collecting retirement benefits. Where do you fit on the spectrum?
Of course, the decision on when to start collecting Social Security is personal. Your priorities and needs, your spouse’s needs, your financial resources, your health, and your expected longevity all can shape your attitude about collecting Social Security.
Your decision on when to begin collecting Social Security retirement benefits may be the most important financial decision you ever make. Starting too early can cost you tens of thousands of dollars. Worse, jumping the gun may hurt the most in your final years, when it’s too late to do anything about it.
This chapter fills you in on the most important factors to consider in order to make the right decision for you. There is no one right answer. The goal here is for you to make the decision about when to collect Social Security fully armed with all the information you need.
Paying Attention to Your Full Retirement Age
A key consideration in choosing a start date for collecting Social Security is something called your full retirement age. The Social Security Administration (SSA) gives you a window of several years before and after your full retirement age in which to begin collecting your retirement benefits, starting at 62. In the following sections, you find out how to determine this age (based on your year of birth) and how it affects the amount of your monthly benefit.
Determining your full retirement age
Your first question is probably this: How much Social Security am I going to get? The answer: It depends. The first step is knowing your full retirement age. If you collect Social Security before reaching your full retirement age, you’ll get less each month — potentially a lot less, for the rest of your life. If you collect Social Security after reaching your full retirement age, you’ll get more each month.
Your full retirement benefit is the amount you get if you wait until your full retirement age to begin collecting. But what the SSA calls your full benefit is not the biggest benefit you can get. You can actually get a lot more than your full benefit by waiting until you’re 70 to begin collecting — 32 percent more if your full retirement age is 66, and 24 percent more if it’s 67. The SSA uses your full benefit as the starting point when it decides how much you or your dependents will receive (see the next section for details).
The earliest age at which you can start collecting retirement benefits is 62, and the latest is 70. Your full retirement age falls somewhere in between. Table 3-1 shows a person’s full retirement age based on their year of birth.
