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This seems to be a theme lately – super low or no down payment mortgages. The latest of these not-so-novel loan programs comes courtesy of Chicago-based bank Guaranteed Rate.

The lender, which you may have heard of thanks to its commercials with crazy old Ty Pennington, is offering a 1% down payment home loan to Chicago area buyers.

The loan is made possible via a partnership with the City of Chicago and Chicago Infrastructure Trust (CIT), and is designed to tackle one of the major hurdles to homeownership, the hefty down payment requirement.

It appears to be open to all Chicago-area lenders, but hometown bank Guaranteed Rate is the first to officially launch the program.

Chicago Home Buyer Assistance Program

  • Guaranteed Rate has partnered with the City of Chicago
  • To create the Chicago Home Buyer Assistance Program
  • Which requires just $1,000 down payment
  • And a forgivable grant for up to 7% of the loan amount

The so-called “Chicago Home Buyer Assistance Program” allows both existing and prospective homeowners to take advantage of a low down payment mortgage via the use of a grant that doesn’t need to be paid back.

The City of Chicago will provide home buyers with a forgivable grant, for up to seven percent of the final loan amount. The borrower must simply come up with 1% of the purchase price, or $1,000, whichever is lower.

It’s unclear if reserves are also required, but if not, it means individuals can buy a home with just $1,000 in the bank. Pretty sweet deal.

It’s open to first-time home buyers and existing ones looking to move up or even downsize. And current owners can use it to refinance an existing loan.

You can purchase a home or a condo (up to four units), but you must reside in the property to be eligible. No second homes or investment properties. Oh, and you must reside there for a while to get the grant completely forgiven.

You Must Stay Put for Five Years

  • There is one fairly large catch with this program
  • You have to remain in the property for at least 5 years
  • To get the grant extinguished
  • Otherwise the grant will be forgiven on a prorated basis

The catch to this seemingly favorable loan program is that you must reside in the property for a minimum of five years to get the down payment grant forgiven. It’s basically a hard prepayment penalty.

During that time, you must also make on-time mortgage payments in order to extinguish the grant.

If you move or refinance before that time, the grant will be forgiven on a prorated basis. Put another way, you’ll be on the hook for the remaining amount of the grant if you don’t fulfill the tenancy requirement.

After all, the point of programs like this is to help more folks realize the dream of homeownership, not allow them to flip their home in six months for a profit.

Borrowers utilizing the program must also purchase a property within the city limits of Chicago. The good news is the income limit is pretty liberal, allowing for annual income as high as $133,000, regardless of family size.

So most individuals looking to buy a home in Chicago should be eligible for the program.

What I don’t know is how low the mortgage rates are, or if mortgage insurance is required. Even if it’s not, it will be built into the interest rate.

I would expect rates to be higher than those found elsewhere, such as via the FHA or via the conventional route with a higher down payment.

If you’re interested in this program, you may want to compare it to the Fannie 97 program as well if you’re able to muster 3% down – the rates may be lower and you don’t have to stick around for five years.

Source: thetruthaboutmortgage.com

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Shortly after my daughter, now 14, was born, I got the best advice: “Travel with her soon, ideally when she’s 6 or 7 months. That’s old enough to be engaged but young enough to be portable.”

My wife and I soon whisked her off to Amsterdam. We strolled along canals, sipped white beers with lunch, and explored art and history museums. Contrary to what many new parents believe, it could not have been better timing.

Pros and Cons of Traveling With a Baby

The most obvious perk of traveling with a baby: You don’t need to pay for their airplane seat until they reach age two! Besides that, the upsides and downsides depend on your approach to parenting.

Generally speaking, traveling around the 6-month mark is mostly positive. Before babies start crawling, they don’t struggle to be put down or need a baby-proofed hotel room in which to roam. You can ditch the stroller and opt for a carrier as you explore, and the baby can either nap or observe the scenery.

There’s also a good chance your baby isn’t yet relying on solid food — we actually delayed kickoff by a month or two until after our travels — so there’s no need to hunt down special infant meals. If you’re breastfeeding, keep it up through your trip and you’ll barely need to pack a thing for your baby. Otherwise, just bring enough formula (yes, TSA will allow it through) and you’ll be good to go.

With infants younger than 6 months, you may face more fussiness. And depending on the conditions your little one needs to get to sleep, your schedule may have to revolve around nap times. After they’ve started to crawl or toddle, you’ll want to be more vigilant of potential hazards in your hotel, rental, or host’s home.

When planning your day, keep in mind that picky eaters can take time to satisfy. But what better way to expand your kid’s palate than in another country? Our daughter tried her first taste of pancakes in Amsterdam, while sitting in her first-ever high chair, and it remains one of our favorite early-parenting memories.

By the way, we also have good tips for new parents wondering how families afford to travel.

Pre-Trip Checklist

Before you go anywhere, you’ll want to check a few important items off your to-do list.

Collect Your Baby’s Travel Documents

When you’re traveling within the United States, your baby is good to go. Just be sure to have their birth certificate on hand and, if only one parent is present, a letter of consent from the other, to avoid any custody dramas while you’re trying to enjoy a vacation.

If you’re traveling internationally, via plane, your little one will need a passport just like every other U.S. citizen. When traveling by sea, you’ll want to bring the birth certificate and consent letter from a parent who stays at home.

To apply for your baby’s passport, be sure to start the process as early as possible by filling out form DS-11 , found on the State Department’s site. You’ll be asked for evidence of a birth certificate (and/or other options to prove citizenship, if they apply to you) and a properly formatted photo. This image will be used until your kid is 5 and needs an updated passport — a source of great amusement for them until then, guaranteed.

Recommended: How to Balance the Urge to Travel and the Need to Save

Visit the Pediatrician

Consider bringing your baby to the pediatrician about a month before your departure, and make sure they are up-to-date on routine vaccinations. Additional shots may be required depending on your destination.

Check the Centers for Disease Control and Prevention (CDC) website for other travel alerts. And be sure to pack any medications your child might need, such as baby acetaminophen in case of teething pain or fever.

(By the way, this article will tell you what to do if you or your baby get sick on vacation.)

Pack or Reserve Baby Items

Think about what you might need at your destination: bassinet, Pack ‘n Play, etc. You may be able to call to request larger items at your hotel or rental, attached to your reservation. If you plan on renting a car, make sure you reserve a car seat.

If you don’t already have a baby-wearing sling or pack that’s light and comfortable, consider investing in one. The structured Ergobaby and Tula are two excellent options. If you’re not a baby-wearing type and your baby is old enough to sit up, think about getting a lightweight folding stroller (Maclaren has a range of great options) that’s easy to carry and maneuver (and should meet all carry-on specifications). Leave your souped-up fancy version at home.

Flying With a Baby

What to Bring

The things you’ll need when traveling with a baby are not so different from what you need for a day in the park. Besides a stroller or carrier, you’ll want to make sure you’ve got enough amusements on hand to get your baby (and those around you) through the flight without much drama. I remember getting great new-parent tips from others about flying, including the advice to bring a small bag stuffed with distractions: board books, her Sophie the Giraffe teether, a light-up rattle. It was an excellent idea, even though she wound up happily playing with an empty plastic water bottle for much of our time in the air — anything that works!

If you’ve got a toddler who likes to snack, have plenty of their favorites with you (for yourself, too, as they’re not the only one who needs to be distracted from grumpiness). Other useful items to bring in your carry-on: plenty of diapers, wipes, a travel diaper pad to use in the cramped bathroom (not fun), formula, and a small cozy blanket.

Recommended: Air Fares: What You Need to Know

Dealing With Air Pressure Changes

When flying with a baby, take-off and landing are likely to be the toughest parts, due to air-pressure changes in the cabin that can plug up their little ears. Start breastfeeding or bottle-feeding a few minutes before the actual take-off or landing. The sucking and swallowing actions will help their ears keep popping. Your little one will be blissfully unaware that they’re supposed to start screaming.

At Your Destination

When traveling, think of your baby as a mini-version of you, and take all precautions (and then some) that you’d take for yourself. For summer travel in warm climates, apply mosquito repellant, use plenty of sunscreen (don’t forget to reapply!), and dress them in long-sleeved rash guards while swimming or on the beach. In new countries, avoid tap water.

Consider nap times, and where you’d like to be to help facilitate your baby falling asleep in a strange environment. Finally, be prepared to adjust your plan as you go to accommodate any fussiness and meltdowns.

Recommended: Responsible Tourism: How Travelers Can Support Local Economies

The Takeaway

Don’t stress out about traveling with your infant — enjoy it! Now, when your little one is still portable and not yet making their own demands, might be your last chance to feel free as a bird while exploring a new place. No, they won’t remember the experience, but you will. And you’ll have the pictures and stories to prove it.

Photo credit: iStock/tatyana_tomsickova

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Source: sofi.com

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Check out the best cities for remote work to ensure all of your lifestyle needs are met when living and working remotely.

Since 2020, work-from-home (WFH) has become the new normal in the workplace. While some companies are pushing for a return to office, others are embracing remote work indefinitely. When the world is your oyster, where should you go to live and work remotely?

Well, the team at Rent. did our research to put together a list of the best cities for remote work. So, if you’re ready to explore the country while working remotely, consider any one of these top best cities for remote work.

The 10 best cities for remote work

As a remote worker, your physical location hardly matters. As long as you have a productive workspace and a strong internet connection, you can pretty much work wherever your heart desires. Do you enjoy sitting on a patio while you take your Zoom calls? Well, as long as your connection is strong you’re good to go!

We looked at a few things to make our recommendations:

  • Median rent and rent change year-over-year
  • Access to the internet and average internet speeds
  • WFH population and number of coworking spaces

If you’re a digital nomad who wants to fully embrace WFH, consider these top 10 locations across the country that have been named the best cities for remote work.

  • Median rent: $2,075
  • Average Mbps: 83.46
  • Number of coworking spaces: 68
  • % of population WFH: 19 percent

Orlando is the number one best city for remote work based on our ranking methodology. With a population of 309,154 people, it’s a perfect mid-sized city in the sunny state of Florida.

You’ve got well-known amusement parks. You’ve got crystal blue beaches and sunny skies. And, you’ve got a solid environment for remote work. Retirees and young professionals alike are flocking to Orlando and it’s easy to figure out why. Consider this city if you want to be a remote worker.

  • Median rent: $1,528
  • Average Mbps: 117.89
  • Number of coworking spaces: 78
  • % of population WFH: 38 percent

Austin is the second-best city for remote workers. It’s a hopping metro with a young millennial crowd. The rent is reasonably priced and there is no state income tax, which is a bonus for remote workers and residents alike. Austin is particularly appealing to the IT sector and is commonly called “Silicon Hills.”

So, if you’re a remote IT worker, this city is even better for you! But if IT isn’t your field of work, don’t fret: You can still live in Austin and enjoy the benefits of remote work in your chosen industry.

  • Median rent: $1,339
  • Average Mbps: 80.71
  • Number of coworking spaces: 11
  • % of population WFH: 13.2 percent

Ranking third on our list is the city of North Charleston in South Carolina. With a smaller population just shy of 120,000 people, this city is the perfect place to settle down to get a mix of big-city life with small-town charm.

People rave about the dining scene, so you can work remotely from a coffee shop or restaurant! This city is full of history and has a diverse cultural scene and stunning scenery. If you’re looking for a place that seemingly has it all, check out North Charleston.

  • Median rent: $1,338
  • Average Mbps: 76.26
  • Number of coworking spaces: 23
  • % of population WFH: 15.7 percent

Grand Rapids is a great city for outdoor recreation and beer scene. If you’re a digital nomad who wants to flex the Midwestern value of “work hard, play hard,” this is the city for you.

The city alone has over 40 breweries. You’ll be able to go on a nice trail walk and cool down with a beer. Additionally, it’s one of the largest office furniture-making cities in the U.S. So, you can definitely find yourself a sweet office set up for your remote work office here.

  • Median rent: $977
  • Average Mbps: 129.12
  • Number of coworking spaces: 7
  • % of population WFH: 12 percent

Columbus, GA, is the fifth city on our list of best cities for remote work. If you’re looking for a family-friendly place to live, consider Columbus. This city is rising in popularity as it’s an easy-going town with friendly people.

There are lots of parks, restaurants and bars so you’ll have a good mix of outdoor and indoor activities when you’re not working. One thing to note is that you may experience severe weather in this pocket of the country.

  • Median rent: $2,220
  • Average Mbps: 92.68
  • Number of coworking spaces: 92
  • % of population WFH: 38 percent

Because it’s a large metro, Atlanta is a great place to live and work remotely — or to look for an in-office job if you tire of the WFH life. You also have several large corporations headquartered here, such as Delta and Coca-Cola, so job options are plentiful and rent reasonable compared to similar-sized metros.

  • Median rent: $1,183
  • Average Mbps: 55.53
  • Number of coworking spaces: 15
  • % of population WFH: 12 percent

You don’t have to be a Packers fan to live in Green Bay (although it wouldn’t hurt!) People love this family-friendly city and rave about the small-town community traditions and vibe you experience living here.

Ranking seventh on our list of best places for remote workers, Green Bay has affordable living and is recently experiencing an influx of people moving here. Enjoy football games or farmer’s markets when you’re not working from home.

  • Median rent: $1,444
  • Average Mbps: 94.95
  • Number of coworking spaces: 128
  • % of population WFH: 15.6 percent

Houston is another Texas city that made our list of the best places for remote workers. It’s a larger city, compared to Austin, so if you’re looking for a big metro area in Texas, consider the nation’s fourth-largest city.

This metro is known for its diverse food and entertainment scene. Since it’s a huge city, you pretty much have a good mix of everything to do. Plus, rent is fairly inexpensive, making the cost of living affordable.

  • Median rent: $1,613
  • Average Mbps: 119.41
  • Number of coworking spaces: 26
  • % of population WFH: 33.1 percent

Another southern city makes our list of the top 10 best places to work remotely. Raleigh has great weather, so if you’re looking for a beautiful and mild place to live, this is for you.

Additionally, it’s known to be a great city for small businesses and entrepreneurs, which is good news for remote workers hoping to branch out on their own and network. It’s also been ranked as the most climate-resilient city, the best for work/life balance and one of the best places for college students to live.

  • Median rent: $1,041
  • Average Mbps: 82.95
  • Number of coworking spaces: 9
  • % of population WFH: 16.7 percent

Last but not least is Appleton, WI. With a population just shy of 75,000 people, Appleton is the smallest town on our top 10 list. So, if you’re looking for a quiet, small city to live and work remotely, this is the place for you.

Residents like the mix of outdoor activities and in-town activities. It’s also been named one of the best places to raise children. Check out Appleton if you’re wanting a great city to be a remote worker and raise a family.

Other cities to consider when working remotely

We’ve listed the cities that rank in the top 10 best places for remote work, but there are several other places across the U.S. that made our list, as well. Check out the top 100 cities in the nation that remote workers can call home.

  • Daytona Beach, FL
  • Savannah, GA
  • Rapid City, SD
  • Greenville, SC
  • San Fransisco
  • Chicago
  • Pittsburgh
  • South Bend, IN
  • Dallas
  • Waukesha, WI
  • Fort Lauderdale, FL
  • Chattanooga, TN
  • Greensboro, NC
  • San Antonio
  • Shreveport, LA

Interesting findings from the top 25 best cities for remote work

While looking at the data, we found some interesting highlights that are worth calling out.

  • 24 of the 25 best cities for remote work are in the South or Midwestern United States.
  • Only one of the top 25 best cities for remote work is on the West Coast. San Francisco is the only West Coast city to make our list.
  • Florida, Georgia and South Carolina all rank well for remote workers with three cities in each state making the top 25 best cities for remote work.
  • The majority of the best cities for remote work have populations under 250,000 residents. While there are a few outliers, the best cities to WFH are generally smaller cities compared to large metro areas.

What to consider when working remotely

Regardless of where you choose to live to work remotely, there are a few common things you must consider to be a successful WFH employee. Here are a few considerations and questions to ask yourself when choosing a city for remote work.

  • How much internet speed do you need? Depending on your location — rural, suburban, or urban — your internet needs will vary. Having a strong internet connection and the right internet speed is crucial for success as a remote worker.
  • Do you have the right office set up? Relaxing poolside while responding to emails is appealing, but there are times when you’ll need a physical office or desk set up. Make sure you have the right desk, chair and computer equipment
  • How long do you plan to stay in your location? Some people choose to settle down in one place and others move frequently. Your choice will determine the length of your lease. You’ll want to consider if a fixed lease or month-to-month is better for your lifestyle.
  • Is your job remote-first indefinitely? Before you pack up and hit the road, ensure that your job is going to be WFH long-term. You don’t want to make a cross-country move only for your company to demand a return-to-office six months later.

Find the right city for you

With so many WFH options available, you really can go anywhere in the U.S. or the world, for that matter. We hope our data and insights on the best cities for remote work help you as you decide where to move and pursue a WFH lifestyle.

Remember, these are the best cities for remote work according to our methodology; however, there are several places in the country that may work for you. Do your research before moving and you are bound to find an apartment and place to live that fits all of your lifestyle needs.

Methodology

Cities were ranked and scored based on the following:

  • Rents: 30 points
  • Median Rent: 20 points
  • Rent Change YoY: 10 points
  • Internet Speed and Access: 40 points
  • Num. Int, Providers, 100mbps: 10 points
  • Avg. Mbps.: 20 points
  • Lowest Cost Int. Plan: 10 points
  • WFH Population and Coworking Spaces: 30 points
  • % Population WFH: 10 points
  • Coworking per 1,000 WFH: 20 points

Our rent prices and changes are from Rent.com’s Rent Report. Internet speed and access numbers are from Broadband Now.

The number of coworking spaces is from FourSquare. Population numbers and proportion of people working from home is from the Census’ American Community Survey (ACS).

Cities with insufficient data were excluded.

The rent information in this article is used for illustrative purposes only. The data contained herein do not constitute financial advice or a pricing guarantee for any apartment.

Source: rent.com

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Many home buyers gravitate toward the traditional fixed-rate mortgage, but home loans aren’t one-size-fits-all. You may be able to get an even lower initial interest rate with an adjustable-rate mortgage, or ARM.

Comparing ARM and fixed-rate mortgages will help you choose the best home loan for your current needs and goals.

How a fixed-rate mortgage works

Fixed-rate mortgages have interest rates that stay the same through the life of the loan. The traditional 30-year fixed-rate mortgage is the most popular mortgage around, but 15-year and 20-year fixed-rate mortgages are available, too. Most mortgages are fixed-rate loans.

How an adjustable-rate mortgage works

An adjustable-rate mortgage begins with a set interest rate for a specified period of time. After that, the rate is adjusted periodically according to a benchmark index until the end of the loan term, which is typically 30 years.

The key to knowing how an ARM will adjust is hidden in its name: A 5-year ARM, also known as a 5/6 ARM, means your rate will be fixed for five years, then adjusted every six months, for example. The most common ARM terms have initial fixed-rate periods of three, five, seven or 10 years.

Although ARM interest rates start lower than fixed-rate loan rates, there’s always a chance they will reset higher several times over the life of the loan, increasing your mortgage payment.

ARMs also have caps, which limit how much the interest rate can change the first time it’s adjusted, in subsequent adjustments and over the lifetime of the loan.

Be careful with interest-only ARMs. These loans let you pay only interest during the introductory period. After that your payment goes way up to cover both interest and the principal.

Example: ARM vs. fixed-rate mortgage payments

5-year ARM

30-year fixed rate mortgage

Mortgage amount: $300,000

Mortgage amount: $300,000

Interest rate: 3.5%

Interest rate: 4.5%

Payment: $1,347.13 (after five years, this payment will reset using a new interest rate that could increase it)

Payment: $1,520.06 (this payment will never change as long as you have the same mortgage)

Getting ready to buy or refinance a home? We’ll find you a highly rated lender in just a few minutes

Just answer a few questions to get started on a personalized lender match

Is an ARM or a fixed-rate mortgage better?

The choice depends on your situation and goals.

The case for a fixed-rate mortgage

A 15- or 30-year fixed-rate mortgage may be right for you if you plan to own the home for the long haul. With a locked-in rate, you’ll always know what your payment will be. And if rates drop or your home appreciates significantly a few years into your mortgage, you can always consider refinancing into another fixed-rate mortgage at a lower rate.

Overall, fixed-rate mortgages are simpler to understand than ARMs, which can make comparing lender offerings easier.

The case for an adjustable-rate mortgage

Adjustable-rate mortgages most often appeal to first-time homebuyers because lower rates boost buying power. If you know this isn’t your forever home and think you’ll move in several years, an ARM could be a good choice. You’ll get the benefit of a lower introductory rate in the first years of homeownership. Then ideally you’ll move or trade up to a bigger home before the fixed-rate period ends.

ARM vs. fixed: Tips for choosing

To decide between an ARM or fixed-rate mortgage:

  • Think about how long you plan to own the home. An ARM might be worth it if you’ll sell the home or pay off the mortgage in 10 years or less. But a fixed-rate mortgage would probably work better if this will be your forever home and you want the certainty of a stable interest rate and monthly payment.

  • If you’re considering an ARM, check the caps on how much the interest rate can increase. Then calculate how much your mortgage payment would be if rates rose to those levels. Would you be able to afford the payments? If not, shop for a fixed-rate mortgage.

  • Whether you choose an ARM or a fixed-rate mortgage, shop around and get preapproved with at least three lenders to compare offers.

Source: nerdwallet.com

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When it comes to living in Atlanta, boredom should be the last thing filling your calendar. With so many things to see and do year-round in the city, it’s easy to get out, explore, meet new people, and discover what makes Atlanta an exciting place to live. The best part of it all? You don’t even have to break the bank to have a good time. Check out the list below for fun things you can do in the ATL for free:

Discover the Great Outdoors

If you need to get away from the hustle and bustle of city life, you don’t have to look far for a green space oasis. Atlanta boasts dozens of scenic parks and trails where you can bike, run, hike, play sports, walk the dog, or just simply sit and take it all in. Here are some places to check out:

The Atlanta Beltline:

Once a former railway corridor, the Beltline has become the place for avid outdoor city adventurers, with 33 miles of multi-use trails, green space, a skate park, public art, and city parks that run through 45 in-town neighborhoods.

Piedmont Park:

Otherwise known as Atlanta’s answer to NYC’s Central Park, this scenic in-town park has everything you could ever want — including a dog park, bocce ball court, swimming pool, lakes and more. It also hosts a number of popular festivals and concerts throughout the year.

Sandy Springs Playable Art Park:

If you have kids who like to swing, jump and climb on everything, take them out to Abernathy Greenway to enjoy this one-of-kind art park made for all kinds of play.

Centennial Olympic Park:

This 21-acre park, built to welcome the world during 1996 Olympic Games, continues to draw crowds with the world’s largest interactive fountain featuring the Olympic Rings. The park also hosts free music concerts and family-friendly events year-round.

Markets

Looking for more than the typical shopping mall fare? Explore some of Atlanta’s trendiest new spaces for unique shops and atmosphere.

Krog Street Market:

Enjoy the vibes of this 1920s industrial space full of culture, stores and people watching in Inman Park.

Ponce City Market:

Once a Sears, Roebuck & Co building decades ago, the space has been transformed into a shopping mecca with many cool things to explore under one roof.

Your Dekalb Farmer’s Market:

One of the largest farmer’s markets in the state of Georgia, Your Dekalb Farmer’s Market offers a range of fresh food items from cheeses, breads, seafood, poultry and beef in cuts and portions of your choosing. This market also boasts a large, global wine selection and spices from around the world.

Find Your Muse

If you love art, you’ll love experiencing variations on a theme through Atlanta’s vibrant museum scene for free:

High Museum of Art:

(First Saturdays and Second Sundays) Complete with more than 15,000 works of art — from classic to contemporary — you’ll find artistic beauty at every turn. The museum is free to Fulton County residents the first Saturday of each month and free to the public for Second Sunday Fundays, which includes family-friendly programs from 1:00 to 4:00 p.m.

Imagine it! The Children’s Museum of Atlanta:

(Free Second Tuesdays) Learning about the world has never been so fun with hands-on, creative exhibits and innovative programming that will entertain your child.

Lit.:

(Books, Booze and Beats) This is not your mom’s book club. Held on the last Thursday of each month at the Edgewood Speakeasy, this monthly event has been dubbed “karaoke for books.” Ten guests from the crowd read excerpts from a chosen book based on the theme of the month. Admission to the event is one new, old or gently used book donation.

Make History

History is present at every turn in Atlanta — from historic sites to historic homes. Explore a few of Atlanta’s famous attractions for free:

Martin Luther King Jr. National Historic Site:

Tour the birth home of Dr. King and the Historic Ebenezer Baptist Church, visit the galleries, walk the world peace rose garden and more.

Oakland Cemetery:

Walk among the beauty of Victorian sculptures, a botanical garden, a wildlife habitat and the graves of Atlanta’s most well-known statesmen.

Go Wild

Lions and tigers and bears are just a few of the wild and exotic animals that also call Atlanta home. Here’s where you can visit a few for free.

Noah’s Ark:

See some of the 1,500 furry and reptilian faces that make up this animal refuge with a free, self-guided tour from noon to 3 p.m. every Tuesday through Saturday. Donations are always welcomed. Call before your visit.

Georgia Aquarium:

(Free on Birthday) Georgia residents can celebrate their birthday with free admission (just show a valid ID or birth certificate) and explore all galleries and shows the aquarium has to offer.

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By Peter Anderson 3 Comments – The content of this website often contains affiliate links and I may be compensated if you buy through those links (at no cost to you!). Learn more about how we make money. Last edited December 9, 2019.

For a while now on this site you’ve heard me extolling the virtues of the Roth IRA, talking about how I think it should be a part of any person’s investment plan, and how it’s a great tool to help diversify your retirement savings.

When I have written the posts I’ve mostly focused on the Roth IRA because that’s the main avenue we’ve taken part in for our own investing. We would have liked to invest more, but some unforeseen (and foreseen – the baby) medical events in the past couple of years have kept us from investing too much.

Now that we’re starting to have a bit more free money to save and invest we’re looking more at the options we have available to us.

My company recently made some changes to the company 401(k)plan moving to a new plan administrator. With the move we’re going to have a lot better low cost investing options in our plan with some good index funds from Vanguard now available, as well as there now being a completely new Roth 401(k)option.

Because we now have more and better choices our investing path will be slightly different. Here’s what we’ll be doing now:

  • Invest in Roth IRA to max: First, we would like to invest in our Roth IRA to the max of $6000 per investor. So that means $6000 for each of us, my wife and I. Little Carter has no earned income so he’ll have to wait. 🙂
  • Invest in company 401(k) & Roth 401(k)to max: Next we’ll be investing in my company 401(k)and Roth 401(k)to the max. For 2020 that means a combined total of $19,500.
  • Investing in taxable accounts: Next we would be investing in taxable investments, most likely through an account with Betterment.com, M1Finance or one of the other robo-advisors. That may not be happening much this year since we’re also trying to save for a down payment for a house.

The History Of The Roth 401k

From Wikipedia:

The Roth 401(k) is a type of retirement savings plan. It was authorized by the United States Congress under the Internal Revenue Code, section 402A,[1] and represents a unique combination of features of the Roth IRA and a traditional 401(k) plan. As of January 1, 2006 U.S. employers have been free to amend their 401(k) plan document to allow employees to elect Roth IRA type tax treatment for a portion or all of their retirement plan contributions. The same change in law allowed Roth IRA type contributions to 403(b) retirement plans. The Roth retirement plan provision was enacted as a provision of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA 2001).

Roth 401(k) Contribution Limits

The Roth 401(k) is subject to the same contribution limit as the regular 401(k). For 2020 that means there is a contribution limit of $19,500. If you are 50 or older the limit is bumped up to $26,000.

Note: The Roth 401(k) and the regular 401(k) are subject to the same contribution limit. In other words the total contribution for both account types is $19,500. You can’t contribute $19,500 to one account and then an additional $19,500 to the other. So the Roth 401(k) offers no new opportunity to invest, just the opportunity for a different tax treatment than the regular 401k.

Roth 401(k) Withdrawals

I would never suggest taking money out of a retirement plan before you actually retire, but in some cases of hardship and so forth it may be necessary. Here are the rules for taking distributions from your Roth 401k(k) account.

Qualifying Distributions

In order to withdraw your money without tax penalties you need to have had the account for at least 5 years as well as being at least 59½ or disabled. Required minimum distributions begin at age 70 1/2, unlike the Roth IRA which has no RMD.

Non-Qualifying Distributions

If you need to take the money out for other reasons and you don’t meet the above criteria (5 year account/59.5 years), then you will see penalties. For the Roth 401(k) you have to report taxable income in proportion to the account’s earnings when you take a distribution.

For example, if 70% of the money in the account is from your contributions and another 30% is from earnings, your distribution will be 30% subject to taxes and penalties even if the amount you withdraw is less than the amount of your contributions. This sets it apart from the Roth IRA which allows tax free withdrawals of your contributions at any time. So again, there will be a 10% penalty and the regular tax rate charged on the proportion of your early withdrawal that is attributable to earnings.

The situations where you can take a non-qualified distribution are limited, so seek tax advice when heading down that road.

Benefits Of Roth 401k

The Roth 401(k) has several benefits that should be noted.

  • Higher contribution limits than the Roth IRA: While the Roth 401(k) has the same after tax contributions, it has a higher contribution level than the Roth IRA which tops out at $6000/year.
  • Rollover option: If you leave a company you can roll a Roth 401(k) directly over into a Roth IRA.
  • Good for high income individuals: High income individuals are limited when it comes to contributing to a Roth IRA. No such limitations exist for Roth 401(k).
  • Post tax contributions mean you pay no more tax: Like the Roth IRA you won’t be paying any further tax on the money or earnings in retirement. It’s a good way to diversify tax risk.

The Roth 401(k) combines some of the great parts of the Roth IRA – the tax free withdrawals at retirement – with the higher contribution limits of the traditional 401k. Because of that it’s a great choice for a wide variety of investors, as long as their company’s plan offers the Roth 401(k)as an option – which not all of them do.

Do you have a Roth 401(k)option in your plan, and are you taking advantage of it? Tell us your thoughts on the Roth 401(k)in the comments!

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Source: biblemoneymatters.com

Apache is functioning normally

As the 2010s closed, many young and new investors were in for a shock. Even cautious and conservative investors – e.g. those diversifying, utilizing index funds, not chasing the hot stock, etc. – had seen 15%+ annualized returns from their stock portfolios toward the end of the decade.

Investing is easy!

Pile away some money, compound at 20% for a few years, then head to the beach. Mojito, please!

Then 2020 brought a shock…but only for a few months. In fact, 2020 probably taught more of the wrong lesson. Sure, pandemics hurt…but just wait for the historic and massive recovery!

2022 taught the real lesson. Investing – especially stock investing – has perils, too.

Still, the good outweighs the bad. The up years outweigh the down years, and stock market investing has, historically, been a net positive…if you wait long enough.

But how long do you have to wait? Let’s look at a “normal” investor who does the following:

  • They invest the same amount every month, like you might in 401(k) or to your IRA. They dollar-cost average.
  • They invest in a broad-based, low-cost index fund. I’ll be using the S&P 500 historical data (from Robert Shiller**) as a proxy for a U.S. stock market index fund.
  • They don’t sell. They just keep buying, through thick and thin.

**All data is this article assumes dividends are reinvested, and shows real, or inflation-adjusted, returns

Is 3 years long enough to ensure positive returns? Not even close. A quarter of the time, you lose money over 3 years. In fact, you have a 1-in-10 chance of losing 20% or more. That’s far from a good outcome.

What about 10 years? About 88% of the time, yes…but not 100% of the time. There have been distinct periods in stock market history were 10 years of consistent dollar-cost averaging lost you money.

Below is a table showing the last year of such periods, along with the annual internal rate of return (IRR) of those periods. IRR is the proper way to account for the various investing periods that dollar-cost averaging creates (120 months, 119 months, etc). You shouldn’t just look at beginning and ending. You need to account for everything in between.

The 12% of decadal periods with negative returns are concentrated around these 8 end dates.

You could have invested every month from March 1999 to March 2009, and the final result is as if every one of your dollars suffered a 9.6% annual loss from the moment you invested it.

Ewwwww! Compare that filth against the magic of the 2010s. It’s a completely different story! Someone who invested the same way from November 2011 to November 2021 would have a +13.8% annual IRR.

(-9.6%) and +13.8% annual returns are both within reason for 10-year stock market investing timelines. But the two investors who suffer these opposite fates would feel as if they’ve lived different lives. I want you to be aware of both possibilities.

If we zoom out to 20 year timelines, the results change. Negative periods are still possible, but far more unlikely. Only 5% of 20 year periods had negative IRRs, all concentrated around the end dates in the table below.

Yes – someone could have invested diligently from March 1989 to March 2009, and their real annualized return was just 0.1% per year. That’s not a fun outcome. But it is an unlikely one.

If we zoom out further to 30 year periods, there are no periods of negative IRR.

There are still bad periods, no doubt. But at least we’re seeing real, positive annualized returns. We’re getting some reward for taking these risks.

Let’s pause the bad news. Because the median of these 30-year returns is 6.6% annually. That’s amazing. That’s the reason we invest in the first place. We are making a bet that the median will apply to us, and we’ll see 6.6% annual real returns in our own portfolios.

But only if we wait long enough.

The upshot from this data is that stock investing is not a short-term exercise. There are far too many bad outcomes occurring over 3-, 5-, and even 10-year periods. Short-term money should not be invested in stocks. Something like U.S treasury bonds or money markets makes far more sense.

But if you have the time, patience, and stomach, then long-term stock investing is great place to be.

Thank you for reading! If you enjoyed this article, join 6000+ subscribers who read my 2-minute weekly email, where I send you links to the smartest financial content I find online every week.

-Jesse

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Source: bestinterest.blog