Skin microflora isn’t the only thing that can grow on you. Films can too. The internet identified several undeniably great films they weren’t feeling the first watch. After a few more viewings, though, initially wary film fans recognized these movies’ excellence.
1. The Big Lebowski (1998)
Photo Credit: Polygram Filmed Entertainment.
Dude, how can you not love The Dude? To be fair, Jeff Bridges’ protagonist in The Big Lebowski is so ridiculous and so dedicated to the word “dude” that I understand how many would see the movie as too much.
Similarly, over-the-top characters like John Turturro’s Jesus Quintana and John Goodman’s Walters Sobchak may take multiple viewings to appreciate.
2. No Country for Old Men (2007)
Photo Credit: Miramax Films.
Movies from the Coen Brothers age like fine wine. According to some, No Country for Old Men was No Movie for For Them.
The 2008 Best Picture Oscar Winner received heaps of praise and was one of the must-see movies of its era. Therefore, the relatively slow pacing and the unconventional ending surprised action-seeking filmgoers. Because, honestly, what else could they possibly complain about when it comes to No Country for Old Men?
3. Napoleon Dynamite (2004)
Photo Credit: Paramount Pictures.
“What are you going to do today, Napoleon?”
“Whatever I feel like I wanna do, gosh!”
Between the unforgettable comedic dialogue, oddball characters (Kip, Uncle Rico, and the llama Tina stand out), and utterly virgin-esque mannerisms of Napoleon himself, Napoleon Dynamite became an unlikely smash comedy.
However, the low-budget comedy didn’t land the first time with many viewers who didn’t understand the hype. With maturation and multiple re-viewings, they came to appreciate Napoleon’s brilliance.
4. Office Space (1999)
Photo Credit: 20th Century Studios.
Mike Judge’s brand of comedy isn’t for everyone, and Office Space clearly targeted the cubicle-dwelling audience. A one-time critic said that Office Space seemed foreign the first time they watched it, but rewatching the movie after working an office job significantly elevated the film’s comedy.
5. The Godfather (1972)
Photo Credit: Paramount Pictures.
One confessional cinephile admits they were an uncultured, 16-year-old neanderthal when they thought The Godfather was slow and tedious. They grew up, changed their mind, and thus we can forgive their youthful ignorance.
6. Vertigo (1958)
Photo Credit: Paramount Pictures.
The acclaimed thriller from Alfred Hitchcock was not as “scary” as some viewers expected. Upon further review, converted fans of Vertigo came to appreciate the movie’s before-its-time cinematography and plot structure.
7. Whiplash (2014)
Photo Credit: Sony Pictures.
Truly one of the most shocking submissions on the internet’s list of films that did not immediately impress, Whiplash received near universal acclaim from audiences.
A one-time critic explained they missed a critical plot point at the movie’s end. The critic immediately became a Whiplash fan when they caught the subtle scene on second viewing.
8. The Life Aquatic with Steve Zissou (2004)
Photo Credit: Touchstone Pictures.
Writers Wes Anderson and Noah Baumbach are not for everyone, and The Life Aquatic With Steve Zissou is one of Anderson’s more ambitious films. The director’s brand of quirky, at times awkward comedy has a way of growing on viewers like that mole you’ve been meaning to have your dermatologist check out.
9. Step Brothers (2008)
Photo Credit: Columbia/TriStar.
Some viewers still don’t appreciate the artistry of two full-grown, established comedic actors playing infantile stepbrothers. While nobody claims Step Brothers to be a highbrow comedy, the absurdity of DIY bunkbeds and drum-set therapy becomes more comedic as the world grows increasingly serious.
10. Miami Vice (2006)
Photo Credit: Universal Pictures.
Viewers were absolutely pumped for a Miami Vice reboot starring box-office draws Colin Farrell and Jamie Foxx, directed by accomplished filmmaker Michael Mann. Many were expecting a South Beach-ified version of Heat yet encountered a more deliberate, artful movie.
With time, many have come to appreciate Mann’s rendition of Miami Vice as a quality film, though the initial disappointment still lingers in the film’s IMDb rating.
Source: Reddit.
Image Credit: Shutterstock – Denis Makarenko
Who is one actress you can never stand watching, no matter their role? After polling the internet, these were the top-voted actresses that people couldn’t stand watching.
10 Actresses People Despise Watching Regardless of Their Role
These 7 Celebrities are Genuinely Good People
Photo Credit: Shutterstock.
We’ve all heard the famous adage that “no publicity is bad publicity,” and while it tends to be accurate, there are certainly exceptions. But what about those few stars who stay out of the limelight and get along without a hint of trouble?
These 7 Celebrities are Genuinely Good People
Photo Credit: Shutterstock
Have you ever known someone and thought you liked them—until you learned about their hobbies? Then you get to know them and then you’re like, “Wow, red flag.” Well, you’re not alone.
These 10 Activities Are an Immediate Red Flag
Photo Credit: Shutterstock.
Some celebrities definitely seem to enjoy the limelight and keep working to stay in the public eye. While others quickly move out of the spotlight. Many of these actors and actresses stepped out of the spotlight to live a more private life without constant media pressures.
10 Celebrities That Made the Big Times Then Disappeared Off The Face of the Earth
Image Credit: Troma Entertainment
We’ve all been there – sitting through a movie that we can’t help but cringe at, but somehow it still manages to hold a special place in our hearts.
These 10 Terrible Movies Are Still People’s Favorites
In 2019, Amazon overtook Apple and became the world’s most valuable brand. Since then, the retail giant has continued to maintain its status as a top global brand, and happy customers aren’t the only ones who’ve noticed.
As Amazon’s revenue climbed, scammers watched from the shadows. In the past few months alone, AARP’s Fraud Watch Network helpline (877-908-3360 toll-free) has witnessed a dramatic spike in Amazon scams targeting U.S. consumers, jumping from 10-30 million robocalls each month to a whopping 150 million!
As scammers claw for our personal and financial information, it’s more important than ever to be prepared. Take a look at the list below for five common Amazon scams and tips for how to spot them before it’s too late.
What’s Ahead:
1. “Suspicious activity on your online account”
Ironically, some scammers trick unsuspecting victims into giving their personal information by pretending the consumer has already been scammed.
The tactic here is fear-based, scaring consumers to act fast. You might receive a spontaneous robocall reporting “suspicious activity” on your account (a missing package, an unusual order, etc.). The caller may ask you to “press one” or call another number to speak to a customer support representative that can address the issue. Don’t fall for it!
The next caller will likely solicit your account information and may even try and prompt you to install remote access software, giving them full access to your device.
2. Fake order confirmations
It’s perfectly normal to receive an order confirmation email from Amazon, so some scammers fool users by sending fake confirmation emails with items the user did not purchase.
Once again, scammers are relying on the user’s panic. You may think your card’s been (or will be) charged for an item (or even an Amazon Prime subscription) that you did not order. These messages have a phone number you can call or internal links you can click on to log in to your account and cancel the order. The reality, however, is those links lead to a fake login page, designed to capture a user’s login credentials.
Instead, leave your inbox and log in to your Amazon account via your web browser. Check “Your Orders” to see if there’s anything that matches the email. If you can’t find a match, odds are you’ve been targeted by a scammer and should report the message to Amazon.
3. “Congratulations! You’ve won a prize!”
Another trick of the trade scammers may use to steal your information is the fake prize message. Perhaps you’ve won a raffle or are eligible for an attractive discount. Whatever you do, don’t bite.
This classic phishing scam uses a victim’s joy and excitement against them, but the strategy is quite similar to the “order confirmation” scam. The text or email often includes a link consumers can click to redeem their prize and arrange for its delivery. Once again, scammers use the link to capture and steal your information, so avoid clicking on any suspicious links. Instead, log in to your account and/or call Amazon’s customer service center for assistance.
4. “Please send Amazon gift cards”
This scam may sound unusual, but unfortunately, it’s both common and complex.
In fact, scammers use Amazon gift cards for a variety of scams. Instead of posing as an Amazon representative, the scammer may pretend to be someone you know, such as a co-worker or boss, or perhaps even a relative. The scammer may request Amazon gift cards for a family member who’s facing an emergency or a contribution to a co-worker’s birthday gift. You may be encouraged to purchase Amazon gift cards as payment for an online product or as payback for an alleged fine or bill.
While there are a number of ways scammers use gift cards to steal your money, you should always be wary if a caller (even a caller you “know”) requests Amazon gift cards.
5. Fake Amazon listings
If you ever spot an Amazon deal that’s too good to be true, don’t be so quick to “Add to Cart.”
These supposedly stellar bargains can be difficult to catch. Some scammers even hire accomplices, who purchase the product and ship it to a random consumer so they can write a fake review. As a result, these products have not only attractive price tags but also great reviews as well. (This helps to convince shoppers that the seller is legitimate).
My husband Steve received a handful of Amazon packages addressed to “Sev” last year, all of which were likely purchased and shipped indirectly by the seller.
The good news is Amazon can often catch these devious sellers before shoppers have a chance to “Buy Now.” The bad news is the scam still happens, so make sure you know how to spot these phony listings.
How to spot an Amazon scam before it’s too late
Scammers are good at what they do, but there are still plenty of red flags you can watch out for to protect yourself from falling for their tricks. Here are some common signs of scammers and tips to help you catch them in the act:
Poor grammar, spelling, and punctuation (in texts and emails).
The message requests that you log in to your account via email.
The message requests payments to be made outside of the Amazon website.
The caller requests remote access to your electronic device.
The message asks you to verify sensitive personal information.
The message offers a refund you were not expecting.
You receive an order confirmation for an item you did not purchase.
The message asks you to update payment information (not linked to an order you placed or service you subscribed to).
The email address does not end in “@amazon.com.”
What to do if you suspect you’re being scammed
If you’re suspicious of a call, email, or text that claims to be from an Amazon representative, do not respond. Instead, visit your account online to see if the message or call you’ve received is accurate, and contact Amazon customer service to verify (only use the contact information listed on Amazon’s site).
If you’re concerned a scammer may already have your account information, change your password immediately. Additionally, if the scammer may have your bank information, contact your bank for help figuring out the next steps in order to protect your account. To prevent future scams, consider downloading a call blocker. Amazon also suggests their users set up two-step verification to protect their accounts.
Finally, report any suspicious calls, emails, or texts to Amazon, as well as the Federal Trade Commission (FTC) to help inform and protect other Amazon customers.
Summary
“You’ve won a prize!” “This call is to inform you of suspicious activity on your Amazon account.”
Messages like these are truthful at times, but they’ve also become common introductions used by thousands of scammers to steal your information.
To protect yourself from a scammer’s traps, make sure you’re aware of common scammer tactics and strategies. Be skeptical of suspicious messages, and if you’re worried a scammer may be targeting you, report them to Amazon, as well as the Federal Trade Commission (FTC).
The decision to purchase a home in today’s rate environment will be influenced by various considerations.
Kevin Kozicki/Getty Images
After 10 consecutive rate hikes, the Federal Reserve decided this month to hold the target interest rate at 5% and assess the effectiveness of its efforts to curb inflation. Since the Federal Reserve began its streak of interest rate hikes in March 2022, mortgage rates have also increased, making the homebuying process more challenging.
At the same time, home prices surged during the pandemic, and despite recent cooling, a shortage in housing supply continues to support these high prices.
Amid these circumstances, the primary question on many homebuyers’ minds remains: Should I buy a home now or wait? The answer will depend on your financial situation, goals and risk tolerance level. Below, we’ll take a deeper dive into both sides of the question for better understanding, so you can make the best decision for you and your family.
Start by exploring your mortgage rate options here and see what rate you qualify for.
Why you should consider buying a home now
After home sellers enjoyed a period of rising home values, the market may be shifting in favor of buyers in some parts of the country. According to the March Case-Shiller U.S. National Home Price NSA index, home prices declined for seven consecutive months.
“We are actually in a buyer’s market for homes for the first time in 10 to 15 years,” says Tawan Davis, founder and CEO of the Steinbridge Group, an investment firm with a sizable focus on and portfolio in real estate. “If a buyer is prepared, it may actually be a time when they can influence price and terms in ways not recently available.”
Home prices may be another reason to consider buying now. High demand, low supply and other factors are broadly supporting home prices despite cooling in some areas. “As long as the economy does not enter a severe recession, housing could be a heads you win, tails you don’t lose situation,” says Michael Ashley Schulman, CFA at Running Point Capital Advisors. “If you buy now and interest rates increase from here, monthly mortgage payments will probably increase even if home prices come down a little, but you’ll be locked into a lower than market rate; and if interest rates decrease, home prices may jump higher, and you could refinance your home to a lower mortgage rate.”
Afifa Saburi, a senior researcher for Veterans United Home Loans, notes that “home prices will vary by market, but due to housing supply constraints, home prices are more likely to remain stable rather than depreciate. For a buyer who is looking to purchase a home in today’s market, it may make more sense to avoid a 7.2% annual increase in rent and lock in a fixed monthly mortgage payment that is not going to increase year after year.”
Explore your mortgage purchasing options here now to see if now if the right time for you to buy.
Why you should consider waiting to buy a home
According to a recent report from Fannie Mae, 65% of consumers believe it’s a bad time to buy a home. Many would-be homebuyers are waiting for mortgage rates to drop. Although mortgage rates are currently averaging 6.69% on a 30-year fixed-rate loan, an April 2023 report from Fannie Mae forecasts these rates will dip below 6% in the latter half of the year.
While a little over half a percent rate decrease doesn’t seem like much, it represents substantial savings over time. For example, if you purchase a $400,000 home with a 20% down payment, your monthly payment on a 30-year fixed-rate mortgage with a 6.69% interest rate would be $2,062.77. However, the same loan with a 5.90% mortgage rate comes with a lower monthly mortgage payment of $1,898.04, a savings of $116.73 each month. At 6.69% interest, you’d pay $422,596.24 in total interest over the life of the loan but only $363,293.26 with the 5.9% loan, or $59,302.98 less.
“As a financial advisor, I would recommend to my clients to wait at least a year before they actually buy a home in this market,” says Young Pham, financial advisor and investment analyst at BizReport. “Buying a home right now would be overpaying, but that is not what I am worried about. As mortgage rates rise and housing prices remain elevated, it is likely that these factors will weigh down heavily on demand,” Pham adds.
The bottom line
Should you wait to buy a home? While the preceding opinions help us shed light on the current housing market, the answer to this question is personal and specific to you and your unique circumstances.
It’s also worth remembering that trying to time the market may be futile because of a wide array of variables at play, including economic conditions and supply and demand. Adds Dana Cornell, CEO and founder of Cornell Capital Holdings: “Like any market, variables will shift both ways inevitably as they always have. A proper response involves analyzing the area of the country, your credit rating—which determines how much and what type of debt you qualify for—and so forth. One thing that many people are not accepting at this point is that it took 40 years to get to essentially 0% interest rates. It is unlikely we will experience that again anytime soon.”
Learn more about your mortgage purchasing options and rate eligibility here now.
If you’re trying to save, you might be struggling with some common challenges: How do I work towards multiple financial goals at the same time? How can I make sure my financial objectives don’t get lost in day-to-day expenses or impulse buys? How can I ensure I hit my savings goal by a certain date? Let’s dig into these questions and more ways to make sure your savings goals remain a top priority. If you’d like individualized help with your savings strategy, consider working with a financial advisor.
Determine Your Personal Goals
One of the most effective ways to make saving a habit is to understand what you want to save for. Everyone has their own savings goals, but here are some of the most common and most impactful.
Building an emergency fund: One of the best ways to feel more secure financially is to have a backup fund for unpleasant surprises. Whether it’s car trouble, an illness or something else, having a savings account that can cover these expenses can help you navigate the ups and downs of life without racking up debt or getting behind on other bills. Many experts suggest you save enough to cover about three months of expenses, but every little bit will help when the unexpected happens.
Saving for retirement: If you’re one of the many who dream about retiring and living life on your terms, starting your retirement savings early is key. The good news is that there are retirement vehicles that offer tax savings and many employers will help you build your savings. If your employer offers a 401(k) match, take full advantage of it. Experts often advise that you save at least 15% of your pre-tax income, but again, saving a smaller percentage is better than saving nothing.
Paying off debt: Paying off debt may not be “saving” in the traditional sense of squirrelling money away for the future, but paying off high-interest debt faster will often save you thousands of dollars over time. Once you pay off debts, you have more income that can then be directed to emergency funds, retirement accounts and more.
Specific funds: Whether it’s a college fund, a vacation fund or a down-payment fund for a house, setting aside money for a specific purpose is an excellent goal to have.
Make a Savings Plan
So you know your goals – now how do you get there? Here are seven steps to kick off your savings journey.
Make specific goals: Even if your financial goals don’t differ substantially from the list above, put your own unique number to it. If your monthly expenses come to $2,500 and you want an emergency fund that covers three months of expenses, you need to save $7,500. If you have two credit cards you want to pay off, each with a $500 balance, you’ll need to set aside $1,000 plus any interest payments and fees you’ll incur. If you want to save for a down payment, what price range can you afford for a home and what percentage are you hoping to put down? Get granular on the details.
Rank your goals by priority: Which goals are the most important to you? While financial advisors will often recommend you work towards multiple financial goals at the same time—especially building an emergency fund, saving for retirement and paying off debt—you will need to determine what percentage of your income you want to direct to each fund.
Break down your goals into monthly steps: Let’s say you’ve decided your top goals are to build an emergency fund, save for retirement and save for a down payment for a house. How much money can you devote to savings per month? If you have $500 of income that you can allocate to savings on a monthly basis, you could put $200 in your emergency fund, which means you would reach your goal of saving $7,500 in a little over three years. You could allocate another $200 to retirement savings and put the final $100 towards your down payment savings goal.
Create a budget: You may already have a budget, but it’s time to officially add your savings goals to your spreadsheet, app or whatever you use to track your spending. By making your savings goals a part of your overall financial plan rather than something you always mean to do and never get around to, you can keep those goals high on your priority list.
Cut spending: One of the quickest ways to accelerate your progress towards your savings goals is to cut your spending in another area and redirect that money towards savings. Are there subscriptions you don’t use? Are there services you could do yourself? Are there luxuries that you don’t enjoy enough to justify the money you spend on them?
Automate your savings: Another way to make your savings goals a reality rather than a pipe dream is to automate them. Set up an automatic 401(k) contribution with your employer. Set up an automatic monthly transfer from your checking to your savings account. Automate your credit card payments. By taking away the opportunity for you to decide to skip it, you can solidify the habit with minimal effort.
Use mistakes as learning opportunities: Let’s say you impulse bought a new pair of shoes with money that could have—and maybe should have—been put towards your savings goals. Rather than beat yourself up about it, ask yourself why you made that decision. Was it emotional? Did you feel peer-pressured? Did you actually get joy out of the purchase or did you just feel bad for not making a better financial decision?
Check In With an Expert
If you feel a little overwhelmed by your financial situation and haven’t been able to make headway toward your goals, you might benefit from working with a financial advisor. Experts are often able to open your eyes to things you wouldn’t otherwise have noticed and strategies you may not have otherwise tried. Financial advisors often understand the emotional side of financial decision-making as well and can help you stick with your financial priorities even when it’s tough.
It’s not just the expertise that can be valuable. Sometimes the accountability of working with a financial advisor can go a long way. If you knew someone was looking at how you spent your money and measuring it up against the goals you shared with them, would you be more likely to stick to your plan instead of splurging on something outside of the plan?
If you don’t think you can afford an advisor’s fees and you belong to an underserved group (including low-income people, military personnel, veterans and more), you may be eligible for pro bono financial planning services through the Financial Planning Association. Reach out to your local chapter to see what services they offer.
The Bottom Line
Many people have trouble prioritizing their savings goals, but you can start by fleshing out the specifics of your goals and making a plan to reach them. If you need expert help, consider working with a financial advisor, who can share new strategies and provide accountability that will help you meet your goals that much faster.
Tips for Saving Money
Not sure what investments and strategies will help you meet your long-term goals? For a solid financial plan, consider speaking with a financial advisor who can help you think through details you may not be aware of. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Use SmartAsset’s budget calculator to see how your spending breaks down and how your budget stacks up against the average person in your neighborhood.
If you die without naming a beneficiary for your 401(k) account, the rules for your retirement plan will likely require that funds in the account be considered part of your estate and have to go through probate. The probate process is governed by state laws that vary significantly, but can often add considerable cost and delay to settling your estate. You can avoid this by naming beneficiaries, including both primary and secondary ones, and reviewing your selections periodically or when major life events occur. You can plan your estate with the help of a financial advisor.
401(k) Beneficiaries
A 401(k) plan is a tax-advantaged way to save for retirement that many employers offer as a benefit. Plans often allow you to select how funds in the account will be invested, and all allow and encourage if not require you to name one or more beneficiaries.
The beneficiary can be almost anyone you want to be able to control and benefit from the assets in your 401(k) plan after your death. A beneficiary can be a person, such as a spouse or child, as well as a nonprofit charity, religious or educational institution or even a business or other legal entity.
Typically, 401(k) plans will ask you to name beneficiaries when you open these accounts. If you don’t, your plan may remind you from time to do this. It is to your benefit to do so because it enables easy and cost-free transfer of control of assets after your death.
Naming a beneficiary or beneficiaries helps ensure your assets will quickly and efficiently go to provide for family members or support favorite causes. When you name a beneficiary to your 401(k), that person or entity acquires a partial right of ownership to the account. On your death, that partial right becomes full ownership.
This process generally happens automatically on your death. One possible exception occurs when you name a beneficiary other than your spouse. In that case, some plans may require a letter of approval from your spouse before another beneficiary can take control of the account.
A beneficiary has a strong position when it comes to taking control of assets naming that person as beneficiary. For instance, if your will directs an asset to one person while the asset account lists another person as beneficiary, the account goes to the one named on the account, not the one named in the will.
You can name multiple beneficiaries, splitting assets in the accounts in any way you like. You can also name backup beneficiaries in case the person or persons named aren’t able or willing to take control of the 401(k). It’s a good idea to review the beneficiaries you have named from time to time or after major life events such as marriage, divorce or birth of a child, and possibly update them. Otherwise, you run the risk of someone such as an ex-spouse receiving assets you would rather direct elsewhere.
401(k) Without Beneficiaries
If you don’t name anyone as beneficiary to your 401(k), what happens to the assets in the account is determined by the rules on default beneficiaries set out in the documents controlling your retirement plan. These vary depending on the plan, but usually the spouse is the first default beneficiary, followed by any children and, finally, your estate.
If the default beneficiary comes into play, the process is different than if you had named a beneficiary. A named beneficiary gains control of the 401(k) automatically on your death without any delay or cost. However, a default beneficiary can take ownership of the account it generally will have to go through probate.
Probate is an estate-settlement process governed by state laws that vary widely. Sometimes probate can take years to complete and require paying significant fees and other costs. While this is going on, assets in your estate may be frozen so your surviving family members can’t access them.
A person named as beneficiary to your 401(k) may, at their option, be able to roll over the assets in to an IRA. This can help reduce taxes, among other advantages. However, if you don’t name a beneficiary and the plan directs the assets to a default beneficiary, a rollover may not be possible. That can lead the default beneficiary to have to pay more taxes on the transfer than otherwise.
Bottom Line
If you don’t name a beneficiary for your 401(k) plan, your plan’s rules will likely direct the assets to a default beneficiary, such as your spouse or children. Before a default beneficiary can gain control of the account, however, it will likely have to go through probate, adding time and cost to the process of settling your estate. You can avoid this by naming one or more beneficiaries, as well as backup beneficiaries, either when you establish the account or later on.
Retirement Tips for Beginners
You can get help saving for retirement from a financial advisor. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
SmartAsset’s Retirement Calculator can help you turn a few data points including your location, age, income, current savings and amount and frequency of future contributions, into a forecast of how much money you’ll have when you are ready to retire.
Mark Henricks
Mark Henricks has reported on personal finance, investing, retirement, entrepreneurship and other topics for more than 30 years. His freelance byline has appeared on CNBC.com and in The Wall Street Journal, The New York Times, The Washington Post, Kiplinger’s Personal Finance and other leading publications. Mark has written books including, “Not Just A Living: The Complete Guide to Creating a Business That Gives You A Life.” His favorite reporting is the kind that helps ordinary people increase their personal wealth and life satisfaction. A graduate of the University of Texas journalism program, he lives in Austin, Texas. In his spare time he enjoys reading, volunteering, performing in an acoustic music duo, whitewater kayaking, wilderness backpacking and competing in triathlons.
Last Updated: May 26, 2023 BY Michelle Schroeder-Gardner – 13 Comments
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Mystery shopping. Many of you have emailed me and asked me the question “what is mystery shopping” and have been wondering how I am making money through mystery shopping.
I usually make around $150 to $200 a month from mystery shopping.
Side note: If you are interested in the many other ways I earn extra money, check out my Extra Income page on my blog.
I use mainly Bestmark for my mystery secret shops. I’m not sure what other companies are good and reputable mystery shopping websites, but I know for a FACT that Bestmark is a legitimate mystery shopping website, so you can trust me when I say that.
Last month I didn’t make too much because not a lot of “good” shops were offered in my area. Lately, I’ve been a little more picky with the shops that I sign up for also.
What I consider a worthwhile shop for ME:
Either an online shop or phone call shop
If I have to drive, it’s close to somewhere I’ll be
Something I’ll use. I love doing Estee Lauder shops because I always love free makeup.
Restaurant shops, because I have to eat, of course.
Of course, what’s worthwhile to you and me might be different. When I first signed up for mystery shopping (sometime last summer I think), I literally signed up for everything. I made decent money, but it wore me out. The amount of surveys that you have to do is so repetitive that it makes you want to throw your computer at the wall.
Sometimes surveys take just a minute, but sometimes they literally take an hour. Restaurant shops usually take a little longer than others because usually you are grading every little detail.
Some examples of mystery shops I’ve done include:
Restaurants. This ranges from cheaper restaurants where I’m reimbursed for around $30 worth of food, all the way up to nice steakhouses where I get $100.
Dealerships. Bestmark has a ton of dealership shops available, but I only have done the phone call and scheduling services online secret shops.
I usually do about 4-5 of these a week and these are the easiest shops. You don’t have to drive anywhere and the surveys literally take one minute. And you get paid around $5 for them. Although recently they’ve lowered the payment to only $3, and there’s a ton more work involved. I had to cancel around 3 or 4 shops because they didn’t make it clear enough about the amount of work that I signed up for. And for $3, I’m not really willing to do too much.
They also have dealership secret shops where you go in and pretend you want a car. These usually pay around $20. This is something I’ve never done, and they have plenty of these available for everyone to do. I’ve never done this because car salesmen scare me. I’m not ready for thousands of annoying phone calls and I’m afraid that I’d be stuck in a dealership for an hour while trying to run away from the salesperson.
Retail. I mainly do Estee Lauder. I’ve done a lot of these. I’ve gotten foundation, lotion, toner, face wash, concealer, lip gloss and so on, all for FREE! And these aren’t sample sizes, I’ve probably gotten over $200 in stuff, plus gotten paid around $10 on top for each shop as well.
I’ve also done a couple of Best Buy shops. These are easy too. You just survey a certain department (takes like a minute), and then you can just buy something small like a candy bar so that they have your receipt for proof that you were actually there and performed it. Best Buy shops usually pay around $13. Not a ton, but the Best Buy is along the way home from my work so I just pop in.
This is a mystery shopping check from one week’s of mystery shopping.
The highest paid shops I do are usually for restaurants. I’ve done a couple of nice restaurants where I had to eat over $100 worth of food. Crazy! I’ve also seen Hotel mystery shops, but they’ve never been on a good day for me, so I’ve never been able to sign up.
Also, if you find that you cannot do a shop that you sign up for, all you do usually is contact your scheduler and say you need to reschedule or cancel. Try not to do this too often though. These schedulers will remember you, and if you’re good to them, they will give you good shops, so remember that!
Mystery shopping money will NOT make you rich. I want to make that clear. It’s just a nice form of side income, where I can get things I want for free! What I make from mystery shopping, I add to my vacation fund. So it’s a nice little addition every month.
If I want to eat at a nice restaurant that I would usually go to, then YES I would love to do a secret shop there. Those are always the greatest shops because you are paid to have fun.
Do you secret shop such as through Bestmark? Any tips?
Also, if you join Bestmark, please say I referred you! My ID is MO4999. You can join Bestmark by clicking here.
If you are new to my blog, I am all about finding ways to make and save more money. Here are some of my favorite sites and products that may help you out:
Cut your TV bill. Cut your cable, satellite, etc. Even go as far to go without Netflix or Hulu as well. Buy a digital antenna (this is the one we have) and enjoy free TV for life.
Start a blog. Blogging is how I make a living and just a few years ago I never thought it would be possible. I earn over $30,000 a month online through my blog and you can read more about this in my monthly online income reports. You can create your own blog here with my easy-to-use tutorial. You can start your blog for as low as $3.49 per month plus you get a free domain if you sign-up through my tutorial.
Lower your cell phone bill. Instead of paying the $150 or more that you spend on your cell phone bill, there are companies out there like Republic Wireless that offer cell phone service starting at $5. YES, I SAID $5! If you use my Republic Wireless affiliate link, you can change your life and start saving thousands of dollars a year on your cell phone service. I created a full review on Republic Wireless as well if you are interested in hearing more. I’ve been using them for over a year and they are great.
Sign up for a website like Ebates where you can earn CASH BACK for just spending like how you normally would online. The service is free too! Plus, when you sign up through my link, you also receive a free $10 gift card bonus to Macys, Walmart, Target, or Kohls!
Save money on food. I recently joined $5 Meal Plan in order to help me eat at home more and cut my food spending. It’s only $5 a month (the first two weeks are free too) and you get meal plans sent straight to you along with the exact shopping list you need in order to create the meals. Each meal costs around $2 per person or less. This allows you to save time because you won’t have to meal plan anymore, and it will save you money as well!
Answer surveys. Survey companies I recommend include American Consumer Opinion, ProOpinion, Pinecone Research, Opinion Outpost, Survey Spot, and Harris Poll Online. They’re free to join and free to use! You get paid to answer surveys and to test products. It’s best to sign up for as many as you can as that way you can receive the most surveys and make the most money.
Use Swagbucks for your online searches. Swagbucks is something I don’t use as much, but I do occasionally earn Amazon gift cards with very little work. Swagbucks is just like using Google to do your online searches, except you get rewarded “points called SB” for the things you do through their website. Then, when you have enough Swagbucks, you can redeem them for cash, gift cards, and more. You’ll receive a free $5 bonus just for signing up today!
Try Digital Voice. Another one you may be interested in related to Swagbucks is Nielsen Digital Voice. Digital Voice is a part of Nielsen, which I’m sure you’ve heard of. All you have to do is surf the web and you may be able to start earning money.
Try InboxDollars. InboxDollars is an online rewards website I recommend. You can earn cash by taking surveys, playing games, shopping online, searching the web, redeeming grocery coupons, and more. Also, by signing up through my link, you will receive $5.00 for free just for signing up!
Find a part-time job. There are many part-time jobs that you may be able to find. You can find a job on sites such as Snagajob, Craigslist (yes, I’ve found a legitimate job through there before), Monster, and so on.
Let’s talk about traditional dining versus “my time” dining (also known as flexible, anytime or freestyle dining). Even if you’ve cruised a few times, do you really understand your mealtime options and what to choose?
An acquaintance, who is not a new cruiser, confessed to me that she only recently learned that meals in the luxurious-looking main dining rooms on cruise ships are included in the cruise fare. She had previously thought the phrase “anytime dining” referred only to eating in the buffet area whenever she wanted.
While it’s true you can eat in the buffet anytime it’s open, flexible dining (by whatever name your cruise line calls it) specifically refers to the main dining room. It’s one of the standard complimentary dining options on every cruise ship. Whether you select to eat at the same table at the same time each night or opt to take your chances on any available table during the dining room’s open hours, you never have to pay to eat in your ship’s grand dining hall.
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Don’t let the complexities of cruise ship dining plans keep you from enjoying all the great food your ship has to offer. Here, I’ll walk you through the ins and outs of “my time” versus traditional dining, as well as how these dining concepts came to be and how to choose the best meal plan for your trip.
A brief history of cruise ship dining concepts
The Manhattan Room on Norwegian Epic. SUSAN SEUBERT/NORWEGIAN CRUISE LINE
For a bit of history of the dining concepts used by most mainstream cruise lines, you have to go back a couple of decades. In the past, all cruise ships served dinner at two fixed times, dubbed early and late seatings. Everyone was assigned to one of the seatings, and they’d sit at the same table, with the same dinner companions and waiters, for the duration of their cruise.
That concept began to evolve in the early 2000s when Norwegian Cruise Line introduced Freestyle Dining. Rather than have everyone assigned to arrive at specific times, cruisers were allowed to show up to eat whenever they wanted during the dining room’s hours of operation. NCL’s Freestyle Dining also heralded the modern version of specialty restaurants, so not only could passengers eat at the time of their choosing, but at whichever eatery suited their fancy each evening. It was a stunning change to the long-running system previously used.
The idea took hold. After considerable fine-tuning of the dining concept over the years and plenty of variation among cruise lines, the industry standard now is that most ships allow you to choose either the traditional early or late dining options or a flexible option with open seating and no set dining time.
Traditional dining
The Festivale Restaurant on Carnival Celebration. ERICA SILVERSTEIN/THE POINTS GUY
Traditional dining includes an assigned table and your choice of an early or late dinner time. Though what constitutes “early” and “late” varies by cruise destination, on most cruise lines, the early seating is usually set to a specific time between 5 and 6 p.m., while the late seating might be as early as 7:45 (Carnival Cruise Line) or as late as 9 p.m. (MSC Cruises, which has three traditional seatings on some ships).
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You can opt into this traditional plan when you book your cruise, and the decision-making ends there. When you arrive for your cruise, you’ll be handed a cruise card marked with your dining room name and deck number, dining time and possibly even your table number.
From that point, each evening you will show up at your table at the appropriate time. If your travel group spans several cabins and you want to dine together, you should coordinate your choices before booking, then ensure that the reservations are linked. It’s wise to have someone in the group stop by the restaurant on boarding day to make sure the group will be seated together.
Related: The ultimate guide to cruise ship food and dining
If you’re just a couple or a small travel party, the dining team may assign you to a table by yourself or place you at a large table with cruisers you don’t know. You can ask for dining time and table changes once on board, but the restaurant staff may or may not be able to accommodate requests.
Cruisers who prefer traditional dining say they prefer it over flexible options partly because they feel it allows them to get to know their waitstaff, which is not always a guarantee with “my time” dining. Others feel it’s better simply because once you know where your table is on the first evening, there’s no standing in line to be seated unless you arrive before the doors open.
There are reasons to think twice about set seating. An early dinner often leaves you with no time to wind down and dress for dinner, especially when the ship has a late departure from port and you want to make the most of your time ashore.
Also, if you’re cruising in a time zone just a few hours different from your norm, you might find you’re hungry at the wrong times for traditional fixed dining. Alaska is the worst for me. I’m not hungry enough for the early seating but hangry by the time the late seating rolls around. Flexible options work best for me on those itineraries.
‘My time’ dining
PUXAN BC PHOTO/PRINCESS CRUISES
On cruise lines that offer both traditional and flexible dining, you generally opt into the flexible dining program at the time of booking. Your stateroom keycard will list you as a flexible dining passenger and note your assigned dining room.
Lines that offer both a traditional and anytime dining program will usually separate the two groups into different dining rooms or different areas of a large dining room. Menus are identical for both groups, so don’t worry about missing out.
Here’s where it gets a little confusing. On most lines, prior to sailing, those who opt into flexible dining can make main dining room reservations for each night of the cruise. Do you have to make reservations? The answer is a resounding no, unless you have a large group wanting to dine together.
Think of it like dining out at a restaurant on land. You can show up at your leisure and wait in line for a table, or you can make a reservation and possibly be seated more quickly. On a cruise ship, those with reservations may be offered a priority line, sometimes even a separate section of the dining room. Those without reservations will still be seated, but during a rush you may have to wait a few minutes (or even an hour) for a table to open up.
One big plus for flexible dining is that you can make specific table requests each night. You might have to wait a bit longer for that window table for two, but if it’s important to you, it might be worth the wait.
Some cruise lines only offer flexible dining options. Norwegian’s modern version of Freestyle Dining has no fixed dining times; you can dine anytime you wish during a venue’s hours of operation. Reservations are not required but are “highly suggested.” These can be made pre-cruise online in your MyNCL planner or on board, subject to availability.
Princess Cruises recently changed its dual system to a single system called Dine My Way. You can dine at the same time, same table every night, or change it up on a daily basis, but you need to make advance reservations for your preferred mealtimes. Changes are made in the Princess MedallionClass app.
People who rave over flexible dining options often have a serious aversion to sitting with strangers or prefer to dine with different people each night. Let the maitre d’ know your preferred table size. Families with small children love the ability to eat around the schedule that works for their family on any given day.
One last advantage of flexible dining (and it might be the deciding factor for some) is the ability to book spa appointments during the traditional dining times. Especially on big ships where the spas stay open late, flexible dining allows you to dine around your spa time, not the other way around.
On the other hand, you might think twice about selecting “my time” dining if the cruise line’s shows are a priority for you. On cruise lines that offer both traditional and flexible dining, the show schedule is likely to match the traditional time frames to allow as many people as possible to attend the shows. Dining between the two traditional times would cause you to miss the early show, if there are two performances, and the entire show on nights when there’s only one performance.
Also, if you feel like you are queuing in enough lines already, you might be happier with a traditional dining time. Flexible dining always involves lines, even when you make reservations. On a good night, at a late evening arrival time, your wait might be minor, but on a megaship with 3,000-plus people wanting to be seated at 6:45, you could find yourself waiting for an extended time.
Specialty dining
Making plans to skip the main dining room in favor of a specialty restaurant or dining rooms exclusive to your stateroom category does not alter your ability to choose either a traditional or “my time” style of dining in the main dining room. You don’t even need to let the wait staff know you plan to dine elsewhere. (In most cases, the maitre d’ will have access to your specialty reservations, so they will not be expecting you, but if you have tablemates, it’s a courtesy to let them know.)
Related: 5 reasons you should splurge on a cruise ship specialty restaurant
It’s perfectly OK to choose traditional dining as your main option but make a 7:30 reservation in a specialty restaurant one night, plus try out the suites-only dining room a few nights (if you have access). You can usually see the menus in advance, either in the app, on interactive screens in your stateroom or posted near the restaurants themselves.
Cruise line offerings
Cyprus, one of the complimentary restaurants on Celebrity Beyond. ERICA SILVERSTEIN/THE POINTS GUY
Several cruise lines offer both flexible and traditional dining in the main dining room.
Carnival offers a flexible plan called Your Time Dining that uses pagers to let you know when your table is ready. Carnival’s website states that “advance table reservations are not accepted,” but recent Carnival cruisers report being able to use the app to let the dining room know they are on their way to speed up their wait time most nights.
Royal Caribbean’s My Time Dining plan uses optional reservations with separate lines for those who reserve a seating time. Sister line Celebrity Cruises’ options are a bit confusing. Its traditional dining plan is named Celebrity Select Early or Late, and its flexible dining is dubbed Celebrity Select Anytime. This latter plan offers advance reservations and separate lines for those who walk up without reservations.
Holland America calls flexible dining As You Wish Dining, with reservations accepted but not required. MSC Cruises calls its nontraditional dining plan My Choice Dining. This option is only available to guests who book the Aurea or Yacht Club experience; passengers selecting the Bella or Fantastica packages can only access set-time dining.
In addition to Princess and Norwegian, which have dropped set-seating dining options, upscale lines like Windstar Cruises, Viking and Oceania Cruises do not utilize set dining times, tables or dining companions, nor do luxury cruise lines. Most of these accept main dining room reservations made by calling the maitre d’ or have dining rooms so spacious they can accommodate all walk-ups with no wait. Advance reservations on these lines are especially useful for group dining.
All cruise lines expect reservations for sit-down specialty restaurants.
Related: 12 dining mistakes you must fix on your next cruise
Bottom line: ‘My Time’ dining vs. traditional dining
PRINCESS CRUISES
Traditional dining, when it’s offered, is a great option for large groups traveling together. There’s no last-minute quibbling over dinner reservations and whether the group can get a table together. Everyone knows ahead of time when they’ll be eating and which dining room and table to go to for dinner.
Flexible dining — whether called My Time, Anytime, Freestyle or something else — works for those for whom the early or late traditional times aren’t ideal or those who want to eat at different times each night depending on the day’s schedule. Cruising with children is one reason some people prefer to keep all dining options flexible. The same holds true for travelers who pack their cruise days with every available activity.
The bottom line when it comes to traditional versus “my time” dining is to choose what works best for you and your travel companions on any given cruise. Some people choose traditional dining when they travel with groups of friends and family and the flexible plan when they travel with only one partner or with children. Others stick with one or the other on every cruise.
Either way, cruise lines want happy cruisers. Giving you choices of how and when your main dining room experience is scheduled is one way to keep everyone satisfied.
An IRA is a simple little thing. It’s a common, garden-variety retirement vehicle, basically nothing more than a savings account with initials — right? Wrong.
The rules regulating IRAs are varied and vexing; IRS Publication 590 [PDF], the definitive source for Uncle Sam’s shalls and shan’ts regarding IRAs, weighs in at a hefty 108 pages. And then there are all the guidelines about employer-sponsored plans — e.g., 401(k)s and 403(b)s. Whew! Seems like all this would be enough to fill a two-day conference focusing on nothing but retirement accounts.
Actually, it is. I know, because I attended one — Ed Slott’s two-day IRA workshop (fun!). Slott, a CPA and the operator of IRAHelp.com, is recognized as one of America’s foremost authorities on individual retirement arrangements (yep, that’s what the “A” in “IRA” actually stands for). At the conference, he and his team led 100 financial-services pros (and one Fool) through a 430-page manual that described the care and feeding of retirement accounts, as well as several real-life examples of people who made mistakes that cost them thousands of dollars.
Some examples:
A teacher withdrew $67,553 from her 403(b) to pay her daughter’s college expenses. She paid the income taxes, but thought she’d be exempt from the 10% penalty since the money was used for higher-education expenses. Sadly, that exemption applies only to IRAs, not 403(b)s or 401(k)s. Oops.
A widow inherited a $2,646,798 retirement account from her deceased husband. She transferred it to her own IRA, then withdrew $977,888. She wasn’t yet 59-1/2 but figured she’d be spared the 10% early withdrawal penalty since she inherited the account. Indeed, distributions from inherited accounts are exempt from the 10% penalty. However, since she transferred the account to her own IRA, she owed Uncle Sam $97,789. Bigger oops.
It would be the ultimate in stinkiness if you spent years — nay, decades — saving in a retirement account, only to lose thousands due to one simple mistake. Here are just some of the guidelines you must follow to prevent just such a mistake from happening to you.
Stuffing It The maximum you can contribute to an IRA in 2011 is $5,000 — or $6,000 if you’re 50 or older. Granted, the biggest source of your IRA’s funds is likely a transfer from a 401(k) or other employer plan, but contributing $5,000 annually is nothing to sneeze at. For one thing, sneezing at something is rude — but more importantly, contributing $5,000 a year to an account that earns 8% annually would result in $78,227 after 10 years and $247,115 after 20 years. Not shabby at all.
While contributing to an IRA can pay off over the long term, most people first contribute to their employer’s retirement plan, especially if the boss matches contributions. After that, you may want to contribute additional savings to an IRA; if you have money in a retirement plan with a former employer, moving that to an IRA also makes sense.
Here are the advantages of an IRA over a 401(k) or other plan:
More investment options. The typical 401(k) offers a menu of five to 15 mutual funds, whereas an IRA with a discount brokerage allows the owner to choose from among thousands of stocks, exchange-traded funds (ETFs), mutual funds, individual bonds, CDs, and, if approved, alternative strategies such as options.
Lower costs. This depends on the plan and the IRA provider, but the cost-conscious investor will have more ways to limit fees in an IRA, such as investing in index funds, ETFs, or stocks that you hold for many years (avoiding the annual expenses of funds).
There are two reasons not to transfer an employer plan to an IRA:
If you retire between the ages of 55 and 59-1/2, you can take money out of the plan from your last employer penalty-free, whereas withdrawals from an IRA before age 59-1/2 might result in a 10% penalty.
If you own stock in your employer, you’re likely better off transferring it to a taxable account to take advantage of net unrealized appreciation (NUA).
Getting It There From Here The easiest and best way to move money from one retirement account to another is with a “trustee-to-trustee transfer.” Contact the company to which you wish to move the money, complete the paperwork they send you, and they’ll handle the rest.
You want to avoid being sent a check payable to you alone. If that happens, you’ll generally have 60 days to get the money into the new account. Wait any longer and it may be considered a distribution from your previous plan, subject to taxes and possible penalties. In addition, 20% of the distribution may be withheld; you’ll have to cover that gap with personal funds when you move the money to a new account, but you’ll get a refund when you file your taxes. If you don’t make up that 20%, it, too, will be considered a distribution subject to taxes and penalties. This is all very bad.
If your current account provider insists on sending you a check, request that it be made payable to the new financial institution — for example, “XYZ Bank as trustee of IRA of John Doe” or “ABC Firm FBO Jane Smith” (FBO means “for benefit of”).
Spending It As mentioned earlier, you generally have to wait until age 59-1/2 before tapping retirement accounts, whether IRAs or 401(k)s — if you don’t, you’ll be charged a 10% early-distribution penalty. However, there are several exceptions. Some apply to both IRA and employer-sponsored plans, others to just one. (Any exceptions apply just to the 10% penalty; regular taxation will still apply.)
The chart below lists the possible exceptions. If you find yourself in any of these situations, take the time to know all the details before you make a withdrawal. Most exceptions are restricted to certain groups, but Substantially Equal Periodic Payments are available to everyone; they’re explained in IRS Code 72(t), but they’re complicated and can trigger the penalty if not done properly. For all the details, visit www.72t.net.
Note: The very first exception listed is also available to everyone, but it’s a large price to pay to avoid an IRS penalty.
Medical expenses that exceed 7.5% of adjusted gross income
?
IRS levy
?
Active reservists
?
Distributions from inherited accounts
?
Higher education, for self or qualified relatives
?
“First-time” home buyer, up to $10,000 per account owner (can be used for qualified relatives, or for yourself if you didn’t own a home in the previous two years)
?
Health insurance if unemployed
?
Age 55
?
Age 50 for public safety employees
?
457 plans
?
Dividends from employee stock ownership plans
?
Qualified Domestic Relations Order
?
Totally insane prices on flat-screen TVs at an after-Christmas sale
Contributions to a Roth IRA can be withdrawn tax- and penalty-free at any time, while earnings will be subject to the age 59-1/2 rule (as well as the five-year rule, which is a whole other complicated ball of wax). A Roth 401(k) is a different matter; all withdrawals are a proportional mix of contributions and earnings, with any taxes and penalties being assessed against the earnings only.
When You Gotta Take It Owners of traditional IRAs as well as traditional and Roth employer plans must begin taking annual required minimum distributions (RMDs) the year they turn 70-1/2. Alternately, they can wait until the following year but take two distributions in that year. Otherwise, they’ll pay a 50% penalty. Yes, even a Roth 401(k) has RMDs, but they can be avoided by transferring the money to a Roth IRA — the only account not subject to forced liquidation.
Surprisingly, beneficiaries of inherited retirement accounts must also take RMDs beginning in the year following the death of the original owner. This is true regardless of age — even if the account is a Roth IRA. The only exception: a surviving spouse who elects to make the inherited account her own (i.e., has it re-titled in her name) or rolls over the inherited account to her own existing account.
While non-spouse beneficiaries can roll an inherited 401(k) to an inherited IRA, they can’t avoid the RMDs. The account must remain titled something along the lines of “Joe Smith, deceased, IRA for the benefit of Joe Smith Jr. as beneficiary.”
Bequeathing It If you’re interested in passing on wealth to your family, you probably want as little to go to taxes and lawyers as possible. Start by naming living, breathing human beings on your account beneficiary forms. Doing this means the account bypasses your will and probate (which can cost time and money), and the beneficiary or beneficiaries can “stretch” the account over their lifetimes. If the form is blank, or the listed beneficiaries are themselves deceased, the money will go to the estate. In that case, the account may have to be liquidated within five years, and it will lose all the tax advantages of an IRA or 401(k).
Keep in mind that the beneficiary form often trumps other legal documents, such as wills and prenuptial agreements. If your beneficiary form says your IRA should be split between your son and daughter, but your will says it should just go to your daughter (because your son has turned out to be an irresponsible spendthrift — or a banker), the account may end up being split. And to minimize the risk of lost or messed-up beneficiary forms (it does happen!), keep copies in your own records.
It’s important to name primary beneficiaries as well as contingent beneficiaries (the people who will inherit your accounts if the primaries are deceased, or if they’d rather the contingent beneficiaries get the money). If you’ve inherited an IRA, make sure you name new beneficiaries.
Protecting It Finally, here are three other considerations for protecting your retirement accounts, during this life and beyond:
Creditors and bankruptcy. The money in your employer-sponsored retirement account most likely can’t be lost to bankruptcies, creditors, or lawsuits. IRAs receive bankruptcy protection up to $1 million. However, the amount of protection from other creditors varies by state.
IRA fees paid with non-IRA money. Many IRA providers charge an annual account fee, which is automatically taken from your account assets. However, you can instead send a check to the custodian and leave more money in the IRA to grow. This also applies to annual “wrap” fees, though not to commissions and mutual fund expenses.
Estate taxes. Retirement accounts, including Roths, are included in a gross estate for tax purposes. Recent laws increased the federal estate tax exemption to $5 million per person and $10 million per couple, but the limits drop in 2013. Twenty states also impose estate taxes, with exemptions as low as $338,333. If your estate is or will be worth a few million dollars or more, see a local, qualified estate-planning attorney.
Remember: Get help if you need it. If you’re going to make a significant change to your retirement accounts, you might want a little professional help to make sure you’re doing everything right. IRAHelp.com features a listing of advisors in your area who have taken extra training about IRAs and 401(k)s. Also, the fee-only financial advisors at the Garrett Planning Network charge by the hour (among other methods), which makes it easier to get your questions answered without having to turn over your entire financial life.
Annuities can help solve the biggest challenge of retirement.
When you save up for retirement, the two largest risks are intertwined. First, you risk not being able to pay your bills if you don’t properly calculate your annual spending. Second, you risk running out of money late in life if you don’t properly anticipate your lifespan.
A financial advisor can help you calculate how much retirement income you’ll need to generate once you stop working. Find an advisor today.
To help address these issues in tandem, insurance companies sell a product called fixed-index annuities or FIAs. These are designed to provide a baseline of growth-oriented income for the rest of your life. But, as Morningstar researchers recently pointed out, FIAs only work if you use them properly. Otherwise, they turn into money losers compared with more standard options such as fixed-income annuities or index fund portfolios.
What Is a Fixed-Index Annuity?
A fixed-index annuity is a contract you make with an insurance company. In exchange for money upfront the company will give you structured payments over time. Some contracts specify a duration for these payments, making them each month for 10 or 20 years, for example. More often people buy retirement assets called “lifetime annuities,” which start payments when you retire and continue for the rest of your life.
Fixed-income annuities make this payment based on a guarantee. When you buy the contract, the company agrees up front to a certain monthly payment. For example, you might buy a contract for $2,500 per month for the rest of your life beginning in retirement.
A fixed-index annuity is less determined. These contracts guarantee payment, but the amount is not static. Instead, the payments are based on the performance of an underlying index such as the S&P 500 or the Russell 2000. You cannot lose the underlying principal in your contract, and most will come with a guaranteed minimum monthly payment. Otherwise, your income from a fixed-index annuity will increase or decrease based on the performance of its index.
This makes fixed-index annuities a risk/reward tradeoff. If the index does well, this product can pay significantly more than fixed-income annuities, and can even act as a hedge against inflation. If the underlying index does poorly, however, you can potentially make much less money in the long run. This risk is significantly mitigated if you invest in a mainstream index like the S&P 500, but is not trivial if you invest in a higher-risk field.
The Key To Fixed-Index Annuities Is Proper Use
Risk and reward is a very delicate balance in retirement. On the one hand, you want your money to keep growing during these years. On the other hand, you don’t have new income to replace losses, so you want your money to remain safe.
Recently, Morningstar examined where fixed-index annuities fall in that balance. They compared the overall performance of an FIA with a guaranteed lifetime withdrawal benefit rider (GLWB) against standard fixed-income annuities and portfolio investments.
“Overall,” wrote analyst Spencer Look, “I found that FIAs with a GLWB improve projected retirement outcomes, but only if they are used properly.” Specifically, this product can result in stronger payments, fewer shortfalls and more money left over in your estate for the right investor.
But what constitutes proper use? Morningstar found two critical elements:
1. Early Investment
More than anything else, Look found that investors need to buy their FIA at least 10 years before they begin to make withdrawals. For a typical retiree, this means investing by or before age 55.
Why? The annuity needs time to grow. The more time the index has for cumulative growth, the more it will pay. Investors who need income more quickly than this typically see better results with single premium immediate annuities, meaning a fixed-income annuity that you purchase with a lump-sum upfront.
2. Lifetime Investment
This asset also is best for retirees who will hold it throughout their lives.
Exiting an annuity early is known as “lapsing.” When that happens, you collect back the money you put in (often minus a penalty fee) and the contract stops making payments.
Much of the reason to buy this product is that it makes payments for the rest of your life. Over those years and decades, Morningstar found that you will often make more money with an FIA than if you had invested in a fixed-income annuity or a simple stock portfolio.
But if you exit early, you miss out on those future gains. In this case, you often make less money overall than if you had invested in a lump-sum annuity or a stock portfolio.
Longevity Risk Protection
In particular, Morningstar found that a fixed-index annuity can help protect people from running out of money in retirement. “This is because,” wrote Look in his analysis, “an FIA with a GLWB is an insurance product that mitigates against market risk and longevity risk.”
Retirement savers who put their money into portfolios, such as stocks, bonds or index funds, can often get stronger growth than with more careful products like an annuity. But that money is finite, so they risk running out of it.
A fixed-index annuity offers a best-of-both-worlds approach. While FIAs don’t give the full return of their underlying index, they do tend to post stronger returns than a standard fixed-income annuity. Yet, they also come with lifetime payments and a minimum benefit guarantee, mitigating the risk of running out of cash in old age.
Bottom Line
Based on Morningstar’s analysis, investors who are looking for a lifetime retirement product should consider fixed-index annuities. They can offer a strong middle ground between the lower-return/higher-security of a fixed-income annuity and the higher-return/lower-security of a portfolio, but only if you use them correctly. Exiting the contract early can decrease or eliminate the benefits altogether.
Annuity Investing Tips
Annuities can be a strong product for the right investor, but they can often seem complicated. Don’t sweat it. With our step-by-step guide, you can learn the fundamentals of annuities so you can feel more confident about these financial products.
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Eric Reed
Eric Reed is a freelance journalist who specializes in economics, policy and global issues, with substantial coverage of finance and personal finance. He has contributed to outlets including The Street, CNBC, Glassdoor and Consumer Reports. Eric’s work focuses on the human impact of abstract issues, emphasizing analytical journalism that helps readers more fully understand their world and their money. He has reported from more than a dozen countries, with datelines that include Sao Paolo, Brazil; Phnom Penh, Cambodia; and Athens, Greece. A former attorney, before becoming a journalist Eric worked in securities litigation and white collar criminal defense with a pro bono specialty in human trafficking issues. He graduated from the University of Michigan Law School and can be found any given Saturday in the fall cheering on his Wolverines.
The ratio of borrowers 60 days or more past due on their mortgage fell for the second straight quarter, according to credit bureau TransUnion.
The national delinquency rate fell to 6.67 percent in the second quarter, down marginally from 6.77 percent a quarter earlier, but still 14.8 percent higher than the 5.81 percent rate seen a year earlier.
Nevada continued to lead the nation in late mortgage payments with a delinquency rate of 15.86 percent, followed by Florida at 15.02 percent.
The Dakotas held onto the lowest mortgage delinquency rates, with just 1.51 percent of homeowners in North Dakota behind and 2.23 percent in the South struggling to keep up.
“TransUnion believes that the 60-day mortgage delinquency rate will likely continue to drift downward in 2010, possibly nearing 6.4 percent nationally by the end of the year,” said FJ Guarrera, vice president in TransUnion’s financial services business unit, in a press release.
“Note that this forecast is based on various economic assumptions, including the assumption that both real estate values and the unemployment picture will improve gradually. This forecast would certainly change if there are unanticipated shocks to the economy affecting the recovery in the housing market,” said Guarrera.
There’s also the big question as to the long-term success of loan modifications, which some believe will re-default at a rate as high as 75 percent.
Nationally, the ratio of borrowers 90 or 120 days or more past due fell from where it was last quarter, the first time that has happened since the recession began in 2007.
Again, only time will tell if this is just a blip thanks to all the anti-foreclosure efforts, or a long-term trend.
TransUnion also noted that mortgage originations plummeted nearly 50 percent year-over-year in the second quarter, with the largest drops in Idaho (-58.7%) and Washington (58.6%).
