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Author: Maurie Backman

  • ‘This is not Biblical’: Oklahoma man turns to Dave Ramsey after saying he was instructed to invest in the church over saving for retirement — and Ramsey’s answer may surprise you

    ‘This is not Biblical’: Oklahoma man turns to Dave Ramsey after saying he was instructed to invest in the church over saving for retirement — and Ramsey’s answer may surprise you

    It’s natural for some people to want to be as charitable as they can afford. But at what point do we stop helping ourselves and invest in others?

    Daniel from Oklahoma wrote to The Ramsey Show to explain a dilemma he was having. He claimed his church told its members not to focus on investing in retirement but on investments toward the church instead, and was wondering if it was a good idea.

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    "If they said this, this is not biblical," co-host Ken Coleman responded in a clip posted April 13.

    "Change churches if someone’s doing this," Dave Ramsey added.

    Both of them, however, emphasized the "if" in their responses. Here’s what Ramsey, an evangelical Christian himself, had to say about tithing to the church.

    When the concept of charity goes too far

    Ramsey stated he supports tithing to the church — the practice of donating one-tenth of a person’s income to a religious organization.

    However, according to Ramsey, you can’t tithe more than 10%, because the word itself means "tenth."

    "Anything above that is called an ‘offering’ to support … the community work that the church is doing," he said. "There’s nothing wrong with that.”

    Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it

    Ramsey also pointed out that it’s perfectly fine to save for our own needs, including retirement.

    "Wise people save money," he insisted was a biblical lesson.

    Ramsey cautioned that Daniel may have misinterpreted his church’s message. However, if his description was accurate, Ramsey says it sounded like a money grab.

    How to balance savings and charity

    There’s a lot of pressure on Americans today to save for retirement. Ramsey Solutions suggests that workers aim to save and invest 15% of their gross income for their golden years.

    But it’s hard to do that and donate 10% of your income while also covering your needs at a time when living costs are so high.

    That’s why it’s important to strike a balance. After all, faith and finance don’t have to be at odds. Ensuring your needs are taken care of before being charitable with your money doesn’t make you selfish — it makes you practical. It can be a good idea to set up a budget that prioritizes your needs but also leaves room for charitable giving.

    Often, you can give to charity without hurting yourself financially or causing undue stress. If you’re compromising your financial security or well-being, then you may need to rethink your approach to charitable giving and scale back.

    What to read next

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    This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

  • Atlanta residents have waited 7 years for their day in court after they were allegedly scammed by a tree removal business — here are some steps you can take to protect yourself

    Atlanta residents have waited 7 years for their day in court after they were allegedly scammed by a tree removal business — here are some steps you can take to protect yourself

    When you give money to a contractor for home improvements or repairs, you expect that work to be completed. However, some Atlanta residents learned the hard way that things don’t always work like that.

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    They have reportedly waited seven years for a trial date after being allegedly scammed by Angela Hodges, who ran a tree removal business called Don’s Tree Experts.

    Hodges, who is accused of defrauding her customers, once again attempted to postpone a recent pretrial hearing at DeKalb County Superior Court claiming she was ill. However, she showed up to the courtroom after the judge issued a bench warrant, WSB-TV Atlanta Channel 2 reports. She is being charged with felony counts of theft by taking and theft by deception.

    "As soon as I got released from the hospital, I did show. And the judge took the information and is willing to hear our side of the story to get the case moving forward," she told reporter Justin Gray. A motions hearing on the criminal charges is slated for September with an estimated trial date in October.

    Hodges told the news network all of her unhappy clients have been refunded, though it’s unclear whether that’s true and if it encompassed every case against her. An April 2023 report from FOX 5 says that she promised to pay back six DeKalb County customers in exchange for a six-year probated sentence. At least one customer was not hopeful.

    Consumer advisor Clark Howard says it’s hard for people to get their money back in situations like this. As he explained to WSB-TV, “The cases are hard to prove. They’re hard to investigate. And so consumers are left without any help at all. Your money is gone."

    A suspiciously similar name

    In 2023, WSB-TV began investigating Hodges after consumers complained about her taking their money. Back then, DeKalb County resident Sherral Cannon said he contacted Don’s Tree Experts thinking it was the same company he’d used in the past.

    Hodges’ company’s name is similar to another called Don’s Tree Service, which may have led customers to trust her.

    “We called Don, who had been here before, to cut down some trees,” said Cannon to the news network. He wrote Hodges a check for $700 as a deposit for the work he needed done.

    “She disappeared. Never saw her again,” Cannon said.

    Don’s Tree Service is a company that’s highly rated and has been in business for over 20 years. Owner Doni Jones says she’s seen mix-ups along the lines of what happened to Cannon.

    “We hear the stories because they’ll call us when they can’t get that other person on the phone,” Jones told WSB-TV. “You see someone get taken advantage of like that and to know there’s a possibility they think you may be involved in that. It’s frustrating.”

    Meanwhile, Hodges has been arrested numerous times in multiple counties, and there have been at least 40 civil cases filed against her, says WSB-TV.

    Gray asked Hodges if she was still in the tree removal business and was directed to her attorney, who said that the business is still in operation but would not speak to Hodges’ involvement in it.

    Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it

    How to avoid being scammed by a contractor

    The National Association of Realtors, citing a 2023 study from JW Surety Bonds, says that about one in 10 Americans have been a victim of a contractor scam, losing an average of $2,426. That’s why it’s important to know how to avoid becoming a victim.

    First, only work with contractors or companies that are licensed and insured. And from there, do your research. Look up the company on the Better Business Bureau to see how many complaints are on file, and see if you can use a state database to look up complaints by license number.

    Once you’ve done that initial research, you’ll want to talk to previous customers to see what their experience was like. Don’t just trust online reviews — anyone could’ve written them. This especially applies to testimonials on a given company’s site.

    Independent sites like Yelp may be a bit more reliable. But ultimately, your best bet is to ask to see an example of a contractor’s work when possible and have a quick conversation with that homeowner. If you can ask someone you know for a recommendation, even better.

    Furthermore, be wary of companies that require a large deposit up front. You may have to pay something, but if it’s more than 50% of the project cost, consider it a red flag.

    Some states actually place a limit on the amount of money contractors can ask for up front when doing a job. You can research your state’s laws here.

    Also, do not hand over any money without a signed contract. And read the terms of that contract carefully so you know what you’re getting into. Make sure the contract has a date for when the work will be completed, as well as remedies you can take if the company breaches the contract.

    Finally, always get multiple estimates for a home improvement or repair project, and be suspicious if one quote is remarkably lower than the others. It may be that the company is trying to lure you in with a much more attractive price only to try to run away with your money afterward.

    What to read next

    Like what you read? Join 200,000+ readers and get the best of Moneywise straight to your inbox every week. Subscribe for free.

    This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

  • I’m a 32-year-old single mom with two kids and my $2,000 monthly rent eats up half of my take-home pay. How can I cover my other expenses?

    I’m a 32-year-old single mom with two kids and my $2,000 monthly rent eats up half of my take-home pay. How can I cover my other expenses?

    Redfin puts median asking rent in the U.S. at $1,633, so if you’re paying $2,000 a month in rent, that doesn’t seem so out of line – especially if you live in a city with higher rent prices, or if you’re renting a larger unit because you need more than one bedroom.

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    Housing is the largest expense for Americans. But if you’re spending $2,000 a month on rent and your take-home pay after taxes is only $4,000, you may be in a position where it’s tough to impossible to cover your remaining bills.

    The popular 50/30/20 budgeting rule says 50% of your take-home pay should cover your needs, 30% should go towards wants and 20% is for savings and debt repayment. However, such guidelines are not realistic or wise for everyone, so don’t worry if you can’t meet those goals.

    Your situation isn’t hopeless. But some changes may be in order so that you don’t fall behind on either your rent or your non-housing expenses.

    How to cope when rents are high

    One thing you can do is create a budget for yourself and try to identify areas you can cut back on. You can use one of several budgeting apps available to make this process easier.

    Housing may not be one that immediately comes to mind. But if you live in a walkable area, it may be possible to get by without a car and rely on buses and the occasional rideshare.

    AAA puts the average cost of owning and operating a new car at $1,024.71 per month. But even used vehicles can be expensive to own and maintain. So if you’re able to unload that expense, it could help.

    You can also look into getting a side job to boost your income. However, if you’re 32 with two kids, your children may be on the young side. And that means childcare costs could eat into your side hustle profits. So you may want to focus on opportunities you can do from home, like data entry.

    You can also see if your state has a rental assistance program you can apply for. You may, for example, be eligible for subsidized housing. Contact your local public housing agency to find out more.

    Finally, do some research to see if moving to a different neighborhood results in lower rent prices. If you have children in school, moving may not be easy, as it could mean having to switch districts. But if you’re struggling to keep up with your bills, it may be your only choice for the time being until your income increases or other costs of yours start to go down.

    Once you feel like you’re covering your basic costs, focus on building an emergency fund that will protect you from taking on debt in the future.

    Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it

    Why so many Americans are rent-burdened

    An estimated 21 million renter households in the U.S. are cost-burdened, says the U.S. Census, meaning they spend more than 30% of their income on rent. That represents nearly 50% of all renter households based on 2023 data.

    Rents soared after the pandemic, and the reason largely boils down to limited supply and high demand. According to Zillow, the U.S housing shortage grew to 4.5 million homes in 2022, up from 4.3 million the year before. "This balance reached a tipping point when the Great Recession ushered in a decade of underbuilding and millennials — the biggest generation in U.S. history — reaching the prime age for first-time home buying. The result has been worsening affordability, now exacerbated by stubbornly high mortgage rates," it said in a press release.

    The National Low Income Housing Coalition recently said the U.S. has a shortage of 7.1 million affordable housing units. Only 35 affordable and available rental homes exist per 100 extremely low-income renter households.

    The good news is rents have been gradually decreasing. The bad news? This makes multifamily housing less appealing to investors, according to Realtor.com, which could result in lower rental unit inventory going forward and, in turn, cause rent prices to go up.

    What to read next

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    This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

  • I’m 62, ready to retire — but wondering if I’ll be penalized on my capital gains when I start cashing in my nest egg. The secret to turning capital gains into tax-efficient retirement income

    I’m 62, ready to retire — but wondering if I’ll be penalized on my capital gains when I start cashing in my nest egg. The secret to turning capital gains into tax-efficient retirement income

    Tax strategy should be top of mind when it comes to drawing down your retirement account.

    If you’ve held stocks in your retirement portfolio for a long time, you may be looking at significant gains.

    Those long-term capital gains could play a big role in your retirement finances — and a positive one.

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    But it’s important to balance your various income streams and cash out your gains strategically.

    The benefits of long-term capital gains

    Long-term capital gains are earnings on investments held for at least a year and a day. Any earnings on investments held for a shorter time are classified as short-term capital gains.

    There’s a major difference between them when it comes to taxes. Long-term capital gains are taxed at lower rates than short-term capital gains, which are taxed as ordinary income.

    You can leverage the tax-advantageous aspect of long-term capital gains when it comes to drawing on your nest egg for income.

    Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it

    The amount of tax you pay on long-term capital gains depends on your tax-filing status and your overall income. Here’s a rundown of long-term capital gains tax rates as of 2025.

    If you’re single, your long-term capital gains tax rate will be:

    • 0% if your income is $48,230 or less
    • 15% if your income is between $48,351 and $533,400
    • and 20% if your income is more than $533,400.

    If you’re married and filing jointly, your long-term capital gains tax rate will be:

    • 0% if your combined income is $96,700 or less
    • 15% if your income is between $96,701 and $600,050
    • and 20% if your income is more than $600,500.

    These are significantly better rates than the taxes levied on short-term capital gains.

    For example, if you’re single with an annual income of $45,000, you’ll pay a 12% tax on short-term capital gains versus no taxes at all on long-term capital gains.

    If you’re married and file jointly with an annual retirement income of $240,000, you’ll pay a 24% tax rate on short-term capital gains but almost 10% less (15%) tax on long-term capital gains.

    This tax advantage may be one reason to start withdrawing long-term capital gains as retirement income before you claim Social Security. The longer you wait to claim Social Security, the larger those monthly benefits will be — for life.

    Leveraging long-term capital gains

    It’s important to consider all your retirement income sources — including 401(k)s and Social Security benefits — as you plot out your tax strategy.

    Let’s say most years your retirement income is low enough for you to pay 0% taxes on long-term capital gains, but you get a windfall that bumps you into the 15% range in that year.

    If you have a Roth IRA, you could tap it for income in the year you get the windfall because Roth IRA withdrawals are tax-free.

    Then if your income shrinks the following year, you could return to cashing out long-term gains in a taxable account.

    It’s a good idea to talk to a financial advisor or tax professional about the best ways to minimize your tax burden in retirement.

    This could include doing a Roth conversion ahead of retirement so you have some tax-free income at your disposal later on.

    You may end up having to pay taxes on retirement savings if you have money in a traditional IRA or 401(k). At a certain point, you’ll be forced to take required minimum distributions (RMDs), which are a taxable event.

    That said, there are strategies to minimize the tax-related impact of RMDs. One option is to make qualified charitable distributions (QCDs) directly out of your traditional IRA or 401(k), although there is a limit to how much money you can donate.

    If your retirement income isn’t low enough to qualify for a 0% tax rate on long-term capital gains, you can try selling other investments strategically at a loss to offset those gains.

    For example, say you’re looking at a $10,000 long-term gain that’s subject to a 15% tax rate. If you’re able to take a $10,000 loss in a taxable account, that negates your tax obligation.

    Overall, long-term capital gains can be one of your greatest tax advantages in retirement.

    What to read next

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    This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

  • Retiring soon? Not so fast. Here are 3 serious retirement risks that older Americans often forget about — and how to deal with them ASAP

    Retiring soon? Not so fast. Here are 3 serious retirement risks that older Americans often forget about — and how to deal with them ASAP

    Planning for retirement is something that’s best to do throughout your career, not just when you’re approaching that milestone and have a year or two left to work.

    Only half of Americans have tried to calculate how much money they’ll need in retirement, according to a 2024 survey by the Employee Benefits Research Institute (EBRI).

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    However, among those workers who did the calculation, 52% were inspired to save more. Even if you feel confident in your ability to cover your retirement expenses, it’s important to be mindful of hidden costs that could impact your retirement finances. Here are three to keep on your radar.

    Healthcare expenses not covered by Medicare

    Fidelity Investments expects the typical 65-year-old to spend $165,000 on healthcare during retirement. That may sound surprising, but even with Medicare coverage, several expenses could arise.

    For one thing, Medicare isn’t entirely free. Most enrollees don’t pay a premium for Part A, which covers hospital care. However, Part B, which covers outpatient care, charges a monthly premium, as do some Part D drug and Medicare Advantage plans. Plus, higher earners risk surcharges on their Medicare premiums.

    Premiums aside, there are a number of expenses that original Medicare (Parts A and B plus a Part D drug plan) does not cover, which retirees commonly need. These include dental care, eye exams, prescription glasses and hearing aids.

    You’ll also face copays and coinsurance under Medicare that you must pay out of pocket. If enrolled in original Medicare, you can buy supplemental insurance known as Medigap to help offset those costs. But then you’re looking at premiums for Medigap, too.

    Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it

    Long-term care

    It’s a big misconception that Medicare will pay for you to live in a nursing home or cover the cost of a home health aide. Medicare’s scope of coverage is typically limited to medical issues only. So while Medicare might pay for rehab or physical therapy because you broke a hip, it won’t pay for a home health aide because you’re getting older and need help dressing yourself and using your kitchen.

    Meanwhile, the cost of long-term care can be astronomical. According to Genworth, here are the annual median costs for certain long-term care services in the U.S. for 2024:

    Home health aide: $77,792

    Assisted living: $70,800

    Shared nursing home room: $111,325

    Private nursing home room: $127,750

    One option for defraying these costs is to buy long-term care insurance. But that might bust your budget, too. The American Association for Long-Term Care Insurance says an average $165,000 policy with no inflation protection purchased at age 55 by a single male costs $950 a year. For a 55-year-old female, that policy costs an average of $1,500. And for a 55-year-old opposite-gendered couple, the average price is $2,080 combined.

    Of course, the actual cost of long-term care will depend on factors such as where you’re located, your age at the time of your application and the state of your health. But all told, you might spend a lot of money to put that coverage in place.

    Inflation

    In recent years, retirees and working Americans alike have experienced their share of rampant inflation. But even when inflation isn’t as aggressive, it’s still a hidden cost that can upend your retirement budget.

    Social Security benefits are, thankfully, designed to keep up with inflation. They’re eligible for an annual cost-of-living adjustment tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers, a subset of the more widely known Consumer Price Index.

    But ensuring that your savings can keep up with inflation is also critical. One way to do this is to avoid eliminating equities from your portfolio in retirement. You need some growth in your portfolio to make up for rising living costs. You can work with a financial advisor to develop an appropriate asset mix based on your income needs and risk appetite.

    A financial advisor can also help set you up with assets in your portfolio that generate income. These could include dividend stocks, bonds and real estate investment trusts (REITs).

    It could also be a good idea to delay your Social Security claim past your full retirement age, which is 67 for anyone born in 1960 or later. For each year you do, until age 70, your benefits rise 8%. And that boost is guaranteed for life.

    Having a larger monthly benefit gives you more leeway to tackle not only inflation, but also surprise medical and health-related expenses. So it’s a move worth considering if you don’t need to sign up for Social Security sooner.

    What to read next

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    This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

  • I’m 25 and ready to move out but can’t afford a deposit. My parents had promised they’d return the ‘rent’ I paid them over the years, but then they put it into my dad’s 401(k). What do I do?

    I’m 25 and ready to move out but can’t afford a deposit. My parents had promised they’d return the ‘rent’ I paid them over the years, but then they put it into my dad’s 401(k). What do I do?

    Renting a home is not cheap. In fact, Zillow puts the average monthly cost of rent at $2,100 nationally.

    Let’s say you’re in your mid-20s and looking to rent a townhome for more space and a sense of independence. The catch? You have to fork over $5,000 in advance for two months’ security and additional fees. That’s a hefty chunk of change.

    It’s not uncommon for young adults to live at home with their parents until they have sufficient funds stashed away for rent and utilities. Sometimes, parents will charge their kids “rent” only to set it aside to give back to them once they’re ready to move out.

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    But what if your parents went back on that promise and instead deposited your “rent” into one of their 401(k)s? Now, you’re short on the $5,000 you owe for the townhome.

    It’s a difficult situation, but it doesn’t mean all is lost.

    When family lets you down

    It’s not uncommon for young adults to move back into their parents’ house. A recent Thrivent survey found that 46% of parents with children aged 18 to 35 had a child move back home.

    It’s also not a bad thing to contribute financially when you’re living with your parents as a young adult. That could mean paying rent, chipping in for utilities or covering food costs. However, problems can arise if someone fails to follow through on a financial arrangement, such as your parents promising to return your rent and not doing so.

    You may have a few options if you find yourself in that situation. First, you should know that if your dad is at least 59½ years old, he can access his 401(k) plan without an early withdrawal penalty. Just because the money you paid has landed in that account doesn’t mean it’s off limits.

    Next, you can try negotiating with your parents. If you’re short, say, $1,200 on move-in fees, you can ask if they’d at least be willing to return that sum immediately — even if you were promised you’d get more rent back than that. This could allow you to cover your costs and leave their home, which you may especially want to do if you’re feeling hurt about them not keeping their promise.

    Another option is to delay moving until you’ve saved more. This might be a good idea in general. A recent Ipsos poll found that 73% of Americans have a negative view of the U.S. economy, and 72% think new economic policies could spur a recession.

    It’s a dangerous time not to have savings, because if you lose your job, you might struggle to cover your rent. And if your living costs increase broadly because of tariffs, you might have a hard time paying your bills or risk ending up in debt.

    So, if $1,200 is the difference between being able to move out or not, you may want to hold off until you’ve saved that sum plus enough money to cover at least three months of essential bills.

    Another option may be to negotiate a lower move-in fee. For example, if you can’t swing a full security deposit, but have great credit, a landlord may be willing to let you put less money up front.

    You could also consider moving to a smaller rental for a year and then upsizing once you’ve saved more. A townhome might seem like a comfortable place to live, but you might spend a lot less on rent by moving into a studio or one-bedroom apartment.

    That said, if the townhome is large enough, it may be feasible to get a roommate. If that person can split the move-in costs with you, you may be able to get into that home right away. And as a bonus, you’ll have someone to split rent and utilities with on an ongoing basis.

    Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it

    The cost of financial independence

    There are many reasons why so many young adults struggle to leave the nest and end up moving back home. Thrivent found that 32% of young adults moved back home because of a lack of housing affordability, while 30% cited increasing prices on essentials.

    The ever-rising initial cost of renting a home can also catch young adults — and renters of all ages — off guard. Take the security deposit, for example. In a 2023 report, Zillow found that 87% of renters paid a security deposit, with the average cost ranging from $500 to $999.

    Some landlords charge a security deposit equal to a full month of rent, which can be cost-prohibitive for people with limited funds.

    There’s also the issue of rent itself being unaffordable. Recent data from the Harvard Joint Center for Housing Studies found that 22.4 million renters spend more than 30% of their income on rent. A 2023 Bloomberg survey also found that nearly half of Americans ages 18 to 29 were living at home due to being unable to afford rent, the same amount as in the 1940s.

    Part of the problem is that landlords are less likely to negotiate rent when you’re first moving in. Tenants tend to have more negotiating power when their leases are up, because there’s a cost to finding a replacement tenant, and because landlords are more inclined to bend for tenants with a strong history of paying rent on time.

    When you’re a new tenant, a landlord is taking a chance, so you may not have the same wiggle room to negotiate. But, that doesn’t mean you can’t or shouldn’t try if it spells the difference between being able to afford a rental or not.

    What to read next

    Like what you read? Join 200,000+ readers and get the best of Moneywise straight to your inbox every week. Subscribe for free.

    This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

  • I’m 60, ready for retirement with $1.2M saved. I plan to live off dividend income — not sell assets. Is this really more risky than a ‘total return’ approach?

    I’m 60, ready for retirement with $1.2M saved. I plan to live off dividend income — not sell assets. Is this really more risky than a ‘total return’ approach?

    At 60, if you have $1.2 million saved for retirement, you have more than double as much as most of your peers, according to Statistics Canada.

    But even though that’s a lot of money, it’s important to manage your sizeable nest egg carefully. You could try to live off of dividend income from your portfolio, or draw down your total portfolio over time.

    Living off of portfolio income alone

    A 2024 CPP Investments survey found that 61% of Canadians are more worried about running out of money during retirement.

    The nice thing about living on portfolio income in retirement is that you aren’t touching the principal, meaning it should, in theory, hold steady or grow rather than shrink.

    But it takes a lot of principal to generate sufficient income to live on, especially when dividend yields are as low as they are today.

    The average S&P 500 dividend yield is currently just 1.27%. Even if you assemble a portfolio of individual stocks with higher dividend yields, you may only be looking at 5%.

    For a portfolio worth $1.2 million, that’s $60,000 in annual income, which may or may not be enough to maintain your lifestyle.

    Of course, it’s not a good idea to keep your entire portfolio in stocks. A safer bet is to split your assets between stocks and bonds, which could produce a little under a 5% return. It is doable, but whether the income suffices depends on your income-related needs.

    Keep in mind you’ll have CPP benefit, as well. With the average retired worker collecting about $808 per month or up to $1,433.00 if you delay receiving it, you could be looking at up to $17,200 in benefits annually.

    When you combine these government pension earnings with your investment portfolio income that works out to just over $77,000 in retirement income, each year.

    But there’s one big caveat: While living on your portfolio income allows you to preserve your principal investment portfolio, to a degree, neither growth of that portfolio nor income generated from the portfolio are guaranteed.

    Market volatility means your stocks could fall in value, eroding your principal. Stock dividends aren’t guaranteed the way bond interest and principal are guaranteed, assuming you hold the bonds to maturity.

    The other risk of an income-only approach is that you could lose purchasing power over time due to inflation, which drives living costs upward. Assuming the income you earn from your portfolio holds steady at $60,000 per year, this may be adequate when you start retirement, but find it doesn’t stretch far enough a decade or two into retirement.

    The “total return” approach

    Another option is to live on income and principal from your portfolio — the “total return” approach — as you whittle down your principal while enjoying dividends.

    This is a more flexible approach. You can sell principal assets and take advantage of market gains. As your portfolio grows, a total return approach gives you access to more annual income, making it easier to keep up with inflation.

    Here’s how this might work. Say you have $1.2 million and you decide to follow the 4% rule, drawing down 4% of your principal annually to ensure your savings last 30 years. In your first year of retirement, you’d receive $48,000 of annual income. If inflation then rises 2% the next year, you’d withdraw $48,000 plus another 2%, or $960, for a total of $48,960.

    As your portfolio gains value, you can keep adjusting your withdrawals for inflation, making it easier to keep up with the cost of living.

    The 4% rule is just a guideline. There are other factors to consider as you determine your withdrawal rate: market conditions, your investment mix, and your life expectancy.

    For example, Morningstar found that a 3.3% withdrawal rate was optimal for retirement savings in 2021; 3.8% in 2022; and 3.7% in 2024.

    This means that while the “total return” approach offers more flexibility, it requires an ability to constantly adjust to market conditions and your personal needs. It’s a good idea to enlist the help of a financial adviser who can help you adjust your withdrawals as needed.

    In this approach, too, if your portfolio loses value, you may have to withdraw less temporarily until the market settles. It’s wise to have one to two years’ worth of living expenses in the bank so you can leave your portfolio alone for a period of time if need be.

    It’s also important to have income-producing assets in your portfolio that help it gain value from year to year. Dividend and interest income could help offset market losses.

    So all told, no matter which approach you take, the right investment mix is crucial.

    Sources

    1. Statistics Canada: Assets and debts held by economic family type, by age group, Canada, provinces and selected census metropolitan areas, Survey of Financial Security (Oct 29, 2024)

    2. Y Charts: S&P 500 Dividend Yield

    3. Government of Canada: CPP Retirement pension: How much you could receive

    This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

  • ‘It’s time’: The owner of this iconic Chicago newsstand has served his loyal customers for a whopping 64 years — but now he’s finally closing up shop. Here’s how to know when to pack it in

    ‘It’s time’: The owner of this iconic Chicago newsstand has served his loyal customers for a whopping 64 years — but now he’s finally closing up shop. Here’s how to know when to pack it in

    Owning a small business is no easy feat. And there may come a point when you’re ready to close it up and retire, or even retire from any other career that sustained you throughout your life.

    Of course, that doesn’t mean it’s always easy to walk away. And that’s certainly not the case for Mike Kaage, who owns a beloved newsstand in Chicago’s Edison Park neighborhood. But as CBS News reports, Kaage has finally decided he’s had enough and will be closing shop at the end of June.

    “I’ve been doing this way too long,” Kaage told CBS News. “It’s time to end the era."

    Don’t miss

    A neighborhood staple customers will be sad to see go

    Kaage intends to close down his newsstand at the end of the month.

    Kaage’s Newsstand first opened its doors on March 8, 1943 and has served Chicago patrons for 82 years where it’s located, at the corner of Northwest Highway and Oliphant Avenue (right near the Edison Park Station).

    Mike Kaage has been around for 64 of those 82 long years, working from 4-9:00 a.m. in the morning every day. No illness, vacation or death in the family kept him from his work. He started working there in 1961 at just five years old for his father, Irv Kaage, earning $0.25 per hour.

    At the time, newsstands like his peppered every corner. But Mike understood that it was important to keep the tradition alive even as they slowly disappeared, taking over his father’s business in the 1990s.

    Kaage recalls fond memories as well as some challenges. He recalls working at the newsstand in frigid temperatures (seven degrees below zero), but also remembers joyous events, like the day after the Cubs won the 2016 World Series.

    Kaage treats his 75 daily customers like family. He remembers all of their names and knows which newspaper each customer gets. But now, it’s time to say goodbye so he can dedicate more time to his family — specifically, his grandchildren.

    "My wife passed away in February and previous to that, for three years we were babysitting our granddaughter two days a week," Kaage told CBS News. "Now with her gone, it’s really up to me."

    Kaage’s customers, meanwhile, are shocked and saddened by the news. "I thought he would just die here one day," said customer John Evanoff.

    Kaage said the newsstand should have closed decades ago, but his loyalty to his community and father drove him to keep it open. "I’ve paid my dues," Kaage told CBS News. "I know I’m going to miss it, but it’s a new chapter in my life."

    Kaage told CBS News he doesn’t plan to sell or give away the newsstand, so its future is unclear, but what is certain is that holding on to a single job for this long is uncommon these days. Kaage is talking to the local chamber of commerce to discuss options.

    Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it

    Factors that can impact the timing of retirement

    Pew Research reports that in 1987, 11% of Americans ages 65 and older were working. As of 2023, 19% of those 65 and over were still employed.

    Several reasons could explain this trend. First, many Americans might not have the option to stop working by 65 because they lack sufficient savings to retire comfortably. The Federal Reserve put median retirement savings among Americans ages 65 to 74 at just $200,000 as of 2022, the last year for which data is available.

    More recently, in 2024, Vanguard put the median 401(k) balance among Americans 65 and over at $88,488 (by contrast, the average amount is $272,588).

    While the Fed’s data may be more applicable broadly (since Vanguard is only looking at its own retirement plan data), the end result is the same. With the new “magic number” to retire comfortably being $1.26 million, many older Americans just don’t have enough saved and need to work longer to make up the difference.

    However, working longer can also be advantageous from a Social Security perspective. People born in 1960 or later reach full retirement age at 67, which is when they can claim their monthly benefits without a reduction.

    Those who choose to delay Social Security past full retirement age can grow their monthly benefits by 8% per year until they turn 70. Here too, many people need to keep working in the preceding years to make this strategy work.

    Then there’s also the fact that some people derive a lot of personal purpose and meaning through their work and just plain love their jobs. And we now know having that routine can be good for mental and physical health.

    In a February 225 University of Michigan National Poll on Healthy Aging, those who continued to work past 65 were more likely to say that having a job had a positive effect on their wellbeing and health.

    How to know when it’s time to retire

    So when is it time to call it quits? Dreading going into work is definitely one sign. Another is if work starts to be tough on your body and contributes to health problems instead of staving them off.

    You might also reach the point where you feel you’ve saved enough money to be able to retire without worrying about how to pay the bills, month to month. This might especially hold true if you’re able to delay Social Security for larger monthly benefits.

    Finally, if your job starts to get in the way of doing the things you want to do, that’s a good reason to retire.

    In Kaage’s case, he wanted to be there for his grandchildren. You may decide you want to retire to spend more time with loved ones or help out with childcare if you’re able, like Kaage.

    But if you’ve worked hard all your life, there should be no guilt in acknowledging that you’re done and ready for that next chapter.

    What to read next

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    This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

  • ‘A menace to the neighborhood’: LA residents say ‘hell house’ drawing squatters after owners ‘hoarded themselves out of their home’ — leaving them in ‘limbo’ waiting months for city help

    ‘A menace to the neighborhood’: LA residents say ‘hell house’ drawing squatters after owners ‘hoarded themselves out of their home’ — leaving them in ‘limbo’ waiting months for city help

    The Los Angeles neighborhood of Westwood is "well maintained" with "surroundings [that] are quiet and clean" according to comments on the online real estate marketplace Trulia.

    But now, one home that neighbors describe as a “hell house” — attracting squatters, drugs and criminal activity along with a growing pile of garbage — is making life miserable for residents.

    Don’t miss

    As KTLA reports, the underlying issue is that the older brother and sister who own the home are anti-social hoarders who regularly engage in profanity.

    "They’ve been a menace to the neighborhood for the whole time that we’ve lived here," said Amy Gordon, a local resident.

    But Gordon says things went from bad to worse in the past year as the pair “hoarded themselves out of their own home” — moving into their cars out front, essentially opening their front door to problems.

    Now the neighbors have banded together to address the challenge, and their city council rep is taking action.

    When one problem house causes problems for everyone

    Serious hoarding presents a number of concerns for both hoarders themselves and their neighbours. Safety is a serious issue.

    Hoarding can attract rodents, increase risk of fires and — in the case of the Westwood “hell house” — intruders.

    Gordon says the home is attracting people who leave drug paraphernalia around the community, including across the street from a school.

    Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it

    It also impacts property values — as the home where the hoarding takes place drops in value, so do other homes in the area.

    However, it’s important to approach the situation with compassion, since hoarding is a real disorder that affects people of all ages.

    Area resident Carrie Livingston, told KTLA that she called Adult Protective Services to try to help the homeowners, to no avail.

    Neighbors reached out to city police, city leaders and even building and fire inspectors to get the "hell house" owners the help they desperately need.

    Since then, community residents have filed restraining orders against the brother and sister.

    They’ve also gathered more than 150 signatures on a petition they sent to their city council representative Katy Yaroslavsky.

    And that got a response.

    Yaroslavsky promptly asked the city attorney to declare the property a public nuisance and reached out to the Los Angeles County supervisor to provide the siblings with mental health support.

    She’s also advocating for policy change in such situations, saying it takes too long for the city to step in on properties like this one.

    “The process is slow, complicated, and leaves neighbors in limbo,” she said in a statement. “I support current efforts to streamline how the City handles nuisance properties and will keep pushing to move that work forward.”

    What to do if your neighbor is a hoarder

    If you find yourself next to a hoarder, you could try speaking to your neighbor directly about the problem, but they may not be responsive.

    Like the residents in Westwood, you may need to seek intervention. It helps to be aligned, as they have been, in your approach.

    Reach out to local law enforcement if you feel you’re in danger and connect with a local resource like Adult Protective Services and health departments to check in on your neighbor and try to help them.

    This process could take some time. It’s important to protect yourself and your loved ones — as well as your property — in the meantime.

    • Consider constructing a fence, sealing garbage and recycling bins and bringing in a pest control company if required.
    • Document the evolving situation with images, video and notes — particularly in the event your property ends up sustaining damage due to your neighbor’s hoarding.
    • Contact the local code enforcement office if you feel your neighbor has violated a specific ordinance. For example, if there are piles of trash outside your neighbor’s home seeping onto your property, that’s something you could bring to your town or local law enforcement agency.
    • Report any violations of homeowners association (HOA) rules to the HOA board, as Nolo legal services advises. From there, they should be the ones to step in and take action.

    You may, depending on the circumstances, have grounds to file a lawsuit against your neighbor if their hoarding has caused damage to your home or cost you money in a specific way.

    Even if you’re not in danger per se, you have the right to protect your home and community. And you could help people suffering from a very serious disorder.

    What to read next

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    This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

  • ‘Nobody should have to go through this’: Knoxville family falls victim to ‘self-showing’ scam after finding a rental on Facebook Marketplace — now they’re out $1,800 and have nowhere to live

    ‘Nobody should have to go through this’: Knoxville family falls victim to ‘self-showing’ scam after finding a rental on Facebook Marketplace — now they’re out $1,800 and have nowhere to live

    When Alex Todd, his sister-in-law Natalie Ryffel, and their spouses needed a home to rent in Knoxville, Tennessee, they found a listing on Facebook Marketplace that was within their budget.

    They contacted the landlord and asked for a showing, but they were told it was a self-viewing home — meaning the landlord didn’t meet Todd and Ryffel at the property to show them around.

    Don’t miss

    Rather, the landlord sent them the lockbox code for the property and told them to let themselves in and see if the home met their needs.

    Once Todd and Ryffel confirmed they wanted the home and the move-in fees had been paid, the landlord once again sent them the lockbox code so they could move in. But it turned out to be a scam.

    Todd and Ryffel are out $1,800, in addition to not having a place to live. "Nobody should have to go through this," said Ryffel to WATE 6 News.

    Too good to be true

    When Todd and Ryffel found a home on Facebook Marketplace, they didn’t spot any red flags throughout the process of seeing the home and moving in, they told WATE. It was only once they’d moved in that they learned they’d been victimized.

    The landlord, Buh-laal Mustafa Hatim, spoke with Todd by phone and text message once he responded to the Facebook listing. Hatim allegedly wanted $850 a month for rent and sent Todd a contract that looked official.

    "Every time I would talk to him and we would send money to him, he would shortly after send receipts via email," Todd said, adding he didn’t think anything was amiss. “He wanted payment through Chime. I figured, okay, he may not have an actual bank account."

    Todd and Ryffel paid Hatim $1,800 — $850 for rent, $850 for a security deposit, and a $100 application fee.

    “We paid him what we were supposed to pay him,” Ryffel told WATE. “We moved in the day before Easter.”

    But a few days later, they received a notice from the realty company in charge of the property: “You are illegally residing at this property without the consent of the owner. You are instructed to vacate the property immediately.”

    Now, the Todd and Ryffel families don’t have anywhere to go. And, as WATE discovered, the rental property was listed on another website for $1,350 a month, not $850.

    As a gesture of goodwill, the actual realty company is giving Todd and Ryffel a free week-long stay at Woodspring Suites, an extended stay hotel. They plan to use that time to find a new rental. But the chances of them getting their $1,800 back are slim.

    "You have people who work hard for that money, only for it to be gone," Ryffel said.

    Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it

    What is a self-showing scam?

    In 2024, the FBI received 9,359 complaints related to real estate fraud, and total losses for those types of scams totaled more than $173 million.

    That number isn’t broken down by specific scam type, so it’s hard to know how many of those fraud reports stemmed from rental scams versus something else related to real estate. However, scammers are getting better and better at taking people’s money. So it’s important to know how to spot a rental scam so you can avoid it.

    In a self-viewing rental scam, fraudsters find legitimate property listings on rental sites. Then they pretend to be working for the realty company in charge of renting the house out. They gain access to the lockbox by signing up for an account.

    Then, they give prospective tenants access to the lockbox so they can do a self-guided tour, and then take their money once the tenant decides to move forward with the rental.

    That’s why you should be very wary of any rental where a landlord or property manager won’t meet you in person.

    What to look for

    When you come across a listing, double-check to see if it appears on other sites. Zillow highlights some other red flags for renters to be mindful of:

    • Money first: The property manager asks for the money up front, even before seeing the house.
    • Too good to be true: If a one-bedroom goes for $1,500 a month in your area, and you see one listed for $900, it’s highly suspicious.
    • Untraceable payments: If you’re being asked to send payments through an unconventional means that are untraceable, such as cash, crypto or gift cards, then move on.

    In Todd and Ryffel’s case, they might have protected themselves by looking for a listing on other websites. Of course, a self-showing rental may be legitimate, but your best bet is to cross-reference the “for rent” sign and to call the available number posted so you can speak to the realty company in charge.

    Even then, it’s not unreasonable to ask someone to meet you at the property, with their ID, so you can feel safe.

    What to read next

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    This article provides information only and should not be construed as advice. It is provided without warranty of any kind.