by Dr. Jeffrey Lant

Today, for the 360th time in its exalted history, a history far older than
the republic itself, Harvard will, with all the colorful paraphernalia of the
Academy, send a goodly percentage of the brightest young people on
earth on their way to kismet.

Some of these people will become heads of state, women too; that is why
the address of Her Excellency Ellen Johnson Sirleaf, the President of the
Republic of Liberia is so important.  It proves that even in territories inclement
towards women, women may rise high indeed.

Some of these people will head corporations and reap billions, some of
which will undoubtedly be given to Harvard in the form of very public generosities.

Some of these people will buck the capitalist trend and found worthy causes
of every kind. The world has need for every one of them and the people who
give up much, the better able to give more.

Others will rise high in the military, in governments of every nation on earth,
in education, science, medicine, the arts… there will even be a movie star or two but,
perhaps, no rap musician. Not, however, because Harvard would not welcome one; it
would. Rappers, however, may demur; it’s a matter of image…. and no people on
earth are as stringent about image as they are.

One more category may well appear: terrorist, revolutionary. Harvard does not
go out seeking such people, but Harvard has helped shape many such. Red
John Reed, Bolshevik, (class of 1910) is buried in the Kremlin wall… a signal honor
for a gentleman of Crimson. Like so many Harvard graduates he rose high, though this
time for a cause most every other Harvard graduate loathed and disdained. John
Reed wouldn’t have cared about that; Harvard graduates are above such trivia.
They know that what they do is important, even if no one else on this planet agrees.
This profound conviction is part of what the graduates take away today… you can
be sure of it. It is one of the best reasons for the very existence of Harvard.

Many of today’s graduates will write about their Harvard experiences; I am one of
them. Most will cherish happy memories and say so, fudging the truth on
which Harvard prides itself and pruning things not quite happy enough. In truth,
their classmates were probably never as bright as they will remember, as bright or
as dedicated. The faculty never as welcoming and helpful as they will recall. And the
university overall not as profoundly influential. But embroidering your Harvard past
is winked at since happy memories beget handsome legacies. And there is no need
to remind so many, and in print, too, that their time here was not as sun-kissed as they
ardently desire it to be. You were young, vibrant, surrounded by possibilities, and you’d
been marked with the most winning brand of all. Under the circumstances, the utmost
joy and contentment are understandable; indeed mandatory.

There will be some of course, but just a handful who will write otherwise, telling, years
from now, of painful isolation, alienation and the persistent thought that they never were, not for a moment, good enough to have gone to Harvard in the first place, that they were a fluke, a sport of nature. Perhaps. But they will write such sentiments in a ringing style, lyric, too, that shows in its careful refinement and clarity another benefit of a Harvard education.

This day, the most important day in the life of virtually every graduate, save only the
day on which they were born, will start early; the ceremony commences in Harvard
Yard at 9:45 a.m., but Harvard Square is awash with the camera-totting hours before,
even from first light. A sign of  the times: persons unable to be present can see it all, and
clearer, on the Web. There is not a one who so watches that does not wish to be
in Cambridge instead… for all that they see more and better than the audience
shaded by the great trees in Tercentenary Theater.

Graduates, at once shy and proud, will move today surrounded by their personal
claques, the lucky ones invited to see and venerate. Proud parents, who often dipped deep to make this happen, have been admonished, several times, to be prompt and organized. Graduates have conflicting feelings about these folks. They are grateful, of course, though never as grateful perhaps as they should be. It would not do to slight them, but, this is the last day, the very last day, they can see their classmates and friends, similarly burdened, as they will never be again: present, accounted for, resoundingly young; friends, colleagues, lovers, too. This recognition, this sadness is palpable. The pull of the golden past, slipping away forever, against the dawning future, ardently desired… but not this day. This is why the tears fall today for this must be a bittersweet moment for all. In these precincts the past and future truly collide today, to roil emotions. Parting is indeed such sweet sorrow… and now they truly know it.

It is now just 5 a.m., the dawn of this day of days is nigh. It is a day of memories,
memories retrieved, memories born. Parents will recall memories unbeckoned
of their beloved graduates and their brief lives. They will have, for themselves alone,
moments poignant and keenly felt, the more so if they had, once upon a time, a Harvard
Commencement of their own. Then Cambridge becomes the best it can be: an ever-
renewing place of reverie and remembrance, a place where you are always welcome,
for you are part of what has shaped this special place.

The trickle of early comers, seeking parking spaces more valued than gold,
will soon grow into serious traffic. Ladies in hats otherwise known only at weddings and
gentlemen in ties they will later shake off as gladly as a noose begin to appear as
do the marked men of the day… the sheriff of the county who will ride in on white
horse to declare the proceedings open; officials in their always ill-fitting cuttaways
and top hats… and of course and always the brightly garbed graduates in mortar
boards they never wear quite right. With their gowns a Rosetta Stone clearly indicating
just where the graduates have been and where they are going, these players gather
together, together to march into the ceremonies where they shall become, so the
University’s president will pronounce, members of the company of educated men and

This is what every graduate has earned… and everyone has come to hear.  And
it is a marvelous thing, not just for those present but for the entire world, soon
to benefit from the skills, dedications, and hard work of this renewed company,
the company we all rely upon so much.

Think of these new members of this company today. They have much to accomplish
and many lives to touch and improve. We must all be glad they have such a day as
this to start them on their way, for they go forward for us all.

Musical note

Every commencement comes alive when the University’s fight song, “Ten
Thousand Men of Harvard”, written by A. Putnam (class of 1918) is played.
Listen and rejoice.



by Dr. Jeffrey Lant

There are many ways to sell products through creative marketing and sales endeavors. But nothing beats coercion. Wouldn’t you like to increase your sales quotas by certain can’t lose methods? Well the British, that nation of shopkeepers, found towards the middle of the 19th Century a sure fire way to fill its voracious coffers.

That way came to be called the Second Opium War (1856-1860). The goal was to turn the entire Chinese Empire into an opium den. You can imagine the British licked their chops at the prospect of having hundreds of millions of constant and predictable users, each one contributing to Rule Britannia.

They used any methods they could dream up, and the results of course were predictable. Imperial China dissolved in a chaos and cruelty of unlimited opium.

As part of their plan, they took a torch to one of the most beautiful and civilized complexes of exquisite and lavish display, the Old Summer Palace in Beijing. It pleased these civilized gentlemen to destroy every beautiful thing they could find, whilst collecting booty to take home, including what was called the bixi, a magnificent 17 foot marble stele which showed a tortoise surmounted by a dragon.

It was presented, in due course, to Harvard University in 1936 for the 300th anniversary. It was said that anyone who rubbed the nose of the statue would have good luck. But of course good luck flowed only one way… towards the gentlemen looters. They were the hare, and while they gamboled, the dragon slept, as it did all over China for so many pernicious years.

China was simply a box of treasures to be emptied as soon and completely as possible, while insouciant Harvard undergraduates walked past the stele and never knew what it was or the tragedy it represented. That was no concern of theirs.

But quietly, sometimes imperceptibly, but always certainly, the dragon began to stir. This time it was the hare who slept, as it was want to do in the famous tale by Aesop. The tortoise simply moved ahead, unheralded, largely unknown, but without opposition or even acknowledgment… until now.

The slow moving tortoise is now about to astonish the world, and economists and financial advisers worldwide are now aghast at what the sleeping tortoise has done, and what the hare has slept through, all unawares.

All hares, tortoises, people everywhere, are moving inexorably now towards the day of the tortoise, now just literally hours from changing the world when the year 2018 will become a date every school child knows… for it is the day the Great Republic is surpassed by the tortoise.

No longer will American students rub the nose of the tortoise for their luck… for the good fortune that was once theirs has shifted forever… and it is now too late to change the dynamic of events, for the American Era is dwindling, dwindling, soon to be just another statistic, no longer the basis for a superior life.

Some facts

The Conference Board indicates that by 2018, China’s contribution to the world’s gross domestic product will surpass that of the United States. In other words, China’s economy will become more significant than the American economy.

How could such a terrible thing (from our standpoint) have taken place? Was every one of the nation’s captains asleep through his watch, or just praying that he could get through it without further damage, and without widespread public knowledge or concern?

In 1970, the United States contributed 21.2% of the total global economic output. This remained consistent for another 30 years. That is, until the year 2000. In every year since 2000, with one exception, America’s percentage of the world economic output has declined. In 2015, for example, the United States contributed 16.7% of the world’s economy. By 2025, this is expected to fall to 14.9%. Nowsee the other side of the coin.

In 1970, China was responsible for a mere 4.1% of the total. By 2015, this had risen to 15.6%. In 2025, China’s contribution to the global economy is projected to be 17.2%. And so it goes, with the aging U.S. economy more and more at risk; the Chinese dashing ahead, fueled by the kind of enthusiasm and adamant endeavor that distinguishes winners. We talk about our need to succeed. The Chinese simply do so.

Just the other day a body blow to the image of the United States took place, and right down the road, too. This time, the bad news came from Massachusetts Institute of Technology. U.S. News & World Report, which annually rates top learning institutions, demoted M.I.T. as the top engineering university in the world, elevating instead China’s Tsinghua University as the top engineering university in the world in 2015, the latest ranking.

Moreover, of the top 10 engineering schools, China and the United States each have four. However, China annually graduates 4 times as many students in the core subjects of science, technology, engineering, and mathematics as the United States. In these subjects, there are 1.3 million Chinese students versus 300,000 United States students. Moreover, in every year of the Obama Administration, Chinese universities awarded more PhD’s in the core subjects than American universities. Suddenly the boast that we were #1, always #1, felt hollow, even fatuous. The tortoise had done its work well. Most Americans never saw it coming.

What had gone wrong?

I think one illustration will help show what has gone so seriously wrong, and why we may be slated for a permanent number two position, no matter how much face paint and glory hallelujah music is dispensed.

On May 23rd, 2017, the black students of Harvard University held their own commencement exercises, detached from the main University. Although white and other students were invited to attend this program, only two or three actually did so.

They gathered together to share with each other stories about how ill treated they often have been at the World’s Greatest University. Instead of celebrating all the benefits they had, they chose instead to whine and snivel that their golden road was not richer still.

Of course this was a slap in the face of the University, and showed how off center the Administration at Harvard has become, allowing black students to have their own commencement activities, when every other racial configuration was not singled out for special treatment, and didn’t need it.

Now let me tell you how the Chinese would have handled this matter. The admistration in Beijing or anywhere else in greater China would have said:

“Boys and girls, you are among the privileged of the Earth. Get on with your work. You don’t need a special stole or a special ceremony or a special opportunity to complain, because what you’ve got is the most important thing on Earth… the ability to strive mightily and succeed. Young China, you are privileged. Young China, you know it; now get on with the task at hand.”

And so as all the black students complained about the trivial, the Chinese ate their lunch, and put the whole of the rest of us at risk. For shame, for shame.

We in America, prattling on constantly about how successful we are, have proven beyond a shadow of a doubt that we no longer understand the necessities for success, and where we do, we are not willing to implement them.

Can you even imagine that the habits of the average Chinese student are so lax and slothful? They have a joy of learning that once distinguished the Great Republic and its proud institutions, that now, like everything else has gone to Beijing, where the joy of learning flourishes.

Who saw all this coming, that we shall have to eat the dust and take the jibes that will surely accompany China’s inevitable rise to the top of the heap. Professors did not see this, for you can check the curricula of universities worldwide for courses that focus on the rise of China in our time, and for the foreseeable time to come. The media never saw this coming. Tracing the development of the new Chinese Empire is not as exciting as following the sexual peccadilloes of so many of our office holders, or their pilfering. They don’t care that the United States declines, so long as their pockets are filled with ill gotten gains that attract no special prosecutors.

For too long, America has believed what is no longer truth. We have become a nation of second rate quitters who fail to see the Chinese will do whatever they need to do, no matter how time consuming, difficult, and thankless the work. In 2018, these people will push their nation over the top to a glory not seen in China for centuries, and which was ours for but a short time.

So remember this: in 1981, when Ronald Reagan became president, China’s economy was just 10% the size of America’s. By 2014, the indefatigable Chinese had catapulted to 100%. And today, it stands at 115%. Consider this shocker: China’s economy will be 50% larger in 2023 than America’s, and by 2040 it will be 3 times larger.

We have slept for decades while the Chinese looked to the bixi and rubbed its nose, seeking the luck which did not need to be conferred upon them, but which was hewed out of the raw elements of their unstoppable humanity. They would succeed because any other course was un-Chinese… unthinkable… beyond the pale.

Theirs is the example of our time. Our children, and children’s children will have to learn to live with tattered 2nd place, or even less. For that is what we have left them. It was not good enough, once upon a time, for us, but it is perfectly acceptable now… so long as we can shut our eyes to the facts and accept the reality that is intolerable. God bless America… She needs the help.

Millennials: Here’s how to save and invest when you’re just getting by

Ever since she was a little girl, Kate Strauss says she heard Hollywood calling her name.

“I’ve always wanted to act and write, so after college, I moved to L.A.,” says Strauss, a comical, bubbly Millennial living her dream.

After graduating from the University of Arizona in 2014 with a degree in acting, Strauss hopped the first flight to Calfornia. .

While pursuing acting, she’s also taken on production jobs “because they’re fun, and I’m learning a lot,” she says.

The work is also keeping her afloat financially. “On a production job, I can make up to $3,500 a month after taxes,” Strauss, 24, explains.

Her income sounds cushy for a recent grad with less than $1,000 in student loan debt. But as a freelancer, her take-home pay can dip to $1,500 a month. She may have an acting or production gig for a time, followed by a waitress job, she says.

“Honestly, I’m living month to month,” says Strauss, whose bills include rent, food, cell phone, and car and health insurance. The rent is manageable at $850, but Strauss also spends $400 to $600 a month to buy organic groceries, and another $100 per month for personal upkeep, including salon appointments for her hair, nails and eyebrows. It sounds so L.A., but Strauss says, “It’s the cost of doing business as an actress.”

Still, she’s tried to cut back. “I cancelled out my gym and yoga memberships, rarely eat out, and drink coffee at home instead of buying lattes,” she says. For emergencies, like recently needing new tires for her 2008 Toyota Camry, Strauss’ mom helps out.

For now, saving and investing aren’t happening.

“I don’t invest because I literally don’t have any extra money,” she says. “But I’ve been listening to business guru Tony Robbins, so once I can afford to, I plan to invest.”


Now in their 20s and early 30s, young Millennials like Strauss have yet to embrace investing in stocks to reach long-term goals, like funding retirement, surveys show. Nearly half of  this generation —  America’s largest — say that investing is too risky, a BlackRock study reports. And just like Strauss, four of ten say they don’t have enough spare income to put aside for the future, according to a just-released survey from Stash, a financial app.

In the fall, she aims to start putting money in index funds, a type of mutual fund designed to match the components of a broad market index like the Standard & Poor’s 500 Index.

“I used to have the ‘money is evil’ mentality, but as I get older and read more about investing, I realize there’s nothing wrong with wanting to be comfortable and not having to worry about your finances,” Strauss says.

The Expert Advice

Rianka R. Dorsainvil, a certified financial planner and founder and president of Your Greatest Contribution, a financial planning firm in Washington, D.C., applauds Strauss  for being a go-getter. She says savings must be a priority. Dorsainvil offers steps that Strauss and other young Millennials can take to jump-start their savings.

  • Understand your cash flow. “You have to assign every dollar a job, so start with a budget,” Dorsainvil says. She recommends the You Need a Budget app. Users learn how to stop living check to check, get out of debt, and save more. It’s free for 34 days, then costs $50 per year.
  • Pay yourself first, period. Save 5% in an emergency fund and 10% in a retirement account, Dorsainvil says. “For Kate, I would suggest a Roth IRA because she is in a very low income tax bracket, which means she will pay less on the contributions she makes today than she would 10 years from now when her salary increases,” she says.
  • Enlist an accountability partner. “Find someone you strive to be like financially,” she says. “They are intentional about their spending, they are saving, and they are open to teaching you what they are doing.” Choose a person who wants to see you win.
  • Avoid lifestyle creep. For instance, if Kate lands a new acting role, and her salary increases by $20,000, she may want a larger apartment. But, Dorsainvil warns, “Instead of ditching your roommate and renting a more expensive apartment, stay where you are and continue to live off of your starting salary as long as possible,” she says. Put your raise to better use by saving 50%, applying 30% toward paying off debt and spending 20% on what you want.
  • Learn money basics. Our expert recommends Nerd Wallet and XY Planning Network, a fee-only group of financial advisers committed to serving Gen X and Gen Y clients.

8 Sins Christians are Starting to Ignore

8 Sins Christians are Starting to Ignore

8 Sins Christians are Starting to Ignore

There are certain sins that Christians are always good at pointing out – usually in others. And there are obviously sins that we are shocked and appalled by, and usually see these sins as worse than others. But the reality is, all sin separates us from Christ. There aren’t degrees of separation – you are either reconciled to God or you are a stranger to him (see Colossians 1:21-22), there is no in-between.

We can trick ourselves into believing that it’s the really “big” sins we have to avoid, all the while ignoring deadly sin in our own lives. Make no mistake—all sin is wrong, all sin needs to be confessed and all of us need to walk away from our sinful tendencies and through humble, dependent faith, walk in righteousness.

Here are 8 sins we tend to ignore but can’t afford to ignore any longer.

1. Selfishness/Self-Righteousness

How often did Jesus call out the Pharisees in the New Testament? All. The. Time. And it was always for self righteousness or selfishness. If you have to compliment yourself on something good you’ve done, then you aren’t doing it right. So many of us like to display our faithful acts so that others will know what good Christians we are. Christ doesn’t care what everyone else thinks of your generosity. He cares about your heart and your motivation. If you need other people to know about the good things you do, feel, or think in order to feel validated, then you need to re-evaluate.

8 Sins Christians are Starting to Ignore

    • 2. Patriotism

      For the record, I do NOT think patriotism in and of itself is a sin. I put this here because all too often we put faith and Christian values in the same box as political party and patriotism. The bible is clear about the fact that Jesus’ name will be declared to ALL nations and peoples of the world. We shout, “‘Merica!” and talk about how much better we are than everyone else, but that’s not biblical. We project Christianity on to the American flag and assume that God acts American, but that’s not how it works. Celebrate American values and understand how blessed you are to live here, but remember that at the end of the day you are a citizen of heaven, and heaven will be full of people from all over the world.

  • 3. Fear/Worry

    Jesus is very clear about worrying. He flat out tells us not to worry. Faith requires trust. 1 John 4:18 says, “There is no fear in love. But perfect love drives out fear. . .” God is love. He loved us enough to send his son to die to atone for our sins. His love is perfect; therefore, we should have nothing to fear. I know fear is inevitable sometimes. It is a major struggle for me. We are not perfect, but fear and worry are not part of the equation with Christ. These attitudes that imply a lack of faith. All we can do is remember that God is sovereign and always in control.

  • 4. Pride

    We talk about pride all the time in church. We consistently discuss how detrimental and dangerous it is, but it seems like we don’t recognize what pride actually is. We don’t realize that every time we refuse someone forgiveness we are acting in pride. Every time you argue with a friend, family member, or spouse and insist that you will not be the one to apologize first then you act out of pride. Remember the grace that Christ extends to you and try to extend that same grace and forgiveness to others.

    8 Sins Christians are Starting to Ignore

      • 5. Gluttony/Coveting

        This sin is closely related to pride. We bury ourselves in debt in order to make sure we have the best and newest things. The disciples often lived off of the generosity of others and Jesus was a poor carpenter. I’m not saying that wealth is inherently bad. It’s not. If you can afford that Mercedes, by all means, buy it. But if you can’t; if you are spending hundreds of dollars each month paying off debt, then you could be committing a modern form of gluttony. You need to look inside yourself and search your heart. If your nice things were taken away, would you still be satisfied and able to find joy in Christ? Why are you really in debt? Who are you trying to impress, God or men?

    • 6. Gossip

      I’m from the South, and there is an unspoken rule here that you can say whatever you want about someone as long as you follow it with, “Bless her heart!” I am as guilty of this as anyone. We like to talk about other people’s lives as if we live in their heads and know everything about them. This is something “churchy” people are constantly accused of, and is often the result of a judgemental attitude (covered below). Why won’t the woman who had an abortion come to your church? Because she’s afraid of the looks you’ll give her and the distance at which you will keep her. The same could be said for the pregnant 16 year old or the man who cheated on his wife. Sure, it’s nice to escape our own issues by talking about someone else’s for a while, but let’s try to remember to speak with grace and that our sin is just as sinful as anyone else’s.

    • 7. Hatred

      In the Sermon on the Mount, Jesus  tells us what we already know – that murder is wrong – but he follows that up by saying that anyone who has harbored hatred towards someone has committed murder in his heart. Hatred is connected intimately with fear. We fear people we don’t understand and that fear causes us to hate them irrationally. The general attitude towards all Muslims based on the acts of a small sect is a perfect example of this. We also tend to harbor hatred against those who have hurt us. We constantly need to be searching our heart and monitoring our thoughts and feelings.

      8 Sins Christians are Starting to Ignore

      • 8. Judgment

        This one is the kicker. This is what will be the death of our faith and our influence. I know that Paul tells the churches to expel sinners from their midst. He encourages us not to indulge someone in sinful behavior. We use those verses to justify judgement of others and I believe this is a gross misinterpretation of scripture.

        The truth of Jesus is in our equality. We are all sinners in need of a Savior. Christians have accepted Christ and avoided condemnation based on faith and the grace of God. We do not avoid condemnation based on our own actions. Every time we think less of someone else, we forget that we are also sinners.The only way to avoid this sin is to acknowledge our own weaknesses and to embrace humility. In fact, that could help us avoid a multitude of sins.

Retirement Planning Is Your Biggest and Scariest Financial Resolution for 2017

One of your top financial resolutions for 2017 is to get serious about your retirement. If only you knew how to do so.

According to an end-of-the-year survey by Capital One Investing, more than one-third (32%) of investors will dedicate at least one of their New Year’s resolutions to personal finance, up from 27% in 2015. Though the top goal is creating an emergency fund (24%) which we’ve discussed in depth this year — a whole lot of you want to invest more in retirement savings (23%) and getting smarter about investing (23%). More than one-third of investors will increase contributions to their retirement plan, with 83% reporting they have access to a plan (up from 75% last year).


However, Prudential Investments found that although 80% of people they surveyed before the end of the year considered retirement their priority, the average grade they give themselves for the retirement preparation is a “C.” A very honest 12% give themselves a failing grade.

“Understanding the hurdles keeping people from a secure financial future is critical to helping them meet their goals,” says Stuart Parker, president of Prudential Investments. “This research reinforces the need for people to seek advice and the need for the investment community to give advisors the best tools and solutions available.”

So what are the key issues that are keeping you from sticking to your retirement resolutions? Well, 63% of you find investing complex and confusing, 66% think it’s harder to invest now than it was during your parents’ generation and 64% of you are overwhelmed by the number of available choices. Roughly 42% of you don’t know how your assets are allocated once you do invest, and 43% of you don’t know what it is you’re investing in.

One of your top financial resolutions for 2017 is to get serious about your retirement. If only you knew how to do so.

According to an end-of-the-year survey by Capital One Investing, more than one-third (32%) of investors will dedicate at least one of their New Year’s resolutions to personal finance, up from 27% in 2015. Though the top goal is creating an emergency fund (24%) which we’ve discussed in depth this year — a whole lot of you want to invest more in retirement savings (23%) and getting smarter about investing (23%). More than one-third of investors will increase contributions to their retirement plan, with 83% reporting they have access to a plan (up from 75% last year).

But don’t worry: you’re far from alone. A whopping 74% of you think you should be doing more to prepare for retirement, while 40% don’t know what to do to prepare. Though 24% of workers think they’ll need $1 million or more to retire, 54% have less than $150,000 saved in employer-sponsored plans. It doesn’t help that 20% of workers don’t believe they’ll ever be able to retire, while 35% say they’ll never be able to save enough, so it doesn’t matter when they start saving. That kind of retirement nihilism is leading to all sorts of bad decisions, with 57% of Americans saying they would use savings to cover a financial emergency.

That’s not helpful when 51% of all retirees retired earlier than expected, with 50% retiring five or more years earlier than expected. If you’re among the 2% of that group who retired early, because they were tired of working, congratulations. However, if you’re among the 52% who retired because of your health problems or those of a loved one or the 30% who were either laid off or bought out, it can be scary out there. Among those of you who haven’t retired he, 57% say health care costs could bite into retirement savings, another 57% say changes to Social Security might alter their plans and 45% say the potential for dealing with an illness or disability has them worried about their savings.

None of that has scared you into saving, though. According to a recent study of 1,000 U.S. workers by financial services firm Edward Jones, 45% of non-retired U.S. workers aren’t saving for retirement at all. Of that group, only 36% plan to do so in the future and almost 10% say they aren’t planning to save for retirement at all. While 58% of respondents 18 to 34 years old have not yet started saving, 90% say they have or plan to start saving for retirement before they turn or turned 30. However, as a testament to the power of procrastination, 26% of 35- to 44-year-olds say they plan to start saving in their 40s.

“When it comes to retirement savings, there’s a big difference between planning to save and actually doing so,” said Scott Thoma, principal and investment strategist for Edward Jones. “While intentions to save for retirement are legitimate, individuals tend to satisfy more immediate, short-term spending goals and push off their long-term saving goals. This behavior can be incredibly detrimental for individual investors, particularly as they enter the critical savings periods of their 30s and 40s when they have — and unfortunately waste — a tremendously valuable asset — time.”

This is not only a terrible approach to retirement planning, but it’s also one that has U.S. workers worrying themselves into some bad habits. When the U.K.-based deVere Group asked new clients between ages 50 and 65 what their top financial worry is, 52% said that they were concerned that they would have to “downsize” their lifestyles at some point in their retirement. Another 19% said they worried about having to work longer than they had planned to, while 15% feared not having enough funds to help children, grandchildren and/or elderly parents. In another survey, found that 50% of U.S. workers between ages 50 and 65 actually lose sleep worrying about whether or not they’ve saved enough for retirement.

“Whatever situation you’re in, it’s never too late to start growing, maximizing and safeguarding your retirement income — there are always things that can be done,” says Nigel Green, founder and chief executive of deVere Group. “But the time to act is now as the longer you put off planning for your retirement, the harder it becomes.”

Especially once children enter the equation. While 39% of singles told Edward Jones that they are not currently saving for retirement, that number ballooned to 51% of those in households of three or more. Along those lines, 58% of workers without children have already started saving for retirement, while just 49% of parents had done the same.

“Parents are recognizing the need to save earlier in order to account for additional costs, like education,” said Thoma. “We cannot emphasize enough the importance of saving for retirement early and often – it leads to higher future income in retirement, with less stress and uncertainty while working to achieve those goals.”

Considering all the expenses retirees will be facing, you’d think there would be more urgency behind retirement planning. The Voya study found that 61% of workers were significantly concerned about their inability to pay for health care expenses in retirement. Meanwhile, 58% were also significantly concerned that they would end up with fewer Social Security benefits than expected. That’s not great news, when 45% of retirees plan to rely on Social Security as a major source of their income in retirement and 66% of workers planned to start taking Social Security at age 66 or younger — well short of when full benefit payouts begin at age 70.

So what should retirees do to get a better start? Well, Thomas Walsh, an investment analyst with Palisades Hudson in Atlanta, says employer-matching retirement programs are always helpful, with many matching up to 3% or 4% of each paycheck at 50% or even 100% of the contributed amount. Advisors call it free money, which is basically what a worker is getting. However, having a small amount taken out of your paycheck each month isn’t the path to a comfortable retirement.

“As your salary increases, try to maintain the same standard of living while increasing your retirement plan contributions,” Walsh says. “Not only will the amount deducted from your paycheck escape income tax until retirement, the investments held in your account grow tax-free until the funds are later needed as well.”

Those additional tax savings also benefit from compounded growth over time — basically reinvested earnings making you more money — and can make a substantial difference in your future retirement income. However, if you’ve maxed out your employer’s retirement plan and still need a place to save, there are other options.

“Participating in an employer retirement plan does not disqualify you from contributing to a traditional or Roth IRA,” Walsh says. “Tax-deductible IRA contributions will be subject to a reduced income phase-out, but even nondeductible contributions offer a tax-efficient means of growth compared to a brokerage account.”

The benefits of maintaining both employer and private retirement plans will only increase as you age. Many employer retirement plans allow those who have reached age 50 to make an additional bonus contribution, or a “catch-up contribution.” For example, a 401(k) plan allows participants age 50 and over to defer an extra $6,000 into their retirement account each year. However, this additional contribution has no effect on the amount you’re able to contribute to your personal IRA.

“In fact, if you qualify for an IRA contribution, you’re permitted a similar catch-up contribution of $1,000 for a total IRA contribution of $6,500,” Walsh says. “This can add a substantial amount to your retirement funds at a time most are envisioning what their golden years will look like.”

But what targets are you aiming for? That can be a little tougher to discern. According to the advisors at T. Rowe Price, saving 15% of your earnings — including employer contributions — starting at age 30 can earn you upwards of $1.7 million by the time you retire. Now, that assumes 7% annual returns on your investments, a $50,000 salary at age 30, a 3% annual salary increase, a 4% annual withdrawal rate beginning at age 65 and 3% annual inflation. It also assumes that you wouldn’t forfeit about $570,000 by saving just 10% a year.

But what if you aren’t that young and haven’t really put away a whole lot for retirement. Don’t worry. For folks who begin socking away 15% at age 45, that still adds up to $457,000 based on those same variables. That’s helpful, since a recent Google survey study conducted by GOBankingRates indicates that 33% of U.S. workers say they have no retirement savings. Another 23% who have less than $10,000 saved. According to GOBankingRates survey responses, J.P. Morgan Asset Management checkpoints and Census Bureau data on median incomes by age range, a 30-year-old making the median $54,243 should have about $16,273 saved. However, roughly 67% of workers that age are well behind that goal.

Considering that 75% of workers over 40 are behind on their retirement savings, according to GOBankingRates, they can use any help they can get. Even throwing 15% of income into to 401(k) and IRA accounts, paying down debt and using the catch-up provisions that allow for bigger contributions to retirement plans by people over 50 can help investors salvage their retirement. That’s going to help the 58% of workers 18 to 34 who have not even started a retirement fund, which GOBankingRates and J.P. Morgan says should happen by age 24.

However, advisors at Voya Financial found last year that 74% of Americans have never calculated their monthly retirement income needs. Meanwhile, 51% of retirees have never tried to determine if their current savings will be enough to last through retirement – though 39% assume what they have will not last 20 years. A full 13% of current retirees don’t know how much savings they have in the bank in the first place.

HSBC says that 72% of pre-retirees ages 45 and older would like to retire in the next five years; however, 37% won’t hit that mark, largely (77%) because they don’t have the cash to do so. DeVere Group, meanwhile, found that 78% of workers from all over the world underestimate how much they’ll need to save for retirement.

“They know that saving for their retirement is now, without question, a personal responsibility for each and every one of us,” says Nigel Green, chief executive of DeVere Group. “However, what is alarming is that the vast majority do not know just how much they will need to save. This black hole in the detail — not knowing how much they will need in something as fundamental as funding their retirement — is extremely concerning indeed.”

There are other variables at play as well. HSBC found that 67% workers are unable to predict how much they are likely to spend on health care in retirement, including 63% of those living in households with an annual income over $79,999. UBS, which only surveys investors with at least $1 million in investable assets, found that only 50% in investors have factored healthcare costs into their overall financial plan, and only 23% have saved for their future care. About 88% of wealthy investors say factoring in health care costs is harder because people are living longer, while 76% note that the price of modern healthcare is significantly higher than it was for previous generations.

“The life expectancy factor is the trickiest one, because there is no way to confidently predict how long we will live, and we actually tend to underestimate our own longevity,” says Mike Lynch, vice president of strategic markets for Hartford Funds. “While in the past, life expectancy was shorter, today we are living longer, healthier and more actively than previous generations before us. That’s the good news and the bad news, because our retirement dollars may need to last longer and work harder than we realize.”

As a result, Voya Financial points out that 59% of working Americans are very or extremely concerned about outliving their retirement savings — with 74% having never calculated their monthly retirement income needs — just taking that first step can be tough. Voya notes that retirees will need 70% of their current annual income to continue their current lifestyle in retirement.

That’s proving to be a tough obstacle Though GOBankingRates notes that 13% of workers have $300,000 or more saved for retirement, about 30% of those age 55 and over have no retirement savings and 26% have less than $50,000. In fact, only 26% of Baby Boomers nearing retirement age have $200,000 or more, while 31% of Boomers over 65 can say the same.

That still beats the 52% of Generation X (ages 35-54) who still have less than $10,000 in retirement savings after the recession wiped out 45% of their net wealth on average, according to Pew Research Center. Roughly 31% of Gen Xers have no retirement account at all, though 40% of Gen Xers over 40 have more than $50,000 in retirement accounts. Among that group 7% have between $200,000 and $300,000 socked away, while 15% have $300,000 or more. Meanwhile, though 60% of Millennials (18-34) have started a retirement fund, 72% have saved less than $10,000 or nothing at all. A full 42% have no retirement savings, though that percentage shrinks to just 36% of those older than 25.

If you’re looking for bare minimums, GOBankingRates and J.P. Morgan have calculated them out. If you’re age 40 and making the $66,693 median salary, you should have more than $100,000 saved for retirement. Unfortunately, only 20% of people at that benchmark do. For the 50-year-olds making a median of $70,832 a year — the peak of their earnings — there should be close to $212,496 socked away. Only 22% have hit that mark. As for 60-year-olds coasting into retirement at $60,580 a year, only 26% have the recommended $260,500.

The best advice anyone can offer is to start now. Don’t worry if you didn’t start saving early on: Just get to saving. Edward Jones noted that 90% of its study’s youngest respondents said they planned to or began saving in their 30s or earlier. However, only 64% of respondents ages 35 to 44 actually began saving in their 30s. Roughly 22% of all respondents say they began saving between the ages of 40 and 50.

Getting an Inheritance? Don’t Make These Mistakes

It turns out you’ve got a pretty good shot of landing an inheritance.

According to the Washington, D.C-based CFP Board, one-third of Americans can expect get a “significant” inheritance in their lives. If you fall into that fortunate category, congratulations. The Board says inheritance cash has multiple benefits, from providing the ability to pay off long-term debt to financing a family member’s college education.

But as hard as it might be to believe, there can be a downside or two with an inheritance, primarily because many recipients squander the inheritance and don’t want wind up using the money wisely.

Windfalls can turn into mixed blessings when people indulge themselves or rush into their decisions about what to do with their inheritances, states Jill Schlesinger, a financial planner and senior CFP Board ambassador.

Schlesinger lists the most common – and most financially painful – mistakes made by people who squander an inheritance. It all starts with bad decisions. Here’s a look:

Mindless spending: Some people begin mindless spending on “just a small indulgence,” Schlesinger notes. “A series of those kinds of purchases can morph into a spending splurge that might rob people of their ability to reach their overall goals for the inheritance.”

Forgoing professional financial advice: Even Americans who manage their 401(k)’s or their taxes well on their own can benefit from help, Schlesinger adds. “That’s because a windfall, whether it’s an inheritance or even lottery proceeds, is different,” she says. “Those who receive an inheritance should consider assembling a team, including an estate attorney, an accountant and a certified financial planner.”

Rushing big decisions: People receiving an inheritance should be careful not to make any big life decisions, like selling a house or quitting a job, too early in the process, Schlesinger explains. “An inheritance often coincides with loss, and many people aren’t thinking clearly when their emotions run high,” she says.

Doing nothing: Sometimes people who receive a lump sum become so worried about “investing at the top,” that they do nothing, she adds. “These individuals should consider dollar cost averaging, the investment strategy that divides available money into equal parts and then periodically puts the money to work in a diversified portfolio over time,” Schlesinger states.

Being too charitable: Schlesinger notes that people love their kids, friends and charitable organizations – so much so that they sometimes neglect to take care of themselves after a financial windfall. “Push the pause button,” she advises. “There is plenty of time to provide generous support after a plan is established.”

Overall, approximately 50% of inheritances are “squandered,” says Darren T. Case, a tax and estate planning attorney at Tiffany & Bosco, P.A. in Phoenix. “And they’re squandered almost immediately,” notes Case. “Often times this is due to the beneficiary simply being unprepared to receive the inherited windfall.”

Like Schlesinger, Case advises heirs who inherit a financial windfall to get good help right out of the gate, and bring in a professional, if necessary.

“From an estate planning standpoint, avoiding a blown inheritance often starts with family discussions about inherited wealth, which very much differs psychologically from earned wealth,” he says. “However, assuming that the family meeting never occurred prior to the beneficiary receiving the inheritance, one recommendation to beneficiaries is to come up with a plan of what to do with the inheritance with a reputable financial advisor, and also strongly consider waiting a significant amount of time prior to making any decision.”

Other financial professionals advise against heirs taking a lump sum payment in an inheritance.

“A large percentage of net worth for most people is tied up in retirement accounts,” offers Brent R. Sutherland, a financial planner with Ntellivest in Pittsburgh.

When the owner of a traditional retirement account (an IRA or work retirement plan) passes away, the beneficiary has three options in which to receive their inheritance, Sutherland says:

1) As a lump sum distribution.

2) As payments spread over five years

3) As payments spread over the course of their lifetime.

“A lot of people make the mistake of taking the lump sum distribution, not knowing that all those funds get treated as ordinary income, which often bumps them into the highest tax bracket,” he says. “In this situation, a significant portion of the inheritance is lost immediately via the Internal Revenue Service.” Sunderland says the beneficiary is usually always better off taking a smaller distribution over longer periods of time. “This way, the money can continue to grow tax-deferred while also helping keep the beneficiary in a lower tax bracket,” he adds.

In addition, the way inheritances are set up, there may be other tax considerations that most people just don’t know about, and can wind up costing them even more money.

“One of the biggest mistakes people make with inherited assets is spending them right away without considering the tax implications,” notes Anthony D. Criscuolo, a portfolio manager with Palisades Hudson Financial Group in Fort Lauderdale, Fla.

Criscuolo says that, depending on the type of assets one inherits, hasty action could mean handing over a substantial portion of your inheritance to the tax man. “For instance, if you inherit an IRA, distributions are subject to ordinary income tax,” he says. “Many people who inherit such accounts may regret acting hastily, without understanding the tax hit involved in an immediate withdrawal of funds.”

When you receive an inheritance, take the time to consider whether it changes your overall financial position, your future tax situation or your retirement plans, Criscuolo advises. “Depending on what you receive, you may be able to adjust your portfolio’s asset allocation, pay down high-interest debt or make new investments that were previously out of your reach,” he says. “It’s important to make a long-term plan and to avoid the temptation to make big purchases, such as a vehicle or a home, right away.”

“Instead, take your time, and consider hiring a financial professional to help you make the most of your windfall,” he adds.

HSA accounts: The good news and bad news

Why HSA accounts can be a blessing and a curse

High-deductible health plans spell trouble for many people’s financial and health outlook.

If you don’t know what a health savings account is, it’s time to find out.

These accounts, which are available only to people who have a high-deductible health plan, offer a trifecta of tax benefits for people who use them to save money for medical expenses: you put money in pre-tax, the money grows tax-free and is distributed tax-free as long as you use it on qualified medical expenses. But for many people, the disadvantages of such plans will outweigh the advantages.

A key tenet of President-elect Donald Trump’s stated health-care plan is to expand access to these savings accounts, but there’s already a growing trend among employers to move employees to high-deductible insurance plans. That means consumers need to understand both those insurance plans and the pros and cons of health savings accounts.

Here’s why: A trend toward high-deductible health plans spells trouble for many people’s financial and health outlook — unlike a traditional insurance plan, a high-deductible plan necessitates having money set aside for initial health costs — but it’s also true that some retirement savers are going to like what they see with health savings accounts.

That’s because they are probably the most tax-beneficial account on the planet and, for those who have good health, good luck and the financial wherewithal to pay their health costs out of pocket while they work, a health savings account or HSA could be a stellar way to save for that huge health-care bill we’re all going to face in retirement.

You’ve seen the numbers, right? One estimate is that a 65-year-old couple retiring in 2016 will need $260,000, or about $13,000 per year for 20 years, according to Fidelity Investment data.

With an HSA, you contribute pre-tax money, like a 401(k) or other defined-contribution account. You invest the money, and it grows tax-free. The icing on the cake is that if you use the money for qualified medical expenses, you don’t owe any tax on that money at all. Ever.

“One of the major benefits of the HSA is the tax-deferred growth and tax-free distributions if proceeds are used for qualified medical expenses,” said Brent Ulreich, senior financial planner at Hefren-Tillotson Inc. in Pittsburgh, Penn. “Even after you leave employment, funds left in your HSA can be used to pay for medical expenses throughout retirement.”

But there are drawbacks. One major hitch is that to open an HSA, your health insurance plan must have a high deductible. In 2017, only health plans with a deductible of at least $1,300, for single people, or at least $2,600 for family coverage, qualify.

Given that only 37% of folks said they can afford to pay for a $1,000 emergency from their savings account (that’s from a 2016 Bankrate survey) the question is how many people are financially prepared to pay for the health expenses they face under a high-deductible plan?

High-deductible plans generally have lower premiums than traditional plans, but people who use such plans need to consistently stash the difference into an HSA. These accounts only benefit people who are disciplined about saving, or have enough monthly cash flow to cover their health costs.

Meanwhile, the long-term tax benefits of HSAs — letting that tax-free money grow tax-free — will only accrue to you if you don’t need to withdraw the money. That is, these plans are a huge boon to those who can afford to pay for medical expenses with cash on hand, letting the money in these accounts grow.

A study in 2006 by the U.S. Government Accountability Office (GAO) found that about 55% of the people who reported HSA contributions in 2004 didn’t withdraw any funds from their account that year. The study also found that HSA users had higher-than-average incomes, with 51% earning adjusted gross income of $75,000 or more, versus 18% of all taxpayers under age 65. “Many focus group participants reported using their HSA as a tax-advantaged savings vehicle, accumulating HSA funds for future use,” the study said. One focus group participant said he paid for an expensive surgery out of pocket, so he could save his HSA money for the future. (Granted, HSAs didn’t become available until 2004, so this report is an early indicator of HSA use.) Read the report

Moving toward high deductibles

The move seems to be toward such plans. Certainly, Trump’s health plan includes expanding access to HSAs and making such accounts inheritable.

Read more: Health savings accounts are crown jewel of ‘Trump care’

HSAs have long been favored by Republicans, in part because such plans are said to encourage smarter consumer behavior. Rather than almost all costs being covered by your insurer, you have those upfront costs to pay before the deductible kicks in. The thinking, at least in part, is that will encourage consumers to shop around. (Some studies suggest it encourages people to refrain from seeking care at all.)

But it turns out one aspect of the Democratic push toward Obamacare might also be encouraging employers to move toward high-deductible plans: the so-called Cadillac tax, which, if it goes into effect, will tax the value, over a specified amount, of the most generous health plans. That tax is slated to go into effect in 2020, though with the new Republican administration there seems to be a good chance it will be repealed. Under the Obama administration, employers were eyeing ways to avoid that tax by reducing the value over their plans, in part by shifting to high-deductible plans, according to a study by Richard L. Kaplan, a law professor at the University of Illinois. The full study is here

Cadillac tax or not, companies in general want to lower their health costs. A growing number of U.S. workers are covered by a high-deductible health plan paired with an HSA: 19% of workers who have employer-sponsored health insurance have that type of coverage in 2016, up from 15% in 2015, according to the Kaiser Family Foundation. Read their report.

Plan deductibles vary widely, but the average for workers who have a high-deductible plan combined with an HSA is higher even than the regulations call for: $2,295 for single workers and $4,364 for family coverage, according to the Kaiser Family Foundation.

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Here’s what Trump means for health care

Not all bad

High-deductible plans combined with HSAs do offer some consumer protections and benefits. For example:

• People with high-deductible plans are legally protected in terms of their maximum out-of-pocket expense for deductibles and copays. In 2017, that maximum is $6,550 for individuals and $13,100 for family coverage in 2017.

• Thanks to the Affordable Care Act, some preventive care—including some cancer screenings—are covered before that high deductible kicks in.

• The money you save in your HSA can be accumulated over time, unlike a flexible savings account that requires you to spend the money down each year.

• Your employer might offer matching contributions, like a 401(k).

• If you manage to save the money for retirement (that is, you don’t need to use it for medical costs before you retire), HSA accounts don’t require distributions the way that traditional IRAs do at age 70-1/2. And Trump has suggested HSAs should be inheritable.

Not all good, either

There are also some serious drawbacks. Here’s one: If you use your HSA savings for non-qualified expenses before age 65, “you’ll owe an additional 20% penalty in addition to any taxes due,” Ulreich said.

Generally, qualified expenses for HSAs are the same as those for claiming the medical expense deduction. Some examples of nonqualified costs include “unnecessary” plastic surgery, swimming or dancing lessons even if recommended by a doctor, most insurance premiums, diaper service, hair transplants, and electrolysis. See IRS Publication 502 for the complete list and Publication 969 for general rules on HSAs.

A health savings account “should always be viewed first as a savings and accumulation vehicle for the inevitability of medical emergencies, but it does offer an opportunity for an additional retirement savings strategy,” he said.

Another drawback is that the investment options in your HSA may be limited and more expensive than your 401(k). “I would say the investment options in general are not as good as what you’re going to see in a 401(k),” said Rob Austin, director of retirement research at consulting firm Aon Hewitt. “HSAs are a relatively new concept and don’t have the same assets under management,” he said.

As for allocating your perhaps limited paycheck to an HSA instead of your 401(k), be wary. In addition to cheaper and more robust investment options, your 401(k) may come with a better employer match. “Most people should probably look at [an HSA] as a complement to their 401(k) strategy if they’re looking at this as a long-term investment vehicle, and not so much as a replacement for it,” Austin said.

If you can swing it, do both, said Marina Edwards, senior retirement consultant at consulting firm Willis Towers Watson. “It could be a good strategy to save enough into your 401(k) to get the matching contributions and then allocate your additional leftover savings dollars to your HSA.”

Manage your money

With a high-deductible health plan, don’t set it and forget it. While the low premiums might be appealing, be sure to pay the difference (between those premiums and a typical health plan) into an HSA.

“The mindset when you’re going through open enrollment is, ‘Oh, this is a great deal. I’m going to pay less per paycheck,’” said Eric Dowley, head of Fidelity Investments’ HSA business. “Then they forget about it and then it’s, ‘Oh my gosh. I have to pay this.’”

Look at the difference in premiums between an HMO or PPO and a high-deductible plan. If you’re willing to pay $400 a pay period for the HMO but you’re paying $200 a pay period for the high-deductible plan, set that $200 monthly savings into a health-savings account, Dowley suggested.

If you’re lucky in health, or wealthy enough to cover your health expenses out of pocket, you can let the money grow in your account tax-free—awaiting your retirement. “To the extent that you can devote some money and set it aside for medical expenses that are going to take place in your golden years,” said Aon Hewitt’s Austin, “by all means go ahead and do that.”

But don’t embrace one of these plans at the cost of your health.

How couples are sabotaging their retirement

It’s not just how much you save, but how you save that matters

Coupling up has a lot of perks, financial and otherwise. Married people have more wealth, a nightly couch companion and automatic rescue — via an agreed-upon I’m-just-scratching-my-eyebrow signal — from the token close-talker at a party.

Yet, many twosomes don’t take advantage of the benefits. Research on the number of couples who aren’t using a “save me” signal is thin, but Harris Poll recently surveyed more than 1,800 Americans in a relationship — defined as married or living with a partner — for NerdWallet, and a third of respondents said neither they nor their partner is saving for retirement.

In fact, Americans in a relationship may be making mistakes that could seriously undermine their financial advantage, according to the survey. Here are three of the most worrisome missteps:

1. When couples save, it’s often in the wrong accounts

Here’s the general order when it comes to where you should save for retirement: Contribute to your 401(k) or other employer-sponsored plan, at least to the point where you earn all possible matching contributions. Then turn to a traditional or Roth IRA. If you max that out, you can add more money to the 401(k).

Unfortunately, many Americans in a relationship who are saving for retirement have somehow worked into that hierarchy a savings account, which showed up in the NerdWallet survey as the second most common home for retirement savings.

Thanks to low interest rates, growing your money in a savings account is nearly impossible. Money for retirement should be invested in a mix of low-cost stock and bond funds via a tax-advantaged retirement account. You can do that even without earned income: If you file taxes jointly, you can open a spousal IRA based on the income of the working spouse.

2. Couples are letting one partner shoulder the responsibility

It’s not unusual to have an income gap in a relationship; the pay gap actually widens with marriage and expands more when children come into play.

According to salary comparison site Payscale, married women without children make 21% less than married men without children. That gap widens to 31% when you compare married women with children to their male counterparts.

So it’s not surprising that in the NerdWallet survey, only 24% of Americans in a relationship said both they and their partner are saving for retirement, or that men in a relationship were more likely to report saving for retirement than women in a relationship (65% versus 46%).

Saving for retirement is a solo game until you’re married. After that, it should be a shared effort. That’s not because the nonsaver could be left with nothing in a divorce — how retirement assets are split depends on your state, but they do get split — but because that person could be giving up tax advantages and employer-matching dollars.

Even if one spouse earns less, the couple should be planning retirement account choices together. If only one of you has access to an employer match, use your shared retirement savings to contribute enough to catch that match, which is free money and a guaranteed return on your investment. If you both have an employer match, you should each contribute enough to take advantage of it.

3. Couples aren’t putting a dollar sign on their dreams

It isn’t hard to talk about the fun parts of retirement, like how and where you’re going to spend it. I’m not saying these chats aren’t important — my husband should know that I’m out if he ever buys an RV — but how you’re going to pay for those dreams should also be part of the conversation.

The trouble is that, according to the NerdWallet report, almost a third of Americans in a relationship who are saving for retirement haven’t discussed how much they need to save. This isn’t a fun part, but it also isn’t hard: An effective retirement calculator can shoulder some of the work.

How much you save makes all the difference in retirement. It means you can live in a beach house instead of a sand castle. It’s what gives you a choice about how you’ll spend retirement. Without savings, you could spend it working, and that’s if you’re lucky. Nearly half of retirees left work earlier than planned, most commonly due to health issues, according to a recent survey by the Employee Benefit Research Institute.

When you plan for your future, you can hope for the best while being prepared for the worst.

401(k) Intro: Is Your Retirement Plan Foolish?

How to get the most from your employer’s retirement plan.

It’s no secret that when it comes to retirement, you’re on your own, Fool. Traditional pensions — where employers send retired employees a check every month for the rest of their lives — are increasingly rare. As for Social Security, the average annual benefit is around $16,000, and we’ll see what happens to that when the future funding problems become present funding problems.

No, Fool, if you want to retire, you’re going to have to do all the saving and investing yourself. For many Americans, the best place to start is with the defined-contribution plan at work, whether it’s called a 401(k), 403(b), 457, SEP, or SIMPLE IRA. Taking advantage of such accounts is a great way to sock away thousands of dollars, with all kinds of tax benefits to boot.

But just because your employer offers a retirement plan, that doesn’t mean somebody in your office will tell you what to do with it.

Enter the Fools. We’re happy to share our knowledge about employer-sponsored, self-directed retirement plans, and in this tidy little collection we very much believe you’ll find out everything you need to know about yours. In fact, for the truly lazy, we’ve packed all the real information into the first 100 words of the first step. How’s that for brevity?

But, hey, we realize that there may be some individual questions that aren’t covered in this concise little package. So if you’ve read our whole collection here and still wonder, “Hey, what’s up with my plan?” — then give our Rule Your Retirement service a try free for 30 days. You’ll get access to special retirement discussion boards, plenty of good advice about how to invest your money, and some cool, whizbang financial-planning tools.

In the spirit of the aforementioned brevity, we will henceforth use the term “401(k)” when discussing employer plans. However, we recognize that you may have a different type of plan. The vast majority of our advice will still apply to you, but check in with the HR guru in your office to find out the particulars (especially contribution limits and employer matching arrangements) of your plan.

And now it’s time to learn how to use these accounts to improve your retirement prospects. Also, consider the opportunity to rule your 401(k): Check out The Motley Fool’s new guide to getting the most out of your workplace retirement account!

7 Facts About Your Roth IRA You Didn’t Know

You may be saving for retirement via a Roth IRA without fully understanding how it works and what it can do — or you may not be using one because you don’t appreciate just how powerful it can be. Indeed, making the most of your Roth IRA might even help you retire early.

Whichever camp you’re in, you’ll likely benefit from a brief review of the Roth IRA. Here are seven facts about it that are worth knowing.

Young boy in glasses at laptop looking astonished, mouth open


Roth IRA fact No. 1: The Roth IRA is relatively new

Your grandparents probably couldn’t have saved for retirement with a Roth IRA — though it’s much more likely that they had or have pension income than it is that you will have it. Roth IRAs were introduced as part of the Taxpayer Relief Act of 1997, with their most prominent feature being tax-free withdrawals in retirement. This is a good reminder that tax laws and possible investment strategies can change over time, sometimes getting better and sometimes worse.

highway sign that says "tax free"


Roth IRA fact No. 2: The Roth IRA isn’t the only IRA with tax benefits

There are two main kinds of IRAs — the traditional IRA and the Roth IRA — and both offer tax-advantaged ways to build your future financial security. With a traditional IRA, you contribute pre-tax money, reducing your taxable income for the year, and thereby reducing your taxes, too. (Taxable income of $70,000 and a $5,000 contribution? You’ll only report $65,000 in taxable income for the year.) The money grows in your account and is taxed at your ordinary income tax rate when you withdraw it in retirement.

With a Roth IRA, you contribute post-tax money that doesn’t reduce your taxable income at all in the contribution year. (Taxable income of $70,000 and a $5,000 contribution? Your taxable income remains $70,000 for the year.) Here’s why the Roth IRA is a big deal, though: Your money grows in the account until you withdraw it in retirement — tax free.

So while one kind of IRA offers an upfront tax break, the other offers a back-end one. In many cases the Roth IRA will provide the greatest savings, but sometimes a traditional IRA is the better choice.

Roth IRA fact No. 3: Roth IRA contributions must be made with earned money

If you’re a teenager who wants to sock away $500 you got for your birthday in a Roth IRA, you’re out of luck. Roth IRA contributions must be made with earned money. There’s no minimum age for opening a Roth, but anyone funding their Roth IRA, whether child or adult, must do so with earned income. For kids, allowance or birthday money doesn’t qualify, but cash earned through babysitting or odd jobs can. For adults, qualified earnings include wages, commissions, and even alimony payments, but not inheritances, Social Security benefits, or pension or disability income.

Close up of stack of money


Roth IRA fact No. 4: You can sock away up to $5,500 or $6,500 in an IRA

The contribution limit for all IRAs in 2017 is $5,500, plus an additional $1,000 for those 50 or older. That’s a combined maximum contribution, so if you have three IRA accounts, you might contribute $1,000 to one, $2,000 to another, and $3,500 to a third — if you’re 50 or older.

The limits increase over time, so expect higher ones in the future. In 2000, you could contribute only $2,000 to an IRA, while in 2002 you could sock away $3,000 — plus an additional $500 if you were 50 or older. The current limit has been in place since 2013.

Roth IRA fact No. 5: You can amass a surprising sum in a Roth IRA

Contributing $5,500 annually to a retirement account doesn’t seem like a recipe for riches, but you can build a surprisingly hefty war chest that way. The more you park in your Roth IRA each year, the more dollars you’ll have that can grow for you. Remember, too, that your earliest invested dollars can do the most for you, as they’ll have the most time in which to grow. Check out the following table, showing how much you might amass investing $4,500 versus $5,500 each year:

Growing at 8% For: $4,500 Invested Annually $5,500 Invested Annually
10 years $70,405 $86,050
15 years $131,959 $161,284
20 years $222,403 $271,826
25 years $355,295 $434,249
30 years $550,556 $672,902


You can see how powerful time is by looking at how much more rapidly the sums grow in later years. Note, too, how much of a difference it can make to invest an additional $1,000 each year — in this example, $5,500 instead of $4,500. If you’re old enough to contribute the $6,500 allowed for those 50 and older, aim to do so.

Fingers turning a dial labeled "profit" to "high"


Roth IRA fact No. 6: How you invest in your Roth IRA matters

While 401(k)s often limit your investment choices to a modest suite of mutual funds, you can invest in all kinds of securities through your Roth IRA. Some make more sense than others, though. For example, there’s little point to investing in municipal bonds in a Roth, since they’re typically already tax-exempt. Low-interest rate CDs and slow-growing stocks are also not ideal.

It can be effective to park Roth IRA money (at least some of it) in stocks you expect to be your fastest growers — especially if you’re a long way to retirement. If a stock averages 15% growth per year for 25 years, a single $5,000 initial investment can turn into about $165,000. Better still, fully $160,000 of it will be a capital gain — on which you pay no taxes, if you withdraw following the rules.

Real estate investment trusts are also good for Roth IRAs. They tend to generate a lot of dividend income, but much or all of that is often not eligible for the low long-term capital gains tax rate and is instead taxed at your ordinary income tax rate. In a Roth, there can be no tax at all. You can also do quite well just investing in a broad-market index fund or two, or a target-date fund, in your Roth IRA. Such a simple approach can be very effective.

The following table highlights the importance of your growth rate over time. It shows how much you might amass with $5,500 annual investments:

$5,500 Invested Annually For: Growing at 6% Growing at 8% Growing at 10%
15 years $135,699 $161,284 $199,224
20 years $214460 $271,826 $346,514
25 years $319,860 $434,249 $595,000
30 years $460,909 $672,902 $995,189


Roth IRA fact No. 7: You can convert a traditional IRA into a Roth IRA

Finally, know that if you have money in a traditional IRA, you can probably convert that IRA into a Roth IRA — a tactic that makes particularly good sense for some people, such as those with relatively small accounts and many years until retirement.

Converting a traditional IRA into a Roth means you’ll face a tax hit, as the money you’re converting has avoided taxes so far but will be going into an account funded with post-tax money. If you’re converting $150,000, you’ll be recognizing that as taxable income in the year of conversion, and it can result in a big tax hit. You’ll have to decide whether the tax hit is likely to be worth it. Conversions can be especially effective after a market crash or correction, as the sum you’re converting will be smaller.

You can roll over 401(k) funds into an IRA, too, when you change a job.

Don’t overlook the power of a Roth IRA, as it can give you more financial security in retirement — and possibly hundreds of thousands of dollars in tax-free withdrawals!