Think Your Credit Score Doesn’t Matter in Retirement? Think Again.

credit score

You have battled with your credit score your whole life. You wanted a good score so that you can could get the best loans, especially for your home mortgage. Finally, you’ve reached retirement, and you have it in mind that you can rest easy. You have your mortgage, you are done taking out loans for education, so you don’t have to think about your credit score any more right? Wrong. Your credit score still maters in retirement.

You Need to Watch Your Money Carefully in Retirement

Unless you happen to retire with extreme wealth at your disposal, you need to be frugal after retirement. You need to budget. After all, you don’t have the kind of income coming in that you once did. You aren’t going to get raises and other windfalls. You have to make do with what you have.

Therefore, it’s really important that you watch your money carefully. If you have bad credit, then you put yourself at risk. What if something happens and you need to refinance your home? Or what if you need to take out an emergency loan? So many things can go awry in life. Medical expenses, natural disasters, the needs of adult children … you just might need to get credit or a loan again even after you’ve retired.

If you don’t have good credit, then you’re going to end up with a loan that has terrible terms (if you can get a loan at all). A bad credit score means you’ll have a higher interest rate, which in turns means that you’ll have higher monthly repayment bills. If you’re trying to budget in retirement then you can’t afford to waste money on those exorbitant fees. If you maintain a good credit score in retirement then you don’t have to worry about that so much.

You Probably Have More Bills in Retirement Than You Anticipated

People like to paint a rosy picture of retirement. You’ve worked hard your entire life, so now you can rest. You can take the money that you set aside and enjoy your sunset years. However, this financially lovely picture simply isn’t the reality for many Americans reaching retirement age today.

Baby boomers who have retired or about to retire have much higher bills than they might have expected. In fact, many still owe on their homes, either due to an original mortgage or to refinancing over the years. Additionally, older people increasingly have high levels of credit card debt to their names. Some people even still have student loan debt when they retire!

If you have these types of outstanding debt, then you really need to make sure that you have a good credit score in retirement. You should work to improve the score as much as possible. You can do that through debt repayment, increased credit lines, disputing incorrect credit report information, etc. Once you have boosted your score as much as possible, you can then use that good credit score to get a great rate on a consolidation loan. This will allow you to repay that debt as quickly as possible so that it doesn’t hang over you throughout your entire retirement.

Plus more and more Americans retire but then start a post-retirement business of their own. If you’d like to start a new business, then you might need a business loan. If you have a good credit score in retirement, it’ll be significantly easier to get that loan.

Read More:

Suburbia in the City? Pros and Cons to Bringing Suburban Life to Urban Areas.

suburbia in the city

I recently read a New York Times opinion article about the trend to have suburbia in the city. It caught my eye specifically because it highlighted changes in San Francisco, which is where I live. I live here because I love the city, with all of its pros and cons. I don’t enjoy spending time in the suburbs, so naturally, I’m a bit skeptical about this trend.

What Does It Mean to Have Suburbia in the City?

Before I read the article, my mind immediately drifted to the store Target. I moved to San Francisco about fourteen years ago. When I did, there was no Target in the city. We had a Best Buy and a few other similar large chain stores – mostly out of the way in areas that I didn’t typically walk around. But then Target came in.

I hated it at the time. I still don’t really shop there much, although I admit I’ve been in a time or two to pick things up because it’s convenient. But increasingly I see chain stores here and there. My own street of mostly local restaurants now has a few big names you’d recognize if you’d traveled here from somewhere else.

I don’t like it. If that’s what it means to have suburbia in the city, I’ll pass. After all, if I wanted that cookie-cutter life, I’d certainly prefer to pay far less than city rents to have it. One of the key points in the article is that those people who do decide they want suburbia in the city will pay a pretty penny for it. It’s not as cheap as actually moving to the suburbs.

Bringing in the Good Parts of the Suburbs

The article does mention those chain stores. It highlights the fact that people used to flee the cities for the suburbs in order to start families. Now they don’t. So perhaps they want some of those creature comforts – those familiar foods, those familiar stores. But that’s not the thrust of it. What it seems the article wants to highlight is that there is a way of life in the suburbs that people yearn for in the city.

It specifically mentions The Landing apartment building, in which residences are clustered around yards. Ah, yards. Yes, we don’t have too many of those in the cities. Having a dog myself, I can see why there are people who long for the yards of the suburbs. Personally, I’m okay with visiting the local parks every day. But a yard does sound appealing. You can grow vegetables in The Landing’s planter boxes and rest on their hammocks. I get the appeal in that.

What People Want is Connection

What I realized in reading the article is that it’s not really about suburbia in the city at all. It’s about connection.

Historically, people may have found a strong sense of connection and community in the suburbs. All of the kids would run from house to house to play with their friends. The cul-de-sac was a safe spot for football games. Neighbors joined one another for big backyard barbecues.

To be honest, I never experienced that living in suburbs or smaller cities. I have always found those places to be isolated. People seem to stay in their own yards, in their own cars. I, personally, have found so much more connection in the city, where I walk or ride the bus, visit the park, and talk to strangers.

But I can certainly see how the city can feel disconnected for people. If you’re walking with your headphones on then you’re not connecting with people. And so, I can see the appeal of The Landing, which is really all about creating community in your own little part of the city. You get to connect with your neighbors. If you can do that while lounging in a hammock, that sounds wonderful (although I question how many days per year the weather in San Francisco is really hammock weather.)

So, I think suburbia in the city could be good or bad – depending on what it means. When it creates connection and adds a little convenience, great. When it makes a city look like every other place in the world, I draw the line.

Read More:

When to Invest in TreasuryDirect.Gov: Savings Bonds, Notes, and More

treasurydirect.gov

TreasuryDirect.gov is one of the simplest tools that you can use to park small or large amounts of cash. You can make your money work for you. And yet, many people have overlooked this tool. If you’re not familiar with it or haven’t made the most of it, yet, then you might want to take a gander. There’s a good chance it’s a smart tool for you to use to diversify your investments and boost your savings.

What is TreasuryDirect.gov?

TreasuryDirect.gov is a website that allows you to quickly begin investing your money. You can use it to purchase:

  • Treasury Bills
  • Treasury Notes
  • Floating Rate Notes
  • Treasury Bonds
  • Saving Bonds
  • Treasury Inflation-Protected Securities (TIPS)

The site cuts out the middle man so that you make the purchase directly from the government.

It’s Right For You If You Are A Beginner Investor

If you are new to investing, then this is a great place to start. Once you’ve put aside some emergency funds in a savings account and maxed out your retirement contributions, you need to take a next step. Treasury investments are an easy and smart next step. They are backed by the government, so they are quite secure. Here are some other reasons that beginner investors like them:

  • You earn more money than you would with a regular savings account but the risk is not much higher.
  • There are several options for investing so you get your feet wet with trying out different choices.
  • There are no fees, and you might not even have to pay taxes on the interest you are. It’s financially smart.
  • Plus you can start investing with just small amounts of money. You can get bonds with as little as $25.

If You May Need Access To Your Money Then It’s A Good Time to Invest

One of the reasons that people keep large sums of money in savings is because of the fear that they’ll need that cash. You may have a big expense planned, such as buying a house. Or perhaps you work in the gig economy and aren’t sure how long your income will stay steady. Either way, you don’t want to get your money all tied up for years in long-term investments. So you stick it in savings.

However you don’t earn much interest with a regular savings account. You get the security of being able to always access your funds but you lose out on growing your money. TreasuryDirect.gov investments offer you a little bit more of a financial gain. However, your money isn’t tied up for long periods of time. You can make investing choices through the site that allow you to easily get your money out without penalties.

TreasuryDirect.Gov is Good if You Have a Lot of Cash to Park

Perhaps you just got a big inheritance. Wherever it came from, you have a big sum of cash. You want to earn a decent return on it. However, you don’t want to get too hard at tax time. TreasuryDirect is a good answer. Oftentimes the investments don’t require you to pay taxes, particularly state taxes, so you get to keep what you earn. The more money you invest, the more money you’ll get back. So even though you can start these accounts with as little as $25, they’re a great choice for people with significantly more money to invest.

Read More: