Here’s Why Applying for a Credit Card Hurts Your Credit Score

Credit Score

If you’ve ever checked your credit score before and after applying for a loan or credit card, you may have noticed it dropped a little bit. Yes, applying for credit hurts your credit score, but it’s usually a small hit, and it won’t drag you down for long.

This is because applying for new credit results in a hard inquiry on your credit report, and credit scores view hard inquiries as a slightly negative bit of credit history. Hard inquiries are pretty straightforward, but understanding why they’re bad takes some explaining. First, you need to understand the difference between a soft inquiry and a hard inquiry.

What Are Inquiries?

Whenever someone looks at your credit report, it’s noted in your credit history. There are many reasons to pull a credit report: You do it to make sure everything in your history is accurate, monitor for signs of fraud, and understand how a potential creditor may view you; lenders look at consumer credit reports when deciding to whom they should send offers; an employer may check your credit history as a part of the job-offer process — there are a variety of situations in which someone may want to review your credit history for something other than granting you a loan, and those informational requests are called soft inquiries. Soft inquiries have no effect on your credit scores.

It’s when you’re asking someone to take a risk and extend you credit that an inquiry has a negative impact on your credit standing.

Why Is Applying for Credit Bad for Scores?

This isn’t to say you should never apply for new credit, but it’s definitely something to do sparingly and cautiously. Applying for a new credit card is only going to shave off a handful of points from your credit scores, and that effect only lasts for about a year (inquiries stay on credit reports for two years, but most scoring models ignore inquiries older than a year). In addition to the damage being only temporary, the benefit of the new credit (if you receive it) will likely outweigh the few points you lost to the inquiry because of things like account mix and available credit relative to your debt matter more than inquiries.

Don’t underestimate those hard inquiries, though. If you apply for a lot of new credit in a short time frame, those little dings in your credit score will add up. Think of it from the lender’s perspective: Someone who is suddenly shopping around for a lot of credit may be doing so to cover a shortage in cash. That could indicate potential trouble repaying debts, which makes the consumer credit risk. The drop in credit score resulting from many hard inquiries reflects that risk.

There are some exceptions to the “apply sparingly” rule: When searching for a mortgage, auto loan, or student loan, most credit scoring models allow you at least a two-week period to apply for multiple loans of the same kind, so you can find the best deal. For example, if you’re shopping for the best mortgage pricing, any mortgage inquiries made within two weeks will count as a single hard inquiry — this encourages consumers to seek the most affordable deal, without having to worry about harming their credit standing.

In many cases, credit score shifts of a few points won’t matter much, but with large loans like mortgages or auto loans, small score changes could cost you thousands of dollars over the life of the loan. That’s why it’s important to apply for credit only when you need it, abstain from getting new credit in the months leading up to submitting a home- or auto-loan application and regularly monitor your credit scores and reports to make sure errors don’t adversely affect your chances at securing affordable financing. You can get a free credit report summary every 30 days on Credit.com to help you stay organized and informed.

How Warren Buffett Chooses a Great Stock, in 4 Steps

Warren Buffett is one of the most brilliant investors of all time, yet his investing strategies are simple.

In an episode of their podcast “We Study Billionaires: The Investors Podcast,” host Preston Pysh and Stig Brodersen delve into the four rules Buffett follows before making a stock pick, citing “The Snowball: Warren Buffett and the Business of Life,” by Alice Schroeder and Buffett’s foreword of “Security Analysis,” by Benjamin Graham.

While Buffet doesn’t recommend that the typical investor cherry-pick stocks — he prefers conservative bonds and low-fee index funds for that purpose — Pysh and Brodersen emphasize that he makes sure to follow each of these four rules before investing in any company:

1. Invest in companies with vigilant leadership.

“The first rule is that the company has to have vigilant leadership,” explains Pysh, founder of BuffettsBooks.com. “Everything within the company starts at the top and reflects the lowest position of the company. Finding the right leader of a company and organization is vitally important to Buffett.”

The renowned investor will look at the top of the company — at the CEO and the chairman of the board of directors. He looks at their salaries, whether or not they’ve kept company debt in check, and their past decisions, which give him a good idea of how prone to risk the company is.

2. Invest in companies with long-term prospects.

The next crucial thing to look at is whether or not the company will be able to sell their product in 30 years.

A good question Buffett likes to ask is, “Will the internet change the way we use the product?” If the answer is yes, that means the product could soon become irrelevant and you might not want to invest. This is one of the reasons he chose to invest in Wrigley’s gum because chewing gum will be around for a very long time.

3. Invest in stable stocks.

“The third rule is that the stock should be stable and understandable,” explains Brodersen. To figure this out, he looks at the company’s metrics over the past 10 years to make sure its earnings have been consistent and trending in the right direction. 

To help you see a company’s stability for yourself, Pysh and Brodersen built a stability calculator.

4. Invest in stocks with an attractive intrinsic value.

Finally, Buffett predicts the intrinsic value of the company — what it will be worth in the future. If he can buy the stock for much lower than the intrinsic value, he’ll consider investing.

“A dollar tomorrow is not the same as a dollar today,” emphasizes the podcast hosts. If you’re interested in the intrinsic value of your investments, Pysh and Brodersen also built an intrinsic value calculator.

The 5 Best Pieces of Financial Wisdom From Ben Bernanke

There's no such thing as a free lunch.

Particularly when it comes to getting a few hours of Ben Bernanke's time. The former chairman of the U.S. Federal Reserve charges from $200,000 to $400,000 for speaking engagements at private equity firms, hedge funds, banks, and trade associations around the world.

However, "Helicopter Ben" (also known as "Bernanke") has made a few pro-bono appearances and speeches in which he provides some great advice on financial matters. Here are the five best pieces of financial wisdom from Ben Bernanke.

1. Be Smart About Student Loans

Student loans are a key issue for Millennials, so it's not a surprise that the topic came up during a speaker event at the Romain College of Business in March 2015.

Chasing a college degree is a two-edged sword for many Americans. On the one hand, workers with a bachelor's degree earn about $1 million more in their lifetimes than those with just a high school diploma. On the other, in 2014 college graduates owe an average of $33,000 in student loans.

"People have to be smart about how much money they take out," Bernanke recommends to young people. This short piece of advice is very powerful for retirement planning reasons. Your initial employment years are key for retirement savings because money invested then has the most time to take advantage of interest compounding. If student loan payments are preventing you from maximizing retirement savings, you're at a disadvantage.

Bernanke points out that you must find and talk with a student loan adviser on a regular basis. Remember that education is an investment, so that means it must provide returns. Keep student loans in check, live a frugal lifestyle during your college years, and choose your major wisely. (See also: 20+ Freebies for College Students)

2. Remember Money Isn't Everything

During a graduation speech at Princeton, Bernanke gave this suggestion to the class of 2013: "Remember that money is a means, not an end."

He wasn't trying to convince you that money doesn't matter. He is aware that there are many of us that don't have enough of it. Instead, he was suggesting to avoid making big decisions purely based on money. The perfect example is choosing a career.

More than half of Americans are dissatisfied with their jobs. While workers making more than $125,000 are the happiest with their jobs, there are still about 35% of them who are dissatisfied.

How can this even be possible? Turns out that the two criteria that make people happiest at work are non-monetary. "Interest in work" and "people at work" were chosen by 59% and 60.6% of workers, respectively.

Bernanke is right in warning that choosing a career based only on money without consideration of love for the work or desire to make a difference is a recipe for unhappiness. Give appropriate consideration to these factors, as well.

3. Evaluate If Annuities Make Sense for You

During his four-year tenure as Federal Reserve Chairman, Ben Bernanke had one of the toughest financial jobs in the world.

So, it's no surprise he kept his investments simple. His two largest assets are two annuities, TIAA Traditional and CREF Stock Large Cap Blend, each valued at between $500,001 to $1,000,000 as of 2007.

High net worth individuals, workers close to retirement age, and workers with a late start in the retirement saving race could all benefit from owning annuities for four reasons.

• Like with other retirement accounts, all monies contributed to an annuity grow tax-deferred until they are withdrawn at retirement age when you're more likely to be in a lower tax bracket.
   
• Unlike other retirement accounts, annuities have no contribution limits. This means that high net worth individuals could put away more for retirement than the $18,000 limit set by the IRS.
   
• Immediate annuities allow workers close to retirement to stuff away more money in their nest eggs and start receiving distributions after a short period of time.
   
• Some annuities offer a guaranteed stream of income, which is key for those close to retirement age or who have a very low tolerance to investment risk.

Owning annuities isn't for everybody, but evaluating whether or not annuities should be part of your retirement planning definitely is. Talk with a financial advisor to learn more about these financial vehicles. (See also: Don't Know What Annuities Are? You Might Be Missing Out)

4. Improve Your Financial Literacy

"Financial education supports not only individual well-being but also the economic health of our nation," said Bernanke during a teacher town hall meeting in 2012.

Low financial literacy is an issue for Millennials. According to a survey from FINRA, only 24% of them are able to correctly answer four or five questions on a five-question financial literacy quiz. While Millennials are offered courses in financial education in high school and college, or by an employer, only 61% of them participate in those courses.

However, Millennials aren't the only ones in dire need of improving their financial education. More than a fifth of Americans think that winning the lottery is the most practical way to accumulate wealth.

Bernanke advises us to improve not only our own financial literacy but also that of our children. He recommends that our focus shouldn't be on memorizing financial products or calculations, but learning essential skills and concepts necessary to make major financial choices. For example, to shop around for a loan to get the lowest interest rate and to start saving early for retirement. (See also: 10 Investing Lessons You Must Teach Your Kids)

5. Minimize Costs

When discussing rising gas prices and their effect on the American worker, Bernanke said: "it must be awfully frustrating to get a small raise at work and then have it all eaten by a higher cost of commuting."

This piece of wisdom is applicable to several financial scenarios.

• If you were to invest $5,000 in the average actively managed U.S. mutual fund, you would pay $66 in management fees. On the other, you could pay just $8.50 in fees by investing the same $5,000 in the Vanguard Total Stock Market Index (VTSMX) fund. Over a 30-year period, that difference would give you an additional $4,692.21, assuming a 6% rate of return.
   
• When putting down less than 20% of the price of a property, you have to pay PMI on your mortgage. In 2014, the average PMI payment ranged between $775 and $1,551 per year. By saving enough for a 20% down payment to buy a property, you could avoid the PMI expense.

Whether it's the sale price of your home or the size of your nest egg, you can't always have full control of the returns of your investments. However, you always have much more command over the cost of your investments and purchases. Minimize any type of fees so that you give your investments a better fighting chance.

What are other great pieces of financial wisdom from Ben Bernanke?

Source: https://www.wisebread.com/the-5-best-pieces-of-financial-wisdom-from-ben-bernanke

Why Invest For Dividend Income?

Why are dividend investors fanatical about rising dividend income?

The answer illuminates why dividend investing continues to attract new adherents.

Simply put, dividend investors realize that investments should pay you real money. Too often, people approach the stock market as the world’s largest virtual casino.

The World’s Largest Virtual Casino

It is very easy to think of each stock ticker as a virtual bet. Sometimes, the price rises, and sometimes it falls. It all feels so random. It is the same feeling you get in Las Vegas… You either get lucky and win money, or you don’t.

Stocks are much more than virtual lottery tickets.

Buying a share of stock entitles the investor to a fractional share of ownership of a business. When you buy a stock, you are investing in a real-world business.

Business and gambling are very different. Businesses earn money when they provide services or products that their customers are happy to purchase. If a business is run well, it will continue to grow larger. If it is run poorly, it will eventually decline.

Notice the stark difference between business and gambling. In business, success depends on serving your customers better or more efficiently than your competitors. Sure, there is some luck involved, but intelligence and hard work will lead to favorable results.

Gambling is completely different (this does not include games played against other people instead of the house, like poker). The odds in gambling are set. You will lose over time. There is no amount of skill that can make someone a winner playing slots or roulette. You will lose if you play long enough. The house always wins.

The stock market is not a large casino, even though many investors treat it that way. The stock market allows people to purchase small percentages of the world’s greatest companies (or mediocre companies, if you want).

Dividend-Paying Businesses

At this point, hopefully, readers see the difference between buying random stock tickers and investing in sound businesses to take advantage of their attractive economic prospects.

Dividend-paying businesses are different than non-dividend-paying businesses. First, for a business to pay a dividend for any lengthy amount of time it must be profitable. Businesses that lose money simply cannot pay dividends for any meaningful length of time. Unprofitable businesses will run out of money and declare bankruptcy faster by paying dividends.

Profitable businesses, on the other hand, can return profits to their owners by paying dividends. A dividend payment is the return of profits to the owners of a business. As a shareholder, you are an owner.

Take Coca-Cola (KO) as an example. Coca-Cola pays out 64% of its earnings as dividends. Every time someone buys a Coke, Coca-Cola shareholders get 64% of the profits paid to them.

You may be wondering, what happens to the other 36% of Coca-Cola’s earnings? If shareholders own the company, why aren’t 100% of earnings paid out to shareholders as dividends?

Reinvesting Earnings for Future Growth

The reason Coca-Cola does not payout 100% of its earnings as dividends is that the company’s management attempts to maximize the long-term value of Coca-Cola shares.

To do this, Coca-Cola needs to grow. Coca-Cola’s managers have estimated that the optimal amount of profits to reinvest in the business is around 36%. This money goes to repurchasing shares, building up cash balances for stability, repaying debt, and investing in future growth.

Coca-Cola is expecting earnings-per-share growth of 7% to 9% a year. The company will likely grow dividends at around the same rate.

If Coca-Cola paid out 100% of its earnings as dividends, it would have a yield of 5.1%. Coca-Cola stock currently has a yield of 3.3% and is expected to grow at 7% to 9% a year. In 10 years, Coca-Cola shareholders will have a yield on cost of around 7.1% thanks to growth. If the company paid out all of its dividends and reinvested nothing in growth, shareholders would be worse off in 10 years than if Coca-Cola does reinvest some of its earnings for future growth.

Why Invest for Dividend Income?

Investing for dividend income places focus on what matters in investing – a businesses’ ability to generate growing income over time. Dividend investors look for businesses that will be able to pay increasing dividends because the business is growing its income.

This eliminates unprofitable businesses from consideration for dividend investors. Avoiding the worst businesses is certainly a good start in not losing money investing. If you aren’t losing money, you will end up making money.

Dividend-paying businesses also produce passive income. Dividends roll in each month or quarter, without you doing a thing. Over time, this passive income stream will grow as the businesses grow, and as you invest additional money. This ‘snowball effect’ results in a compound growth of passive income.

The ultimate goal of dividend investing is to be able to live off the passive dividend income your portfolio generates. The speed at which a dividend investor reaches this goal depends on a few key variables:

• What your monthly expenses are (the lower, the better)
• How much you save every month (not how much you make)
• How quickly your dividend income grows

Why invest in dividend income? Because you will build a growing, passive stream of income while focusing on what makes investments successful.

Source:http://www.talkmarkets.com/content/us-markets/why-invest-for-dividend-income?post=67248

The 5 Best Pieces of Financial Wisdom From Warren Buffett

The "Oracle of Omaha" truly lives up to his name.

Between 1964 and 2014, the S&P 500 increased by a whopping 2,300%. On the other hand, the stock price of Berkshire Hathaway, the company of which Warren Buffett is chairman, president, and CEO, grew an even more mind-blowing 1,800,000% over the same period.

This performance cements Buffett's reputation as the most successful investor of the 20th century. Here are his five best pieces of financial wisdom that you should take note of.

1. Invest in Stocks

In his 2012 letter to shareholders of Berkshire Hathaway Inc., Buffett wrote "American business will do fine over time. And stocks will do well just as certainly since their fate is tied to business performance."

Buffett's optimism in the American economy is backed up by strong facts. Remember that stocks still managed to return 2,300% between 1964 and 2014 — despite wars and recessions. The takeaway is that the average investor shouldn't be discouraged by the normal ups and downs of the U.S. stock market. Invest in stocks and do so in the long run. In Buffett's own words, "if you aren't willing to own a stock for 10 years, don't even think about owning it for 10 minutes."

2. Don't Chase "Winners"

Everybody is looking to buy low and sell high.

For example, if you had purchased AOL stock at a rock bottom price of $12 per share on September 1, 2011, you would be jumping with joy at AOL's May 2015 price (now over $50 per share due to Verizon's acquisition of AOL). (See also: The 4 Greatest Stock Reversals in the Last Decade)

However, Buffett recommends that the average investor not play stock picker. Instead, he recommends that the average investor invests in a low-cost S&P 500 index fund.

Keeping true to his own advice, Buffet laid out in his will that his trustee puts 10% of the cash left to his wife in short-term government bonds and the remaining 90% in Vanguard's S&P 500 index fund. That's as simple as it gets.

In simple terms, you already have a day job, so stick to it. You'll save a lot of money on trading fees, too.

3. Avoid Get-Rich-Quick Schemes

In the book The Tao of Warren Buffett, you can find many inspiring sayings from The Oracle of Omaha. Here is a great baseball analogy from Buffett about the stock market:

"The stock market is a no-called-strike game. You don't have to swing at everything — you can wait for your pitch. The problem when you're a money manager is that your fans keep yelling, 'Swing, you bum!'"

Past stock-picking performance is not a guarantee of future success. Take any five-year period and only 20% to 35% of actively managed funds beat the benchmark for their category. Resist the temptation of jumping on any "hot investment," particularly when you don't understand what the investment is about. (See also: 5 Investors With Better Returns Than Warren Buffett)

"When promised quick profits, respond with a quick 'no'", Buffett suggests.

4. Pay Yourself First

Roughly half of Americans are saving 5% or less of their incomes. Even worse, 18% of us are not saving at all.

The main problem is that most people are going the wrong way about saving. Most of us first pay rent or mortgage, then take care of bills and debt payments, and after that spend on dining out and shopping. With such a strategy, it's no wonder that 18% of us aren't saving.

"Don't save what is left after spending; spend what is left after saving," recommends Buffett. Just like your budget based on your net paycheck after federal and state taxes have been applied, you need to start planning on your net paycheck after savings.

There are three key ways to pay yourself:

• Retirement account: Participate in your employer's retirement plan or set up your own, such as a Solo 401(k), to build up your nest egg and postpone your tax bill until retirement.
   
• Savings account: Set up an automatic monthly deposit into your savings account. Take advantage of high-yield online savings accounts, such as Ally Bank and Capital One 360.
   
• Emergency fund: 26% of Americans have no emergency savings.

Pay yourself first by automatically funding your retirement, savings, and emergency fund accounts. Only start paying bills and spending on necessities after you have taken care of these three key items.

5. Pay Down Debt

Of course, to be able to save, you must first take care of debt.

In another letter to shareholders of Berkshire Hathaway Inc., Buffett warned, "Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks."

The "chronically leaking boat" that Buffett is referring to is living paycheck-to-paycheck, which 76% of Americans are doing. On the other hand, the "patches" are expensive forms of financing, such as car and payday loans, and withdrawals from retirement accounts. (See also: 25 Dumb Habits That Are Keeping You in Debt)

Robbing Peter to pay Paul will catch up with you. For example, the more you treat your 401(k) as an ATM, the bigger the financial hole that you'll build. A study of borrowers from 401(k) plans shows that 25% of them took out a third or fourth loan, and 20% of them took out five or more loans. Borrowing from your nest egg too often turns into a vicious and expensive cycle.

If you think that paying down that huge credit card balance is near to impossible, think again. One couple was able to pay off $48,000 in debt over 2.5 years and a young entrepreneur paid off $40,000 in student loans by age 24. Any debt monster can be slain no matter how scary it may appear. All it takes is consistency and time.

What are other Buffett-isms that have improved your financial situation?

Source:http://www.wisebread.com/the-5-best-pieces-of-financial-wisdom-from-warren-buffett

11 Pointers to Investing in Your 60s and Beyond

Investing in your 60s is a different ballgame than when you focused mostly on growing your retirement funds. When you crack into your retirement nest egg, you need to change your investment strategy. The idea is to withdraw enough to help you get by now while holding enough in reserve to finance the rest of your life.

Making the transition to investing in your 60s and beyond requires a new way of thinking about investments. Here are 11 pointers:

1. Estimate how long your savings must last

You can’t plan effectively without an idea of how long your money should last. Of course, you can’t know how long you’ll live, so we’re talking here about estimating the longest you might live so you won’t run out of money.

A 65-year-old woman can expect to live to nearly 87, and a man the same age will live, on average, until 84, says the Social Security Administration, whose Life Expectancy Calculator gives a rough idea of expected lifespans. Or use the Wharton School of Business’ Life Expectancy Calculator for a more specific estimate based on your answers to questions about behavior, family history, and health.

2. Calculate annual expenses

To plan your finances in retirement, you’ll need to know how much you need to live. Especially if money is tight, you’ll need specific spending data, not estimates. If your budget and have tracked your spending, you’ve got the data you need. If not, start now. Automatic tracking is simple with free tools like one from Money Talks News’ partner PowerWallet. But a notebook or spreadsheet, to name a couple of alternatives, also will do — as long as you keep it up. After tracking for a few months, you’ll begin to see where your money’s going and can decide how much to withdraw from investments.

3. Fully fund emergency savings

Keeping a cushion of savings in cash or short-term CDs lets you ride out market downturns without selling stocks at low valuations. Some experts advise having an emergency fund to support yourself for a year and a half to two years.

4. Plan your withdrawals

Retirees need a system for regular cash withdrawals. For example, one popular system suggests withdrawing 4 percent of your initial savings balance each year, then adjusting that amount annually for inflation. The creator of this approach, William Bengen, says savings split equally between stocks and bonds should last at least 30 years with this system. While, as he recently told The New York Times, the 4 percent rule “is not a law of nature,” it does provide a framework. The key is to adopt a system, then adjust it as necessary.

5. Seek safety

How much you will keep in CDs, bonds and high-yield savings accounts depends somewhat on how much safety you require. An intelligent risk is necessary with part of your investments if you don’t want inflation to erode your portfolio’s value.

Many retirees follow this rule of thumb (called the “glide-path” rule):

• Subtract your age from 100. The resulting number is the percentage of your investments you should hold in stocks.
• Invest the remaining amount in bonds and money market funds.

If you’re 70, for example, keep 30 percent of your portfolio in stocks, including mutual funds and ETFs, and the remaining 70 percent in bonds.

Does this rule provide enough growth to keep a portfolio going strong? Experts disagree. Writes CNN Money:

[W]ith Americans living longer and longer, many financial planners are now recommending that the rule should be closer to 110 or 120 minus your age. That’s because if you need to make your money last longer, you’ll need the extra growth that stocks can provide.

Take a look at the results of various asset allocations at Vanguard’s portfolio allocation models. These illustrate the performance of various stock-bond mixes since 1926.

6. But don’t neglect growth

The other end of the retirement seesaw is the need to grow your nest egg, at least a little.

Unless you have so much money that you don’t need to worry about inflation, you’ll need some growth investments. Usually, that means stocks and stock market mutual funds and ETFs. Learn more about growth investing here: How to Get Into the Stock Market — Safely.

How much of your portfolio to devote to growth? Again, there is no single approach. Travis Sollinger, director of financial planning at Fort Pitt Capital Group in Pittsburgh, tells US News’ Kira Brecht that he advises retirees to allocate 60 percent of their portfolio to stocks and 40 percent to bonds because “your years in retirement will still be significant.”

“If you have a well-diversified portfolio with heavy equity exposure, you should see annual returns of 6 percent, 7 percent or more,” Sollinger says.

7. Plan for required minimum distributions

After age 70 1/2 the Internal Revenue Services requires savers to begin taking minimum annual withdrawals from IRAs, 401(k)s, and other non-taxable accounts into which you contributed funds before taxes. The IRS requires you to pay tax on the income.

(Note: The rules, penalties, and taxes on withdrawals from Roth IRAs are different from regular IRAs and 401(k)s. Be sure to check the specifics of your Roth account.)

These minimum withdrawal amounts are calculated by the IRS based on life expectancy and account balances. The IRS rules are specific and inflexible about how much to withdraw and when. Ignore them, and you could face stiff IRS penalties. For example, if you were supposed to withdraw $4,000 and didn’t, you could owe a $2,000 penalty, writes the New York Times.

Here’s an IRS worksheet that shows when to make withdrawals and how much to withdraw.

8. Keep a lid on spending

Financial discipline is crucial if you are to outlive your money. Take an unsentimental look at your spending, decide how much to withdraw annually from savings and investments, and stick to that plan through bad times and good.

9. Get help now and then

When you manage your own money it’s a good idea to pay an expert for an independent review at least occasionally. Bengen, who came up with the 4 percent rule, tells The New York Times that even he uses financial advisers:

“Go to a qualified adviser and sit down and pay for that,” he said. “You are planning for a long period of time. If you make an error early in the process, you may not recover.”

Hire a Certified Financial Planner who works on a flat hourly rate to review your retirement plan, income, and expenses. A CFP adviser must put your financial well-being ahead of their own.

Money Talks News founder Stacy Johnson discusses when and how to find a trustworthy financial adviser. Consumer Reports tells how to shop for a financial adviser and what their credentials mean.

10. Rebalance your portfolio yearly

You’ve decided what proportion of your investments to allocate to various types of investments but, over time, your investments perform differently, throwing off your original allocation. Once a year you’ll need to adjust, or “rebalance,” your portfolio to restore it to your original allocation choices.

11. Consider other sources of income

Stocks and bonds are not your only investment choices in retirement. Two other possibilities are longevity insurance and annuities.

AARP financial writer Jean Chatzky says that longevity insurance starts payouts when you reach a specified age — 85, for example:

Say at age 60 you buy a $50,000 policy from MetLife. If you live to 85, you’ll start receiving annual payouts of $15,862 if you’re a man, $15,511 if you’re a woman.

No doubt you’ve heard of annuities, which are financial contracts sold by insurance companies. There are several annuity types, as explained in this piece by Stacy: Ask Stacy: Should I buy an Annuity for Retirement Income?

“As with all investments, the more a salesman is trying to jam something down your throat, the more cautious you should be,” Stacy says. If you are considering an annuity, get expert advice, and not from a salesperson but from an accredited financial adviser who charges a flat hourly fee. 

Source: http://www.moneytalksnews.com/11-pointers-investing-your-60s-and-beyond/?all=1