Saving for retirement is good advice. But stretched thin by today’s economy, you may be asking, “Where do I get the money?”
- Your Uncle Sam. If you get a tax refund every year, you're paying too much. Put that money in your pocket by filing a new W-4 form to more closely match the amount withheld from your pay to what you actually owe. Claiming extra W-4 "allowances" will trigger higher take-home pay as soon as your next payday. Stash that extra income in your 401(k).
- Your savings from refinancing. When mortgage interest rates are falling, take advantage by refinancing your home mortgage, and share part of the bounty with your 401(k).
- Your life insurance premiums. If you're in good health, a few minutes spent shopping for lower premiums could save you money. You can do it quickly at InsWeb (www.insweb.com).
Your car insurance premiums. You may be able to save hundreds of dollars just by doing some comparison shopping (www.insweb.com). Once you've settled on a policy, you can save hundreds more by taking advantage of discounts if you
· raise your deductible
· buy your homeowners insurance from the same company
· install a car alarm
· have a teenager who qualifies for a good-student discount or moves away from home to attend college
- Your mortgage insurance. Lenders generally require private mortgage insurance (PMI) if you put down less than 20% when you buy your home. But if you’ve owned your home awhile, check with your lender about dropping your PMI. You could save $1,000 to $2,000 a year on a $200,000 mortgage.
- Your student loans. When interest rates fall, take advantage of your once-in-a-lifetime opportunity to consolidate your loans. Cut your rate further by consolidating with a lender that offers discounts, such as Collegiate Funding Services (888-423-7562; http://www.cfsloans.com/). If payments are automatically withdrawn from your checking account, the lender may cut the interest rate an additional one-fourth of a percentage point. After five years of on-time payments, your rate may fall by another point.
Investing involves risk, including possible loss of principal. Withdrawals from a tax-deferred account are taxable at the time of withdrawal at then-current tax rates, and early withdrawals may be subject to a penalty.
Calvert and its affiliates do not provide tax advice, and nothing on this site should be construed as tax advice. Before acting on any such information, consult your own accountant or tax advisor.