Learn and Plan:
Finding Money for Retirement

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 If payments are automatically withdrawn from your checking account, the lender may cut the interest rate an additional one-fourth of a percentage point.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.
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