Is Recession Coming? Watch These Signs

recession market scare crash downturn stock business men
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There’s no time stamp on when recessions pop up, or how long they last. Our last recession was two months long at the onset of the COVID-19 pandemic in 2020, making it the shortest on record.

The one before that was the Great Recession starting in 2007 and lasting 18 months, the longest downturn since World War II.

If the stock market and economy are keeping you on the edge of your seat, you can look for signs of a recession before it hits. That can help you determine whether you should start preparing for a recession, and the act of getting your finances ready for a possible downturn should give you some peace of mind.

An inexact science

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Before we dive into the possible warning signs of a recession, it’s worth noting that predicting a recession is not an exact science.

So, while the following warning signs historically have served as indicators that a recession might be on the horizon, that doesn’t mean they are foolproof. The economy is dynamic, and there is no list of indicators that have preceded every past recession.

Still, the following indicators tend to be a good place to start looking if you’re worried about whether a recession lies ahead.

Sign No. 1: The yield curve inverts

Positive yield curve
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Typically, long-term bonds pay more than short-term bonds, as illustrated above. This makes sense: If you agree to tie up your money for longer periods, you should be paid more for your trouble. This is why a five-year certificate of deposit (CD) pays more than a one-year CD.

Rarely, however, the reverse is true: Long-term bonds start paying less than short-term bonds. When that happens, a recession often follows. In fact, this situation, known as an inverted or negative yield curve, has proven a highly accurate recession predictor.

Why would long-term bonds ever pay less than short-term bonds? The nation’s central bank, the Federal Reserve — or “the Fed” for short — controls short-term rates, but the market controls the rates on longer-term securities.

The Fed can raise short-term rates, which is exactly what they started doing in March 2022, for the first time since 2018. But if investors start thinking things don’t look so good in the economy, they keep their powder dry by buying long-term bonds. The more they buy and bid up the price, the lower the rates on these securities go.

The yield curve did dip into negative territory in late March 2022. It quickly recovered, but it’s worth noting that it was the first time the yield curve turned negative since 2019 and, before that, 2006.

What to watch: You can find Treasury yields on the U.S. Treasury Department’s website. CNBC also tracks in real time the spread, or difference, between the yields on two-year and 10-year Treasurys.

Sign No. 2: The Leading Economic Index slips

Jenga game at risk of slipping
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The Conference Board’s Leading Economic Index (LEI) is one predictor of global economic health. The Conference Board, a nonprofit research group, describes the index as one of “the key elements in an early warning system to signal peaks and troughs in the global business cycle,” with the LEI specifically anticipating turning points in the business cycle.

Monthly dips in the Leading Economic Index aren’t alarming. However, year-over-year drops in the benchmark have been followed by recessions in the past.

The LEI increased by 0.3% from February to March, and by 1.9% over the six months leading up to March, so there’s no reason for concern based on this indicator right now.

What to watch: Keep an eye on Conference Board press releases or media coverage of the index.

Sign No. 3: Interest rates rise

Federal Reserve
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Government monetary policy can be another economic bellwether. We’ll explain what to watch, but first, a quick refresher on how it works.

The Federal Reserve influences the economy by using a couple of tools. One of those tools is control over short-term interest rates via the target federal funds rate. If the economy is in the doldrums, it can lower the federal funds rate to encourage consumers and businesses to borrow, buy and invest, which stimulates the economy. That’s why this rate was kept near zero for years following the Great Recession that began in December 2007.

On the other hand, if the economy is growing too fast, that can lead to rising prices, otherwise known as inflation. To cool things down, the Fed raises the federal funds rate, which serves to put the brakes on the economy by discouraging both consumers and businesses from borrowing and spending as much.

While interest rates don’t directly affect the stock market, if businesses have to pay more in interest, that hurts their profits, which will ultimately be reflected in a lower stock price.

Also, as rates rise, investors often sell stocks, driving prices lower. Why do they sell? Think about it: If you can earn high interest from insured bank accounts or guaranteed Treasury bonds, why take a chance on stocks?

Again, the Fed resumed raising the federal funds rate in March 2022, marking the first rate hike since 2018. The hike in May — a half-point — was the largest increase since 2000.

What to watch: The Federal Reserve’s Federal Open Market Committee posts statements, which include any votes to change the federal funds rate, after each of its regularly scheduled meetings. The meetings are also widely covered by the financial media.

Sign No. 4: Consumer sentiment falls

Upset shopper at a grocery store
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Another economic indicator published by the Conference Board, the Consumer Confidence Survey, monitors everything from Americans’ buying intentions and vacation plans to their expectations for inflation, stock prices and interest rates.

After an uptick in March, consumer confidence fell slightly in April. The Consumer Confidence Index was at 107.3 for the month, down from 107.6. During the recession at the beginning of the COVID-19 pandemic, the index was less than 90.

Fluctuation is normal, especially as economic conditions shift. The pandemic, the rising costs of products and the war in Ukraine can change how people feel about the economy from month to month. But if consumer confidence continues to drop, that could be a sign of a looming recession.

What to watch: The Consumer Confidence Survey is updated monthly. Track press releases for it on the Conference Board’s website. The survey is also widely covered in the media.

Sign No. 5: Business confidence cools

Upset businessman holding his head at his computer
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Like consumer confidence, business confidence can shed light on the direction of the economy.

The Conference Board’s Measure of CEO Confidence remained in positive territory — 57 — in the first quarter of 2022. (The board considers measures of more than 50 points as positive, and lower readings as negative.) But this measure marked the third consecutive quarter of decline.

CEOs’ assessment of the current general economic conditions, and their expectations for the near future, also declined.

The outlook of small-business owners isn’t any rosier, according to the National Federation of Independent Business’ Small Business Optimism Index.

In March, inflation overtook labor quality as the top problem among small businesses. In fact, the share of owners raising their average selling prices reached its highest level in the survey’s 48-year history.

Moreover, the share of owners who expect better business conditions over the next six months fell to its lowest level in the survey’s history.

What to watch: Business confidence gauges like the Measure of CEO Confidence and CFO Survey are updated quarterly. The Small Business Optimism Index is updated monthly.

Sign No. 6: Vanguard’s risk forecast worsens

Vangaurd
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Vanguard is one of the biggest asset management firms in the world, so its economic outlooks can help paint a picture of how to monitor fluctuation in the economy.

Before the recession that started in late 2007, Vanguard’s six-month forecast had said the probability of a recession in six months was greater than 40%, according to The New York Times.

The firm’s forecast for 2022 — subtitled “Striking a better balance” — was overall optimistic, if cautiously so:

“While the economic recovery is expected to continue through 2022, the easy gains in growth from rebounding activity are behind us. We expect growth in both the U.S. and the euro area to slow down to 4% in 2022.”

In March, however, Vanguard downgraded its 2022 estimated growth for the U.S. from 4% to 3.5% — which is where it remained going into May.

What to watch: Vanguard posts its monthly market perspectives on its “Our Insights” webpage and issues press releases about its annual outlooks.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Source: moneytalksnews.com

17 Home Upgrades That Rarely Help Close a Sale

A real estate agent posts a for sale sign in front of a brick house that is under construction
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We all like to think that making positive changes to a home can make it more attractive to buyers. However, some renovations that might make you feel more comfortable, actually might not help you sell your home in the long run.

The National Association of Realtors (NAR) recently released its latest Remodeling Impact Report, finding that some renovations are less effective than others in convincing buyers to move forward.

Surveying real estate agents, NAR looked at 20 types of projects and asked agents which they’d suggested homeowners do before selling a home. The survey also asked agents whether completed projects had helped close a sale.

Following are the renovations this survey identified as least likely to close a home sale. Specifically, fewer than 10% of real estate agents said these projects helped close a sale.

17. HVAC replacement

New Africa / Shutterstock.com

Surveyed real estate agents who said this project helped close a home sale: 7%

Agents who have suggested that homeowners do this project before selling: 20%

According to the National Association of Realtors report, the estimated cost of completing an HVAC replacement is about $8,200, and the cost recovered in a home sale is about $7,000. So, even though you might be able to recover much of the cost of doing the project, it’s not one that is likely to help you close the sale.

16. New wood flooring

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Surveyed real estate agents who said this project helped close a home sale: 5%

Agents who have suggested that homeowners do this project before selling: 16%

The Joint Center for Housing Studies of Harvard University reported earlier this year that indoor flooring replacement is the most common upgrade, as we detail in “The 15 Most Popular Home Upgrades – and What They Cost.”

And yet, real estate agents indicate that this project is unlikely to add much to a home’s appeal to buyers.

15. Hardwood flooring refinish

Jo Ann Snover / Shutterstock.com

Surveyed real estate agents who said this project helped close a home sale: 5%

Agents who have suggested that homeowners do this project before selling: 27%

New flooring isn’t recommended by as many real estate agents as refinishing the wood flooring that’s already there, according to the NAR report.

Even though it doesn’t help much to close a home sale, the report indicates that those who invest in the project see a recovery of 100% of their investment.

14. Bathroom renovation

Susan Schmitz / Shutterstock.com

Surveyed real estate agents who said this project helped close a home sale: 4%

Agents who have suggested that homeowners do this project before selling: 33%

A third of real estate agents suggest homeowners make this change before they sell, even though this project doesn’t usually help close a sale.

Additionally, you might only see a 57% return on value when you complete a bathroom renovation, according to the NAR report.

13. New vinyl windows

MJTH / Shutterstock.com

Surveyed real estate agents who said this project helped close a home sale: 4%

Agents who have suggested that homeowners do this project before selling: 12%

With new vinyl windows, homeowners can expect to retain about 73.4% of the cost when they sell the home, according to Remodeling magazine’s 2019 Cost vs. Value Report. Believe it or not, that’s a relatively good cost recouping.

12. Basement conversion into living area

Artazum / Shutterstock.com

Surveyed real estate agents who said this project helped close a home sale: 2%

Agents who have suggested that homeowners do this project before selling: 5%

Only 5% of real estate agents suggested this renovation to homeowners looking to sell, and for good reason, since it doesn’t contribute much to the ability to close a home sale. However, it does offer homeowners relatively high satisfaction, as we recently reported in “19 Home Renovations That Give Owners the Most Joy.”

11. New garage door

Luxury home
karamysh / Shutterstock.com

Surveyed real estate agents who said this project helped close a home sale: 2%

Agents who have suggested that homeowners do this project before selling: 16%

While this home improvement project might not do much to help close a home sale, it can return nearly all of the cost when reselling your home.

Remodeling magazine’s 2019 Cost vs. Value Report shows that a garage door replacement retains 97.5% of its value upon resale of the home, as we report in “These 10 Home Improvements Offer the Highest Returns.”

10. Add a new bathroom

Monkey Business Images / Shutterstock.com

Surveyed real estate agents who said this project helped close a home sale: 1%

Agents who have suggested that homeowners do this project before selling: 5%

Very few real estate agents suggest this renovation, and even fewer find that it helps with closing a home sale.

It might be best to skip this one since it can cost as much as $60,000 — and only return about 50% of its cost, according to the NAR report.

9. New steel front door

Monkey Business Images / Shutterstock.com

Surveyed real estate agents who said this project helped close a home sale: 1%

Agents who have suggested that homeowners do this project before selling: 4%

While replacing your front door isn’t something that closes a home sale, it can help boost the value of your home — especially if you paint it black, as we report in “Painting With This Color Can Boost Your Home’s Sale Price by $6,000.”

Additionally, this project is likely to bring homeowners joy. The NAR report gave the project what it calls a “Joy Score” of 9.7 out of 10.

8. New vinyl siding

Red and black house
Lindasj22 / Shutterstock.com

Surveyed real estate agents who said this project helped close a home sale: 1%

Agents who have suggested that homeowners do this project before selling: 4%

While it’s not a project much-recommended ahead of selling, new vinyl siding is one of those renovations that offer a relatively high return on value. According to Remodeling magazine’s 2019 Cost vs. Value Report, the replacement of siding retains 75.6% of its value when the home is sold.

7. New wood windows

Woman with dog in house
Ahmet Naim / Shutterstock.com

Surveyed real estate agents who said this project helped close a home sale: 1%

Agents who have suggested that homeowners do this project before selling: 2%

The NAR report gave new wood windows a “Joy Score” of 9.6 out of 10, as we detail in “19 Home Renovations That Give Owners the Most Joy.” But these windows aren’t likely to help close a home sale and agents aren’t likely to recommend them as a pre-sale renovation.

6. New master suite

Nenad Aksic / Shutterstock.com

Surveyed real estate agents who said this project helped close a home sale: Less than 1%

Agents who have suggested that homeowners do this project before selling: 3%

Not only is this project unlikely to help close a home sale, it’s also unlikely to pay for itself.

Both a midrange master suite addition and an upscale master suite addition made the list in our article “The 10 Worst Home Renovations for Your Money.”

5. Attic conversion to living area

Attic bedroom
Photographee.eu / Shutterstock.com

Surveyed real estate agents who said this project helped close a home sale: None

Agents who have suggested that homeowners do this project before selling: 2%

This project costs up to $80,000 to complete, and it returns only about 56% of the investment, the National Associations of Realtors report states.

4. Insulation upgrade

Worker insulating an attic
Bilanol / Shutterstock.com

Surveyed real estate agents who said this project helped close a home sale: None

Agents who have suggested that homeowners do this project before selling: 4%

Even though this project isn’t one that agents say could help close home sales, the NAR reports that it offers homeowners a relatively good recovery (83%) on the money spent.

3. Closet renovation

A woman picks clothes out of her closet
New Africa / Shutterstock.com

Surveyed real estate agents who said this project helped close a home sale: None

Agents who have suggested that homeowners do this project before selling: 4%

A closet renovation earned the highest Joy Score possible — a 10 out of 10 — in the NAR’s study.

Even if it won’t help you sell your home, you might enjoy this renovation while you still live in the home.

2. New fiberglass front door

Woman opening a door
Monkey Business Images / Shutterstock.com

Surveyed real estate agents who said this project helped close a home sale: None

Agents who have suggested that homeowners do this project before selling: 4%

Even if you don’t close a home sale by replacing the front door, choosing the right color for that front door may add to your home’s sale price.

Plus, as with a new steel front door, a new fiberglass front door is likely to bring homeowners joy. The NAR report gave both projects a Joy Score of 9.7 out of 10.

1. New fiber-cement siding

Artazum / Shutterstock.com

Surveyed real estate agents who said this project helped close a home sale: None

Agents who have suggested that homeowners do this project before selling: 2%

While fiber cement siding can return 76% of the cost and give homeowners satisfaction, it’s not a project that real estate agents say they find helps close a home sale.

What home renovations have you been considering? Share your thoughts in a comment below or over on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Source: moneytalksnews.com

5 Ways to Avoid Taxes on Social Security Income

Social Security and money
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The Tax Cuts and Jobs Act of 2017 changed a lot of rules, but one thing remains the same: It is exceedingly difficult to evade the long reach of the taxman.

That’s even true of Social Security benefits. Many people know that if you work while collecting benefits before reaching your full retirement age, it can result in a reduced benefit. But earn too much money — even by simply making withdrawals from some types of retirement plans — and you also can end up owing income taxes on your Social Security benefits.

According to the Social Security Administration (SSA):

“Some of you have to pay federal income taxes on your Social Security benefits. This usually happens only if you have other substantial income in addition to your benefits (such as wages, self-employment, interest, dividends and other taxable income that must be reported on your tax return).”

Whether you owe taxes on these benefits depends on your “combined income.” The SSA defines this as the sum of:

  • Your adjusted gross income
  • Your nontaxable interest
  • One-half of your Social Security benefits

If you file an individual tax return and your combined income is between $25,000 and $34,000, you may owe income taxes on up to 50% of your Social Security benefits. Earn more than that, and up to 85% of your benefits could be subject to taxes.

If you file a joint return and your combined income is between $32,000 and $44,000, you may owe taxes on up to 50% of your benefits. Earn more than that, and up to 85% could be taxable.

Fortunately, there are ways to reduce your income and reduce — or even avoid paying — taxes owed on your Social Security benefits. They include:

1. Delay collecting your benefits

Retiree with money and a clock.
Just dance / Shutterstock.com

Choosing to delay collecting Social Security benefits until your full retirement age — or even beyond — might be the simplest way to avoid paying taxes on your Social Security benefits, at least for a while.

Waiting to file for benefits also means you will get a bigger check each month once you finally do start collecting.

For more on the pros and cons of delaying Social Security benefits, check out:

2. Don’t work, or work less, in retirement

Seniors happy and relaxed in retirement
Monkey Business Images / Shutterstock.com

Every dollar you earn doing part-time work can push you a little closer to owing taxes on your Social Security benefits. Of course, it’s silly to quit a job you enjoy — or need — simply to trim your tax bill.

But if the job is a low-wage pain in the neck that only provides you with a modest financial benefit, you might be better off — at least emotionally — quitting so that you can reduce your income for the tradeoff of lowering or eliminating taxes on your Social Security benefits.

3. Avoid municipal bonds

Senior woman preparing for retirement
insta_photos / Shutterstock.com

A lot of people turn to municipal bonds as a way to lower their tax bill. Interest earned from these types of bonds typically is not subject to income taxes.

However, municipal bond interest is included in the formula that determines whether you will pay taxes on your Social Security benefits.

As MunicipalBonds.com states:

“When it comes to taxing Social Security benefits, tax-free municipal bond interest can become a ‘stealth tax’ that quietly eats away at income. Bondholders should be aware of these potential tax consequences when deciding between tax-free muni bonds and other kinds of fixed-income investments.”

Consider consulting with a financial adviser to help you determine whether municipal bond holdings might cause such trouble for you.

4. Withdraw money from a Roth account

investing
designer491 / Shutterstock.com

If you have socked away money in a traditional IRA or 401(k) plan, expect Uncle Sam to come calling during your retirement. After years of deferring taxes on those contributions, the bill is due once you begin making withdrawals on the money.

Additionally, these withdrawals will boost your combined income, which could make the difference in whether or to what extent your benefits are taxed.

One way to avoid such taxation is to withdraw only as much money as the government obligates you to do each year — known as the required minimum distribution (RMD) — and to take any additional cash that you need from a Roth IRA or Roth 401(k) plan, if you have one. No taxes are due on Roth distributions, and these withdrawals will not impact your combined income.

However, there are many good reasons not to withdraw money from a Roth account — including that RMDs do not apply to Roth IRAs.

So, consult with a tax professional before making this decision. A pro can help you decide whether withdrawing money from a Roth account — or making a combination of withdrawals from both a Roth and a traditional account — is the best strategy for you.

5. Distribute your RMD to a charity

Senior man working on a laptop
Monkey Business Images / Shutterstock.com

Giving money to charity is a great way to help make the world a better place. While doing good for others, you can also lower the odds that your Social Security benefit will be taxed.

If you are at least 70½, you can take up to $100,000 of your annual required minimum distribution, give it to a charity and avoid income taxes on the money. This is known as a qualified charitable distribution.

Since the money is not taxed, it will not boost your adjusted gross income. But you need to be aware of some key rules.

For starters, the money must be directed to a qualified 501(c)(3) organization.

Also, you cannot use funds from a 401(k) or other employer-sponsored plan to make this type of distribution. There are ways around this — such as rolling over money to an IRA — but again, this strategy should not be used without consulting your tax adviser.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Source: moneytalksnews.com

10 Inherited Items Worth More Than You Think

shocked man with money cash
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After 25 years of appraising and reselling antiques, I know how daunting it can be to settle an estate. It usually goes something like this: A family is overwhelmed after inheriting a house stuffed to the rafters with generations’ worth of objects. They choose a few keepsakes for themselves and then rent a roll-off dumpster to dispose of everything else.

And while that approach might feel efficient, it’s a tremendous waste. Sometimes the most mundane-looking items can be worth a surprising amount of cash. So if you’re a recent heir, take a breath — and take stock. These items are worth more than you think.

1. Cookware

Vintage Texas Ware bowl
Kentin Waits / Money Talks News

There may be money in those kitchen cabinets! Buyers love cookware that’s been proven by years of use. Look for Pyrex and Fire-King casserole dishes. Texas Ware mixing bowls (pictured) and Revere Ware pots and pans.

Beyond their practical uses, many of these brands are hot collectibles. This jadeite casserole dish by Fire-King sold for $178.40 on eBay.

2. Midcentury furniture

midcentury modern couch sofa loveseat
TierneyMJ / Shutterstock.com

From architecture to accent tables, midcentury design is having a moment. If you’ve inherited a houseful of MidMod (midcentury modern) furniture, get ready to be pleasantly surprised.

Eager buyers aren’t limiting themselves to high-end designers. Decidedly midmarket when first produced, pieces by Heywood-Wakefield can now sell for several hundred dollars. And this Plycraft chair and ottoman (a knock-off of a famous Charles Eames design) recently sold for $1,350 on eBay.

See also: “8 Tips for Selling Inherited Family Furniture”

3. Vintage tools

Jeff Giniewicz / Shutterstock.com

At estate sales, I’ve noticed shoppers make a beeline for the garage or basement workshop in search of tools. Vintage Craftsman, Skil and Stanley products sell well because they’re better made than their contemporary counterparts.

And don’t worry about emptying the toolshed. If you’re lucky enough to inherit one of these 20 valuable old tools, you can afford to hire a handyman anytime you need one.

4. Old phones

rotary phone
evkaz / Shutterstock.com

Everything old is cool again. Collectors pay top dollar for rotary phones made of an early type of plastic called Bakelite. This Western Electric model from the 1930s sold for $155.99 on eBay.

Princess phones from the 1960s and ’70s are in demand too. Unusual colors like pink, mint green and orange command the highest prices. This aqua blue touchtone phone made by Bell System recently sold for $150 on eBay.

5. Retro clothing

Vintage retro clothes clothing
Marbury / Shutterstock.com

Have you inherited closets packed with vintage clothing, shoes and accessories? Buyers are waiting.

According to thredUP, an online consignment and thrift store, the used clothing market is expected to be worth $84 billion by 2030. That demand is fueled by a new generation of consumers who prioritize sustainability and appreciate the quality and style of vintage clothing.

Not convinced? This vintage pair of Florsheim Imperial shoes recently sold for $295 on eBay. And on Etsy, this three-piece Pendleton set for women is listed for $160.

See also: “11 Secrets to Finding Quality Clothing at Thrift Shops”

6. Stainless steel flatware

Antique silverware
Zadorozhnyi Viktor / Shutterstock.com

Stainless flatware sold in most department stores today should be called “bentware.” The quality and durability just doesn’t compare with pieces from the 1960s and ’70s.

Consumers are noticing and willing to “fork” over more cash for better quality. This 59-piece Oneida flatware set sold for $175 on eBay and this Montgomery Ward set brought $112.50.

7. Old eyeglasses

Hipster man with vintage glasses
MS_studio / Shutterstock.com

Brands like Warby Parker have carved out a niche by selling vintage-inspired eyeglass frames. But there’s a strong market for truly old-school glasses. The following styles are hot sellers right now:

  • “Cat-eye” frames from the 1950s
  • Round wire-frames
  • Horn-rimmed frames (sometimes referred to as “Buddy Holly glasses”)

Vintage examples in good condition can sell for $25-$65 per pair.

8. Vintage Christmas decorations

Sarycheva Olesia / Shutterstock.com

Yes, Virginia, there is a Santa Claus. Vintage glass ornaments made in Germany by Shiny Brite sell well all year long. This lot of 61 ornaments recently sold on eBay for $295, and this Shiny Brite tree-topper brought $75.

And remember those ceramic table-top Christmas trees from the 1970s? They’re selling for hundreds these days. This 23-inch tree made by Atlantic Molds is listed for $500 on Etsy.

9. Original artwork

Nataliia Zhekova / Shutterstock.com

Over the years, many older adults accumulated generations’ worth of family art. Purchased in a gallery or homemade by a budding artist, original creative work can sell for serious money.

And though it may be tempting, don’t cast aside art that looks crudely done. Sometimes referred to as “naïve” or “outsider art,” these pieces may have value. This painting of South Beach, Florida, signed simply “E.S.,” recently sold on eBay for $235.

10. Vintage vinyl

George Carlin records
digitalreflections / Shutterstock.com

Those milk crates full of vinyl records just might be hiding a treasure. Even if you don’t have one of the rarest records of all time, you could still make a handsome sum in the resale market. This Buckingham Nicks album (by the Fleetwood Mac members) recently sold for a rockin’ $149.99 on eBay.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Source: moneytalksnews.com

7 Reasons Workers Age 65 and Older Have Not Retired Yet

A senior worker in eyeglasses stands in his carpentry workshop
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It seems like more and more Americans can’t get enough of work, whether it’s for enjoyment or necessity.

The Bureau of Labor Statistics estimates that by 2028, about 23% of people age 65 or older will be in the workforce.

Money Talks News even points out some signs that might mean it’s time to get back into the workforce in “8 Signs That You Should Leave Retirement.”

Provision Living, which operates senior living communities in three states, recently sought to find out why seniors continue to work. It surveyed more than 1,000 people between age 65 and 85 who work full- or part-time.

The responses indicated that 62% of these folks work for financial reasons while 38% work for personal reasons.

Following is a closer look at the findings. The percentages we report indicate the share of all surveyed seniors who cited a particular reason.

7. Loneliness

A senior woman looks out the window of her home
Rawpixel.com / Shutterstock.com

Surveyed seniors who said this is the main reason they continue working: 2.3%

The Provision Living survey found that a small share of working seniors stay on the job out of loneliness. Specifically, these seniors “say that their workplace provides invaluable camaraderie and they would feel too lonely if they stopped working,” according to the survey.

These seniors might be on to something. The findings of a 2018 survey of people ages 50 to 80 from the University of Michigan National Poll on Healthy Aging suggest that chronic loneliness can affect older adults’ memory, physical well-being, mental health and life expectancy.

6. Saving for a big expense

A senior couple enjoys their retirement savings
Ruslan Guzov / Shutterstock.com

Surveyed seniors who said this is the main reason they continue working: 2.5%

Older workers adding to their income by working must also be smart about not wasting those precious dollars.

While that sounds like common sense, you may be wasting money without realizing it. Money Talks News outlines several ways that seniors blow money needlessly in “7 Surprising Ways Retirees Waste Their Savings.”

5. To avoid boredom or fill time

A black senior man drives a forklift at work
sirtravelalot / Shutterstock.com

Surveyed seniors who said this is the main reason they continue working: 11.4%

The Provision Living survey found that about 6.8% of working seniors remain in the workforce out of boredom and about 4.6% work to fill time, although the survey did not explain the difference between these two responses.

Many people relish the thought of never having to work again, but for some, retirement isn’t all it’s cracked up to be. All those hours once spent commuting and working have to be filled up somehow.

For folks who can relate, Money Talks News lays out a game plan for making retirement fun and constructive in “7 Things You Should Try If You Regret Retiring.” And only one of the suggestions involves a job.

4. Supporting family

A senior Asian couple with their grandchild
Eastfenceimage / Shutterstock.com

Surveyed seniors who said this is the main reason they continue working: 14.3%

The days of kids financially being on their own at age 18 are quickly fading into the past, with more parents helping support their kids well after they officially become adults.

This should not delay your retirement, though: There are numerous ways you can help grown kids financially without sacrificing your own finances, as we detail in “6 Ways to Help Adult Children Without Going Broke.”

3. Paying off a mortgage or other debt

Happy seniors
By michaeljung / Shutterstock.com

Surveyed seniors who said this is the main reason they continue working: 19.9%

The Provision Living survey found that about 8.1% of working seniors remain in the workforce because they are paying off a mortgage. An additional 11.8% said they are still working because they are paying off debt, although the survey does not specify what type of debt.

At least seniors’ average debt load of $70,633 is less than the national average of $93,446, according to a 2019 analysis from credit reporting company Experian.

If you’re carrying debt, whether as a senior or a younger person, check out “8 Surefire Ways to Get Rid of Debt ASAP” for advice. If you need help digging out of your debt, try the Money Talks News Solutions Center, which can direct you to a trustworthy credit counselor.

2. Can’t afford to retire

Confused senior
fizkes / Shutterstock.com

Surveyed seniors who said this is the main reason they continue working: 22.9%

About 22.9% of working seniors “say they simply can’t afford to retire at the moment,” according to Provision Living.

That easily makes retirement affordability — or rather, lack thereof — the most commonly cited financial reason for which seniors remain in the workforce. The second-most common financial reason, supporting family, was cited by only 14.3% of survey respondents.

1. Enjoy working

Tyler Olson / Shutterstock.com

Surveyed seniors who said this is the main reason they continue working: 23.2%

The survey found that of seniors who still work either full-time (17.1%) or part-time (6.1%), nearly a quarter do so because they enjoy it. That makes enjoyment of work the most commonly cited reason, whether financial or personal, among survey respondents.

Are you a senior who is still working? What are your reasons for delaying retirement? Share them with us in the comments below or on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Source: moneytalksnews.com

Does a Year Make a Difference? How to Know Whether to Retire Now or Later

senior making a decision
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This story originally appeared on NewRetirement.

In some cases a year can make a huge difference. Think back to 2019. It was certainly different than 2020 (to say the least). But sometimes years go by and not all that much has changed. Knowing when to retire is a huge decision. It can be easy to put it off a year and then again another year.

Do those years really make a difference in the grand scheme of things? The answer largely depends on your perspective, but the answer is yes. Our choices about when to retire — even waiting just a year — impact both our financial as well as our emotional well-being.

Current and Future Value of Your Decision

Older couple thinking about their long-term investments
ESB Professional / Shutterstock.com

When figuring out when to retire, you need to think about both the present and your future. What does delaying retirement net you now? What does it mean to your future?

For example: If you retire earlier, can you still afford your future? If you delay retirement, can you be more financially secure without regretting the extra year working?

Let’s take a look at what the real differences are when you delay your retirement one year. What about if you wait another five years or longer?

1. Your Time

Grandparents spend time with their grandchildren at home on a sofa
Monkey Business Images / Shutterstock.com

Your time is your most valuable resource. And, let’s face it, how you spend your time gets increasingly more important as you age. You have fewer years ahead of you and you want to make the best use of them.

You should probably consider time as an important component in your when-to-retire decision-making. What does delaying retirement for a year or more mean if you value your time?

If you are happy, fulfilled, and are finding meaning in your work, then there is probably no need to rush to retirement. However, if there are other ways to spend your time that you think are more important, then you might want to prioritize retirement sooner rather than later.

Ashley Whillans, an assistant professor at Harvard Business School, writes about how to think about and value your scarcest resource, your time, in her book, “Time Smart: How to Reclaim Your Time and Live a Happier Life.”

She became interested in the value of time after observing that people don’t spend money for optimum happiness.

Here is what she said on the NewRetirement podcast, “If people are not spending one resource that’s so precious in our lives, money, in a way that promotes happiness, I’m sure that they’re probably not optimizing the way they spend their time, either. And we also became really interested in trying to understand the trade-offs that we make between time and money.”

She advocates taking time seriously. “So I do hear from a lot of my MBAs, a lot of the executives I chat with, saying, ‘Well, once I get this title, once I hit this number in the bank, then I can start focusing on what I would like to do with my time. But it’s not until I achieve this title or achieve this amount of money in the bank that I’m really going to take time seriously.’”

How do you value your time? How can you use that valuation to inform your decision of when to retire?

2. Your Pension, If Applicable

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If you have a pension, waiting a year can make a HUGE difference between vesting into income or not. For most pension holdings, when they qualify for income is the most pivotal factor for when to retire.

This could be a million-dollar decision. Don’t retire before you get your pension.

3. Social Security: A Decision That Lasts Longer Than a Year

Older worker with money
Elnur / Shutterstock.com

There are a few considerations to think about with regards to delaying retirement and what that means for your Social Security retirement income.

First, you can retire from work and delay the start of Social Security. And if this is your decision, then when you retire might not have appreciable financial considerations.

However, if you need to start Social Security right away after you retire and you haven’t yet turned 70, then you may take a financial hit. Depending on your Social Security earnings and how long you live, the difference between starting Social Security at age 62 and age 70 can be a $500,000 decision in lifetime value.

But, what is the difference of just delaying the start of Social Security for one year?

Examples:

Higher Earner: Let’s say you are a relatively high earner and will be earning the maximum Social Security benefit available. If this is true, then your monthly benefit at your Full Retirement Age (66 for most people) would be around $3,100. If you were to delay for a year, then you could boost your monthly benefit to around $3,300. That is a $200 monthly and a $2,400 a year difference. The boost would result in almost an extra $50,000 over a 20-year retirement.

Average Earner: What about someone more average? Does delaying a year still make a big difference? The average Social Security benefit at Full Retirement Age is $1,500. Delaying the start for two years boosts monthly income by an extra $200. That is a $2,400 a year difference and would result in an extra $48,000 over a 20-year retirement.

So, delaying retirement a year can indeed make a big difference in Social Security income because it is a decision that impacts you not just in one year, but over your lifetime.

4. Work Income (and Related Expenses, Savings, and Needed Withdrawals)

older worker whose job was affected by the coronavirus crisis
Gustavo Frazao / Shutterstock.com

Retirement and retirement planning depends on a variety of inter-related levers: your income, expenses, how much you save, and how much you withdraw from savings will all be impacted whether or not you have work income.

Keep reading for some estimates of what delaying retirement by a year might mean with regards to work income:

The Income

Senior man with money
aerogondo2 / Shutterstock.com

Let’s start with the obvious. Delaying retirement gives you an extra year of income. And that is no small chunk of change at probably $50,000 or more, perhaps much more.

Retiring early simply means that you aren’t banking that money or are able to use it for living expenses (and you need to pay for life somehow).

Withdrawals

Stealing money
esthermm / Shutterstock.com

Work income enables you to delay making withdrawals to cover expenses. And, this delay enables the money to stay invested and continue to grow. So, the value of delaying a year can be equal to whatever you would have taken out of savings PLUS your returns on that money.

Many people withdraw about 4% of their savings a year, and the average retirement savings for someone in their 60s is around $200,000.

So, with those averages, delaying that withdrawal for a year would net you $8,000 plus however much your money might appreciate. (The appreciation might be $1,500 over 20 years at a 6 percent return.)

Expenses

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When you are working, you might have higher (or lower) expenses than when you retire — depending on your personal situation.

You’ll want to think about commuting costs, lunches out, fancy coffee on your way to work, and your wardrobe — well, if we ever get out of the pandemic anyway. And, if you choose to retire, you’ll want to carefully consider if your expenses will go up or down. Many people find that they spend a lot more after retirement. Explore best ways to budget for retirement.

However, the biggest potential factor with regard to expenses and when to retire might be where you live. If you intend to relocate after retirement, this can be a pretty massive financial factor. Buying and selling a home is a big decision, and timing those transactions can mean big swings in value.

Expenses can’t be easily generalized — delaying retirement a year might result in a higher or lower burn rate. So, let’s just call it even. (But we really recommend that if you are considering when to retire, do detailed personalized planning so that you can feel confident with your decision.)

Savings

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First, do you know how much savings you need to have the retirement you want? If you don’t have enough and an extra year or more in the workforce could get you there, then keep working.

But maybe you want an extra cushion or to leave behind a bigger financial legacy. Working longer could potentially enable you to contribute greatly to savings.

Extra savings — especially if you are able to do catch-up savings — can be a great use of an extra year in the workforce. You are allowed to save up to $33,000 in tax-advantaged accounts after the age of 55 (as of writing). (And, those savings might appreciate $6,500 over 20 years.)

Work Benefits

workplace benefits
Rawpixel.com / Shutterstock.com

Many workplaces offer benefits in addition to salary. Health insurance and 401(k) matching are notable big-ticket items that should be considered if you’re debating whether you should delay retirement a year.

If you are retiring before you are eligible for Medicare at 65, then you may face huge out-of-pocket insurance costs. And, if your employer offers 401(k) matching, then you will be walking away from that cash.

Health Insurance: Fidelity estimates that out-of-pocket costs for health care are just shy of $12,000 a year.

401(k) Matching: The most common employer match is 50 cents on the dollar of up to 6 percent of your salary. So, at a $150,000 salary, an employer might be adding $4,500 to your retirement account (assuming you saved at least $9,000).

Does Delaying Retirement by a Year Really Make a Big Difference?

Questioning senior
Krakenimages.com / Shutterstock.com

Yes. Delaying retirement by a year can be meaningful. But, the reality is entirely dependent on your personal situation. Without counting appreciation on the additional savings, here is how it adds up:

Social Security: A year could mean a $0–$500,000 difference. Let’s take a modest example and say it costs you $50,000

Pension: (Because few people have a pension, and almost no one would retire before they vest, we’ll leave it out of this summation.)

Work Income: $50,000+

Work Benefits: $16,500 ($12,000 for health insurance and $4,500 for employer match)

Delayed Savings Withdrawals: $8,000+

Savings Contributions: $33,000 (if you can max out catch-up contributions)

Your Time: As the TV commercial used to say, PRICELESS

There is a huge range for what delaying your retirement for just one year might cost you — but it is safe to say that $100,000–$200,000 is a conservative estimate, except that your time really is priceless. At a minimum, it has some value to you that should offset whatever you might gain from working longer.

You can use the NewRetirement Planner to run scenarios for what delaying retirement a year — or moving it up five years — might mean to you. Just remember to balance the financial side of the equation with how you really want to be spending time.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Source: moneytalksnews.com

14 Uses for WD-40 That Save Money, Time or Headaches

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WD-40 is marketed as a “multiuse product.”

The spray is known for the capabilities for which it’s usually enlisted — such as lubricating squeaky hinges, loosening rusted parts and driving out moisture. In fact, “WD” stands for “water displacement.”

But WD-40’s uses extend well beyond those tasks.

The San Diego-based WD-40 Co. offers thousands of uses for its namesake product on the WD-40 website, including 2,000-plus uses contributed by the product’s devotees.

Folks have been discovering more uses since the original WD-40 product was developed in 1953 after 39 failed attempts. (Thus, the “40” in its name.)

We’ve rounded up some of the least known but most helpful uses.

If you try a new use for WD-40, test it in a small inconspicuous area first. WD-40’s list of fan-submitted uses notes that the company has not tested those suggestions and that “customers should exercise common sense whenever using WD-40” and read the label.

1. Remove dead bugs and bird droppings

couple taking a road trip in a convertible
AlessandroBiascioli / Shutterstock.com

Is a summertime road trip in your recent past or near future? When the fun is done, remember that WD-40 has been used to remove dead bugs plastered onto everything from car radiators to boat windshields and golf carts.

You can also reach for that familiar blue can the next time you find bird poop peppering the hood or roof of your car.

Just don’t store the can in your car if it’s one of WD-40’s aerosol products. As we explain in “Never Leave These 9 Things in a Car“:

“Aerosol cans — such as those containing spray paint, sunblock or deodorant — shouldn’t be kept in your car, since they are sensitive to heat. The contents of pressurized cans may expand, possibly causing them to explode.”

2. Remove adhesive

Stickers on window
InnervisionArt / Shutterstock.com

Give your fingernails a break. Whether you’re trying to peel off a stubborn sticker, decal, price tag or tape, WD-40 can help. It also works on adhesive residue that has been left behind by stickers.

If you don’t have WD-40 on hand, vinegar, baby oil and baking soda can work for this purpose, too, as we’ve reported.

3. Remove coffee stains

couple eating breakfast in bed
Rawpixel.com / Shutterstock.com

Examples of successful removal listed on WD-40’s website include coffee stains on cups, tables, counters and floor tiles. Just be sure to wipe up all fluid after cleaning floors so no one slips.

Baking soda can also remove stains from coffee mugs, as we explain in “7 Household Uses for Baking Soda.”

4. Clean shoes

shoes
Natalia Deriabina / Shutterstock.com

Paint or grass stains on your favorite sneakers? Dog poop or salt in the crevices of your boot soles? WD-40 has been used to tackle it all.

Tip: Enlist an old toothbrush for the job. They’re good for cleaning various nooks and crannies, including those in the soles of your shoes, as we report in “7 Ways to Use Old Toothbrushes.”

5. Unstick gum and glue

Tennis shoe with gum on the heel.
Africa Studio / Shutterstock.com

WD-40 has been used to remove chewing gum that was stuck to hair, shoes, concrete and lunch trays.

It’s also been used to remove glue from carpet, leather and other surfaces; remove hair-extension glue from hair; and remove glue stains from jeans.

6. Keep squirrels at bay

squirrel
Malachi Ives / Shutterstock.com

WD-40 Co. CEO Garry Ridge told the Los Angeles Times that his favorite story about an unusual use for WD-40 involves a woman who sprayed it on her backyard bird feeder pole because squirrels were filching bird food.

Petroleum jelly works for this purpose as well, as we detail in “9 Everyday Problems You Can Solve With Vaseline.”

7. Wipe away permanent marker

professor using a whiteboard
Rido / Shutterstock.com

Did you or the kids unwittingly pick up a Sharpie and go to town on the dry-erase board? The damage need not be permanent, thanks to WD-40.

8. Prevent car parts from freezing

vehicle key
Brian A Jackson / Shutterstock.com

A frozen-shut door lock or ice-clogged windshield wiper spray nozzle is the last thing you need when you’re running late to work. Lubricating locks with a squirt of WD-40 before winter can keep them from locking up when icy times return.

For more handy driver’s aids, check out “26 Things Everyone Should Keep in Their Car.”

9. Keep lawn mower blades clean

Teenage boy mowing lawn.
By Suzanne Tucker / Shutterstock.com

Spray your lawn mower blades with WD-40 to prevent grass clippings from collecting on the blades.

10. Banish barnacles

Boating
freevideophotoagency / Shutterstock.com

If you’re using a boat, hopefully it’s one that you rent or share rather than own — Money Talks News founder Stacy Johnson cites boats in “8 Things Rich People Buy That Make Them Look Dumb.”

But in any case, know that WD-40 has been used to remove even barnacles from the undersides of boats.

11. Fend off wasps

bugs
schankz / Shutterstock.com

For evicting the buggers from a nest or preventing them from building one, users of Reddit’s LifeProTips message board agree on WD-40’s effectiveness. Just don’t spray a nest while wasps are around. As one commenter who made this mistake put it, “They do not like it, and will attack.”

12. Separate stubborn Legos

Kid with Legos
KPG Ivary / Shutterstock.com

Did Junior stick those blasted bricks together a little too well? Use WD-40 to spare your fingertips and nails for a slicker way to pry them apart.

13. Open iced mailboxes

cold
juade2000 / Shutterstock.com

Put the ice pick down. WD-40 is a safer “open sesame” when you find your mailbox door frozen shut.

14. Prevent snow from sticking

Shoveling snow
Chiyaca / Shutterstock.com

Spray your shovel and your snowplow blades with WD-40 to stop snow from sticking to them as you clear the walk.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Source: moneytalksnews.com

5 Moves That Will Sabotage Your Job Interview

Obnoxious man sticks out tongue
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Hiring the right person for a job is difficult, and there is much at stake for employers. If the company hires the wrong person, it could be stuck for years with an unqualified worker.

That’s why everything an applicant does is closely scrutinized, from the wording of their resumes to the clothes they wear to interviews.

Job applicants often do things that sabotage their own efforts to find work. Here are some things to avoid if you want to get on the payroll.

Dressing inappropriately

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The quickest way to send a message that you’re not interested in a job is to dress inappropriately for an interview. Strive to fit in by dressing like the people you’re seeking to work with.

Don’t forget that it is possible to overdress. If you’re trying to get a job on a construction site, showing up in a suit and tie won’t be appreciated. Your goal should be to dress as if you were going to be hired and put to work immediately.

Also, there’s evidence that the color scheme you choose makes a real difference. Check out: “70% of Successful Job Candidates Wear This Color.”

Not tapping into your personal network

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Use your network of friends, acquaintances and business contacts to find openings that might be appropriate for you. One survey reported by LinkedIn found that 85% of jobs are filled through networking.

It may be embarrassing to ask friends if they’re aware of job openings, but if you don’t you’ll be missing out on an important source of information.

Check back with friends and acquaintances every few weeks so they’ll immediately think of you when they hear of a job opening. Here’s more on that subject: “9 Tips for Successful and Painless Networking.”

Failing to take a job interview seriously

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Bad jokes and flippant remarks can cost you a job by calling into question your character, or your ability to fit into the workplace.

Once people are hired, letting them go can be a cumbersome process. That’s why employers don’t hesitate to pass on applicants who don’t seem to be taking interviews seriously.

Speaking of interviews, consider some of the curveballs you might get: “20 Bizarre Job Interview Questions, and How to Answer Them.”

Not following up

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Your job search doesn’t end after you’ve filled out an application. Getting the attention of prospective employers usually requires polite persistence.

The goal is to stand out from the crowd as the best person to hire. To do this, follow up applications with emails and phone calls.

Make sure employers know that you’re eager to join their team. Stand out by displaying a can-do, ready-to-work attitude.

Trashing your previous employers

Angry businessman lashing out in a meeting.
fizkes / Shutterstock.com

Criticizing past companies you’ve worked for, even if the criticism is deserved, can give the impression that you’re disloyal. Your interviewer may decide that since you don’t like past jobs, you won’t like the new position you’re seeking.

Employers are looking for people who are eager to fit into new surroundings. They don’t want to hire workers who will leave the company unhappy and tell unpleasant stories about their job.

Covering up a layoff or a dismissal

Man lying
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Be prepared to honestly explain employment gaps in your work history caused by dismissals or layoffs. If you try to cover up a past problem and your interviewer learns about it, he or she isn’t likely to hire you. And you will raise concerns about your honesty.

Instead, acknowledge and briefly explain the situation. It’s better to deal with such issues openly than to have your employer discover them later.

Using inappropriate language

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The use of profanity is increasingly common, but it has no place in the job-seeking process. Your peers may not care if you drop an occasional curse word into conversations, but foul language is likely to cause a job interview to end badly. It will be interpreted as disrespectful, regardless of your intent.

Most employers will assume that you’re on your best behavior when seeking a job. If you swear during your job search, they’ll conclude that your language will be worse after you’ve been hired.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Source: moneytalksnews.com