If you’re in the running for a new job and decide to withdraw from the interview process, the way to do so is simple. According to Diane Farrell, career services director at the University of North Georgia, here’s the best approach: Write a brief and polite email thanking the hiring team for considering you for the role and letting them know you’ve decided not to move forward.
Don’t just disappear on the employer, warns Farrell, who’s spent more than 20 years in career services. Once you decide to withdraw, promptly communicate that with the hiring team.
In your email, keep the tone friendly and express your gratitude. “You want to exit as positively as possible,” she says. So there’s no need to detail the reasons you’re withdrawing, which could seem like critiques.
“You don’t have to be super specific,” Farrell says. “You do not want to burn bridges.”
Why would you withdraw from the interview process?
Until you accept a job offer, withdrawing from the interview process is always an option, Farrell says. It might take several conversations with people at the company for you to know whether it’s a job you’d want to accept.
Here are common reasons you might withdraw from the interview process:
The job would be a bad fit. Ask questions about the role’s responsibilities, daily workload and performance metrics to help you get a sense of the company’s priorities and whether the job really appeals to you, Farrell says. Keep in mind that the description in a job posting isn’t always accurate.
The process is slow and frustrating. A 2022 Talent Board report on job candidate experience showed that people interviewing with North American companies sometimes dropped out because hiring teams disrespected their time. Poor communication and a drawn-out process could tell you a lot about what it might be like to work for the company.
They won’t meet your expectations for pay. You could get all the way to a job offer and find out the company’s budget is too far below your salary demands. If they won’t negotiate enough to offer a compensation package you can accept, the right move might be to walk away.
You’ve accepted another offer. Once you’ve accepted an offer and signed an agreement for a new job, it’s a good idea to drop out of any other ongoing searches. If you’re interviewing for multiple jobs at once, be careful not to accept one of them if you’re not willing to give up the possibility of the others. “I wouldn’t recommend withdrawing after you’ve signed an agreement,” Farrell says. “It could burn a bridge with that particular organization.”
Even if trains, history and nature aren’t your cups of tea on their own, something absurdly special happens when the three combine.
The White Pass and Yukon Route Railway is a staple of any visit to Skagway, Alaska, particularly if you arrive by ship during an Alaska cruise. The town’s success is closely linked to the development of the railroad infrastructure, with the train line carrying both passengers and cargo between Alaska and Canada for more than 120 years.
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I’ve ridden the train’s Skagway-to-White Pass Summit route, and the experience was fascinating and exhilarating, offering a narrated history lesson and views that are absolutely unrivaled by any other train journey I’ve experienced.
From how it started to where the route will take you and how much you’ll pay for tickets, here’s what you can expect from a ride on the White Pass Railway, Skagway’s most scenic route to Canada.
White Pass and Yukon Route history
Construction on the White Pass train, Skagway’s easiest way in and out during the gold rush days of the early 1900s, began in 1898, with investors from the U.S., Canada and England — and more than 35,000 workers — coming together to complete the $10 million project in just two years.
Until the tracks were laid, the two main routes over the mountain were the shorter but steeper Chilkoot Trail and the longer but flatter White Pass, both of which presented rough terrain and brutal conditions for anyone who made the trek.
Each person who ventured out in search of gold via one of the two paths was required to carry 1 ton of supplies to see them through their trip, making the hike even more treacherous. After the railroad’s completion, the expedition was far less arduous, and it took much less time for stampeders to reach the Klondike region.
From 1982 to 1988 — after more than 80 continuous years in operation, including during the winter months — the railroad halted services when the cost of metal dropped and mines, which produced most of the train’s cargo, closed.
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In 1988, the route reopened as a tourist attraction and now operates from early May through late September to align with the Alaska cruise season. In 1994, the White Pass and Yukon Route was designated an International Historic Civil Engineering Landmark, among the likes of the Eiffel Tower and the Statue of Liberty.
White Pass train price
Like the mountain over which the locomotives run, the cost to ride the train along the White Pass Summit route is steep. Tickets purchased online at least 24 hours in advance are $142 per adult and $71 per child for the 2.5- to 3-hour trip, which takes passengers 20 miles from Skagway to an elevation of 3,000 feet before turning around at the Canadian border and heading back.
The White Pass and Yukon Route Railway also sells tickets to non-cruise passengers for options like one-way train rides and camping, as well as connections via Carcross and Bennett, which venture out of Alaska and into British Columbia before entering the Yukon Territory.
I bought my White Pass Summit adult ticket through Norwegian Cruise Line as a shore excursion, and it set me back $219 — a significant but not unexpected markup of $77. (On some sailings, the excursion starts at only $199 per adult and $99 per child.)
Longer and more expensive variations of the train trip, when booked as cruise shore excursions, include visits to local sights before or after the train ride, as well as hybrid train and motorcoach rides that venture as far north as Carcross in Canada’s Yukon Territory.
Prices vary by cruise line and specific tour inclusions.
How to purchase tickets for the White Pass and Yukon Route Railway
In addition to purchasing tickets yourself online on the White Pass and Yukon Route Railway website or through your cruise line’s app, website or shore excursion desk, you can buy day-of tickets at the ticket office on Second Avenue in Skagway. There, you’ll also find The Train Shoppe, which sells all sorts of memorabilia and apparel.
Whether you purchase your tickets online or in person, through your cruise line or directly from White Pass and Yukon Route, you can choose from several departure times. Select one that fits your schedule. If you book independently (not through your cruise line), double-check that the time you pick coincides with the time your ship will be in port.
Where does Skagway’s White Pass train go?
The train ride for visitors to Skagway starts at the train tracks about halfway between the cruise ship docks and the downtown area.
From there, the train will travel, without stopping, to one of several points: White Pass Summit at the U.S. border with Canada, where the train will turn around and travel back down the mountain to Skagway (most excursions); Fraser, British Columbia, where passengers can transfer to motorcoaches that travel the Klondike Highway (also an outpost for Canadian customs); and Carcross in Canada’s Yukon Territory, where passengers can explore the historic town, including a gold rush general store.
Along the way, riders can follow along with provided maps to track their route past several points of interest, including the rail line’s maintenance shops, a donated caboose now rented as an Airbnb, gravesites, waterfalls, steel bridges, two tunnels and lookout points that make for fantastic photo opportunities.
What it’s like to ride the White Pass and Yukon Route train
When you book (or receive your ticket, in the case of a cruise line booking), you will be given a meeting place and instructed to be there at a set time. If you’re coming from a cruise ship and plan to spend time in town prior to your ride, take note of your meeting place well ahead of time to be sure you know how to get there. My travel companion and I took a wrong turn on our way to the meeting spot and would have missed our excursion had it not been for a kind rail worker who saw us running with our tickets and gave us a ride.
Apart from the railroad’s six brand-new engines, its fleet is impressively vintage, consisting of two steam engines from the first half of the 20th century, 20 diesel-electric locomotives dating from the 1950s and 92 restored and replica passenger coaches, including one that’s more than 140 years old. As such, there is no air conditioning in the coaches, so passengers can expect things to feel a bit stuffy if it’s a hot day. On my journey, it was chilly, making it a pleasant ride.
Although travelers are prohibited from moving between coaches while the train is in motion, they are permitted to stand on the exterior terraces on either side of each car for fresh air and views that are unimpeded by the coaches’ glass windows. Be warned that visibility can be poor and the vibe creepy when the weather is foggy, as it was the first time I rode the train back in 2013. Ten years later, I caught a break and happened to visit on a clear, sunny day when I enjoyed phenomenal views.
Guides and eventually the conductor will come through to say hello, check tickets and sell souvenirs, such as DVDs, hats and photo books. They can also answer any questions you have. Guides narrate during the trip, providing valuable tidbits of information about each point of interest the train passes on the mountain. If you enjoy the experience, it’s appropriate to tip a few dollars to your car’s guide or to tip a larger amount to the conductor, who will divide it among all the staff.
Each passenger is provided with a free booklet about the train route’s history. It includes safety rules, a map with a blurb about each point of interest, information about the fleet, a preview of items available to purchase at The Train Shoppe in town and a couple of puzzles to pass the time. (Some passengers report being bored during their rides. If you’re worried, bring a pen for the puzzles.)
Bottom line
While I don’t recommend a ride if you’re someone who can’t sit still for long periods of time or if you’re afraid of heights, I do think it’s one of the best activities a visitor to Alaska can do.
If you’re looking for a memorable way to grasp the history and sheer vastness that is the Alaskan wilderness, a ride on the White Pass and Yukon Route train is something you don’t want to miss.
Spirit Airlines is known for its low fares and plentiful flights to popular vacation destinations. But because of the airline’s pricing model, choosing your seat and most other services beyond the ticket itself will cost you extra when flying Spirit.
Before you book your ticket, here’s what to know about seat selection on Spirit Airlines, including the types of seats available and how much they might cost.
Spirit Airlines seat assignment
As an ultra low-cost carrier, the rule of thumb on Spirit is that seat selection isn’t free, and customers can expect to pay for seats on each leg of their trip.
The only travelers who don’t have to pay a seat selection fee are Free Spirit elite status members, who get free seat selection as one of the program’s perks.
When booking, you can pay for seat selection and baggage as part of a bundle. Alternatively, you can choose your seats individually as a trip add-on during booking or anytime after — even at check-in.
Do I have to select a seat on Spirit Airlines?
Travelers hoping to fly as cheaply as possible can skip paying for seat selection altogether. In that case, the airline will randomly assign them a seat at check-in.
Yes, that means you could end up sitting apart from your travel companions: The airline states it can’t guarantee travelers will be assigned seats next to each other, even if they booked the tickets on one reservation.
However, the airline says gate agents and flight attendants will try to provide adjacent seats “when possible” for travelers ages 13 or younger who are traveling with an adult.
Notably, this assurance is not enough to meet the U.S. Department of Transportation’s new recommendations that airlines guarantee adjacent family seating for no additional cost.
Spirit Airlines seat types
Unlike other airlines that have a wide range of seat types and classes of service, it’s pretty straightforward on Spirit — there are just three options to choose from.
Standard seats
Spirit’s standard seats represent the vast majority of seats on the aircraft. You can buy a standard seat a la carte or purchase it as part of a bundle — which we’ll discuss in a moment.
While you may want to equate a standard seat to economy class on another airline, don’t expect much besides a place to sit. As a budget airline, you’ll generally have to pay for anything else you want, from soda and snacks to carry-on bags and other services.
Premium seats
On Spirit, premium seats are exit row seats that come with a bit of extra legroom but also require passengers to be able and willing to assist in an emergency. This means travelers under the age of 15 can’t choose these seats, per federal guidelines.
Big Front Seats
While Spirit doesn’t have a true first class, it does offer wider seats with more legroom at the front of the aircraft. The airline calls the seats in this section the Big Front Seats.
With eight or ten such seats available on each flight — depending on the aircraft — Big Front Seat passengers get up to 32% more legroom when compared to standard seats. There’s also no middle seat, as all Big Front Seats are either window or aisle seats.
Spirit Airlines seating chart
On the web, there are a few ways to see the Spirit seating chart. You can take a sneak peek before choosing a flight by selecting “seat map” on an itinerary you’re considering.
Once you do that, you can view seat types and availability on the plane, as shown in this example flight from Newark, New Jersey to Orlando, Florida.
When it comes time to select a seat while booking, the seat map will show the price of each seat. When you select a seat, a pop-up box will display the price, along with an image and additional information, like whether it’s an aisle or window seat.
If you’re selecting seats as part of a bundle, you’ll choose your seats using the same type of map, but seats included in the bundle will be listed at $0.
How to pick seats on Spirit Airlines
When it comes to selecting a seat on Spirit, you have three main options:
Pay to select seats a la carte while booking, or anytime up until check-in.
Pay for a bundle that includes seat selection, baggage and other benefits such as priority boarding.
Skip seat selection and pay nothing. This option will result in the airline randomly assigning you a seat at check-in.
Spirit Airlines seat selection fees
Seat assignment prices can vary dramatically based on the flight and the seat you choose. Spirit advertises the price for a standard seat as starting at $5 per flight and climbing as high as $200 under the most expensive circumstances.
The price of a Big Front Seat ranges from $12 to $750 per route, and will be pricier than standard seats for the extra space. You can also save money by paying to upgrade to a Big Front Seat on the day of your flight, but there’s always a chance there won’t be any available.
In NerdWallet’s analysis of airline seat fees, Spirit Airlines is the second most expensive among major U.S. airlines, at an average of $20 per seat per flight. Spirit trails only its budget airline counterpart, Frontier, in that ranking.
With such a wide range of prices, let’s see what these fees look like in practice. We priced out a summer weekend trip from Baltimore/Washington International Airport in Maryland to the Fort Lauderdale-Hollywood International Airport in Florida, with a base fare coming in at $229 round-trip. On the leg to Florida, seat selection fees start at $17 for a standard seat toward the back of the plane.
If we want to sit closer to the front of the plane, standard seats go for $18 or $27. Exit row seats are $33, while the larger, extra-legroom Big Front Seat costs $110.
For the return trip, the cheapest seats start at $20.
If we aren’t paying for extra baggage, and if we select the least expensive seat each way, our $228 ticket ultimately comes out to $265.
Spirit Airlines fee bundles
Instead of paying for seats separately, you can pay for one of Spirit’s bundles. These include a checked and/or full-size carry-on bag, a standard seat and other services for one price.
Like the seats themselves, the costs of the bundles vary by flight. And keep in mind you’ll need to pay for the bundle for both the outbound and return flight.
Before choosing a bundle, you’ll want to decide what services you need and then price out the best option.
Here’s what you get with Spirit’s two main bundles:
Seat selection
Other services included
Just For You Bundle
Standard seats included.
Shortcut boarding and one checked bag or one full-sized carry-on bag.
Bundle It Combo
Standard seats and premium (exit row) seats included. Big Front Seats not included.
Shortcut boarding, checked bag and full-sized carry-on bag, plus one free flight change allowed.
For our hypothetical trip from Baltimore to Fort Lauderdale with a $229 base fare, the Just for You bundle costs $69 each way. The Bundle It Combo tacks on $130 each way.
So if we decide to add on the Bundle It Combo, we would pay $489 — which might not be such a good deal.
If we only want one part of a bundle’s offerings — for example, a carry-on bag — and don’t need seat selection or priority boarding, it might make sense to skip the bundle and pay for the carry-on bag separately.
Spirit Saver$ Club
Members of Spirit’s subscription-based Saver$ Club receive discounts on seat selection for themselves and up to eight travel companions, along with other benefits like expedited security access, early boarding and ticket flexibility.
The program costs $69 for a 12-month membership, with 18-month and two-year memberships also available.
Spirit Airlines seat selection for elite members
One of the most useful perks of Spirit Airlines elite status is the ability to select a seat for free. Spirit’s seat selection benefits for elite status members are as follows:
Free Spirit Silver members get complimentary seat selection at check-in and may be able to move to an exit row seat prior to departure at no cost.
Free Spirit Gold members get complimentary seat selection when booking, including exit rows.
If you’re a frequent Spirit flyer, you can work toward Free Spirit elite status through flying and everyday spending using the Free Spirit® Travel More World Elite Mastercard®. Cardholders earn 1 Status Qualifying Point (SQP) per $10 spent on eligible purchases.
For context, it takes 2,000 SQP to reach Free Spirit Silver and earn complimentary seat selection at check-in. Gold status is earned once you reach 5,000 SQPs.
Spirit Airlines seat selection recapped
When flying a budget airline like Spirit Airlines, you should go in expecting that your ticket only gets you a spot on the plane and a personal item that fits under the seat. Anything else, including choosing your seat, will cost extra.
When booking a Spirit Airlines flight, a little research and strategy can help you save money. Figure out your greatest areas of need— whether it’s a full-sized bag, shortcut boarding or selecting a seat — and then compare the price of bundling your add-on services or paying for them individually.
And, if you’re planning to fly Spirit regularly, supplementing your flying with an airline-branded credit card is a great way to help you reach elite status and earn free seat selection.
(Top photo courtesy of Spirit Airlines)
How to maximize your rewards
You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2023, including those best for:
Editor’s note: This is a recurring post, regularly updated with new information and offers.
As you load your cart in celebration of Amazon’s annual Prime Day event this July 11-12, make sure you’re maximizing your purchases by paying with a credit card that earns rewards on top of your killer savings.
However, determining which card is right for you for Amazon purchases requires looking beyond just points-earning rates and considering other factors, such as rewards currencies, purchase protection and extended warranties. In some cases, you might even want to consider different cards depending on the specific purchase. Additionally, your best option may vary based on whether you’re a Prime member and what other cards you already carry.
And even if you don’t actually use a participating card, you may be eligible for a discount of up to 50% on your purchase by applying just 1 American Express or Chase point to your purchase.
With all those things in mind, here’s a look at the best credit cards to use when shopping at Amazon.
Best credit cards for Amazon purchases
The information for the Prime Visa and Discover it Cash Back card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
Prime Visa
At first glance, Amazon’s own Prime Visa appears to be the most exciting option — and for most people, it probably is. The Prime member-exclusive card, which should not be mistaken for the basic Amazon Rewards Visa Signature, does not charge an annual fee (though you do need to pay for Prime membership, obviously).
It offers an impressive 5% cash back on all Amazon and Whole Foods purchases; 2% back at restaurants, gas stations and drugstores; and 1% back on all other purchases.
Plus, cardholders will enjoy bonus earnings on Prime Day this year. On July 11-12, Prime Visa cardholders will earn 6% back at Amazon.com, Amazon Fresh and Whole Foods Market.
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The biggest drawback is that the high return on spending is all this card really has to offer. While it comes with purchase protection (it covers items up to $500 in value if they’re damaged or stolen within 120 days of purchase) and extended warranty protection, it doesn’t include important purchase benefits like price protection and return protection, so it’s not ideal for large purchases.
The other drawback is that you need a Prime membership ($139 per year) to qualify. Although with so many U.S. households already subscribed to Prime, that’s probably not much of an issue for the card’s target demographic.
For more details, check out our full review of the Prime Visa.
Capital One Venture X and Venture cards
If you want transferable points on your Amazon purchases, a pair of cards from Capital One could be good options. That’s because both the Venture X Rewards card and the Venture Rewards card offer 2 miles per dollar spent on everyday purchases — including Amazon.
Based on TPG’s most recent point valuations, that’s a very respectable 3.7% return (valuations are an estimate and not provided by the issuer).
Beyond that, both cards offer identical sign-up bonuses (75,000 miles once you spend $4,000 on purchases within the first three months from account opening).
Check out our comparison of the two Venture cards for additional details.
Official application links: Capital One Venture X and Capital One Venture, each with 75,000 bonus miles when you spend $4,000 in the first three months.
Chase Freedom Unlimited
If you’re not a Prime subscriber and still want a solid return on your spending from a card with no annual fee, your best bet may be to go with the Chase Freedom Unlimited. The Freedom Unlimited provides 5% back on travel purchased through Chase, and 3% cash back on drugstore purchases and dining. All other purchases will earn 1.5% cash back.
While that’s a solid return on its own, you could potentially double the value of your rewards by pairing the Freedom Unlimited with a Chase Sapphire Reserve, Chase Sapphire Preferred Card or Ink Business Preferred Credit Card.
By doing so, you can convert your cash-back points into full-fledged transferable Ultimate Rewards points, worth 2 cents each based on TPG’s monthly points valuations.
Related: The power of the Chase Trifecta: Sapphire Reserve, Ink Preferred and Freedom Unlimited
Additionally, the Freedom Unlimited also offers 120-day purchase protection and extended warranty protection that extends eligible manufacturer’s warranties by an additional year. Like the two Amazon cards, this one does not have an annual fee.
For more details, check out our full review of the Freedom Unlimited.
Official application link: Chase Freedom Unlimited with an additional 1.5% back on all purchases up to $20,000 spent in the first year.
Discover it Cash Back
Amazon’s Prime Visa isn’t the only card to offer 5% cash back on purchases — the no-annual-fee Discover it Cash Back does, too (on rotating categories, up to $1,500 each quarter you activate, and 1% cash back after that) — and this one doesn’t require you to be a Prime member. However, this earning rate is typically only available on Amazon purchases just one quarter out of the year, and even that isn’t guaranteed to come around every year.
The most recent times Amazon was a rotating category were in the last quarter (Q4) of 2021 and 2022.
Keep in mind that while this card is great for Amazon purchases during any quarter when Amazon is among the retailers that count toward bonus earning, it isn’t the best card to use year-round. When Amazon is not a part of the quarterly cash-back bonus category, your purchases will only receive 1% back.
However, what makes the card shine is that Discover will match your rewards at the end of your first cardmember year, so you could get up to 10% back on Amazon.com purchases from a quarter when it’s a bonus retailer.
Unfortunately, the card has discontinued other benefits, including extended product warranty, return guarantee, purchase protection and price protection.
For more details, check out our full review of the Discover it Cash Back.
American Express® Gold Card
This card is a good choice for those who make many high-value purchases on Amazon.
With the Amex Gold Card, you’ll earn 1 Membership Rewards point per dollar on Amazon purchases, yielding a return of 2% based on TPG’s valuations. Unless there’s an Amazon deal available through Amex Offers, this won’t be the best card from an earning perspective.
The biggest benefit of using the card is its generous purchase protection policy. While many cards include a similar perk, the Amex Gold Card provides an astounding $10,000 in protection per incident and up to $50,000 for all incidents in a calendar year.*
*Eligibility and benefit levels vary by card. Terms, conditions and limitations apply. Visit americanexpress.com/benefitsguide for details. Policies are underwritten by AMEX Assurance Company.
Related: Best credit cards for purchase protection
The Amex Gold Card has a $250 annual fee (see rates and fees), but its benefits — including up to $120 in dining credits each calendar year at participating restaurants/locations and up to $120 in Uber Cash each year ($10 monthly credits) — make the card worthwhile. The card must be added to your Uber account to receive the Uber Cash benefit. Enrollment is required for select benefits.
For more details, check out our full review of the Amex Gold.
Official application link: American Express Gold Card with a 60,000-point welcome offer after spending $4,000 in the first six months of card membership. However, you may be targeted for a higher welcome bonus through the CardMatch tool (offer is subject to change at any time).
Bottom line
As you can see, picking a card for Amazon purchases isn’t as simple as going with the one at the top of this list.
The best rewards credit card for you depends on your personal habits and priorities. So, while the Amazon Prime Rewards Visa Signature card offers a high return on Amazon purchases, it’s not everyone’s best option, as it’s only available to Prime members and lacks key shopping protections, which you’ll want for larger purchases.
Card benefits such as return protection have proved extremely valuable and may be worth sacrificing 2%-3% in rewards in the long run. Additionally, if you’ve been saving up transferable points for a specific redemption, it may make sense to earn rewards in that currency rather than cash back so that you can top off your account and book that award trip you’ve been dreaming about sooner.
For rates and fees of the Amex Gold, click here.
Additional reporting by Emily Thompson, Ryan Wilcox, Stella Shon and Benét J. Wilson.
For Capital One products listed on this page, some of the above benefits are provided by Visa® or Mastercard® and may vary by product. See the respective Guide to Benefits for details, as terms and exclusions apply.
The investing information provided on this page is for educational purposes only. NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.
Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions. In this episode:
Learn how to avoid overspending on investing and brokerage fees, and get smart about how to choose a financial advisor.
Today’s First Money Question: Investing Nerd Alana Benson joins Sean Pyles and Liz Weston to demystify brokerage fees and how you can reduce them. They discusses the types of brokerage fees and how they can impact your investments.
Today’s Second Money Question: The Nerds walk through the process of choosing the right financial advisor for your needs. They explain the qualifications and expertise of various financial advisors and what to consider when selecting one, including how to spot red flags. They also discuss the importance of estate planning and power of attorney, and they offer ideas for how you can manage your money independently if you prefer a DIY approach.
Check out this episode on your favorite podcast platform, including:
NerdWallet stories related to this episode:
Episode transcript
Liz Weston: Sean, what’s your favorite part about working with a financial planner?
Sean Pyles: Well, I always love having another set of eyes to check my work. And my financial advisor has shown me financial opportunities that I didn’t know that I had, which was a nice surprise. What about you, Liz?
Liz Weston: Oh, check my work. I love that. That’s it exactly. I am a certified financial planner, but I still want another CFP looking over my shoulder. For one thing, she has access to more powerful financial planning software than I do. And I also like it that if something happens to me, my husband has somewhere to turn to get his answers.
Sean Pyles: Nice. So, listener, today we’ll tell you a few things that you might want to consider if you are in the market for a financial advisor, but first we’ll answer a listener’s question about brokerage fees. Welcome to NerdWallet’s Smart Money podcast. I’m Sean Pyles.
Liz Weston: And I’m Liz Weston. This month we’re bringing back some of our most popular money tips from the past couple years, and today’s theme is investing.
Sean Pyles: We’ll answer two timeless listener questions. First, how do brokerage fees work? And second, what might you want to consider when you’re choosing a financial advisor?
Liz Weston: And listener, if you’ve used any of our tips or tricks when choosing a financial advisor, then please let us know. We’d love to hear your story. Leave us a voicemail or text the Nerd hotline at 901-730-6373. That’s 901-730-NERD, or email a voice memo to [email protected]
Sean Pyles: OK, on with the show. This episode’s money question comes from our listener’s voicemail. Here it is.
Danny: Hi, this is Danny in Fort Worth, Texas. I was curious about fees paid on investments like mutual funds and ETFs, things like expense ratio, commissions, et cetera. How do they work and how closely should an average investor be watching the fees on their 401(k), taxable brokerage accounts or other investment vehicles? Thanks so much.
Liz Weston: To help us answer Danny’s question, on this episode of the podcast, we’re joined by investing Nerd Alana Benson. Welcome back to the podcast, Alana.
Alana Benson: Hey, guys.
Sean Pyles: Hey, before I throw a bunch of questions at you, Alana, we have to get one thing out of the way, a brief disclaimer, and that is that we are not investment advisors and will not tell you what to do with your money. All that we are about to discuss is for educational purposes. So OK, with that done, Alana, our listener Danny is primarily concerned with something called brokerage fees. Both trade commissions and expense ratios are forms of brokerage fees, but there are others, too. Can you start off by explaining what brokerage fees are at a high level?
Alana Benson: So brokerage fees can be a lot of things. They’re essentially fees that are charged by your brokerage and other investment companies for everything from making a stock trade, to closing your account. And there are even fees for premium research tools or investing data, but the important thing is that some of these fees you can avoid and some you just can’t.
Liz Weston: Let’s break down the different fees paid on investment accounts.
Alana Benson: OK, so trade commissions: This is about how much it costs every time that you make a trade. If you bought a stock, they might charge you a little bit for that trade. Many brokerages have actually dropped these to zero, but you should always check with your individual broker to see how much a trade will actually cost you because they can really vary. If you’re finding a brokerage that is going to charge you for every single trade that you make, it’s definitely worth shopping around because there are a lot more now that charge $0 per trade.
Sean Pyles: And what about expense ratios?
Alana Benson: Expense ratios, these are what are charged on funds like mutual funds or exchange-traded funds, and this is the cost of what it actually takes to manage the fund. Think of index funds; these are passively managed and they just track an index like the S&P 500. So it doesn’t actually cost that much to manage them and they can vary, but around 0.1% to 0.2% is a pretty good deal. So that would be about $10 or $20 for every $10,000 that you invest. But if you have a mutual fund, that’s actively managed and that means someone is picking and choosing the investments within the fund. So it’s a much more expensive fund to manage than a passively managed fund. And these can run closer to 0.5% or even over 1%, and that means instead of paying $10 or $20 for each $10,000 that you have invested, you’re paying like $100 or more.
Liz Weston: Ooh. That’s a big difference. Now our listener’s also wondering about 401(k) fees. How should they think about those?
Alana Benson: The investments that are available to you in your 401(k) may be more restricted than just buying different investments from a brokerage, but just because you may not be able to do as much about your 401(k) fees doesn’t mean that you should not invest in one, particularly if your employer offers a match.
Liz Weston: If you work for a larger company, you may have access to institutional funds through your 401(k) and those are the cheapest ones you can get. So the idea that all 401(k)s are expensive really isn’t the case. The fees have come down and in some cases you can do better in a 401(k) than you could in your own IRA [individual retirement account] when it comes to expenses.
Sean Pyles: I have a quick follow-up question around index funds and mutual funds. Is there a max fee that you think people should look for and say, “OK, this fee is too high for this account and I’m not going to go for that”?
Alana Benson: I think that really just depends on each individual investor and what’s important to you and what you want to get out of the fund. Personally, when I look for funds, and again, I am not a financial advisor, but I try to find the cheapest management fees that I possibly can. So I’ll look for an index fund that will have a really, really low fee. But if you want something that’s managed by professionals or you’re looking for a particular type of fund, there’s different reasons why people might pay a higher fee. If you’re looking at a mutual fund and it wants you to pay 1%, that’s a pretty significant fee.
Sean Pyles: I could see some people thinking, “OK, the fee is higher, that must mean I’m going to get a greater return or the results will be better for me,” and that may not be the case, right?
Alana Benson: And in fact, a lot of times actively managed investments like those actively managed mutual funds don’t perform as well as passively managed funds because it requires people to sort of predict the market, which people — no matter how much experience they have in the industry or whatever their background is — people are just notoriously bad at predicting the market. And so the likelihood that your actively managed fund will outperform the market is actually really low. So you’re kind of paying more to underperform in a lot of cases.
Sean Pyles: Doesn’t sound like a good deal.
Alana Benson: To each their own, but I’m inclined to agree with you, Sean.
Sean Pyles: OK.
Liz Weston: Well, maybe we should give people an example of how much fees can cut into earnings. There’s so much that you can’t control with investing. You can’t control the market, but the thing you can control is how much you invest and what you pay in terms of expenses. So can you talk about how fees cut into earnings?
Alana Benson: Absolutely. Say you invested that $10,000 into a fund with a 0.1% fee and you match the average market returns; you’d have nearly $210,000 after 40 years. But if you had a 1% fee, you’d have just $150,000. So that’s a pretty significant difference just from a fee that you don’t actually have to be paying.
Sean Pyles: That leads me to my next question, which is how much should folks be worrying about their fees? And it seems like the answer is maybe a lot, a decent amount at least.
Alana Benson: Yeah, and like Liz said, this is something that people actually have some control over when it comes to investing. And there’s not a lot of things that you do have control over, so you should definitely look into your fees. But I don’t think this is something that you should be super stressed about. Once you know what fees your brokerage charges, you can kind of adjust your plan. So if your brokerage charges a trading commission, maybe keep that in mind if you’re regularly trading stocks and you can also check out the expense ratios of funds that you’re invested in and see how much you’re paying and maybe explore cheaper options if the fees are pretty significant.
Sean Pyles: Is there any room for a negotiation? Say you’ve been with a brokerage for a while, you find another one that has lower fees and you call up the brokerage that you’ve been with and say, “Hey, there’s someone else over here that has lower fees. If you lower yours, I won’t jump.” Is that possible?
Liz Weston: A lot of it is baked-in, in terms of what they’re going to charge you for trading commissions, if they’re charging those and what the expense ratios are of the underlying investments. But if you are paying someone to manage your money for you, if you’re paying a financial advisor a 1% of assets fee for example, or you’re paying some kind of brokerage rep fee, there may be some room.
Sean Pyles: OK.
Liz Weston: So you can let them know that you’re looking around and you think it’s a little expensive what they’re charging and maybe you can get a break. One thing we should talk about is robo-advisors because that’s another way to get access to some pretty cheap investment accounts.
Alana Benson: I love the idea of a robo-advisor, particularly for the folks who otherwise just would be too stressed out, or not have enough time or get a little intimidated by the research that they should do to start investing on their own. And a robo-advisor is great because like you said, the fees are pretty minimal for the service that you get and you just don’t even have to think about it. You don’t have to know any of the lingo. All you have to do is set up an auto deposit and kind of forget about it.
Sean Pyles: Well, speaking of lingo, we should probably define what a robo-advisor is for those who don’t know. These are services that use computer algorithms to build and manage a portfolio for you.
Alana Benson: And when you invest through a robo-advisor, you’re paying for them to manage those investments for you. So those fees will typically float around 0.25% of your assets. So if you have $10,000 managed, you’ll pay $25, but remember they’re doing all of that work for you. So that’s not just an expense ratio that you’re paying, you’re actually paying for a service.
Sean Pyles: Some brokerages will charge you for things like inactivity fees, and robo-advisors don’t tend to do that. Is that correct?
Alana Benson: That’s correct, because essentially a robo-advisor will be doing the managing for you. So it’s kind of tough to have an inactive account with a robo-advisor, particularly if you have auto deposits. There could be robos out there that do charge for that. So these fees will vary by broker or robo-advisor. So it’s always really important to look into what fees you’d be charged before committing to one.
Sean Pyles: And one thing I’m betting our listener and a lot of other listeners out there are wondering, is how they can reduce the fees that they’re paying on investment accounts?
Alana Benson: The first and most important thing is to just know what you’re going to be charged. Expense ratios may not actually show up on your monthly statement. They’ll likely just be deducted. So it’s good to know what kind of expense ratios, whether you’re working with a robo-advisor or you’re buying investments on your own, what those fees are going to look like for expense ratios. But the other thing is that you can always look at a brokerage or robo-advisors fee sheet. This’ll give you a whole list of every possible fee that they could charge you.
So things like those closing or inactivity fees, that’s where they’ll be listed. So definitely do your research ahead of time and just make sure you know what you’ll be charged. The second thing to do is look at your investment fees that you’re already being charged. So if you’re in an actively managed mutual fund, you can kind of consider some of those lower cost investments like index funds, look at the price point difference and see what you’re comfortable paying.
Sean Pyles: This is also a good reminder for folks to shop around when they’re looking for various investment accounts. When people are considering one account or another, how do you think fees should factor in?
Alana Benson: Fees are pretty important because they do eat into your bottom line, but they are just one factor alongside performance and sector. Like if you wanted to invest in a particular fund like emergent technologies, that kind of fund, because it’s so particular, might be a little more expensive. You can look at the existing diversification in your portfolio. You can also look at what kind of tools and research that that brokerage has because some are better than others, and if you really want to get into the nitty-gritty of your investments, that might be something you’re willing to pay a little bit more for. So just remember that fees are important, but it can be balanced with other things.
Sean Pyles: All right, Alana, I think that covers this pretty thoroughly. Do you have any final thoughts for our listener?
Alana Benson: I think it’s just really important for investors to remember that they’re in control. They have the choice to make about what kind of investments matter to them, and some will charge more than others, but at the end of the day, it’s their choice. So they should remember that they have the power. If they’re getting charged a really high fee, they don’t just have to pay that; they can look around and find other options.
Sean Pyles: I know what you’re thinking. There’s a lot to consider when it comes to brokerage fees, but don’t be discouraged. If you’re feeling overwhelmed, then you could always work with a financial advisor to help you sort things out. And you know what? That’s what our next listener question is all about. So let’s get into it.
Liz Weston: This episode’s money question comes from Andrea, who has a number of questions about financial advisors. Here they are. Any recommendations on how to interview and choose a tax or retirement advisor? Are there any red flags to look out for? And specific questions that should be asked? And should you have both types of advisors or can one cover both areas? Also, at what point should a family consider estate planning? How do you know when you need this type of service? I’m interested in locating and engaging with advisors that 1. won’t take advantage of me and 2. are willing to consider my best interests. Thank you.
The good news is that it’s never been easier to find good, objective, affordable help with your finances. The bad news is that it’s still not necessarily easy to find the right financial advisor.
Sean Pyles: That is true. I think that we should maybe start off by talking about what exactly financial advisors do. At the highest level, a financial advisor is someone who helps people manage their money and reach their goals. There are many different types of financial advisors though, who have different qualifications and areas of expertise. Someone who’s the tax advisor, for example, might not be able to help you with investment advice. Alana, can you give us a quick rundown of the different types of folks that one could hire?
Alana Benson: So there are a lot of different names of financial advisors and some mean more than other things. For example, anyone can call themselves a financial advisor. Joe Schmoe down the street with no qualification could legally call himself a financial advisor, and that’s something that you really want to look out for. At the bare minimum, a registered investment advisor is governed by the SEC [Securities and Exchange Commission] or a state securities office, and they can legally provide personalized investment advice. So at the bare minimum, someone who is talking with you about your money should have that designation.
Ideally, you could work with a certified financial planner. This means that they have a very rigorous education and they have a fiduciary responsibility, which just means that they have to work in your best interest. And that really addresses what this reader is asking about. They want to make sure that this advisor isn’t going to take advantage of them, and that is so, so important. The other designation, if you’re looking for help with your taxes, is a CPA or a certified public accountant, and they’ll be able to answer all of those nitty-gritty tax questions.
Liz Weston: I’d also recommend enrolled agents because they’re not CPAs, but they are tax pros and they can be a little bit more affordable than CPAs. So that’s another thing to think about. If you’re looking for just strictly help with taxes.
Sean Pyles: Another type of financial advisor that folks might not think about is actually credit counselors. And these work at nonprofit credit counseling agencies, and they offer free debt and credit advice for people who maybe can’t afford financial help but would benefit from it.
Liz Weston: Another category to look into is accredited financial counselors and accredited financial coaches. These folks tend to be employed by credit unions, the military, sometimes they’re available for free, sometimes they have a sliding scale, but they specialize in issues that are common to middle-class folks. So it’s not just estate planning, trust issues of the high net worth. They really are on the ground and can help you with things like budgeting and debt, stuff like that.
Sean Pyles: Paying someone to manage your money is something that I think a lot of people either can’t afford or don’t think that they need. When do you think someone should think about hiring a human, versus DIYing it or employing a robot on the internet?
Alana Benson: This is a great question. It’s all about how complex your individual picture is. If your situation is getting very complex and say you got married and you bought a house, and your parents are getting older, and you’re having kids and trying to figure out where your money should go in the future, that might be a time to talk to a financial advisor. Say you got a new job and they offer a lot of different health care plans or an HSA [health savings account], versus an FSA [flexible spending account]. Those kinds of things are a great time to get in touch with someone so you can ask your individual questions.
If you are just looking for investment management and you don’t care at all about picking your own stocks, you just know you’re supposed to invest, but you don’t really want to have to do anything, a robo-advisor will automatically invest your money for you. But it’s not going to be the same as going to someone saying, “Hey, I want to make an estate plan. Can we do that?” And it just depends on what you want to do with your money and how complex your life is getting.
Liz Weston: I also think it might be a good idea to think about hiring somebody if you’re not keeping up with the DIY chores. If you are not rebalancing your account or you’re not staying up on tax law or whatever needs to be done. You can also consider hiring somebody if you’re having trouble coming to an agreement with your partner. You may need a neutral third party to work things out. And also, this is kind of interesting, but it’s truly a thing: Some people hire financial advisors because they want somebody to blame if things go wrong, and financial advisors typically will have errors and omissions insurance. Basically it gives you somebody to sue. So not the best reason, but it’s a reason. So there you go.
Sean Pyles: For me, I think a lot of personal finance management comes down to understanding specific products, which are often tied up with different acronyms, and the way that these products intersect with your financial goals and often tax liabilities and this can get extremely complicated. So for me, I am trying to get help from a team that I’m building — one of my financial goals for next year — that can help me understand all of these different products that I should be leveraging, how I can use them in the most efficient way tax-wise and also in a way that can help me meet my personal goals.
Liz Weston: Yeah, exactly. That’s really smart to think about who can help you. And a lot of times it’s the tax person who’s the gateway financial advisor. It’s like we look at taxes and go, “Oh, I really don’t want to deal with this.” So that’s the first person that we hire.
Sean Pyles: Yeah. Well, Liz, I actually want to talk for a minute about your situation because interestingly, you are a certified financial planner, yet you have a team of folks that help you manage your money. Can you talk with us a bit about how and why you decided to outsource some of your money management?
Liz Weston: Yeah, when I started getting the CFP credential, I thought, well, a reasonably intelligent person can handle her own money. And by the time I’d finished the education, I had my tax person lined up, I had an estate planning attorney. And later I added all kinds of other people, including, I have a terrific insurance agent now. And the last part of it was hiring our own CFP. And part of it was that thing about the cobbler’s children having no shoes, is that I was advising everybody else and I wasn’t taking care of my own business. So things weren’t getting done that needed to be done. Another part of it is just really nice to have somebody to bounce ideas off of. My CPA lives and breathes taxes so that I don’t have to.
Sean Pyles: Right.
Liz Weston: And to me that is just amazingly freeing. It’s well worth the money that I pay her. Same thing with the insurance agent. We just had an issue and I was able to go to her and say, “Can you help us out with this?” She moved mountains, got things done. It really is nice to have people on your side.
Sean Pyles: Think it’s really telling that in the process of going through the various courses you have to take to get the CFP certification, you saw just how complex all these different areas of money management are and you decided to get someone who can handle this for you to take that weight off of you.
Liz Weston: Exactly, because you don’t know what you don’t know. And that’s what really trips people up. Particularly I think if you are heading towards retirement, you really, really, really need another set of eyes on your plan because you’ve never retired before. And a good financial planner will have many, many clients who have been retired and they know all the things that can come up, all the ways that you can screw it up. And again, this is your money for the rest of your life. You need to make sure you’re making the right choices.
Sean Pyles: Well, now I think we should probably talk about how and where people can find financial advisors for tax, retirement or general money management advice. Alana, where do you think people should go for that?
Alana Benson: You definitely want to work with a CPA for taxes, as Liz said that they really live and breathe that sort of thing. They’re the person to talk to. A CFP for financial advice. One note on this is it’s really, really important to do your due diligence and double-check their certifications. Some people could have a delinquency on their designation, maybe they had a violation. There are websites where you can go and check these designations and make sure they’re up to date. Make sure they haven’t had any lawsuits and make sure they’d be a really good person for you to work with. So definitely before you work with anyone, double-check that their designation is what they say it is and you’ll save yourself a very big headache by doing that small amount of work upfront.
Liz Weston: We should also mention that there are financial planners who have a tax background, those are CPA-PFS. So the PFS stands for personal financial specialist, and if you want to get a tax person but also want financial advice, there is that all-in-one designation you can look for. Alana, there used to be a pretty wide divide between the people who worked in person and then the people who only worked online or robo-advisors. That’s kind of blurred a little bit with the pandemic, but can you talk about online, versus in-person financial advice?
Alana Benson: So traditional in-person financial advisors often charge around 1% of your money that they manage for you. The more money you have under management, the steeper that fee is going to be. Some people just want to meet with someone in person and that is totally fine. If that is your comfort zone and you want to pay for that, that is a personal choice. But online you are able to find services that will help you connect with an online financial advisor and they often charge a much lower fee of the percentage of assets that they manage for you. And they can do just about everything that a traditional in-person advisor can do. And a lot of times these services will also have access to tax help and tax preparation.
Those are a nice in-between if you don’t want to necessarily pay the 1% fee of meeting someone in person and you can pay a cheaper fee. And a lot of these services now do video calls so you can still meet with someone and talk to a human being. It’ll just be over Zoom or over video conferencing. There’s also a lot of one-time services that can be offered. I know Ellevest is a provider that you can purchase one-on-one sessions with a CFP, or you can even do career counseling and some other providers offer these one-time services as well. If you need help with something very particular, that might be a good option.
And then there are some providers that even do a mix of robo-advising, so managing your money with a computer algorithm and access to human advisors for less as well. There’s a lot more flexibility than there used to be and there are more affordable options. So you don’t just have to be this very wealthy person to go and get help with your finances. There’s all kinds of options for every financial threshold.
Liz Weston: In addition to that 1% all-around fee, you can find people who charge by the hour, for example. Or maybe have a monthly retainer fee and that can be a more affordable way to get help.
Sean Pyles: Choosing a financial advisor is a pretty serious decision. You want to make sure that this is someone that you can trust, that you can have a healthy, open and ongoing relationship with. While there are a lot of options, choosing the one that’s right for you can be a little bit of a challenge. When someone is vetting a potential financial advisor, what questions do you think they should ask?
Alana Benson: So first and foremost, the most important is to ask them if they are a fiduciary. And again, that just means that they’re legally obligated to work in your best interest. They won’t offer you products because they’ll make a commission on them. They will offer you things that are truly the best option for you. Well, another important thing is to ask how they get paid. Advisors can use that assets-under-management structure I was talking about, but people use a variety of fee structures. So it’s really important to upfront understand how you’re going to be paying them so that down the road you’re not saying, “Well, wait, I thought it was going to be a lot less than this.”
You definitely also want to, again, ask about those qualifications. And then you can also ask about how you’ll communicate. Make sure that you’re comfortable talking with them in the way that you would prefer, whether that’s over the phone or over email. Make sure you know how frequently you’ll get to speak with them. Maybe it’ll only be four times a year or maybe you’ll have unlimited access. And that’s going to be a really important distinction. Like if you need a lot of help, you want to make sure you have unlimited access to your advisor so you’re not just holding out for those quarterly phone calls.
Liz Weston: There’s also the issue of are you going to be talking with the same person each time, or could your case be handed off so that you’re talking to a different CFP or different advisor every time. With the less expensive services, you may not have one dedicated person to talk to.
Alana Benson: It’s really important to figure that out upfront because that is the difference of developing a long-term relationship with one person who gets to know you as a person and gets to know the things that you really care about and maybe even gets to know your family background a little bit. And if you develop that relationship over time, that can be a really, really valuable asset, versus speaking to a different person every single phone call.
Sean Pyles: Our listener is also wondering about red flags to look for when vetting an advisor. What do you guys think about that?
Alana Benson: I think one of the biggest things is that they can’t answer your questions clearly. If they’re giving you really vague answers about payment or what you’re going to be invested in, that is definitely a red flag. Another thing is to just make sure that you click with them. Do you feel comfortable communicating your concerns or are you kind of holding yourself back? Really trust your gut and see if this can be a person that you can have a really solid relationship with.
Liz Weston: You don’t want to be the first time that they’re dealing with certain issues, like stock options or small-business issues. Retiring or being a government employee, being a military employee, you don’t want them learning on you. So if they have other people who are like you in that situation, they’re likely to have a deeper knowledge of what you need and how to get you to your goals. Alana, how could people decide if they’re better off having one advisor doing a lot of things or having specific advisors for different purposes?
Alana Benson: I think it really depends on the person. It’s more important to have a team that all works together if you’re going to work with a team. I know a lot of advisors will work with your finances and then call your tax person and make sure that everybody plays together nicely and let you live your life. In terms of whether it’s better to have one for everything, again, I think it just depends on the person. If you find an advisor who also has a background in tax and they can kind of take care of everything for you, that might really, really work for you.
But just like you were saying, Liz, not everyone can be an expert in everything. And if your financial picture gets more complicated or you have to deal with stock options or you have to deal with estate planning, you may want to bring in a specialist who really, really knows their stuff in that field and then they can work with your existing team. But again, it depends on the person.
Liz Weston: Yeah, and good people tend to know good people. That was the case when we hired our financial planner. She knew the insurance person that we have now and she knew the CPA that we have now, recommended them both and we’ve been really happy. So if you do find one of these professionals and want more, maybe go to them for recommendations.
Sean Pyles: Our listener’s also wondering about when to consider estate planning? The short answer is ASAP. You should probably have an estate plan yesterday and it won’t take that long to sort out. It’s very important, but it’s especially important if you have kids that you want to take care of.
Alana Benson: It’s much better to have those things ready and in place, versus to not have them.
Liz Weston: And there’s two documents actually everybody needs. Even if you decide not to have a will, which I can’t imagine why you would. But you do need to have advance directives so that somebody can make decisions for you if you are incapacitated for health care. And you need a power of attorney for financial decisions. So those are about quality of life. That’s not what happens to your stuff after you die, that’s while you’re still alive. And as Sean said, if you have minor children, really you need to name a guardian. You don’t want them to go through the court or the foster care system, heaven forbid. So do that because you love them, get it done.
Sean Pyles: Right. And there are a lot of resources available online like Rocket Lawyer is a service people can pay for, some have as a benefit from their employer. Also, websites like Nolo.com, they have templates for certain documents like this that can help you get started.
Liz Weston: Even if you decide to go to an attorney later, if your situation gets more complicated, at least the online stuff will put something in place for you so you have it in case of emergency.
Alana Benson: And estate planning may be one of those things that you could pay a one-time fee for. And then just go speak to someone who could help you draw up those plans. And it’s not a fee that you’re paying on an ongoing basis; you could just pay it once, get those documents squared away and then they’re done.
Sean Pyles: All right. Well, Alana, do you have any final thoughts for Andrea or anyone else that’s in the market for one or a team of financial advisors?
Alana Benson: I really think the biggest thing is to trust your gut. Know that this is a relationship that you’re starting to form. If you’re working with a person, whether it’s online or if it’s face-to-face, make sure you feel comfortable with them because at the end of the day, you are paying them as a service and it’s your money. You don’t owe anybody anything upfront. And a lot of these advisors will offer free consultations. So just make sure that you feel comfortable. I think that’s the most important thing.
Sean Pyles: Well, thank you so much for talking with us.
Alana Benson: Yeah, thanks for having me.
Liz Weston: So, Sean, how has the way you work with the financial advisor changed since we had that conversation?
Sean Pyles: Well, to start, I work with one now at all, which is a change. I have a CFP that I check in with a couple of times a year to talk about my financial goals and how I can meet them and how I can maybe course-correct to hit them by the end of the year. And that’s one thing that I didn’t realize before I had a financial advisor is that it’s not like you have to be in constant communication with them. You’ll likely talk with them a little more regularly in the beginning and then you’ll go off and do the slow work of meeting your goals and then you’ll check in with them a few months later. Or at least that’s been my experience.
Liz Weston: Yes, exactly. And for me, I mentioned at the top that I wanted somebody that could help my husband if something happened to me. He’s a very gifted artist, but money just isn’t his thing and I didn’t want him to have to worry about finding help if he needed it. So it’s really a huge relief knowing that all the money management isn’t on my shoulders. I love having somebody to answer any questions that we have. And there is a small element of, “See, I told you so,” when she sides with me.
Sean Pyles: Yeah, I bet.
Liz Weston: And that’s all we have for this episode. Do you have a money question of your own? Turn to the Nerds and call or text us your questions at 901-730-6373. That’s 901-730-NERD. You can also email us at [email protected]
Sean Pyles: Remember to follow our show on your favorite podcast app to automatically get new episodes in your feed. If you’re listening on Apple Podcast or Spotify, then tap the 5-star button to rate the show. We really appreciate it.
Liz Weston: This episode was produced by Cody Gough and myself, with help from Sean. Kaely Monahan mixed this episode with additional audio editing by Cody. And a big thank you to the folks on the NerdWallet copy desk for all their help.
Sean Pyles: Here’s our brief disclaimer. We are not financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances. And with that said, until next time, turn to the Nerds.
Low-cost airline Norse Atlantic adds Miami flights to Paris and Berlin
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Travel demand to Europe peaks in the summer, but if you go during winter instead, you can often enjoy lighter crowds and better prices.
That’s now doubly true for some Floridian travelers.
Low-cost carrier Norse Atlantic Airways on Tuesday announced new flights from Miami to Paris and Berlin. The new service is set to start just before the holidays.
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Flights from Miami International Airport (MIA) to Paris-Charles de Gaulle Airport (CDG) will run four times weekly in each direction starting Dec. 12. Service between Miami and Berlin Brandenburg Airport (BER) will run once per week starting Dec. 14.
The new routes complement Norse’s existing flights from Miami to London Gatwick Airport (LGW) and Oslo Airport (OSL) in Norway.
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Flights start at $165 each way, although the cheapest fares tend to book up quickly.
Related: This feels familiar: A review of Norse Atlantic Premium on the 787 from London to New York
Norse, which replaces the low-cost transatlantic business that Norwegian Air expanded before the pandemic, began flying in June 2022 with plans to expand point-to-point service between European and U.S. cities.
The airline uses a fleet of Boeing 787 aircraft with both standard and premium economy seats.
Thanks to its low-cost business model, the airline’s fares are often cheap. However, the carrier charges extra for everything from carry-on bags to food and drinks, so it’s important to be strategic when taking advantage of any great prices.
Related reading:
Featured image by PATRICK T. FALLON/AFP/GETTY IMAGES
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.
Homebuyers watching mortgage rates should buckle up—but they probably won’t enjoy this ride.
Mortgage interest rates were above 7% for the past two weeks—much to the dismay of many cash-strapped buyers. They averaged 7.09% on Tuesday before falling to 6.96% on Wednesday for 30-year fixed-rate loans, according to Mortgage News Daily.
“Within the last 30 days, we’ve seen everything from low 6% to low 7%,” says Jason Lerner, producing area manager at George Mason Mortgage in Towson, MD. “That’s exceptionally volatile.”
It has, in fact, been a wild ride. Mortgage interest rates have been up, down, and then up again as investors try to guess the Federal Reserve’s next move. The Fed has been steadily hiking its own short-term rate to bring down inflation by cooling the economy.
When the Fed raises its own rates, mortgage rates have often followed. And Fed officials have indicated another rate increase—or two—is likely this year.
The results of the Fed’s actions have been mixed. Inflation has tumbled down to 3% annually in June. That bit of good news caused mortgage rates to fall below 7% on Wednesday. But while that’s a big improvement from when inflation was running at 9.1% during the peak in June 2022, it’s still higher than the Fed’s 2% goal. Other data, such as recent employment reports, shows the economy is still stronger than the Fed would prefer.
When a report comes out that shows employers are still looking for workers, consumers are still spending, or inflation remains high, investors worry the Fed will raise rates. So mortgage rates rise in anticipation of another Fed increase.
“We should expect a lot of bumping around,” says David Stevens, CEO of Mountain Lake Consulting, which provides consulting services to the mortgage industry. He’s also the former CEO of the Mortgage Bankers Association. “Whatever the economic news is, we see rates swing.”
Higher rates have made it more challenging for buyers to afford homes and incentivized many would-be sellers to stay put instead, worsening the housing shortage.
Even when mortgage rates do come down below 7%, buyers shouldn’t expect they will fall down to the record lows experienced during the COVID-19 pandemic.
“One can never truly predict the future, but I don’t see mortgage rates returning back to the 3% range in the remainder of my lifetime,” Lawrence Yun, chief economist of the National Association of Realtors®, told CNBC.
Where will mortgage rates go next?
Real estate experts don’t expect mortgage rates to remain this high forever.
By year’s end, Realtor.com® expects rates to be around 6.1%. Stevens believes rates will be back in the mid-5% to 6% range by the first few months of next year.
Once the Fed wrangles inflation down to its target, it should stop raising rates. The Fed is walking a tightrope trying to cool the economy without causing additional bank failures or pushing the nation into a recession. If the economy slumps too much, the Fed will likely cut rates to stimulate it. That should bring mortgage rates down as well.
“Rates will never go back to where they were to the peak of the COVID pandemic, which was in the 2% to 3% range,” says Stevens. “But they will normalize.”
Lower mortgage rates could lead to more homes for sale
Lower mortgage rates could help ease the housing shortage—and high home prices.
Right now, many homeowners are reluctant to sell. Most sellers are also buyers who don’t want to give up their ultralow mortgage rates to take out another mortgage with a rate that’s likely more than double what they have now. Many are waiting for rates to come down, at least to the 5% range, before listing their properties.
“Existing homeowners with a very low mortgage rate [have] very little incentive to decide to sell,” says Danielle Hale, chief economist of Realtor.com. The result? “There’s nothing to buy, it’s expensive to buy what’s available to buy.”
So when a move-in ready home in a desirable area is listed at a good price, it’s a bit of a unicorn in today’s market. Hordes of buyers typically descend, and that fierce competition bids up the price of the home.
“With an increase in mortgage rates, you’d expect a drop in property values,” says Roland Weedon, CEO of Essex Mortgage. Essex does business in 40 states, working primarily with first-time buyers and renters. “But because there’s such a shortage of inventory, that hasn’t happened.”
Mortgage lender Lerner is seeing borrowers stretch their “comfort levels” with higher mortgage payments to make homeownership work.
He’s also seeing buyers offer lower down payments. They’re using the rest of the money that would have gone toward their home to pay down other debt, so they have more money available for monthly mortgage payments.
“The fact that we’re back at this point again could be a drag on the housing market in the months ahead,” says Hale. “We do expect mortgage rates will eventually decline. It’s going to take some more progress on inflation.”
What determines mortgage rates
While rates are influenced by the Fed’s rates, and often move in the same direction, they’re more tied to what’s happening in the bond market.
After a mortgage is made, lenders will typically bundle it up with other loans into a mortgage-backed security, aka mortgage bonds. Then those are sold to investors on what’s called the secondary mortgage market. This gets the mortgage off of a lender’s books, freeing up more money to make new loans.
If investors believe the Fed is likely to keep hiking rates, they’re often reluctant to purchase mortgage bonds. One reason is they assume that the borrowers of those mortgages are likely to refinance those loans once rates fall again. There are also more mortgage bonds on the market for investors to choose from as a result of the bank failures. The FDIC is selling the portfolios of Silicon Valley Bank and Signature Bank. This makes these bonds less valuable.
As mortgage rates are the inverse of bond prices, when bond prices are down, mortgage rates go up.
“Going forward, we can expect rates to continue paying a tremendous amount of attention to incoming economic data,” says Matthew Graham, chief operating officer at Mortgage News Daily. “Traders are on the edge of their seats, waiting for evidence that the economy and inflation are finally cooling off in a meaningful way. … When it happens, we should see a reasonably swift move back toward more livable rates.”
The Supreme Court’s recent decision to block affirmative action — preventing colleges from using race as one of many factors when evaluating applicants for admission — may also block scholarships and grants intended for minority students, even though the ruling did not extend to financial aid.
Though some institutional scholarships that take race into account may soon disappear, minority students with financial need still have access to a variety of funding sources for their education — including grants, external scholarships, aid related to family income and federal loans.
Fewer minority scholarships could decrease college enrollment
A few states have already begun threatening scholarships meant for students of color in the wake of the Supreme Court’s affirmative action ruling. On June 29 — the day of the Supreme Court decision — Missouri’s Republican attorney general sent a letter to state universities directing them to end race-based scholarships. The Republican speaker of Wisconsin’s state assembly and the president of the University of Kentucky have also released statements indicating that race-based scholarships could fade.
More institutions could follow suit, and not just because of political leanings. “If states and schools are looking at their legal budgets, and they’re saying, ‘look, we don’t want to be sued,’ the safer thing to do would be what Missouri is doing,” says Dwayne Kwaysee Wright, an assistant professor of higher education administration and director of diversity, equity and inclusion initiatives at George Washington University.
As a result, enrollment could suffer and education could become less attainable for some minority students.
“We know that there’s a racial wealth gap in this country,” says Wil Del Pilar, senior vice president of The Education Trust, an organization that works to dismantle racial and economic barriers in the American education system. “So if we’re going to limit access to resources that help people make college affordable, then we can expect to see decreases in enrollment.”
In 2019, the median white family in the U.S. had accumulated $184,000 in wealth compared to $38,000 for the median Hispanic family and $23,000 for the median Black family, according to a 2021 analysis by the Federal Reserve Bank of St. Louis.
Other financial aid pathways remain open
While the affirmative action news may be discouraging to current and prospective students of color, both Wright and Del Pilar emphasize that college is still worth it.
“I do think that education is still a great way to try to change one’s life,” Wright says. “We know that over the course of a lifetime, a college degree brings millions if not more in additional earnings.”
Here’s how to get the financial aid you need to afford a college education, even in the face of dwindling minority scholarships.
Submit the FAFSA
The Free Application for Federal Student Aid (FAFSA) is the key to unlocking financial aid, including federal student loans, grants, work-study programs and some scholarships. Be sure to submit the FAFSA each year you’re in school, even if you don’t think you’ll qualify for any financial aid.
The FAFSA will also put you in the running for the need-based Pell Grant — an award of up to $7,395 per year. Eligibility isn’t tied to income alone, so you could qualify even if you don’t think you will.
Start planning early
Time can be a valuable tool. Start having conversations with your guidance counselor or college advisor as early as the second semester of your freshman year of high school about higher education options and costs, says Wright.
“I think the sooner families start to plan for college, and the sooner families start to have that conversation with their students, the better the outcome will be,” Wright adds.
Apply for lesser-known scholarships
To find a scholarship, start by casting a wide net. The Labor Department’s Scholarship Finder is a helpful resource because it allows you to sort through nearly 9,000 scholarships, fellowships, grants and other financial aid award opportunities. Reach out to your target schools; colleges and universities often have big lists of scholarships available to students. And take a look at scholarships offered in your community, in addition to the bigger, well-known scholarships.
“Everyone’s trying out for the Coca-Cola scholarship, it’s national, but there are probably less folks who are applying for your local Boys & Girls Club scholarship,” says Del Pilar, who once worked as a financial aid counselor.
Private external scholarships meant for minority students are not yet facing the same legal challenges as institutional or state scholarships, says Del Pilar. For example, the NAACP offers a variety of merit- and need-based scholarships to Black students and students of color.
Think outside the box when it comes time for college applications, too.
“I really hope that students will take advantage of some of the great historically Black colleges, minority-serving institutions, Hispanic-serving institutions and regional colleges we have around the country,” says Wright. “Going to community college for your first two years and then transferring is always a good cost-saving option.”
Ask how your college handles external scholarship money
It’s not enough to apply for and win an external scholarship — you also need to check your target school’s “packaging policy,” which outlines how the scholarship money will impact other financial aid you may receive, explains Del Pilar. In some cases, this policy may mean that it’s not worth it to apply for external scholarships.
For example, a school’s packaging policy may be to replace every dollar you bring in with the dollars that it has given you. So if your school awards you a $5,000 scholarship, and then you bring in a $1,000 external scholarship, then your school may decrease the scholarship they gave you to $4,000. At the end of the day, you’ll still have the same $5,000 worth of scholarship money.
“It could be disheartening for a student to do all this work to bring in extra dollars that they thought they were going to get, for the institution just to take away money that they had awarded you through their own institutional financial aid,” Del Pilar says.
Watch for new financial aid options
Lastly, keep an eye on new scholarship framing. “What might be left open is sort of an intersectional way to apply financial aid,” says Wright. “So you might not say ‘this scholarship is exclusive to Black students.’ What you may say is ‘this scholarship is exclusive to any students who come from the [historically Black] seventh or eighth wards in D.C. and whose family makes below $80,000 a year.’”
The University of North Carolina, one of the schools singled out in the Supreme Court cases for its affirmative action policies, announced on July 7 that it would provide free tuition and waive fees for all in-state students whose families earn less than $80,000 per year. The policy begins with the incoming class in 2024.
Duke University, a private North Carolina-based institution, unveiled a similar policy in June for students hailing from North Carolina or South Carolina whose families make $150,000 or less per year.
Northwestern Mutual Earns Fifth Consecutive Perfect Score on National Disability Equality Index MILWAUKEE, July 13, 2023 /PRNewswire/ — Northwestern Mutual announced today that the company earned its fifth consecutive perfect score on the Disability Equality Index (DEI), a comprehensive benchmarking tool that helps companies build a roadmap of measurable, tangible actions that they can take … [Read more…]
Editor’s note: This post has been updated with new information. Pricing and availability are accurate as of 2:30 p.m. on July 11, 2023.
I can’t fly anywhere without a pair of noise-canceling headphones.
Even if I’m not actively listening to music or enjoying a TV show, I often use noise-canceling headphones to drown out background noise.
If you’ve traveled recently, I probably don’t need to convince you of the value of a pair of these headphones. These days, there are more distractions than ever in airports and on planes — there are only so many times I can hear the same canned pitch for a cobranded airline credit card.
However, if you really want to drown out everything, which pair of headphones or earphones does it best? Here’s a guide to my current favorites based on portability, sound experience, comfort, battery life and, of course, how well their noise-canceling abilities fare in the TPG hair dryer test.
Apple AirPods Pro
How portable are they?
Since their introduction in 2019, Apple’s AirPods Pro have been my go-to travel headphones, thanks in no small part to their portability.
AirPods Pro have two components: a charging case and the earbuds. The charging case is where the AirPods sit when they’re not in your ears, and there’s even a built-in speaker to help you find the case if you misplace it.
The actual earbuds are much smaller than Apple’s entry-level AirPods, and they’re much less bulky and unwieldy than some other earbuds on the market.
How is the sound?
Apple recently introduced the second-generation AirPods Pro with a claim of double the active noise cancellation of the legacy model. If you were on the fence about these earbuds before, this updated model should make them a no-brainer for most travelers who use an iPhone.
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With the second-generation buds, I am disturbed by fewer announcements and chatty passengers than with the original model. The sound quality is also noticeably better, thanks to a more powerful audio driver.
How comfortable are they?
Aside from the portability, the AirPods Pro also excel in terms of comfort.
As you decide which headphones are right for you, you’ll need to choose between in-ear and over-ear models. Back in the day, in-ear headphones didn’t offer great noise cancellation. However, Apple and its competitors have since introduced earbuds that feature this travel must-have.
That’s great news since I find earbuds are generally more comfortable than over-ear headphones. Also, with four tip sizes included with the AirPods Pro, you’re bound to find the right fit.
How is the battery?
The second-generation AirPods Pro offer up to six hours of listening time with a single charge. The charging case offers 30 hours of listening time, and just five minutes in the case provides about one additional hour of listening time.
The hair-dryer test
To simulate the background noise on an airplane, I borrowed my wife’s Dyson hair dryer and blasted it at full force next to my ears while listening to the same song (Taylor Swift’s “Enchanted”) through each of the following six pairs of headphones (set at the same 80% volume level).
The verdict? I could hear the blow dryer when it was at the highest setting, but only just.
Are they worth it?
The fact that the AirPods Pro fit in my pocket makes them a game changer for travel. I used to lug around bulky over-ear headphones, but why bother when you can get great sound quality in a pair of earbuds that fit in the palm of your hand?
Sure, there are headphones that offer better noise cancellation, but the AirPods Pro pack the best mix of sound, noise cancellation and portability that an iPhone user will find in a small package.
Additionally, with multiple microphones, they double as a great set of headphones for those who make phone calls while on the road.
Buy now for $199.00 and save 20% on the standard price of $249.00
Bose Noise Cancelling Headphones 700
How portable are they?
Bose’s Noise Cancelling Headphones 700 are the company’s sleekest over-ear headphones, but you’ll still need to tote around a nearly 1-pound pouch when the headphones are stowed safely in your bag.
Aside from Bluetooth wireless connectivity, I love that you can also use the provided 3.5-millimeter audio cable to plug the headphones into seatback entertainment systems that don’t yet support Bluetooth.
How is the sound?
Bose is renowned for its best-in-class noise-canceling headphones, and the 700 series builds on that legacy with some of the best sound and noise cancellation you’ll get in a pair of headphones.
I always feel immersed in my music when I listen to these headphones, and the noise cancellation is among the best I’ve experienced.
I also love that you can adjust the noise-cancellation levels to control how much of the outside world you want to hear.
How comfortable are they?
These headphones are much more comfortable than some of Bose’s older models, but they aren’t for everyone.
During long-haul flights, I find that my ears sometimes start feeling numb after wearing these headphones for prolonged periods (something that hasn’t bothered me with other over-ear headphones like the AirPods Max).
How is the battery?
Bose’s top-of-the-line headphones offer up to 20 hours of nonstop listening. It takes about 2 1/2 hours to fully recharge the headphones, and a quick 15-minute charge will provide up to 3 1/2 additional hours of battery life.
The hair-dryer test
I couldn’t hear the faintest sound from the hair dryer, even when it was blasting at full force.
Are they worth it?
Back in the day, Bose was No. 1 when it came to noise-canceling headphones. The company now has some formidable competitors, but Bose builds on a very strong foundation with the Noise Cancelling Headphones 700.
These are among the world’s best over-ear noise-canceling headphones, and you certainly can’t go wrong with them. I just wish they were a tiny bit more comfortable for prolonged periods of use.
Buy now for $299.00 and save 21% on the standard price of $379.00
Sony WH-1000XM5
How portable are they?
Like any over-ear noise-canceling headphones, you’ll need to make room in your bag for Sony’s WH-1000XM5 headphones, though they only weigh around 250 grams and shouldn’t add too much weight to your luggage. They come with a carrying case to keep them in tip-top shape while you’re on the move — just note that the ear cups don’t fold in for a more compact carrying experience.
Like the Bose headphones, Sony’s top-of-the-line model can connect directly to seatback entertainment systems using a 3.5-millimeter audio cable.
How is the sound?
These headphones pack some serious active noise-cancellation chops, building on the company’s already industry-leading noise-canceling technology.
Unlike the Bose offering, you can’t adjust the level of noise cancellation, but you’ll have no issue tuning out your surroundings when listening to music with these headphones.
How comfortable are they?
I find these headphones to be perfectly comfortable for long-haul flights. They aren’t too heavy on the head and ears, and the padded headband helps keep them in place throughout the journey.
How is the battery?
Sony’s headphones offer some of the best battery life you’ll find. The company advertises up to 30 hours of nonstop use, with the ability to quickly charge the headphones for three minutes to unlock an additional three hours of music playback.
The hair-dryer test
Just like the Bose 700s, I couldn’t hear any noise from the hair dryer while listening to music with these headphones. To test them further, I blasted some music at 100% volume on my home speaker, and I could still barely hear any distractions with the Sony WH-1000XM5 headphones.
Are they worth it?
Sony’s WH-1000XM5 headphones are about as good as you can get in the roughly $400 range. They’ve got great sound in a (somewhat) portable package with top-notch battery life.
In my experience, the Sony WH-1000XM5s slightly outperform the similarly priced Bose headphones in terms of noise cancellation — I am usually less distracted when wearing Sony’s headphones on a plane.
Buy now for $328.00 and save 18% on the standard price of $399.99
Apple AirPods Max
How portable are they?
There’s no denying that these are among the sleekest headphones on the market, though that comes at the expense of some portability.
The AirPods Max include a magnetic smart carrying case, but it only protects the actual earpieces themselves. The headphones can’t be folded to create a more compact configuration, so you’ll need to make room in your bag for them.
While you might think that the AirPods Max only connect via Bluetooth, there’s some great news. You can actually plug them directly into seatback entertainment systems using a Lightning to 3.5-millimeter Audio Cable, sold separately for $35.
How is the sound?
As the most expensive headphones in this guide, you might not be surprised to learn that they offer the best noise cancellation I’ve experienced yet.
You can’t control the level of noise cancellation, but when flying around with these headphones, you won’t want to. With the AirPods Max, I had no trouble drowning out a crying baby sitting three rows behind me.
Combine this impressive noise cancellation with immersive sound, and these headphones offer travelers the best listening experience.
How comfortable are they?
The AirPods Max aren’t just sleek — they also boast an incredibly snug fit on the ear.
Apple did a great job designing the AirPods Max for inflight use, and for most domestic and transatlantic flights, your ears should stay cool and comfortable while using these headphones.
That said, some friends have complained about them getting a bit uncomfortable during the longest flights, something experts call “eardrum suck.”
How is the battery?
The AirPods Max offer up to 20 hours of listening time on a single charge, and five minutes of charging provides roughly an additional hour and a half of listening.
These numbers mean that you’re set for all but the longest flight in the world (nearly 20 hours from pushback in New York to landing in Singapore).
The hair-dryer test
As you might expect, the AirPods Max passed the hair-dryer test with flying colors.
Are they worth it?
The AirPods Max combine a best-in-class audio experience with top-notch noise cancellation in a modern and sleek package.
As the most expensive headphones in this guide, the AirPods Max are most definitely a splurge. However, if you’re already in Apple’s ecosystem and looking for the best travel headphones, these are it.
Buy now for $449.00 and save 18% on the standard price of $549.00
Bose QuietComfort Earbuds II
How portable are they?
Much like the AirPods Pro, these earbuds are among the most portable noise-canceling headphones you’ll find. They also magnetically snap into a separate charging case, which is longer and narrower than the AirPods Pro case.
The buds themselves are small and sleek and should fit into your ear without any issues — more on that below.
How is the sound?
What sets these earbuds apart is the noise cancellation. They’re just as good, if not a tiny bit better, than Apple’s second-generation AirPods Pro.
That said, I find the overall listening experience on AirPods Pro to be more immersive — I don’t feel nearly as engrossed with my music when using the Bose earbuds.
How comfortable are they?
Bose’s QuietComfort Earbuds II are very comfortable. There are three different size options for the tips and ear bands.
With nine different possible combinations, you shouldn’t have a problem finding a very stable fit, no matter the shape of your ear.
How is the battery?
Bose advertises up to six hours of battery life on a single charge, but I was able to beat that estimate by about 30 minutes on a recent flight.
The charging case offers 18 additional hours of battery life, and just 20 minutes of charging in the case should deliver up to two additional hours of listening time from the earbuds.
The hair-dryer test
Bose’s earbuds outperformed the AirPods Pro on the hair-dryer test. They blocked slightly more noise, but both sets of in-ear headphones should do the trick on most flights.
Are they worth it?
For most travelers, these earbuds will compete head-to-head against the AirPods Pro. If you aren’t in the Apple ecosystem, the Bose buds may be the right choice for you.
For everyone else, the choice is much trickier. AirPods integrate seamlessly into the entire iPhone (and Apple product) experience. Coupled with a quick setup and familiar controls, the AirPods will certainly do the trick for many.
However, if you’re looking for best-in-class noise cancellation, I’d consider the $50 splurge over the AirPods Pro for Bose’s earbuds.
Buy now for $236.55 and save 21% on the standard price of $299.00
Soundcore by Anker Life Q20
How portable are they?
One of the best travel features of the Life Q20 headphones is that they swivel inward for increased portability. They come with a drawstring travel pouch, and they won’t take up as much space as the other over-ear headphones in this guide.
Aside from Bluetooth wireless connectivity, you can use the provided 3.5-millimeter audio cable to plug the headphones into seatback entertainment systems that don’t yet support Bluetooth.
How is the sound?
As you might expect for a sub-$60 pair of headphones, the Life Q20s aren’t going to beat the likes of Apple, Bose or Sony.
That said, given the price tag, they offer an impressive amount of active noise cancellation. I find that the sound quality is better than expected for such an inexpensive pair of noise-canceling headphones.
How comfortable are they?
With memory foam ear cups, these headphones do a pretty good job of molding to your ears. They’re a bit bulkier than some of the other over-ear models, but that’s a trade-off you have to make, given the price.
How is the battery?
Of all the headphones in this guide, the cheapest ones also pack the longest battery life. Anker advertises 40 hours of wireless playback on a single charge.
If you’re pressed for time, you can quickly charge these headphones for five minutes to add four hours of listening time.
The hair-dryer test
Perhaps unsurprisingly, these headphones did the worst job of blocking out the background noise from the hair dryer. At the highest setting, I could definitely hear the noise from the Dyson.
Are they worth it?
If you aren’t a super-frequent traveler, the Life Q20s may be a great starter option for you. The active noise cancellation and sound quality aren’t as impressive as with the other, more expensive brands, but you’re saving around $300 with these headphones.
Several other features may feel quite basic, including the outdated micro USB charging port. However, that’s not stopping nearly 50,000 customers from leaving five-star Amazon reviews for these headphones.