Finance of America Companies (FOA) Chief Marketing Officer Chris Moschner found himself working for the lender in the wake of its acquisition of American Advisors Group (AAG), and Moschner previously told RMD about his journey to the position and the “intoxicating” opportunity he sees in the reverse mortgage space.
But that space is also facing a series of challenges including lower origination volume, high interest rates and liquidity challenges. The companies have to react and respond to the macroeconomic environment, which could include employing other tools — including more market research — in its messaging, he said.
‘It’s obviously about the macros’
Describing the larger economic environment in the housing finance sector, Moschner said that those factors — particularly interest rates — are not able to be controlled by reverse mortgage companies themselves.
“It’s obviously about the macros,” Moschner explained. “I don’t think it’s anything about [what] the companies themselves [are doing], it’s strictly related to things like the health of the bond market, rates and our ability to invest [correctly] in the short term.”
In such instances, it becomes important to focus on what the companies can control, he explained. That includes borrower outreach efforts and methodologies.
“I think [we’ve seen] all of the ingredients and all of the tools for success the category has been laying down for a long time,” he said. “We know that we’ve got to do a better job of educating our customers. Education continues to be a barrier, but that’s not a problem that’s solved overnight. That’s a problem that’s solved with content.”
That content could include reverse mortgage marketing material that includes influencers, and more focused public relations exercises that aim to streamline messaging and advertising, he explained.
But making those more focused moves might need to come after the macroeconomic environment becomes more favorable, which could allow the companies to pivot to marketing “offense” as opposed to macroeconomic “defense.”
“Those types of things will avail themselves over time when we’ve had the opportunity to have a bit more of a stable footing enabled by the macro environment,” he said. “[At a time] when we’re not dealing with strong interest rate headwinds that are leading to bond market volatility, which is leading us to be unsure about what we’re going to get for these loans when we securitize them in the market. So, that’s really it.”
Passion for customers
Moschner identifies passion for the customer base as a key driver for his work, he said.
“[It’s about] truly understanding what it means to be an older American today,” he said. “And not just understanding it at a surface level, and not just [speaking in generalities]. It’s about really understanding them. Some of the work we’re doing now — that I can’t say much about yet — is really focused on foundationally understanding this category.”
Despite sharing a label of “senior” or “older American,” a wide swath of age ranges exist within the demographic. The interests of a 62-year-old are not necessarily identical to the interests or realities of an 85-year-old, Moschner suggested.
“[It’s about discovering] who’s in their network, who their influencers are, what’s important to them,” he said. “And it’s not only about their financial situation but the things that make them excited, nervous or otherwise. So we’re going to that exercise because again, one of the things I learned going back to [my time at Procter & Gamble (P&G)] was that ‘who-what-how’ framework.”
The first step is to “assess the landscape,” which includes a comprehensive review of the category and determining messaging for them that is most resonant and relevant, he said.
Market research
In his “Origins” interview, Moschner shared his history at P&G and how he came to his role at FOA from a classically oriented marketing background in consumer goods. When asked if a P&G-like approach that more regularly makes use of traditional market research tools could benefit the reverse mortgage industry, he agreed.
“FOA and AAG have certainly made use of market research in the past, but I think as an industry more broadly, we need to go deeper,” he said. “The 65-plus demographic is a very interesting and unique one because it is not where the majority of the marketing dollars are spent.”
Instead, most of those marketing dollars tend to focus on people at or below the age of 45, he said.
“Which is interesting because most of the wealth in this country is actually held by people 65 and above,” he explained. “That is certainly changing, but I would argue because of that fact there has been underinvestment in formal market research. There’s been underinvestment in things like attitude and demography studies, and the 65-plus demographic is very diverse in terms of life stage, lifestyle and socioeconomic pillars.”
Understanding the nuances of everyone within that larger demographic will be essential to unlocking the industry’s potential, Moschner said.
There’s no better way to celebrate this festive season than by taking a step towards unlocking the door of dream house. This festival, benefits from Tata Capital’s Festival Home Extravaganza with swift approvals, smooth transactions and, most importantly, the smiles of loved ones when someone buys or begins constructing the dream home the buyer’s family deserves.
Tata Capital home loans bring an affordable and convenient way of financing dream.
Tata Capital home loans
Tata Capital provides personalized home loans that empower customers to realize their dreams of buying or constructing homes. With the flexibility to choose loan amounts, convenient repayment EMIs, and flexible tenures, customers can tailor their home loan experience.
Being secured loans, Tata Capital’s home loans do require customers to offer property as collateral against the loan. Further, to facilitate a smooth experience, the company provides minimal documentation and quick approvals to get started on building or buying a safe space for buyers and families.
The completely digital application process, accessible through the Tata Capital home loan website, allows customers to apply for their home loans without leaving the comfort of their homes
Why choose Tata Capital’s home loans
With a Tata Capital home loan, customers make their festivities a true celebration. Here is why one should consider applying for a home loan from Tata Capital.
1. Multipurpose loans
Tata Capital home loans aren’t restricted to just buying a property. These convenient loans can also be utilised to buy an under-construction or ready constructed house. Further, customers can also avail of this loan to buy a plot and construct their dream home on it.
Not only that, one can also use home loan to renovate existing house and even transfer outstanding house loan balance.
2. Flexible loan tenure
With Tata Capital home loans, one gets unmatched flexibility in managing financial affairs. Customers can choose their loan tenure depending on their repayment capacity and financial goals. The company’s loan tenures range from 5 to 30 years to help keep EMIs within a comfortable budget.
3. Attractive interest rates
Tata Capital prides itself on offering one of the most competitive interest rates available in the market. Further, on the basis of loan eligibility, credit score, income and other factors, the company will discuss the best home loan interest for individual application as well.
4. Easy eligibility criteria
The company’s easy-to-meet home loan eligibility criteria make home loans especially favourable. As part of loan approval process, the company examines a candidate’s age, income, credit score, employment stability and the like. Customers can learn the maximum loan they can apply for by using home loan eligibility criteria, available on the website.
5. Quick application processing
With Tata Capital, home loans get processed quickly and efficiently.
6. Instant approvals
All it takes is a couple of simple steps on one’s part, and Tata Capital home loan is on its way.
Screen Mom is a a small business creating gentle, streak-free cleaning solutions for all your screens that are odorless and free of abrasive chemicals.
The set includes the spray and an extra-large, scratch-free microfiber cloth. The formula has no alcohol, ammonia, or harmful phosphates and will gently clean HDTVs, PC monitors, Kindle Fire, tablet, laptops, smartphones, Apple Mac products, iPhones, and more!
Promising review: “This stuff is absolutely incredible. I’ve had my MacBook for a few months now and in the college environment of lugging it back and forth to class, eating around it and doing group projects it had turned into a grease machine. I had tried just about every version of microfiber cloth, the sprays that promise they don’t streak, and just about every electronic wipe on the market. To no avail, I went to Amazon and with the glowing reviews, I couldn’t say no to giving it a try. Got it today and I am just blown away. Never have I felt the need to write an Amazon review, but here I am because it’s just. that. good. Attached are pictures for proof, it works people! Ordering a travel size version to keep in my backpack as we speak!” —McKenzie Meuleveld
Inside: Are you unsure about how much to tip your valet? This guide will help you understand valet parking tips and the dollar amount for tipping at hotels and restaurants.
Navigating the ins and outs of tipping etiquette can be daunting, particularly when it comes to highly personalized services such as valet at five-star hotels.
You certainly want to show appreciation and respect for the quality service they provide, while inherently being cognizant of not going over the top. From the length of your stay to the level of service rendered, the cost of parking, and even the locale, several factors can sway this figure.
Parking can be a hassle, and that’s where valets step in. They’ve got your back, navigating tight spaces and dodging traffic to park your vehicle. But what do you owe them in return for their hard work and risk?
Honestly, this is a similar question of wondering how much to give for high school graduation.
This guide dissects the intricacies surrounding valet tipping, helping you confidently reward exceptional services without breaking any unwritten societal norms.
This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.
How much should you be tipping your valet?
The rule of thumb for tipping valets is $3 to $5 when dropping off and picking up your vehicle.
This is your baseline, but don’t hesitate to scale up if your driver impresses you with their service. If you’re staying at a place just for a night, a tip of $5 to $10 is seen as appropriate. For multiple nights, you may tip more generously on your first and last night.
Always remember, that your generosity reflects the level of service you’ve received.
The average tipping amount will vary in areas like New York City, Boston, Chicago, anywhere in California, or even Aspen, Colorado as these areas demand a higher tip.
What is proper etiquette for tipping valet?
Proper etiquette for tipping valet is about communication, patience, and gratitude. Ease into the drop-off zone without creating chaos, let your valet know about any special needs or quirks about your car, and stay patient. Afterward, express your thanks with a tip.
Yes, that means you need to have cash on hand.
It’s no crime to ask your valet what’s common for a tip if you’re not sure. This opens up a dialogue and they’ll understand you’re considering their efforts. Whether you tip before or after is wholly your call, but keep in mind that a tip at the start might earn you that extra mile of service.
Be generous, but fair. If you’re pulling up in a more luxurious car, consider a higher tip. The value of your vehicle is a good indicator of your tipping ability.
That said, only tip if you want to and think the service merits it. If your experience was less than satisfactory, bring it up to management instead of slipping a bill. Not tipping isn’t rudeness on your part if the service didn’t meet your standards. But if it did, good etiquette is acknowledging that quality service with a tip.
Valet Parking 101
Valet parking is an efficient service often offered in high-end restaurants and accommodations, providing a hassle-free parking experience, especially in areas that are limited in parking space.
The basics to avail of these services is to drive into the drop-off zone and hand over your vehicle to the attendant, ensuring you’ve removed any personal items and communicated any particularities about the car.
Valet parking etiquette isn’t complex. However, if you are well prepared, it makes the experience more delightful.
Be Alert at Drop-off. Drive with care into the drop-off zone and follow any directions from the valet. Don’t be in a hurry!
Prepare Your Vehicle. Have your car ready for valet parking by removing all personal and valuable items before arrival.
Communicate. Brief the valet about your vehicle’s quirks and intricacies, like touchy brakes or an alarm system.
Show Patience. Give the valet time to park, retrieve, and return your vehicle. They could be overwhelmed with multiple tasks during peak hours, so don’t rush them.
Show Gratitude. Beyond tipping your valet, express your gratitude verbally. A simple ‘please’ and ‘thank you’ can make their day.
Keep the Ticket Safe. You don’t want to hold up the process because you misplaced the claim ticket.
Respect the Flow. Respect the orderliness at the vehicle drop-off zone. The valets have an efficient system for quick drop-offs and pick-ups.
Prep for the Evening. Make sure you have everything you need for your event or stay. The valet can retrieve items from your car, but it’s best to avoid extra trips.
Remember, these simple considerations can greatly affect the smoothness of your valet experience.
An important note – if the driver who retrieves your car is not the same one you gave it to, you might want to tip both.
To Tip or Not To Tip? The Valet Parking Conundrum
With tip-flation out of control in the United States, you may be wondering if tipping your valid is worth it.
Sometimes, tipping can get situational. Let’s consider times when you might tweak the ‘usual’ amounts.
If you’re arriving during peak hours or on a busy weekend, tip more generously. Your valet is juggling a higher volume of cars and more stress, so your tip is a recognition of that hard work. On the other hand, slower hours might warrant a more modest tip.
Your vehicle type should also influence your tip. Driving a luxury or high-end car? That’s a premium charge for your valet, too. Running a more modest set of wheels doesn’t demand the same generosity.
Did your valet go above and beyond? Offering assistance with bags, driving directions or just a friendly demeanor might earn them a little extra.
Forget something in your car? Ask your valet to bring it back, but remember to compensate for their time. If you’re accessing your vehicle multiple times in a single day, consider an additional tip for the added service.
And finally, if you want to ensure your car gets a prime spot, or preferential service, tipping more upfront can help.
All in all, pay attention to how much to tip a valet given the situation. Tip when you feel the service warrants it and remember, it’s not just about the money – the thought counts too!
Should service quality affect your tip?
Absolutely! Service quality is a big factor in how much to tip a valet. Just like you might adjust a restaurant tip based on service quality, you should do the same with valet parking.
For example, if the valet is unfriendly, rude, or handles your vehicle poorly, they shouldn’t expect a hefty tip. At its core, the tip signifies gratitude for good service. Do keep in mind that errors happen, though. If a mishap occurs, such as a delay or a minor mistake, consider informing the manager rather than taking it out on the tip.
Conversely, if your valet provides outstanding service, they should be rewarded appropriately. So, if they treat your vehicle with care, offer assistance with luggage, close your trunk, or provide useful information about the locale, you might want to tip more.
Remember: Adjusting your tip based on the quality of service is not being stingy or overly generous; it’s fair compensation for service rendered.
Do you tip valet before or after?
Tipping before or after for valet service is rather circumstantial and both have their merits.
Tipping upfront might ensure your valet goes the extra mile for you.
Whereas, tipping at the end allows you to assess the service quality first.
The choice is entirely up to your discretion and how you feel about the service!
The misconception is you can get away with not tipping at all.
How much do you tip a valet at a hotel?
The standard courtesy tip for a hotel valet hovers around $5 per car. But hold on, as these aren’t hard-set.
Staying the night? Then consider a tip of $5 to $10; more if it’s for multiple nights.
Meanwhile, high-end hotels usually see higher tip values. A $5 to $10 tip per vehicle is considered suitable given the upscale services rendered.
Remember, the situation might vary depending on a gazillion factors like the destination, hotel class, length of stay, and level of service received. So equip yourself with a tipping strategy best suited for your specific scenario.
When they retrieve your car after your meal, how much should the valet parking tip be?
The baseline remains the same, you’re looking at a minimum of $3 to $5 per car.
But say the meal was special, the night was beautiful, or maybe you’re just in a good mood. Feel free to upgrade a little more to that tip. After all, it’s a token of appreciation for the valet who’s been managing your car while you dined in comfort.
In contrast, suppose their service was not up to your expectations. Maybe they made you wait too long or were discourteous. You then have a valid reason to tip less.
What if you don’t have enough cash?
If you are like me and find yourself without enough cash, there are still a few options to consider.
Ask if their valet services allow tipping through a credit or debit card or even Venmo, although cash is generally preferred.
Give a larger dollar bill when you are leaving the restaurant or checking out of the hotel.
When trying to determine how much cash should I have in my wallet, remember what you may need for tipping your valet.
Regardless, it’s always a good idea to keep some cash on hand for gratuities, to avoid inconvenience or potential embarrassment.
Hospitality Valet Expert Speaks
Jorge, a seasoned valet from the Grand Hyatt Vail, shared some fascinating insights into his job.
Despite the physical demands, Jorge takes pride in delivering exceptional service, swiftly handling numerous vehicles, and making guests’ transitions as smooth as possible. He underlined that gratuity is a crucial appreciation of this labor-intensive service.
Much like the data-driven research suggests, Jorge finds that guests who tip considerably when dropping their car off often get retrieval of faster service.
Also, he noted that tips are shared each day among the valets. This was to ensure there wasn’t favoritism and that all guests received the same service.
Why tip valets?
Valets offer a luxury service. They work hard to save you the hassle of parking, allow you to directly access your venue of choice, and take care of your vehicle in the process.
Valets are also part of the service industry, which means their income often depends heavily on the tips they receive. They brave the elements, handle the stress of navigating unaccustomed vehicles through tight spots, and often do so with a smile on their faces.
Not to mention, they’re on their feet for entire shifts, often dealing with demanding clientele and long working hours. By tipping your valet, you show appreciation for their hard work and encourage them to keep up the high level of service.
Why not show your gratitude with a few extra bucks? It’s a small price to pay for convenience and quality service. So, the next time you pull up to the drop-off zone, remember, your valet deserves that tip.
What do valets expect?
Valets, like other service industry professionals, expect respect and decent compensation for their hard work. This not only includes a fair hourly wage but also tips for the service they provide.
Valets typically expect a tip of around $3 to $5 per vehicle, although this can vary based on location, type of establishment, and how busy it is. In upscale areas, tips can range from $5 to $10 per car.
Additionally, valets appreciate when customers are understanding and patient, especially during peak hours. They also value clear communication about any special requirements or characteristics of your vehicle.
What’s considered a “good” tip?
A “good” tip for a valet typically starts at $5 per vehicle. This is generally considered the norm at most establishments.
However, a “good” tip can depend on several factors, like the establishment and service quality. At high-end hotels or restaurants, or in more upscale locations, a “good” tip might start around $10 or even $15.
With that in mind, treat your personable, hard-working valets to a good tip when they provide a great service. After all, a good tip results in good karma!
FAQs
Yes, you should still tip even if the valet service is complimentary. The valet is parking your car, often in the tight valet lot. Their service saves you time and stress, and that’s worth a tip.
Remember, many valets earn a small hourly base pay and rely heavily on tips. Their pay may not correlate with the price you pay or don’t pay, for the service.
A $20 tip for valet is usually seen as generous. It’s well above the typical range of $3 to $5. However, if you feel the service was exceptional, you have a high-end vehicle, or if the valet went above and beyond, such a tip could be appropriate.
Tipping valets at 5-star hotels usually follow a higher standard. Considering the upscale locale and high level of service, a good starting point is around $5 to $10 per vehicle. So, yes, $20 is a good tip for valet.
Furthermore, if the service exceeded your expectations, or if the valet provided additional help like carrying your baggage, a tip on the more generous side might be appropriate
Now, How Much to Tip Valet Driver?
In the United States, tipping is very much a part of our culture and how many people make their living.
Tipping valet can seem intricate, but it’s straightforward once you know the ground rules: anticipate, be kind, respect the service, and tip accordingly. It all comes down to recognition of the efforts your valet puts in to make your experience easier and classier.
The takeaways are the general tip range ($3 to $5).
However, you need to base your tip on the type of establishment, time of day, and quality of service. Be aware of the situation and tip accordingly. But, above all, remember to appreciate good service and acknowledge it accordingly.
Now, be careful, you need to know how much cash can you fly with.
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Buying a new house or building a dream home is a milestone for all – and with affordable home loans, the goal is certainly achievable. However, sometimes, the loan approval process may be time-consuming, potentially delaying your plans, particularly at a time when the demand and cost of real estate are on the rise. This is where a pre-approved home loan comes in. It can reduce the wait time for your loan approval and disbursal and also put you in a better position to negotiate with the lender. Before we get to the various benefits of a pre-approved home loan, let’s find out what it is.
What Is a Pre-Approved Home Loan?
A pre-approved home loan, as the name suggests, is a loan that has already been sanctioned in principal before the deal is finalized. The process is the same as getting a regular loan sanctioned, the only difference being you need not submit any documents or paperwork related to the purchased property.
The lender offers financing depending on your creditworthiness and repayment history and issues a pre-sanction letter after a quick verification. One thing to keep in mind is that the pre-approved home loan offer comes with a 3-to-6-month tenor, within which the property deal must be finalized. However, in case you fail to do so in the given timeframe, you can re-apply.
Top 3 Benefits of Pre-Approved Home Loan
Here, take a look at the top benefits of pre-approved home loans:
1. Faster Loan Disbursal
Since the majority of your loan verification is done at an early stage, the home loan disbursal process becomes prompt and easy once the property is finalized. You will only need to get the property documents verified at a later stage. The lender disburses the loan amount as soon as the document verification is completed. This proves beneficial when you are urgently looking for finances and need to book an apartment or house at the earliest.
2. House Hunting Made Easier
The real estate market hosts a pool of housing options, including independent homes, apartments, villas, and more. With a pre-approved home loan and pre-determined budget, the search for a suitable home becomes easier. For example, if you have a pre-approved sanctioned amount of INR 75 lakhs, you can shortlist houses or flats that cost anywhere between INR 70-80 lakhs. However, make sure you have enough savings for a down payment as it is not included in the Home Loan amount.
3. Better Scope for Financial Planning
A pre-approved home loan makes you aware of your home loan eligibility. That way, you can plan your finances accordingly and apply for a suitable loan amount that can be paid off comfortably without the fear of the loan application being rejected.
Now that you are well-versed with the advantages of a pre-approved home loan, check how to apply for one.
How to Get a Pre-Approved Home Loan Offer?
The process to apply for a pre-approved loan is no different from a regular loan application process. You can simply head to the bank’s or the lender’s website and fill out the online loan application form while providing a handful of documents to get pre-approval on your housing loan.
Documents Required for a Pre-Approved Home Loan
The documents needed to get your home loan pre-approved are listed below:
Identity Proof: Lenders require valid identity proof issued by the government, such as your Aadhaar card, PAN card, Voter’s ID, Driver’s license, and Passport among others.
Address Proof: Apart from the above ID proof, lenders may ask for your ration card and utility bills (gas, water, phone, electricity bills) to be furnished as proof of address.
A copy of Form 16
The last 3 months’ pay slips
The last 6 months’ bank account statements
The last 3 years Income Tax Returns filed
A cheque used for paying the non-refundable loan processing fee
Note: This is an indicative list, you might have to submit additional documents as per your lender’s requirement.
Why Opt for a Pre-Approved Home Loan?
If you are still apprehensive about a pre-approved home loan, here are all the reasons why it may prove to be the best option for you.
With a pre-approved home loan, you will have an idea of the maximum amount you are eligible for. You can shop around and pick a property listed online by the lender.
Lenders offer pre-approved home loans only on properties that have already passed valuation and quality checks. Thus, you need not worry about your loan application being rejected due to poor construction.
There is no requirement for stacks of documents. All you need are documents related to the property, which means less time is needed for verification and approval.
Unlike regular loan applications, where you need to submit documents after finalizing the property, with a pre-approved home loan, you can get on with the document verification (other than property-related documents) beforehand and then search for a house or property best suited for the budget.
5 Things to Consider When Applying for a Pre-Approved Home Loan
If you are planning to get your home loan pre-approved, here are a few things you should keep in mind:
1. Effect on CIBIL Score
Before the pre-approved loan sanction, the lender will look into your CIBIL score closely. If you have a history of multiple credit card or loan applications, your CIBIL score may not be as impressive. Hence, the loan application may get rejected, which will further reduce the credit score.
2. Chances of Rejection
If you do not meet the eligibility criteria laid down by the lender and instead account for poor credit history, low CIBIL score, inadequate income, etc. then your loan application may get rejected.
3. Same Rate of Interest
The rate of interest applicable at the time you receive the pre-approved home loan offer may be the same at the time you apply. Thus, even if the home loan interest rate goes down later, you may not be able to avail of the lower interest rates.
4. Limited Property Selection
Pre-approved home loans are offered on limited properties. This may narrow down the hunt for your dream home as you would only be able to choose from the properties that are listed and have passed the quality check.
5. Limited Period Offer
A pre-approved home loan is a limited period offer with an expiry date ranging up to 6 months. Therefore, once you get a sanction on your pre-approved loan, you will have to buy a property and apply for the home loan within the validity period.
Conclusion
Easy, hassle-free loan application, faster disbursal, and better negotiating power are some of the top benefits of a pre-approved home loan. And while these can be of huge advantage, a pre-approval on your home loan does not necessarily mean that the loan will be finalized. There are a dozen other factors, such as credit score, repayment history, income, property documents and so on that determine one’s home loan eligibility. However, to reap the benefits of a pre-approved home loan, it is important to complete the loan application process within the given period.
Inside: Are you considering opening multiple Roth IRA accounts? You need to know if you can have multiple Roth IRAs. Here is what you need to know before making the decision.
While managing multiple Roth IRAs can create confusion, especially with tracking contributions across different custodians and potentially violating the five-year rule, I have found a method to use them to my benefit.
By having multiple Roth IRAs, I am able to diversify my investments as each Roth IRA account has a specific purpose.
However, you must know the rules about having multiple IRAs.
For the average investor, having multiple Roth IRAs may seem like a potential strategy to diversify your investments and attain financial independence, but it often leads to more confusion than benefit. Therefore, simplifying your finances by having a single Roth IRA might be a more feasible approach to reaching financial independence.
However, readers at Money Bliss know there is always a reason if I am strategic about why I do something.
So, let’s go through everything you need to know about having multiple Roth IRAs and if it is worth it for you.
What is a Roth IRA?
A Roth IRA stands as a type of retirement account with distinct tax benefits. The Internal Revenue Service (IRS) manages specific rules on who can open a Roth IRA, along with the contribution limits and withdrawal policies. 1
When your contributions in this retirement account and their interest earnings grow, they do so tax-free. 2
“Roth IRAs give you the flexibility to increase retirement savings tax-free. Thus, helping you to reach financial independence quicker.”
Kristy @ Money Bliss
Can You Have Multiple Roth IRAs?
Absolutely! You can certainly have more than one Roth IRA.
Different from some other types of retirement accounts, no restrictions apply to how many Roth IRAs you can manage.
From the IRS perspective, regardless of how many different IRA custodians you choose to utilize, your contributions are treated as one Roth IRA. You must still follow the guidelines on contribution amounts on your Roth IRA and traditional IRA. 3
This could potentially lead to tracking or contribution errors, or even unintentional violations of the Roth IRA’s 5-year rule, which can result in penalties. Furthermore, managing multiple accounts can also lead to an accidental overweighting of one investment strategy due to faulty fund allocation.
Why would a person want more than one Roth IRAs?
Several reasons could motivate an individual to manage multiple Roth IRAs:
Saving for various objectives. Investors might manage different IRAs for distinct purposes—one for retirement income, another as a cushion for emergencies.
Diversification of investment portfolio. Multiple Roth IRAs facilitate varied levels of risk adoption across different types of investments.
Raising insurance protection. With multiple Roth IRAs spread across separate institutions, each account can avail of $250,000 FDIC insurance protection. 4
Simplifying inheritance. Dealing with inheritance matters gets easier upon having distinct Roth IRAs, as assets can be split and handed down according to wishes.
Personally, I choose to have multiple Roth IRAs because I actively trade options contracts in one while the other is for long-term holdings.
Is it smart to have multiple Roth IRAs?
This is a highly personal decision as it depends on individuals and their unique circumstances.
Multiple Roth IRAs can offer remarkable benefits. However, keep in mind that more accounts may mean more fees and added complexity when managing your retirement savings.
You must consider your financial goals, risk tolerance, and time horizon is crucial before opting for multiple IRAs.
Many people end up with multiple IRAs when they decide to rollover a 401k from a previous employer.
Benefits of Opening Multiple Roth IRAs
You will have to decide if these benefits of multiple Roth IRAs are worth it for you:
Diversified investments. By having multiple accounts, it allows you to vary your investment strategy by account.
Conversion Flexibility. Managing the tax implications of converting traditional IRAs or employer-linked retirement accounts to Roth IRAs gets easier.
Varying Savings Objectives. Different Roth IRAs can be maintained for different purposes such as retirement income, house maintenance or rainy day funds.
Elevated Insurance Protection. If one Roth IRA is reaching the FDIC insurance limit, a second account with a different institution ensures additional protection.4
Drawbacks of multiple Roth IRA accounts
While having multiple Roth IRAs has broader benefits, it comes with some shortcomings:
Complex Management. Managing several Roth IRAs requires frequent monitoring and coordination.
Increased fees. Many IRA accounts come with fees. Even low fees across multiple accounts can add up.
Unequal Investment Allocation. Spreading investments across multiple IRAs makes monitoring performance difficult.
More Paperwork. More accounts mean more paperwork, which could be time-consuming.
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Unfolding the Complexities of Multiple Roth IRAs
With multiple Roth IRAs, complexities unfold around the management and tracking of these accounts. The investments need to be monitored on a regular basis to maintain strategic alignment with retirement goals.
It’s necessary to regularly check for fees and investment performance.
Balancing the portfolio of multiple IRAs plays a vital role, as the percentage of each investment differs between accounts. This could make it challenging to form a streamlined portfolio until you have sufficient experience.
Nevertheless, this is an easier question to answer than is now a good time to buy stocks.
Understanding the rules with multiple Roth IRAs
Understanding the regulations with multiple Roth Individual Retirement Accounts (IRAs) is essential when planning for a stable retirement.
With a comprehensive overview of the laws governing multiple Roth IRAs, one can strategically leverage these tax-advantaged accounts for optimal retirement savings.
No more confusion or lack of knowledge on how many Roth IRAs they can legally own, this section provides clarifications on these essential rules.
Does having multiple Roth IRAs mean you can contribute more total money each year?
The short answer is no.
Regardless of how many Roth IRAs you have, your total annual contributions combining all accounts can’t surpass the IRS-placed limits.
For 2023, the limit stands at $6,500 if you’re under 50 or $7,500 if you’re 50 or older. 3
In 2024, the limit stands at $7000 if you’re under 50 or $8000 if you’re 50 or older. 3
Can I contribute to a Roth IRA and a Traditional IRA?
Yes, you can contribute to both a Roth IRA and a Traditional IRA.
However, the total contribution to all your IRAs cannot exceed the annual limits set by the IRS. 3
For instance, in 2023, the total contribution limit is $6,500 for individuals under 50, and $7,500 for those who are 50 or older.
You don’t want to be taxed on excess IRA contributions.
Tips for managing multiple IRAs
Managing multiple IRAs comes with its own set of challenges. But, with the right approach, you can reap substantial benefits:
Organize Your Investments. Keep your IRAs clearly labeled for distinct goals—a critical step.
List Your Beneficiaries Properly: You must list your beneficiaries on each Roth IRA account.
Consolidate Accounts. If you find managing many accounts overwhelming, think about consolidating them at one institution.
Regular Review. Evaluate your portfolio time and again to see if adjustments are needed.
Monitor Fees. Fee accumulation can hollow out your retirement savings. Keep a close watch on them.
Use Software to Help You. My personal favorite is Quicken Classic
For many people, they learn how to invest 10k the first time using their Roth accounts.
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FAQs About Having Multiple Roth IRAs
For 2023, the total combined contribution limit for all of your Roth IRAs stands at $6,500, or if you are 50 or older, it is $7,500 thanks to an extra ‘catch-up’ contribution.
This limit applies to the total contribution made across all of your Roth IRAs and traditional IRAs.3
The IRS does not impose a limit on the number of IRAs an individual can own. You are free to open as many IRAs—Roth or traditional—as you want to suit your retirement savings strategy.
Remember, however, that total annual contributions across all your IRAs must stay within the defined limit. [Quote from IRS documentation stating there’s no limit on the number of IRAs]
No, unfortunately, you can’t.
The yearly limit of $7,000 (or $8,000, if you’re 50 or older) applies to the total amount you contribute across all of your Roth and traditional IRAs, not each individual account for 2024. 3
Yes, you can. The IRS doesn’t set a cap on the number of Roth IRA conversions you can execute.
So, you can certainly convert multiple traditional IRAs into just one Roth IRA.
Take note that you’re likely to owe income tax on the entire amount converted in the conversion year.
Learn more about converting a traditional IRA to a Roth IRA because this decision will affect your taxes.
From my experience, there are times when it is wise to convert and I did. Then, there were others that converting the account did not make financial sense. So, make sure you figure out the best-case scenario for you.
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Now, How Many Roth IRAs Can I Open?
In conclusion, it is not only possible but also potentially advantageous to hold multiple Roth IRA accounts.
By diversifying your retirement savings across various Roth IRAs, you can expose your money to different asset classes and investment opportunities not all available in one account.
Learn how to invest in stocks for beginners.
Nevertheless, the decision to open multiple Roth IRAs must be driven by your personal financial circumstances, retirement objectives, risk tolerance, and expected time horizon. If the decision aligns with your financial blueprint and retirement strategy, opening multiple Roth IRAs today could be a smart move.
Given the unique tax advantages Roth IRAs offer – tax-free withdrawals during retirement – this could ensure a financially secure and tax-efficient retirement.
Honestly, I think choosing the right brokerage is harder for most people.
As always, consider seeking guidance from a trusted financial advisor to help navigate these decisions and ensure your retirement planning is optimally structured for your financial needs and goals.
Remember, the key to successful retirement planning lies in understanding all associated rules, benefits, and potential drawbacks.
Sources
Internal Revenue Service. “Types of Retirement Plans.” https://www.irs.gov/retirement-plans/plan-sponsor/types-of-retirement-plans. Accessed October 10, 2023.
Internal Revenue Service. “Roth IRAs.” https://www.irs.gov/retirement-plans/roth-iras. Accessed October 10, 2023.
Internal Revenue Service. “Retirement Topics – IRA Contribution Limits.” https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-limits. Accessed October 10, 2023.
FDIC. “Your Insured Deposits.” https://www.fdic.gov/resources/deposit-insurance/brochures/insured-deposits/. Accessed October 10, 2023.
Internal Revenue Service. “Retirement Topics – IRA Contribution Limits.” https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-limits. Accessed October 10, 2023.
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[Editor’s note: This is part of the category product review series for the small landlord property management software sector. Originally published in the Geek Estate Mastermind.]
Syndication is a necessary component of succeeding for any property management software vendor, short of a massive built-in audience of renters. After all, a landlord’s goal is to find a tenant for their property as soon as possible—which generally requires advertising a rental listing far and wide.
The five companies covered in the mini-series: Zumper Pro, Airbnb, Avail, Cozy, Zillow Rental Manager. All except Airbnb do some level of syndication of long-term rentals. RentecDirect and TurboTenant are also included below as a result of membership in the Mastermind.
Below is a snapshot of property management software vendors’ syndication partners…
Note: I am keeping an updated spreadsheet available to members of the Geek Estate Mastermind. If you work for a property management software provider and wish to have your company included, please have your company’s founder apply/join.
It’s true that those who own the marketplace (demand) and own the tools have an unfair advantage when it comes to serving landlords. Thus, Zumper and Zillow do hold a strategic customer acquisition advantage compared to Cozy and Avail due to traffic and brand goodwill generated from their rental search products.
Zillow Group, Realtor.com, and CoStar all have significant resources to deploy. However, one significant challenge is getting those leadership teams on board with focusing on low-value (free, in most cases) landlords. They all have larger revenue streams elsewhere, so it’s unclear when, or if, rentals will move up the priority list. Redfin is the dark horse in this race. It seems inevitable that it will eventually broaden its rentals work beyond WalkScore.
[Editor’s note: This is an excerpt from the conclusions from the category product review series for the small landlord property management software sector. It answers two of the questions posed in the introduction. Originally published in the Geek Estate Mastermind.]
How are property management software companies impacting the small landlord business model?
Vendors are making it easier to start or continue operating as a DIY. Certainly, a trusted partner to handle the payments, screening, and marketing makes grokking the operation of a rental more feasible for newbies and part-timers. A small monthly vendor fee (or free) is replacing the model of paying 5-10% of monthly rent for a full suite of services. The time to money trade-off is worth it for many.
Are online rental applications becoming mainstream or are they still mostly on paper?
It depends on the definition of “mainstream.” Digital signatures for documents of all types is still growing in demand. Search inquiries for rental applications continue to increase year over year, according to Avail. Thousands of landlords will screen their tenants online this year. Online rental applications are becoming the only way forward as both demand and adoption increase rapidly.
[Editor’s note: This is an excerpt from the conclusions from the category product review series for the small landlord property management software sector. It answers two of the questions posed in the introduction. Originally published in the Geek Estate Mastermind.]
How are property management software companies impacting the small landlord business model?
Vendors are making it easier to start or continue operating as a DIY. Certainly, a trusted partner to handle the payments, screening, and marketing makes grokking the operation of a rental more feasible for newbies and part-timers. A small monthly vendor fee (or free) is replacing the model of paying 5-10% of monthly rent for a full suite of services. The time to money trade-off is worth it for many.
Are online rental applications becoming mainstream or are they still mostly on paper?
It depends on the definition of “mainstream.” Digital signatures for documents of all types is still growing in demand. Search inquiries for rental applications continue to increase year over year, according to Avail. Thousands of landlords will screen their tenants online this year. Online rental applications are becoming the only way forward as both demand and adoption increase rapidly.
[Editor’s note: This is an excerpt from the conclusions from the category product review series for the small landlord property management software sector. It answers two of the questions posed in the introduction. Originally published in the Geek Estate Mastermind.]
Are backend landlord tools and front-end rental search products in conflict with each other?
These two will continue converging into one another. Zumper and Zillow are starting from the search side, while Avail and Cozy are on the flip side. Airbnb is a different animal altogether. There are areas where goals conflict. For instance, first in and banned evictions are both loved by tenants but hated by landlords. That said, those are both regulation issues. One area where they align is that tenants want to search a comprehensive supply and landlords want to reach the largest possible renter audience (as long as they are qualified).
Will Cozy and Avail end up adding a search experience or syndicating to more partners?
I believe both will continue to focus on syndication, particularly Avail because it does not have the benefit of a large audience on its own (Zumper, Zillow, and Cozy all have access to leverage). Given Cozy operates inside the confines of CoStar, it is far more likely to be built out as a benefit to the company’s customers already using its broad search assets (especially following the acquisition of RentPath), rather than trying to win a syndication battle.