A townhouse is a multi-story home that’s owned by individuals and is attached to at least one other similar unit. This type of hybrid dwelling combines features of a single-family home with a condominium — having some of the benefits and challenges of each. It’s also sometimes called a townhome or a row home or house.
Differences Between Townhomes and Condos
Differences between a detached home and a townhouse may be clearer than differences between a townhouse and a condo. After all, a home is a freestanding structure while a townhouse, like a condo, is part of a complex.
So, how is a townhouse different from a condo? Well, for one thing, although townhouses would share walls with units that are right next to theirs, there wouldn’t be a dwelling above them or below, as could be the case with a condo.
Typically, people who own a condo are responsible for the interior of their units, while funds that they pay into their homeowners’ association (HOA) are used to maintain shared areas and the outside of the building.
Townhouse owners, though, are usually responsible for maintaining the inside and outside alike, which is more like owning a home.
Because townhouse owners are usually responsible for more maintenance than condo owners, their HOA fees are often smaller and they typically have more freedom on how to renovate their dwellings. Neither of these is universally true, though, so it’s important to check the specifics of the property of interest.
Potential townhouse owners may be asking themselves, “Is buying a townhouse a good investment? What are the pros and cons?”
Let’s take a look at the pros and cons of buying a townhouse, along with insights into getting a mortgage loan.
Pros of Buying a Townhouse
Having control over the inside and outside of a townhouse might make it more appealing than the purchase of a condominium. Townhome owners might appreciate how they have more ability to make decisions about their property. Additional benefits of buying a townhouse include:
More Affordable
A townhouse can be an affordable option in communities with higher home prices, providing a space-savvy housing choice in places where available land can be scarce. Although townhouses may be more expensive than a condominium in a community of choice, they tend to be less expensive than a detached home.
Less Maintenance
Townhouses may be appealing to those that are busy; there’s no big yard that needs time and attention and, if owners travel for work and/or pleasure, security services that may be covered by HOA fees can help to protect the dwelling without any extra steps needed — and the complex may even be gated for added security.
Amenities
There may be great shared spaces and amenities for families to enjoy. These can include gyms and pools, and people who own units each have an ownership interest in these common-area benefits — which means they have a legal right to use them.
You Own the Land
Buyers of a townhouse will actually own the land where the property exists. In contrast, the condo owner would only own their unit, not any of the land. This means that someone owning a townhouse is typically less restricted on how the land could be used, perhaps being allowed to grill dinner outdoors, as just one example.
Pay Less in Property Taxes
Owners of a townhouse usually pay less in property taxes when compared to a stand-alone home. This is typically true because of the smaller lot size.
Townhomes could be ideal for first-time homebuyers who are looking for a more affordable option in densely populated areas. It can also be a good choice for people who aren’t interested in doing much home maintenance.
Cons of Buying a Townhouse
Townhomes may not be ideal for everyone. If you don’t want to share walls with another family, for example, a townhouse may be eliminated.
Other potential downsides of buying a townhouse include:
Limited Lot Size
The limited lot sizes that make it easy to minimize maintenance also means that townhouse owners don’t have the benefits that come with a larger yard, whether that means hosting larger picnics, setting up a swing set for the kids, or creatively landscaping the space.
Less Privacy
Townhouses are less private than single-family homes. While there are no units above or below, as there would be with a condominium, walls are shared and backyards are fairly small. This may be problematic if young children living in the townhouse want to run around and play.
Potentially Many Stairs
Townhouses are built upward to maximize limited land, meaning a townhouse could be three or four stories with only a couple of rooms on each floor. This means stairs. Perhaps lots of stairs. And, if someone in the home has physical challenges or has just had surgery, as just two examples, this can make navigation of the townhouse challenging.
Less Appreciation
In general, the value of a townhouse does not appreciate as quickly as single-family homes. Because of this, it may not make sense to buy a townhouse if the idea is to invest in real estate, rather than simply having a desired place to live.
Recommended: Track the Value of Your Home and Real Estate
After reviewing the pros and cons, is buying a townhouse a good idea? Here’s one more consideration: financing the unit.
Financing a Townhouse
Seeking a mortgage loan for a townhouse is similar to one for a single-family home. That’s because, unlike a condo purchase, the buyer of a townhouse also owns the land beneath the dwelling.
When buying a townhouse, lenders will typically want to see a buyer’s monthly income and outstanding debt to determine their debt-to-income ratio and see how much of a mortgage they can afford.
If the townhouse has HOA fees, those would be included in the mortgage calculations. Just as with a single-family home, it can make sense to get preapproved for a dollar amount before townhouse shopping, save money for a down payment and closing costs, and so forth.
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Hiring a landscaper can remove a major headache from both ongoing lawn maintenance and one-time makeover projects in your yard. Depending on your budget and schedule (not to mention your definition of a fun weekend), it may be worth outsourcing some, or all, of your yard projects.
At my house, my husband and I typically outsource mowing and weed whacking because it’s a fairly low-cost service compared to the amount of free time we gain back each week. On the other hand, I love gardening, and we regularly tackle projects that involve growing flowers and vegetables without the help of a professional.
If you’re considering getting professional help with your landscaping, think about the types of projects you plan to undertake, plus the time, tools, and skill level involved. Here’s a breakdown of both ongoing and one-time landscape projects, plus how to determine if professional help is worth the cost.
What’s Ahead:
Average landscaping costs: an overview
Service
Average cost
Lawn mowing
$49 to $218
Bedding plants (selection and installation)
$1,366 to $5,641
Disease and insect control
Less than $100
Tree trimming
$460
Landscape design
$1,954 to $6,971
Deck construction
$7,300
Exterior light installation (10 lights)
$2,000 and $2,500
Drip irrigation system (per acre)
$2,150
Sprinkler system
$2,500
Ongoing services
Having consistent professional help can keep your yard clean and healthy. A well-maintained yard is good for wildlife and also motivates you to get outside more often and enjoy it, so it is a big deal!
Lawn maintenance
Ongoing lawn maintenance involves mowing your grass and weed whacking the edges of any hardscaping, like the sidewalk, driveway, and flower beds. The lawn maintenance company provides their own equipment, as well as any products that may be needed. In the fall, you can also add leaf removal services and have the collected leaves taken off-site by your maintenance crew.
Costs vary depending on the size of your lawn and how intricate any weed whacking may be. According to HomeAdvisor, average prices range between $49 and $218. Depending on your weather, you may opt for weekly or bi-weekly service. The rainier it is in your area, the more frequent mowing may be needed.
Pros of hiring a landscaper:
Seasonal expense in many areas. During cooler-weather months you may not need to pay for lawn maintenance.
Get on a schedule. Avoid tall grass by scheduling recurring services from your maintenance crew.
Avoid paying for and maintaining lawn equipment. Upfront and ongoing maintenance costs for lawn mowers and weed whackers can quickly add up, especially compared to the relatively low cost of professional lawn maintenance.
Cons of hiring a landscaper:
Extra cost added to your monthly budget. Go the DIY path if your budget is already tight or you’re focused on important financial goals like debt payoff.
A fixed schedule may not meet your lawn’s needs. Low rain could mean you’re paying for service even without tall grass. On the flip side, your lawn may be ready for a trim after heavy rain, days before your next mowing is scheduled.
Bedding plants and installation
Spending time in a yard filled with beautiful plants can give you countless hours of joy throughout the year. Plus, you’ll create a haven for all types of important insects, including pollinators.
A professional landscaper can pick out plants that thrive in your area and in specific spots in your yard. You can also get advice on plants that work best for your preferred level of care, whether you want to invest the time to water and weed, pay to outsource those tasks, or focus entirely on low-maintenance plants in your landscape.
The cost of getting a landscaper to choose and install plants ranges from $1,366 and $5,641. If your landscaped beds have become extremely overgrown, this expense may be worth the cost, but if you simply need to pop in some annuals to fill up space, this might be a better DIY project.
Pros of hiring a landscaper:
Create year-round interest. A landscaper’s expertise ensures your flower beds aren’t dull three out of the four seasons of the year.
Choose the right plants based on water and sunlight needs. Avoid killing plants and wasting money by picking the right options for your yard’s conditions.
Pick colors and textures that complement each other. A landscaper creates an overall theme, whereas a DIY approach may create competing colors, heights, and textures.
Cons of hiring a landscaper:
Can be costly. The expertise of a landscaper definitely comes at a price.
You have less control over designs and colors. A DIY approach may be better if you have a very specific aesthetic you want to achieve in your yard.
Disease and insect control
Insects are a natural part of the garden’s ecosystem, but some bugs and diseases can actually harm your plants. There are many ways to mitigate these issues on your own, like promoting healthy soil and encouraging beneficial bugs that prey on the damaging types. For instance, ladybugs eat aphids, an insect that can cause major damage to vegetables, fruit, roses, and other flowers.
But if you need help, a professional landscaper can manage these issues as well. Just be sure to ask about the products they use and the ingredients, especially if you grow edibles in your garden. Non-organic ingredients can be harmful to you, your plants, and beneficial insects. A standard pest treatment typically costs under $100, according to Thumbtack.
Pros of hiring a landscaper:
Fast and easy service. Outsource the work rather than trying to figure out what products and treatment you need.
The expertise of specific disease and pest issues. Make sure you’re treating the right problem, so you don’t waste money on DIY “solutions” that just don’t work.
Cons of hiring a landscaper:
May use harmful ingredients. Ask what products the landscaper uses and check to see if the ingredients align with your needs, especially if you grow an organic garden or have outdoor pets.
Less control over products and processes used. You need to trust the professional you hire.
Tree services
It’s important to regularly care for any trees near your house since they can cause damage to your home as they grow larger. The biggest issues are trees extending over your roofline and dead trees eventually falling. Regular tree maintenance includes pruning your trees to keep them disease-free and trimming away dead branches. Your trees will stay healthy, and you don’t have to worry about branches falling and hurting someone or something on your property.
You can certainly buy the tools needed to care for your trees and take a DIY route, but you also need to learn about how pruning affects each tree and what time of year is best for curbing tree growth. Hiring a landscaper to do the job could very well keep your trees in better shape, not to mention help you avoid the risk of injuring yourself. Just be sure your tree service landscaper is licensed and insured in case they sustain an injury while on the job.
The cost of having tree work done is dependent on how many trees are on your property, their size, and whether or not they need to be felled.
Pros of hiring a landscaper:
Trees safely pruned. Landscapers have the knowledge and experience to keep people safe.
Avoid damage to surrounding property. Falling trees can cause damage to nearby houses, cars, or fences. A professional knows how to cut strategically so the tree lands where it should.
Pick the best season for pruning. Pruning in some seasons spurs new growth, while other seasons are best for managing size.
Utilize the right equipment for hard-to-reach places. Tall trees could require heavy equipment, like a cherry picker or scissor lift.
Cons of hiring a landscaper:
Can be costly for tall trees. Tree trimming is important but will take a pretty big bite out of your budget.
Unlicensed landscapers could be an insurance liability. An uninsured contractor who gets injured on your property could require you to file a claim with your homeowners insurance policy.
One-time landscaping services
In addition to ongoing lawn care, weigh the pros and cons of hiring a landscaper for one-time landscaping projects.
Hardscape design and installation
No matter what size your yard may be, a professional landscaper can help you design hardscaping to maximize its usability. This could be with decking, a stone patio, pergola, or other hardscape features. The design and installation are typically two different services. A professional landscape design for your outdoor space could range from $1,954 to $6,971. For the actual labor and materials, your costs vary greatly depending on the size, scope, and materials.
These projects are typically better left to the professionals instead of a weekend warrior project, unless you have above-average DIY skills. For a homeowner with limited experience, you run the risk of unlevel patio stones or structurally unsound hardscaping if you attempt large-scale projects on your own. Plus, projects like decking typically require city or county permits and approvals.
Pros of hiring a landscaper:
Quality craftsmanship. Avoid the DIY “look” by using a detail-oriented landscaper.
Faster results. Get your project completed all at once, rather than fitting it into your own busy schedule here and there.
Cons of hiring a landscaper:
Expensive costs. Expect to spend several thousand dollars for hardscaping projects.
Potential need to manage multiple professionals. You may have to manage the landscape designer and installer separately.
Landscape lighting
Incorporating lighting into your landscape can add a magical nighttime ambiance to your yard. There are different levels of service depending on the property features you want to highlight in the evening. You could add uplighting towards the home to draw attention to unique architectural features or illuminate walking paths to see where you’re going in the dark. String lights for garden parties are also a popular upgrade when it comes to landscape lighting.
Some of these projects are fairly simple to DIY and if you opt for solar-powered lights, you can especially save money since you won’t have to plan on an electrician having to wire anything. For bigger projects that do require re-wiring, you may want to hire a professional so you don’t hurt yourself. Electricity is not something that you should play around with.
Costs vary on the type of lighting and how far your cables need to go from existing electric lines.
Pros of hiring a landscaper:
Safer than DIY. This is especially true if new electric cables are involved. You don’t want to set yourself up for a fire hazard.
Cons of hiring a landscaper:
Solar projects may be easier. In some cases, DIY projects may be simple if no new electrical cables are needed.
Lawn and garden bed irrigation
If your summers are marked by dry conditions or inconsistent rain, you might consider installing a sprinkler system for your grass and irrigation lines for your garden beds. Irrigation can keep your plants healthy all year long.
If you’ve already invested in lawn seed and garden plants, this could be an important project. Plus, while the average drip irrigation system costs upwards of $2,000 for an entire acre, there are plenty of online DIY tutorials that can help you spend even less. In fact, if you’re willing to do some digging and connect some PVC pipes and soaker hoses, you could knock out this project for around $100 (depending on your garden size).
A new sprinkler system might be pricy, but you can purchase a DIY kit if you feel confident in marking zones and digging trenches throughout your entire yard. Based on the mechanics involved, this would definitely be a project for more seasoned DIYers.
Pros of hiring a landscaper:
A quick process with limited mistakes. A landscaper can quickly get irrigation or sprinklers in place without digging into buried power lines or pipes.
Minimal disruption to grass and other plants. Landscapers have tools to limit the disruption to your lawn, especially compared to you digging trenches by hand with a spade.
Cons of hiring a landscaper:
Small irrigation projects may be simple and inexpensive. You could certainly DIY raised bed irrigation or other areas that aren’t intrusive.
Saving with a DIY approach
When deciding which projects to complete on your own, start by evaluating your safety and skills. Selecting and planting plants takes a little research, that way you can make sure that you are planting them in the right place. That said, it can be a fun experience and much less expensive to tackle by yourself. Consult the staff at your local garden center to get ideas of what plants perform well in your area. If you make mistakes, you can always plant something new.
For projects that have an element of danger involved, like trimming trees or building a deck, consider shelling out the money for the professional. You don’t want to risk building a faulty structure or mistakenly estimating where a tree could fall.
Project
DIY cost
Professional cost
Planting
Cost of plants
$1,366 to $5,641
Lawn maintenance
Average cost of lawn mower: $363 for push mower; $2,450 for rider mower Plus gas and maintenance costs
$49 to $218 per visit
Deck construction
$8 to $10 per square foot
~$25 per square foot
Summary
Some landscaping projects are easy to do by yourself over the course of a few hours, but others take a lot of time, effort, and skill. For some homeowners, it isn’t worth it to take the DIY route.
At a minimum, hire out landscaping projects that may seem dangerous without the right tools or talent. From there, you can gauge how each project cost compares to your budget and timeline to find out if hiring a landscaper is, in fact, worth it for you.
After being settled in our loft for nearly two and half years now, it’s easy to feel like there isn’t really much more for me to do design-wise. Given the small space, we’re pretty set with what we’ve got. But as I finally finished getting all the holiday razzle dazzle put away, I was really getting the itch to make the space feel new again…without making any major changes. With the new house renovations about to get going finally!!, I’m looking to tread design water for a while. And that’s a tough pill for a constant rearranger like me to swallow! I’m quite confident many of you can relate.
To scratch my decorating itch I surveyed our main living space looking for one little change that would have a big impact – and I think found it! By making a simple switch up, our living room suddenly feels brand spanking new. Can you spot what’s different? You can check out before shots here!.
I swapped our living room rug! Tucking my lovely shag Moroccan into storage for safe keeping, I wanted to bring in something with a bit more pop and this bold graphic option from Loloi Rug’s Alder Collection was just perfect! Loloi Rugs is a bit of a hidden gem since they’re a wholesaler, so be sure to ask your favorite design store or online retailer to add them to their rug line! Laid down right on top of our existing sisal, there was no need for a rug pad – the sisal adds the cushion needed to buffer the rug’s flat weave. I love that the new rug is nice and neutral, yet the geometric print adds life to the room without being overpowering. Coincidentally, it also played right into my current obsession with camel + black decor.
After that, all I needed to do was remerchandise some of my existing accessories! After having all the holiday crap accoutrements around, I’m in a very minimalist mood. Instead of adding things, for this update I focused on taking things away. I swapped pillows from the office for a new look on our window seat, switched around some hides decorating secret weapons! and rotated in my favorite snake plant, a couple design books and only a choice selection of knick knacks. If I wasn’t loving looking at it right now, it was out lucky for Goodwill!.
My proudest little DIY moment? Reurposing some empty frames for a fresh focal point over our fireplace! I’m hesitant to invest in any new art until I’ve finalized the design direction for the house, so this is the perfect placeholder. A few strips of 3M stickies and voila – a little abstract gallery wall should get me through the next few months quite nicely.
I don’t know about you, but I’m rather pleased with how this mini-makeover came together – and in a single afternoon mind you! thank you football playoffs!. The room feels clean, open, refreshed and revitalized and so do I!
Up next – making room for le bebe! Details on that to come soon since we’ve only got a couple months to go. How the heck did that happen??
More ways to update your space for 2015 HERE
A rug related DIY HERE
photography for apartment 34 by Bianca Sotelo // photobombs by Chloe & Bailey
***This post is in partnership with Loloi Rugs. Thoughts, opinions and design 100% our own. Thanks for supporting posts that keep Apartment 34’s doors open.***
Inside: Working mothers face many challenges when balancing work and family life. This guide offers the best jobs for moms. Find out how to maximize your career opportunities while raising children.
Moms often feel like they can’t have a successful career and be a good moms at the same time.
I completely feel that way too. I struggled to be a stay-at-home mom when my kids were little because I wanted to help out financially to help pay down debt. It took me a few years, but I soon realized there are great ways to make a mom and be a great mom!
I have uncovered plenty of jobs for moms with no degree that offers flexible hours, good pay, and satisfying work.
The best jobs for moms with no degree are ones that offer flexibility, good pay, and room for growth.
It can be tough to balance family and career, but it is possible to find a job that fits your lifestyle.
Here are the best jobs for moms with no degree or with a degree.
What jobs are good as a mom?
As a mom, finding a job that allows for flexibility and growth can be challenging, especially if you don’t have a college degree.
However, there are still plenty of opportunities out there that can help you balance your family and career.
Most importantly, you need to find a job that you LOVE! An environment that you thrive in!
With flexible schedules, remote work options, and potential for growth, these jobs can provide the stability and income moms need while still being able to prioritize their families.
Whether you’re looking for a part-time job or a full-time career, there are plenty of opportunities out there for moms.
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What are the best careers for current stay-at-home moms?
Stay-at-home moms face the challenge of balancing their family responsibilities with the desire to pursue a career.
With the high cost of child care, you need to find a job that allows you to take your kids or one that offers flexibility to work around your kid’s schedules.
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Your best bet is to check out how to make money online for beginners. That is where you will find the most job options that can be done from home or offer flexible schedules, making it possible to have the best of both worlds.
What are the best careers for former stay-at-home moms?
Returning to the workforce after being a stay-at-home mom can be a daunting task, but there are many careers that are best suited for moms.
You still want careers that offer flexibility, high earning potential, and a good work-life balance.
You need to consider your previous employment, any education or certificates you hold, or skills and/or interests.
As such, the answer will vary for each person reading this post. So, consider any one of these past ideas.
Best Jobs for Moms
There are plenty of great jobs for working moms.
The key is to find a position that offers the right mix of income, hours, and flexibility.
Preferably, you want a low-stress job that pays well without a degree.
Here are jobs to consider if you’re a working mom with no degree.
1. Web developer
Web development is a highly flexible and lucrative career option that is ideal for working moms who may not have a college degree. With the ability to work remotely or part-time, web development is a perfect fit for moms who need a flexible schedule.
This field is rapidly growing and in high demand, making it an excellent choice for those looking for a career change.
To become a successful web developer, proficiency in programming languages like HTML, CSS, and JavaScript is essential. Additionally, knowledge of website design and development tools is crucial to create visually appealing and functional websites.
The skills required for web development can be learned through online courses or boot camps, making it accessible to anyone with an interest in technology and design.
Benefits:
Many web developers work from home or have flexible schedules, making it easier for moms to balance work and family life.
The demand for web developers is expected to grow, making it a stable and secure career option.
Web development is a field that allows for creativity and self-expression.
Pay: The salary for a web developer varies greatly on experience, but it is possible to make six figures.
2. Customer Service Representative
Customer service representative is an excellent career option for working moms who do not hold a college degree.
As a customer service representative, you will be the primary point of contact between customers and the organization, providing information about products and services, taking orders, responding to customer complaints, and processing returns.
You can work from home part-time or full-time, and many times the work takes place remotely. To succeed in this role, you will need to have strong communication and negotiation skills, patience, and the ability to multitask.
Benefits:
The work environment is flexible, and you can work from the comfort of your home.
Job offers great work-life balance and schedule options, making it an ideal choice for working moms.
Pay: As a customer service representative, you can expect to make from minimum wage to $20 an hour.
3. Proofreader
Being a proofreader can be a rewarding and fulfilling career for individuals who have a way with words and a keen eye for grammar. As a proofreader, your primary responsibility would be to review and correct spelling, grammar, and punctuation errors in various types of written content, such as books, websites, and social media posts.
Moreover, the earning potential as a proofreader can be quite lucrative. For instance, Caitlin Pyle, a successful proofreader, made $43,000 in one year working part-time.
To get started as a proofreader, it is important to develop the necessary skills. You can start by attending a free introductory workshop or enrolling in a course that teaches the skills needed to become a freelance proofreader.
Benefits:
Great flexibility as you work on a project basis.
The significant earning potential in the field of proofreading, especially for those who are dedicated and skilled in their craft.
Rewarding career path for individuals with a passion for language and a meticulous eye for detail.
Pay: In terms of salary, the median pay for a proofreader ranges from $15.22 to $26 an hour, depending on experience and the project you are working on. Many other proofreaders earn between $1,000 to $4,000 per month.
4. Flight Attendant
A flight attendant is a career that does not require a college degree but extensive training and certification. It is an ideal job for working moms due to its non-traditional scheduling that allows them to work part-time, take extended periods off, and get out of the house.
Flight attendants can take on trips when they know they have child care covered, and stay at home for days at a time.
Benefits:
Enjoy the perks of travel.
Flexible schedules.
Great health benefits.
Pay: The pay ranges by airline, but the median salary is $65000 per year.
5. Blogger
For moms who are looking for a flexible work-from-home job that doesn’t require a degree, becoming a blogger could be the perfect fit.
With the rise of the internet, there is an increasing demand for content writers and bloggers. These jobs allow you to work from home, set your own schedule, and choose the topics you want to write about. Additionally, these jobs don’t require a degree, making them accessible to anyone who has a passion for writing and a way with words.
Blogging is another option for those who want to write about specific topics they are passionate about and share their insights with others.
Benefits:
Be your own boss.
Flexibility blogging offers – work as much or as little as you want.
Work from home.
Choose the topics you want to write about.
Pay: As a blogger, you are creating passive income through ads, affiliating marketing, and paid sponsorships.
6. Engineer
Returning to work as a mom can be a challenging transition, but leveraging your engineering degree can open up a range of opportunities for you. With your technical skills and problem-solving abilities, there are several career paths that can offer a healthy work-life balance and flexibility to accommodate your family responsibilities.
Here are ways to utilize your degree and still have the flexibility you crave:
Pursue freelance work in your field. As a freelance engineer, you have the freedom to determine your own schedule and take on projects that align with your interests and availability. Platforms like Upwork provide a space for engineers to connect with clients and offer their services on a project basis. This allows you to work on engineering projects from the comfort of your own home, giving you the flexibility to balance work and family life.
Explore part-time or remote positions with engineering firms or companies that value work-life balance. Many engineering firms recognize the importance of accommodating working parents and offer flexible work arrangements. With your engineering background, you can contribute to projects and collaborate with teams remotely, allowing you to work from home and adjust your schedule to meet the needs of your family.
Pursue a career in technical writing or content creation. Many companies and organizations require technical documentation, manuals, and instructional materials to accompany their products or services. With your engineering background, you can leverage your expertise to create clear and concise technical content.
Work as an engineering consultant. As a consultant, you can offer your specialized knowledge and expertise to clients on a project basis. Consulting also provides the opportunity to work remotely or have a flexible work arrangement, making it an ideal option for moms returning to work.
By expanding your knowledge and skill set, you can position yourself for more opportunities and increase your marketability in the engineering field.
Benefits:
This can be done on a freelance basis or as a remote employee, allowing you to work from home and have more control over your schedule.
Take on projects that align with your skills and interests.
Have a fulfilling career that allows you to balance work and motherhood successfully.
Pay: Additionally, engineering offers high earning potential, which can help support a family and provide financial stability. Most engineers earn over $100000 a year.
7. Virtual Assistant
For working moms with no degree, finding a job that balances well with their family life can be a challenge. However, virtual assistant jobs can be the perfect solution.
As a virtual assistant with no experience, you can work from home, set your own schedule, and earn a good income.
A virtual assistant provides administrative support remotely, handling tasks such as email and social media management, scheduling appointments, data collection, customer service, and event planning. The skills required for this job include strong multi-tasking, organizational, and time-management skills, as well as basic computer skills.
Here is a virtual assistant checklist to see if you would enjoy this job possibility.
Benefits:
Be the boss of your own schedule.
Build your own small business if you desire.
Earn significant income
Pay: Most virtual assistants can earn $21 an hour or more pending experience.
8. Teacher
Teaching can be an excellent option for moms who want to work in a field that values education and have the same schedule as their kids.
Plus you can take on one of these summer jobs for teachers to extra cash.
Another option is to become a teacher’s aide that assists teachers in the classroom, helping with tasks such as grading papers, supervising students, and preparing materials. To become a teacher’s aide, you need to have a high school diploma or GED.
Benefits:
Same work hours as your children.
Work in a field that values empathy and care for children, while also providing financial stability and work-life balance.
Most teacher retirement plans are well worth working your full 30 years for that ongoing income post-retirement.
Pay: Unfortunately, teachers are one of the lowest paid salaries for the fantastic work they do. Find out if teachers get paid in the summer.
9. Substitute teacher
Substitute teaching can be an excellent job option for working moms who don’t have a degree. It offers flexibility, a chance to get teaching experience, and a decent daily rate of pay.
A substitute teacher fills in for full-time teachers when they are absent.
This experience can be helpful if you decide to pursue a permanent teaching position in the future.
Benefits:
Allows you to work when your schedule permits. You can note your availability and work as much or as little as you like.
Gain teaching experience without committing to a full school year.
Rewarding job option for some.
Pay: As of right now, there is a shortage of teachers, so the pay for substitute teachers has increased immensely. Substitute teachers can earn a daily rate ranging from $60 to $200, depending on the school district and the region with most substitutes making $22 an hour or more.
10. Consultant
As a consultant, you can use your prior work or life experience to offer solutions and advice to clients in a wide range of areas, including sales, marketing, operations, and management.
Furthermore, consulting can be an ideal way to transition your prior work or life experience into a new career and shorten the time spent in school, making it a great option.
To become a successful consultant, you need to have strong communication skills, the ability to work independently, and experience in your field to run a successful business.
Benefits:
As a consultant, you can enjoy flexible work hours.
The potential to work from home.
Ability to control your schedule.
Pay: The hourly rate for consultants varies depending on the type of consultant and the industry, with some earning high salaries.
11. Day Trader
Swing or day trading is a popular option for individuals who want to work from home and make a living from the stock market. Day traders buy and sell securities within the same day, aiming to make a profit from small price movements.
This job requires a certain set of skills and investing knowledge, as well as specific equipment and software.
It is possible to make money with stocks fast.
Day trading can be a good option for working moms with no degree because it offers flexibility and the potential for high earnings. Personally, I love trading stocks and options. I learned from Teri Ijeoma.
Benefits:
Unlike traditional jobs, day trading allows individuals to work from home and set their own schedules.
Successful traders can make a significant amount of money, with some earning six-figure or seven-figure incomes.
While a degree is not required for day trading, I highly recommend taking this investing course to jumpstart your learning.
Pay: Widely variable as it depends on your risk. You can lose money or make $1000 a day.
12. Claims adjuster
As a claims adjuster, you will be responsible for investigating insurance claims, negotiating settlements, and collaborating with other professionals such as lawyers and medical experts. To become a claims adjuster, you will need to possess relevant experience, strong communication abilities, and proficiency in data analysis.
The work environment can be fast-paced and stressful, but the potential for career growth and the flexibility to work remotely make this an attractive option for many working moms.
Claims adjusters must also maintain accurate records and documentation of all claims activities.
Benefits:
While the work environment can be fast-paced and stressful, the potential for career growth is likely.
Flexibility to work remotely make this an attractive option for many working moms.
Pay: Claims adjusters can advance to higher positions within the insurance industry, such as senior claims adjuster or claims manager. Additionally, many claims adjusters work as independent contractors or consultants, providing even more flexibility and potential for career growth.
13. Bookkeeper
As a bookkeeper, one is responsible for monitoring a company’s cash flow by keeping track of transactions and preserving copies of receipts. The job requires great attention to detail, excellent organizational skills, and an ability to analyze and interpret financial data.
This job can be done virtually, making it an excellent position for moms who want to improve their work-life balance.
Bookkeeping does not require a degree and one can earn a decent hourly pay or salary. To become a bookkeeper, one must have bookkeeping skills, which can be learned from online courses.
Benefits:
Flexible working hours, allowing them to work whenever suits them.
Great for someone who loves analytics.
Pay: Most bookkeepers enjoy relatively high hourly salaries. They can work as independent contractors or be paid as a salaried employee.
14. Nanny
Being a nanny is an excellent option for moms who want to balance work and family life.
As a nanny, you would be responsible for taking care of children, cooking, cleaning, and running errands. The best part about being a nanny is the flexible hours, which allow you to work part-time or full-time while still being present for your family.
Finding a job that allows moms to work while still being present for their families is crucial, and being a nanny provides the perfect solution.
Benefits:
Be able to care for your own children at the same time.
Find a nanny job that works for your circumstances.
Stay young and playful while working with kids!
Pay: The pay varies widely for a nanny, but once you have experience and great references, you can earn good money.
15. Marketing Specialist
Marketing can be an excellent job choice for moms looking for flexibility, potential job growth, and the opportunity to work remotely. With the advancement of digital marketing, moms can now pursue a career in marketing without having to leave their homes or work in a traditional office setting.
As a digital marketer, there are various specializations and skills that can be honed to advance in the field. These include SEO (search engine optimization), web development, content creation, and marketing strategies.
By continuously learning and improving these skills, moms can enhance their professional reputation and open doors to new opportunities within the marketing industry.
Benefits:
Ability to work from home.
Work flexible work hours that can be adjusted to fit their family’s needs.
Digital marketing also offers potential job growth and career development.
Pay: As a marketing specialist, the pay can vary greatly if you work as a freelancer or a bigger corporation.
16. Financial Advisor
Financial advising can be an excellent career path for working moms without a degree, offering flexibility and opportunities for growth.
Honestly, I know many people who have successfully entered the workforce as financial advisors.
The first step towards becoming a financial advisor is to obtain relevant certifications and licenses, such as the Certified Financial Planner (CFP) designation. Once certified, financial advisors can work for a firm or start their own business, providing financial advice to clients.
Pursuing a career as a financial advisor can offer a good salary and work-life balance, making it a great option for working moms.
Benefits:
Help others pursue a life of financial independence.
Perfect for someone who loves numbers!
Pay: The pay for a financial advisor varies greatly, but the median salary is $75000 a year.
17. Writer
Becoming a writer can be a great career choice for moms who want to work from home and have a passion for writing. With flexibility, the potential for a decent income, and no degree required, it’s an accessible and rewarding career path.
Highly recommended to take this writing course to jumpstart your networking opportunities.
As a writer, you can work as a content writer, staff writer, or freelance writer.
Content writers produce content for websites, such as blogs, news aggregators, and e-commerce sites.
Staff writers write articles for publications, such as magazines or newspapers.
Freelance writers write for clients without being permanent employees.
What’s more important is having a way with words, strong research skills, and a passion for writing.
Benefits:
Flexibility to work on a story when you are able to.
For those with a love of English, this is a great way to express yourself.
Pay: While the average hourly rate for writers and bloggers varies, it’s possible to earn a decent income in these fields.
17. Social Media Specialist
As a social media specialist, you will manage social media accounts, create and post content, increase engagement, analyze data, and monitor social media. This role requires skills such as graphic design, writing appealing content, an eye for design, and flexibility.
Moms possess many of these skills naturally, such as multitasking, creativity, and communication. These skills can be applied to social media management, including content creation, scheduling, and community management.
Social media management is also a growing field. As a result, this job can provide moms with a stable income and career growth opportunities while allowing them to prioritize their family life.
Benefits:
Great for those who personally love social media.
Easy to work anywhere.
Pay: With an average salary of $52000 a year, this job can be done from home, making it a perfect fit for moms.
18. Human resources manager
Work-life balance is crucial for working moms, and a career as a human resources manager can provide just that.
Human resources managers are responsible for managing employee benefits, overseeing hiring processes, and handling employee relations. This job offers flexibility, including the ability to work remotely or part-time.
A career in human resources management can positively impact a working mom’s family life by providing a consistent schedule that doesn’t involve weekends or holidays.
Benefits:
HR managers are in high demand in many industries, as every organization requires HR expertise to manage its workforce effectively.
Opportunities for personal and professional growth.
Make a positive impact on employees’ lives.
Ample networking opportunities with employees, upper management, and external stakeholders.
Pay: Human resource managers often receive competitive salaries, with average annual earnings exceeding $120,000.
19. Sell on Printables on Etsy
In recent years, the demand for printable products has grown tremendously, making Etsy a great platform for working moms without a degree to earn a steady income from home.
Printables are digital files that customers can download and print at home, such as wall art, planners, calendars, and invitations.
The best part is that once you create a printable, you can sell it repeatedly without having to invest more time or money.
Check out the list of the most popular printables you can create.
Benefits:
A flexible job that allows you to work from home and set your own hours.
Earn a steady income from a single printable, which means you can focus on creating new products and growing your business.
Able to start s small business.
Pay: This is a passive income. Learn how much these sellers have made.
20. Retail associate
Many moms become retail associates to get a discount from the retailer!
Working in retail can be a rewarding and dynamic career choice. Retail jobs are generally physically demanding, as employees are often on their feet for long periods and may need to lift and move heavy items.
The nature of retail work can also be stressful, especially during busy periods such as holidays or sales events. However, it can also be an opportunity to develop and utilize various skills, particularly when interacting with customers.
Benefits:
Working part-time hours while your children are at school.
Discounts to the retailer you work.
Flexible scheduling hours.
Pay: This is a minimum wage job earning $13 an hour to $18 an hour.
21. Nursing
Nursing is a fulfilling career for moms who enjoy taking care of others.
While most nursing positions require a degree, there are also entry-level jobs available for those without a degree. Certified nursing assistant (CNA) and licensed practical nurse (LPN) are two such positions.
Both positions require certification and training, which can be completed in a matter of months. Pursuing a career in nursing as a working mom without a degree offers the flexibility to balance work and family while also providing the opportunity for career advancement.
Benefits:
Flexible scheduling around what works best for your family.
Ability to work part-time or full-time.
Great career option to take fewer hours while your children are little and more hours when they are in school.
Pay: The average hourly rate for nursing varies depending on where you work. Most certified nurses make between $32 an hour to $50 an hour.
22. Transcriber
As a transcriber, you will listen to audio files and create a document that contains an accurate record of what was said. This is one of the best jobs for moms with no degree, as most transcription companies just require you to pass their test before they give you work.
To become a successful transcriber, you will need fast typing skills, attention to detail, and the ability to sit for long periods of time. You may also need to purchase special transcribing equipment, depending on the company you work for. Most transcription jobs will require the ability to type 75 WPM or more.
This is a great non phone work from home job.
With the right skills and tools, you can become a successful transcriber and earn a decent income. So if you are a fast typer with an eye for detail, consider taking a free mini-course to find out if this is the right job for you.
Benefits:
Transcription jobs from home are available remotely and work as many hours as you want.
Set your own schedule.
Make money by meeting deadlines.
Pay: Generally, transcriptionists earn around $19 per hour in the US, but this can be more depending on your employer.
23. Graphic Designer
Graphic design is an excellent job for working moms with no degree, as it allows for significant flexibility in working hours and can be done from home.
As a graphic designer, you will be responsible for creating logos, designing websites, and developing marketing materials such as brochures and flyers. To succeed in this field, you’ll need to be creative, detail-oriented, and able to work with clients to meet their specific needs.
Benefits:
Balance their family responsibilities with a fulfilling and rewarding career.
Perfect to showcase your creative side.
Pay: With a median annual wage of $48000 per year, graphic design is a lucrative career that offers plenty of room for growth and advancement.
24. Online Coach
Being an online coach is a great job for individuals who are looking to earn money online without a degree. While some online coaches do gain certifications, it is not always necessary.
There are several types of coaching fields to enter, including career coaching, life coaching, health coaching, family coaching, and fitness coaching. It is advisable to choose a field that you have experience in or feel comfortable handling.
As a life coach, for example, you can assist clients in achieving their goals, dealing with self-esteem issues, or working on relationships.
Benefits:
Freedom to set your own schedule and work from home, which allows you to balance work and family responsibilities.
Potential to earn a good income, especially if you specialize in a high-demand niche and build a strong client base.
Viable career option for working moms without a degree.
Work remotely from their computers and communicate with clients online.
Pay: Most coaches make between $30 an hour – 100 an hour pending experience.
25. Counselor
Counseling is indeed a vital service that plays a crucial role in helping individuals and families overcome difficult challenges.
As a counselor, you work closely with clients to address various issues and support them in achieving their personal and professional goals.
Counselors can work in diverse settings, including private practices, mental health centers, schools, substance abuse centers, or government institutions. This allows for a wide range of opportunities and flexibility in terms of work environment and schedule. Additionally, advancements in technology have made it possible for counselors to provide their services online, further expanding the accessibility and convenience of counseling.
Benefits:
Flexibility to work part-time or full-time.
Making a positive impact on the lives of others and contributing to their well-being is a significant aspect of counseling that attracts many individuals, including moms, to pursue this profession.
Offers a fulfilling and financially rewarding career path.
Pay: The average hourly rate for counselors is $39 an hour.
Other Jobs Options to Consider:
Home Health Aide: Care for patients in their own homes. Many opportunities for part-time work.
Personal Care Aide: Assist clients with daily tasks such as bathing, dressing, and grooming. Flexible schedules are available.
Event Planner: Plan and organize events such as weddings, conferences, and parties. Can often work on a freelance or contract basis.
Photographer: Take photographs for a variety of purposes such as weddings, events, or marketing materials. Can often work on a freelance basis.
Personal Trainer: Help clients achieve fitness goals through exercise and nutrition coaching. Can often work on a freelance or contract basis.
House Cleaner: Clean homes or businesses on a regular basis. Offers flexibility in terms of schedule and workload.
Online Tutor: This job involves teaching students online in various subjects. Skills required include teaching ability, subject expertise, and communication. To balance work and family life, set a schedule and prioritize family time.
Translator: This job involves translating written or spoken content from one language to another. Skills required include fluency in multiple languages, attention to detail, and communication. To balance work and family life, set a schedule and prioritize family time.
Pet Sitter/Dog Walker: This job involves caring for pets while their owners are away. Skills required include love for animals, responsibility, and time management. To balance work and family life, set a schedule and communicate with clients to ensure availability.
Personal Shopper: This job involves shopping for clients and delivering their purchases. Skills required include organization, communication, and time management. To balance work and family life, set a schedule and communicate with clients to ensure availability.
What to consider when choosing a job for working moms without a degree?
Working mothers without a degree face many challenges when it comes to finding a job.
They need to find a balance between their family and career commitments, and they also need to find a job that is flexible enough to accommodate their schedule. Here are the things to consider when looking for a new job.
1. Hours and Shiftwork
For working moms being able to control their own schedules allows them to be present for their children’s needs while also earning an income is extremely important. It is important to consider the hours you have available to dedicate to a job along with the shiftwork necessary when choosing a job.
Think about whether you want to go part-time or full-time.
Also, weekend shifts are also an option for those who need to work around their family’s schedule. Even better, remote work has become increasingly popular and offers even more flexibility.
2. Salary
Salary considerations play a significant role in achieving this stability a mom desires.
It is essential to explore different salary options and negotiate to ensure that you are being fairly compensated for your skills and experience.
Consider starting salary, the potential for growth, benefits packages, and negotiation when exploring job options.
3. Responsibility and Stress
As any working mom can tell you, being a working mom can be an incredibly stressful experience. Mothers often have to balance their work responsibilities with household chores and childcare, which can be overwhelming.
Finding a job that balances responsibility and stress is crucial for working moms to maintain their mental and physical health, and to be able to provide for their families.
4. Level of Education Required
As a working mom, it is important to consider the level of education required when choosing a job.
Plus, it is crucial to research job requirements and considers personal interests and skills when selecting a job. By doing so, working moms can find a job that offers flexibility, decent pay, and job satisfaction.
5. Professional Licenses and Certifications
Obtaining, professional licenses and certifications is an excellent way for working moms without a degree to increase their job opportunities, earn higher salaries, and improve job security.
These certifications and licenses are often required for specific industries, such as healthcare, education, and law enforcement.
With so many options available, it’s important for working moms to explore the various certifications and licenses that are relevant to their industry and career goals.
6. Work-Life Balance
Balancing work and family life is a challenge for anyone, but it can be particularly daunting for working moms.
However, there are several factors to consider when choosing a job that can help achieve a work-life balance:
Flexible Work Hours: A job with flexible work hours can help working moms without a degree balance their work and family responsibilities. This can include part-time work, remote work, or jobs that allow for flexible scheduling.
Remote Work Options: Remote work can be an excellent option for working moms without a degree who need to work from home.
Company Culture: A supportive company culture can make all the difference for working moms. Look for companies that offer family-friendly policies such as paid time off, flexible work schedules, and on-site childcare.
By prioritizing work-life balance, working moms can achieve success in both their personal and professional lives.
7. Vacation and Time Off
For working moms without a degree, vacation and time off are crucial benefits to consider when evaluating a potential job offer.
Here are three factors to consider when reviewing a company’s vacation and time off policy:
The number of vacation days offered, including paid time off for sick days and personal days.
The flexibility of the policy, such as the ability to take time off for family emergencies or unexpected events.
The potential for extended leave, such as maternity or paternity leave.
8. Career Advancement
When considering a job as a mom, career advancement is an important consideration. It is essential to choose an employer and a job that offers opportunities for growth and progression in your chosen field.
Advancing in your career not only allows you to achieve personal and professional goals but also provides financial stability and job satisfaction.
Don’t underestimate the power of setting clear career goals and actively working towards them.
By investing in your skills, building a strong network, and setting clear career goals, you can pave the way for a successful and fulfilling career as a mom.
9. Job Security
Job security is especially significant for working moms, who may face more challenges in finding and keeping a job.
Typically, working moms are limited in their job options.
So, look for careers that provide financial security as well as companies with a solid track history.
This is the perfect side hustle if you don’t have much time, experience, or money.
Many earn over $10,000 in a year selling printables on Etsy. Learn how to get started by watching this free workshop.
If you’ve ever wanted to make a full-time income while working from home, you’re in the right place!
This intensive training combines thousands of hours of research, years of experience in growing a virtual assistant business, and the power of a coach who has helped thousands of students launch and grow their own business from scratch.
FAQ
You can search for remote jobs, part-time jobs, or freelance gigs.
You can also look for companies that have flexible policies in place. Also, reach out to your network and ask if anyone knows of any openings that are flexible.
Stay-at-home moms can find a variety of jobs that can be done from home and offer flexibility to work around their schedule. Here are some of the options available:
Working from home offers the benefit of having a better work-life balance and the ability to be present for their families while still earning an income.
Which Job for Moms will You Choose?
For moms who want to balance family and career, finding a job that offers work-life balance and career growth is crucial.
Not only can working increase income, but it can also lead to career advancement and personal fulfillment.
Above, we listed many great jobs for moms. You can choose a job that allows you to work from home, or one that provides flexible hours. Also, many moms like me prefer one of these early morning jobs.
Whatever you choose, make sure you find a job that you enjoy and that allows you to spend time with your family.
Know someone else that needs this, too? Then, please share!!
It can be satisfying to watch your 401(k) plan balance grow over time as you contribute to it. But what happens when those contributions stop? The amount your account will grow depends on how much money you have in it and how the market performs. Here is how you can estimate the future performance of your 401(k). If you’d like personalized advice about planning for retirement, consider working with a financial advisor.
What Is a 401(k)?
A 401(k) is an employer-sponsored retirement account that offers tax benefits. A traditional 401(k) will be withdrawn from your paycheck pretax and will only be taxed when you withdraw from it in retirement. A Roth 401(k) is similar but reversed, in that the money that goes into it is already taxed, so it won’t be taxed when you withdraw from it in retirement. You can withdraw from either type of 401(k) penalty-free beginning at age 59 ½.
When you sign up for a 401(k) plan, you’ll be presented with investment options when you complete the paperwork. Once you deposit money, it will be invested according to your selections.
401(k) plans were specifically created to incentivize workers to save for retirement. If you contribute to a traditional 401(k), your taxable income is reduced due to the 401(k) withholdings. If you’re contributing 6% of your income to a 401(k), you won’t owe taxes on that percentage of your income. With a Roth 401(k), instead of saving on taxes in the year you contribute money to your 401(k), you’ll enjoy the savings when you withdraw it in retirement.
How Does a 401(k) Work?
You may be asking yourself, how does a 401(k) plan make money? The main way you will see your 401(k) grow is from your contributions (and your employer’s, if they offer a match). Once you stop contributing, what happens next?
So, remember the investment options you were given when you signed up for the plan? Your choices told your 401(k) provider how to allocate the money in your 401(k). A common investment option is a target-date mutual fund. This type of fund will contain a mixture of investments, including stocks and bonds, managed to maximize returns while minimizing your risk as you near retirement age. Generally, you’ll be advised to invest in riskier funds when you’re younger and move towards more stable investments as you age.
The money you see in your 401(k) and what you’ll be able to withdraw in retirement are made up of contributions, plus earnings from your investments, plus interest.
How Does It Grow When You Stop Contributing to It?
When you stop contributing to your 401(k) plan, don’t expect to see your balance grow at the same rate. But how much your balance will grow will depend on a few factors.
Interest is one of the big factors in the continuing growth of your 401(k) plan’s balance. When you select a fund to invest in, that fund may include CDs, bonds and/or money market funds—all investments that generate interest. And the larger your balance, the larger those interest payments will be. Simply put, 5% of $10,000 is more than 5% of 100,000.
Other investments might generate earnings based on the market, such as stocks and ETFs. You may see greater volatility in these investments, with earnings either being very good or very bad. When you choose what to invest in, you set your risk profile—riskier investments have the promise of a higher payout but also can suffer markedly when the market turns.
One of the most important things to consider when thinking about how much your 401(k) balance will grow once you stop contributing is compounded growth. When you earn money, either from interest or earnings, that amount is put back into your 401(k) and invested. For a very simple example, let’s say you have $1,000 that you invest for one year and it earns $100. Your 401(k) will add that $100 to the pot and invest $1,100 the next year for a return of $110.
On a small scale like that, it might not seem impressive. But compounding interest and earnings is the most meaningful way that a 401(k) plan will continue to generate growth after you stop contributing. If you add a couple zeroes to the end of those example figures, you’ll soon see the point.
The Bottom Line
While your 401(k) account will likely continue to grow after you stop contributing to it, that growth will be limited by the market, your plan’s balance and other factors. The growth can vary over time as any one of those things changes. In order to get a good idea of what yours could look like you may need to work directly with a professional financial advisor to help you calculate the estimation for your account.
Retirement Tips
Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Use SmartAsset’s free retirement calculator to see if you’re on track to meet your retirement goals.
You may find your company’s 401(k) plan may not be the best option for you. And you may get better investment choices and tax breaks if you open an IRA or a Roth IRA. To help you decide, we published articles on the best IRAs and the best Roth IRAs.
Veterans Life Insurance Group policies are a good option for those in the military, and that is why they received an honorable mention for our list of the best life insurance companies in the United States.
If you have ever shopped for life insurance, then you are likely well aware that there are many different variables that you need to be cognizant of before deciding on your coverage. One such factor is ensuring that you will have the proper amount of protection for your needs. This means that your loved ones or beneficiaries will have enough funds for paying final expenses, paying off big debts, or paying ongoing living expenses if or when the unexpected should occur.
It is also important that you have the proper type of insurance coverage. For example, today, there are many different variations of life insurance protection that you can choose from. While this helps insureds in custom choosing coverage to fit their needs, you also don’t want to pick a policy that isn’t suitable for your specific time frame and your possible long-term savings goals.
There is also another criterion that many people may not realize is important – but should. This is ensuring that the company through which the coverage is purchased is strong and stable financially and that it also has a positive reputation for paying out its policyholder claims. The reason that this is essential is because you don’t want to place your loved ones or beneficiaries in the hands of an insurance company that may not make good on its financial promise to pay out – especially in their time of need.
With this in mind, it is always important to do a thorough review of an insurer before moving forward with the purchase of its coverage. One company that had a good, solid reputation in the life insurance industry is Veteran’s Group Life Insurance Company of Valley Forge, Pennsylvania.
The History of Veteran’s Group Life Insurance
Veteran’s Group Life Insurance Company, also known as Veteran’s Life Insurance Company, has somewhat of a long history regarding names, mergers, and acquisitions. Between the years of 1974 and 1980, National Independence Life Insurance Company operated, and then on January 1, 1981, National Independence became Veteran’s Life Insurance Company.
For more than 26 years, Veteran’s Life Insurance Company operated out of Valley Forge, Pennsylvania. Then, on July 1, 2007, Veteran’s Life Insurance Company merged into Stonebridge Life Insurance Company. Stonebridge was headquartered in St. Louis, Missouri. (Previously, Stonebridge Life Insurance Company was known as J.C. Penney Life Insurance Company, from December of 1967 to May of 2002).
Several years after the merger of Stonebridge and Veteran’s, on October 1, 2015, Stonebridge Life Insurance Company merged into Transamerica Life Insurance Company. This company is operated out of Cedar Rapids, Iowa, and it specializes in life insurance, variable life and annuity contracts, and disability insurance coverage.
Veteran’s Group Life Insurance Company Review
Veteran’s Life Insurance Company, when operating, was headquartered in Valley Forge, Pennsylvania. The company offered a variety of coverage products, including life insurance protection.
It also offered personal injury and property damage, recreational vehicles, and accounts receivable. The company also offered auto insurance, outsourcing, and motorcycle insurance to its customers.
Financial Strength, Ratings, and Better Business Bureau Grade
Before the merger of Veteran’s Life Insurance Company, this insurer was rated by A.M. Best Company as an A (Excellent), and it also had an issuer credit rating of a+. As Veteran’s Life Insurance Company has now been disbanded, these ratings are no longer effective.
Concerning Transamerica Life Insurance Company, the following ratings apply:
A+ from A.M. Best
AA- from Fitch
A1 from Moody’s
AA- from Standard & Poor’s
Transamerica Life Insurance Company has been an accredited company through the Better Business Bureau since December 15, 2014. The company has been given the grade of A+, out of an overall grade scale of A+ through F.
Over the past three years, Transamerica has closed 278 complaints with the Better Business Bureau, of which 97 have been closed within the past year. Of these 278 complaints, 196 were having to do with the company’s products and / or services, 41 had to do with the company’s billing and / or collections, 30 had to do with the company’s advertising and / or sales issues, 10 had to do with delivery issues, and 1 had to do with guarantee / warranty issues.
Life Insurance Products Offered Through Veteran’s Group / Transamerica Life Insurance Co.
Transamerica Life Insurance Company provides a wide variety of different life insurance products. These include both term and permanent coverage, as well as accidental death coverage.
Term Life Insurance Coverage
Term life insurance is considered as the most basic type of life insurance coverage. This is because term provides death benefit protection only – and because of this, term can be a very affordable type of life insurance protection.
Transamerica offers several different term life insurance options. These include policies with term limits of 10 years, 15 years, 20 years, 25 years, or 30 years. Coverage can range from a low of $25,000 up to a high of $1 million in face amount. Most of the policies that are offered through Transamerica will require the applicant to undergo a medical exam as a part of the underwriting process.
Term life insurance policies that are offered via Transamerica include the:
Trendsetter Super Series
Trendsetter LB (Living Benefits)
Whole Life Insurance Coverage
Whole life is a type of permanent life insurance protection. This means that the policy offers a death benefit, along with cash value build up. The cash value is allowed to grow tax-deferred, which means that there is no tax that is due each year on the gain, but rather tax is only due at the time of withdrawal.
Both individual and group whole life insurance policies are available through Transamerica. Also, there are whole life insurance policies available through Transamerica with face amounts of between $2,000 and $50,000 that can assist loved ones in paying for final expenses, such as funeral and burial costs.
Universal Life Insurance Coverage
Universal life insurance is another type of permanent life insurance coverage. While universal life offers both a death benefit and a cash value component, this type of coverage is more flexible than whole life insurance. This is because the policyholder, within certain limits, may choose how much of the premium can go towards the death benefit and how much of it can go towards the cash value. In addition, the amount and the frequency of the premium may also be modified, provided that there is a sufficient amount of cash value in the policy.
Variable Universal Life Insurance Coverage
Variable universal life insurance is yet another type of permanent life insurance. Here, too, there is a death benefit and a cash component of the policy. However, the policyholder can invest the cash component in equity investments such as mutual funds – and because of this, the cash has the opportunity to grow substantially due to market movements. It can also, however, lose value due to market risk. With that in mind, it is important to have a good understanding of all of the potential risks involved before purchasing a variable life insurance product.
Final Expense Life Insurance Coverage
Final expense life insurance coverage is also offered through Transamerica Life Insurance Company. While it may be difficult for most people to discuss, end of life expenses can be high – in fact, today, the average funeral can cost upwards of $10,000. This is especially the case when factoring in such expenses as one’s headstone, burial plot, flowers, transportation, and the memorial service itself.
When loved ones do not readily have access to this much money quickly, a final expense life insurance policy can be a good solution to ease financial worries – and to avoid having to dip into savings or other assets to pay these bills.
Transamerica’s final expense life insurance is a whole life insurance policy – which means that it provides a death benefit and a premium amount that is locked in a guaranteed. It also means that there is a cash value component that will provide tax-deferred savings over time.
There are three different final expense policies to choose from through Transamerica. These include the following:
With accidental death insurance, an amount of death benefit is paid out to beneficiaries if an insured die as the result of a covered accident. This benefit will be payable either on its own or in addition to other life insurance coverage.
This type of coverage can also provide benefits in case of a covered accident where the insured loses a limb and / or their vision. The purchase of an accidental death insurance policy does not require a medical exam in order to qualify. This type of coverage may be purchased as a stand-alone policy, or in conjunction with another insurance plan.
There are various options available about accidental death coverage. These include:
Plan A: This policy will pay out a benefit that is equal to $250,000 for a covered accidental death. The benefit will double and payout the amount of $500,000 for common carrier accidents.
Plan B: This plan will pay out a benefit that is equal to $125,000 for a covered death that is accidental in nature. The amount of the benefit will double to the amount of $250,000 for common carrier accidents.@media(min-width:0px)#div-gpt-ad-goodfinancialcents_com-large-mobile-banner-1-0-asloadedmax-width:250px!important;max-height:250px!important
It is important to note that there are some limitations and exclusions included on these policies.
Other Products Offered
In addition to life insurance coverage, Transamerica offers annuities and disability insurance. It also offers dental insurance, long-term care insurance, and Medicare Supplement insurance coverage in order to help seniors from having to pay high out-of-pocket expenses due to Medicare Part A and B coinsurance and deductibles.
How to Find the Best Premium Quotes on Life Insurance Coverage
If you are seeking the best premium quotes on life insurance coverage from Veterans Life Insurance Company, Genworth Life Insurance, or from any life insurance carrier – then it is typically your best course of action to work with either an agency or an independent brokerage that has access to multiple life insurance providers. This is so that you can more directly compare, in an unbiased manner, numerous life insurance policies, benefits, and premium quotes – and from there, you can make the decision as to which one will be the best for you.
We know that purchasing life insurance coverage can often seem a bit overwhelming. There are many variables to be aware of – and there are lots of carriers in the market that you can compare and contrast. It always helps to have a guide to walk you through the process. This is especially the case if you have a specialized situation such as a health condition or if you have been turned down for coverage in the past. But the good news is that today, there are still many options regarding coverage and premium price that may be available to you. So, contact us today – we are here to help.
It’s difficult to visit any news site without seeing some mention of cryptocurrency. Most people sit there and simply think, nope, crypto’s way too much risk for me. And they’d be right. Crypto is an incredibly volatile asset, but, there’s a “safer” way to invest in it.
An investment in blockchain ETFs (blockchain is the technology cryptocurrencies run through) is a great way to diversify your portfolio. It’s also an excellent way to participate in the growth of this emerging technology while limiting your exposure to the potential risk that comes with cryptocurrencies and other ICOs.
In this article, I will discuss how investing in blockchain ETFs works, as well as the best ways for you to invest today.
What’s Ahead:
A step-by-step guide on how to invest in blockchain ETFs
If you decide to purchase a blockchain ETF, it’s a good idea to make sure you are buying one with an established track record of returns. Below, I’ve outlined a basic, step-by-step guide to investing in blockchain ETFs.
1. Open a brokerage account
To invest in a blockchain ETF, the first thing you need to do is open a brokerage account. If you already have one, that’s great. Otherwise, head on over to your preferred broker and open an account with them. Just make sure that you take note of any fees that the account charges.
You’ll also want to ensure they sell the specific blockchain ETF you’re looking to invest in. It’s important to remember that every brokerage account is different. Some may offer special promotions or have discounts on certain fees for new customers. You’ll want to consider this when choosing your broker.
2. Determine the amount you want to invest
Once you’ve opened a brokerage account, you should determine how much you’re willing to invest. Remember that a blockchain ETF is typically priced based on the total value of assets it holds. This means that if a share is worth $100 and an ETF has 100 shares, then each individual share would be worth $1.
It pays to do some research into what type of blockchain ETFs other investors are investing in and how much they’ve invested – this will give you a sense of where a good starting point is.
Public, for instance, allows you to track and follow other people’s investments. So, you can follow someone who knows the blockchain space and replicate their investments if you wanted.
Whatever you decide, make sure you don’t invest more than you can afford to lose. While blockchain ETFs may be “safer” than buying something like cryptocurrency directly, there’s still the potential for risk.
3. Find the ticker symbol of the blockchain ETF you want to buy
Okay, now you’ve figured out where you’re going to invest and how much you’re going to invest. So it’s time to search for the specific blockchain ETF you want to buy.
The first step is to find the ticker symbol of the blockchain ETF you’re looking for. This will be a short three- or four-letter abbreviation representing the fund and its corresponding company – it’s typically listed in small print at the top left corner of your screen. It looks like this: BLOK, for the Amplify Transformational Data Sharing ETF, if that’s one you’re interested in.
A quick Google search for “blockchain ETFs” should give you a list of some out there – so do your due diligence, and find one that looks the most appealing to you.
Once you’ve found it on your screen in front of you, look for a small box that says “symbol” or “ticker symbol.” It should be right under the fund’s name. Copy this string of letters into your browser by highlighting them with the cursor as selected, then paste it into your brokerage’s search bar.
4. Place an order for that ETF
Once you’ve located the blockchain ETF you want to invest in, it’s time to place an order. You have a few different options for order types when buying a blockchain ETF:
Market order – Market order is an order to buy or sell a security at the current best price available in the market.
Limit order – A limit order is an instruction to buy or sell a security at the specified price below or above the current market price.
Stop limit order – When you place stop and limit orders together, they work as one large trade with two parts: first, if the price reaches your set “stop” point, it will execute your “limit” instructions.
Do whatever makes the most sense for you and your investment goals, but don’t worry about the differences too much. The key here is to get invested in a blockchain ETF.
5. Set up automatic contributions and investments (if you can)
By now, you’ve hopefully invested in a blockchain ETF. But you’ll want to keep the momentum going. To do that, set up an automatic investment plan.
You can automate your investments so that when you set a new goal, say buying a house or saving for retirement, every week or month, the predetermined amount gets invested in blockchain ETFs on your behalf- and you never have to worry about it again.
This is also one of those things where doing something simple now could save you from some major hassles later. Because, before long, blockchain will be everywhere.
What is a blockchain ETF?
A blockchain ETF is a security that tracks the performance of blockchain-based assets. ETFs are composed of individual securities, such as stocks, bonds, or commodities.
An investment in a blockchain ETF is an indirect way to invest in the technology’s underlying infrastructure and protocols which currently power cryptocurrencies like Bitcoin and Ethereum, but will soon be used for much more than just finance.
Right now, you can’t purchase a Bitcoin or cryptocurrency ETF in the U.S., so if you want to invest in blockchain ETFs, they’re best suited as a long-term investment.
The investments are decentralized and transparent, making them immune not just to manipulation but also to fraud. As a result, blockchain technology provides some of the greatest opportunities for investors who don’t have much time to delve into individual companies or venture capitalist firms with different levels of risk.
Two of the most popular blockchain ETFs are the Reality Shares Nasdaq NexGen Economy ETF (BLCN) and the Innovation Shares NextGen Protocol ETF (KOIN). Both of these ETFs track stocks that are involved in the implementation of blockchain technology.
The Reality Shares Nasdaq NexGen Economy ETF is made up of companies like:
Amazon.
Bank Of America.
Facebook.
Google.
The Innovation Shares NextGen Protocol ETF focuses on emerging startups rather than established firms and includes a wider range of investments as well.
Where to buy a blockchain ETF
If you want to buy a blockchain ETF, you can do so through your brokerage account or a robo-advisor.
The easiest way to invest in blockchain ETFs is by using online investment platforms such as E*TRADE.
E*TRADE offers access to specific funds that you couldn’t otherwise buy on exchanges like the Reality Shares Nasdaq NexGen Economy ETF and the Innovation Shares NextGen Protocol.
Many robo-advisors, such as Betterment, also offer access to blockchain ETFs in some of their portfolio options.
If you have a brokerage account with Robinhood or TD Ameritrade, then they may also provide investment funds that include blockchain ETFs within them. Regardless of the platform you are using, buying a blockchain ETF is the easiest way to invest in blockchain.
Benefits vs. risks of buying blockchain ETFs
There are many risks and benefits to investing in blockchain ETFs. But, first, let’s start with the benefits.
Benefits of investing in blockchain ETFs
They have a low cost. The biggest benefit of investing in blockchain ETFs is the low cost. You can invest as little or as much as you want, and it’ll all be allocated to your chosen stocks automatically by a fund manager, who will take care of everything for you.
ETFs are often less risky. There’s also very little risk involved with investing in these types of funds because they are highly diversified.
No minimum amount required most of the time. Another great aspect about them is that there’s no minimum amount required – so even if you only have $20 to spare, that could still make an impact. Finally, one last big upside is getting exposure to many different companies just from one company investment.
Risks of investing in blockchain ETFs
Less consistency. First, you will not get the same consistency as investing in a more traditional fund, like an S&P index fund, for instance. This is because blockchain ETFs (along with crypto) may sometimes move irrationally.
More unknowns. It’s hard to know what companies you’re specifically invested in, so if there is an issue with one company and it causes a domino effect, then your investment might take a hit. For this, I recommend doing deep research on the ETF and seeing which companies it holds and how they’re positioned in blockchain technology.
Higher fees than other ETFs. Finally, the fees can be slightly higher than other ETFs on the market because of how they work. They also have no minimum amount required, which could end up costing you even more money.
Summary
Blockchain ETFs are an exciting new way to invest in blockchain technology while also mitigating your overall level of risk. If you’ve been hesitant to jump into this space because you’re unsure where and how to buy Bitcoin, or if you don’t understand the difference between Ethereum and Ripple, now is a good time to learn more about these types of investments before it’s too late. Always research before jumping into any type of investment.
It’s difficult to visit any news site without seeing some mention of cryptocurrency. Most people sit there and simply think, nope, crypto’s way too much risk for me. And they’d be right. Crypto is an incredibly volatile asset, but, there’s a “safer” way to invest in it.
An investment in blockchain ETFs (blockchain is the technology cryptocurrencies run through) is a great way to diversify your portfolio. It’s also an excellent way to participate in the growth of this emerging technology while limiting your exposure to the potential risk that comes with cryptocurrencies and other ICOs.
In this article, I will discuss how investing in blockchain ETFs works, as well as the best ways for you to invest today.
What’s Ahead:
A step-by-step guide on how to invest in blockchain ETFs
If you decide to purchase a blockchain ETF, it’s a good idea to make sure you are buying one with an established track record of returns. Below, I’ve outlined a basic, step-by-step guide to investing in blockchain ETFs.
1. Open a brokerage account
To invest in a blockchain ETF, the first thing you need to do is open a brokerage account. If you already have one, that’s great. Otherwise, head on over to your preferred broker and open an account with them. Just make sure that you take note of any fees that the account charges.
You’ll also want to ensure they sell the specific blockchain ETF you’re looking to invest in. It’s important to remember that every brokerage account is different. Some may offer special promotions or have discounts on certain fees for new customers. You’ll want to consider this when choosing your broker.
2. Determine the amount you want to invest
Once you’ve opened a brokerage account, you should determine how much you’re willing to invest. Remember that a blockchain ETF is typically priced based on the total value of assets it holds. This means that if a share is worth $100 and an ETF has 100 shares, then each individual share would be worth $1.
It pays to do some research into what type of blockchain ETFs other investors are investing in and how much they’ve invested – this will give you a sense of where a good starting point is.
Public, for instance, allows you to track and follow other people’s investments. So, you can follow someone who knows the blockchain space and replicate their investments if you wanted.
Whatever you decide, make sure you don’t invest more than you can afford to lose. While blockchain ETFs may be “safer” than buying something like cryptocurrency directly, there’s still the potential for risk.
3. Find the ticker symbol of the blockchain ETF you want to buy
Okay, now you’ve figured out where you’re going to invest and how much you’re going to invest. So it’s time to search for the specific blockchain ETF you want to buy.
The first step is to find the ticker symbol of the blockchain ETF you’re looking for. This will be a short three- or four-letter abbreviation representing the fund and its corresponding company – it’s typically listed in small print at the top left corner of your screen. It looks like this: BLOK, for the Amplify Transformational Data Sharing ETF, if that’s one you’re interested in.
A quick Google search for “blockchain ETFs” should give you a list of some out there – so do your due diligence, and find one that looks the most appealing to you.
Once you’ve found it on your screen in front of you, look for a small box that says “symbol” or “ticker symbol.” It should be right under the fund’s name. Copy this string of letters into your browser by highlighting them with the cursor as selected, then paste it into your brokerage’s search bar.
4. Place an order for that ETF
Once you’ve located the blockchain ETF you want to invest in, it’s time to place an order. You have a few different options for order types when buying a blockchain ETF:
Market order – Market order is an order to buy or sell a security at the current best price available in the market.
Limit order – A limit order is an instruction to buy or sell a security at the specified price below or above the current market price.
Stop limit order – When you place stop and limit orders together, they work as one large trade with two parts: first, if the price reaches your set “stop” point, it will execute your “limit” instructions.
Do whatever makes the most sense for you and your investment goals, but don’t worry about the differences too much. The key here is to get invested in a blockchain ETF.
5. Set up automatic contributions and investments (if you can)
By now, you’ve hopefully invested in a blockchain ETF. But you’ll want to keep the momentum going. To do that, set up an automatic investment plan.
You can automate your investments so that when you set a new goal, say buying a house or saving for retirement, every week or month, the predetermined amount gets invested in blockchain ETFs on your behalf- and you never have to worry about it again.
This is also one of those things where doing something simple now could save you from some major hassles later. Because, before long, blockchain will be everywhere.
What is a blockchain ETF?
A blockchain ETF is a security that tracks the performance of blockchain-based assets. ETFs are composed of individual securities, such as stocks, bonds, or commodities.
An investment in a blockchain ETF is an indirect way to invest in the technology’s underlying infrastructure and protocols which currently power cryptocurrencies like Bitcoin and Ethereum, but will soon be used for much more than just finance.
Right now, you can’t purchase a Bitcoin or cryptocurrency ETF in the U.S., so if you want to invest in blockchain ETFs, they’re best suited as a long-term investment.
The investments are decentralized and transparent, making them immune not just to manipulation but also to fraud. As a result, blockchain technology provides some of the greatest opportunities for investors who don’t have much time to delve into individual companies or venture capitalist firms with different levels of risk.
Two of the most popular blockchain ETFs are the Reality Shares Nasdaq NexGen Economy ETF (BLCN) and the Innovation Shares NextGen Protocol ETF (KOIN). Both of these ETFs track stocks that are involved in the implementation of blockchain technology.
The Reality Shares Nasdaq NexGen Economy ETF is made up of companies like:
Amazon.
Bank Of America.
Facebook.
Google.
The Innovation Shares NextGen Protocol ETF focuses on emerging startups rather than established firms and includes a wider range of investments as well.
Where to buy a blockchain ETF
If you want to buy a blockchain ETF, you can do so through your brokerage account or a robo-advisor.
The easiest way to invest in blockchain ETFs is by using online investment platforms such as E*TRADE.
E*TRADE offers access to specific funds that you couldn’t otherwise buy on exchanges like the Reality Shares Nasdaq NexGen Economy ETF and the Innovation Shares NextGen Protocol.
Many robo-advisors, such as Betterment, also offer access to blockchain ETFs in some of their portfolio options.
If you have a brokerage account with Robinhood or TD Ameritrade, then they may also provide investment funds that include blockchain ETFs within them. Regardless of the platform you are using, buying a blockchain ETF is the easiest way to invest in blockchain.
Benefits vs. risks of buying blockchain ETFs
There are many risks and benefits to investing in blockchain ETFs. But, first, let’s start with the benefits.
Benefits of investing in blockchain ETFs
They have a low cost. The biggest benefit of investing in blockchain ETFs is the low cost. You can invest as little or as much as you want, and it’ll all be allocated to your chosen stocks automatically by a fund manager, who will take care of everything for you.
ETFs are often less risky. There’s also very little risk involved with investing in these types of funds because they are highly diversified.
No minimum amount required most of the time. Another great aspect about them is that there’s no minimum amount required – so even if you only have $20 to spare, that could still make an impact. Finally, one last big upside is getting exposure to many different companies just from one company investment.
Risks of investing in blockchain ETFs
Less consistency. First, you will not get the same consistency as investing in a more traditional fund, like an S&P index fund, for instance. This is because blockchain ETFs (along with crypto) may sometimes move irrationally.
More unknowns. It’s hard to know what companies you’re specifically invested in, so if there is an issue with one company and it causes a domino effect, then your investment might take a hit. For this, I recommend doing deep research on the ETF and seeing which companies it holds and how they’re positioned in blockchain technology.
Higher fees than other ETFs. Finally, the fees can be slightly higher than other ETFs on the market because of how they work. They also have no minimum amount required, which could end up costing you even more money.
Summary
Blockchain ETFs are an exciting new way to invest in blockchain technology while also mitigating your overall level of risk. If you’ve been hesitant to jump into this space because you’re unsure where and how to buy Bitcoin, or if you don’t understand the difference between Ethereum and Ripple, now is a good time to learn more about these types of investments before it’s too late. Always research before jumping into any type of investment.
Catch-up contributions are about to change. Starting in 2024, some workers who make catch-up contributions to employer-sponsored retirement plans, like a 401(k), will have to put this money in a Roth account. This means that they cannot deduct these contributions from their income taxes, but will be able to withdraw the account’s gains later in life tax free. This change will apply to anyone who earns $145,000 or more. Here’s what’s going on.
Consider working with a financial advisor as you evaluate your options for building a nest egg.
What Are Catch-Up Contributions?
Every tax-advantaged retirement account has a maximum contribution limit. This is the cap on how much money you can put into the account each year without paying taxes. For example, in 2023, an individual can only contribute up to $22,500 to his or her 401(k) account. For IRA account, you can contribute up to $6,500.
In order to incentivize retirement savings, the IRS allows “catch-up contributions” for those who are age 50 or older. So if you’re over the age of 50, you can contribute an extra $7,500 to a 401(k) or an additional $1,000 to an IRA in 2023. This is on top of the aforementioned contribution cap.
Historically, the rules around catch-up contributions have been based on the underlying account. If you make catch-up contributions to a 401(k), for example, you receive the standard tax deduction of that account. If you put catch-up contributions in a Roth IRA, you pay taxes up front and pay no taxes on withdrawals.
For higher-earning households, however, that’s about to change.
Section 603 Changes How Catch-Up Contributions Work
In 2022, Congress passed the law known as SECURE 2.0, a sweeping collection of changes to retirement in the United States. Although it had a few signature elements, most notably the transition of 401(k) programs from opt-in to opt-out, most of the law makes detailed changes to a very large number of programs.
But detailed changes aren’t the same as small ones, a fact that has become quite clear with the now-infamous Section 603.
In Section 603 of the SECURE 2.0 Act, Congress changed how catch-up contributions work for higher-earning households. Specifically, with employer-sponsored plans such as a 401(k), if you earned more than $145,000 in the previous tax year you must make all catch-up contributions on a Roth basis. This means that you cannot deduct the income they use for catch-up contributions, but will not have to pay taxes on the money or its earnings when you withdraw it later in life.
This rule does not affect IRA plans.
Contribution limits will not change, since individuals will still contribute this money to an employer-sponsored plan. Instead, employers who allow catch-up contributions will need to begin offering Roth plans in addition to their standard pretax retirement plans. This has led to some pushback, with retirement industry groups citing the time and costs involved with establishing new Roth plans.
These changes are set to take effect beginning Jan. 1, 2024.
What Does This Mean for Taxes?
The first thing to note is that Section 603 does not phase in. Individuals who earn $144,999 or less are exempt. They may fully deduct the income that they contribute to an employer-sponsored retirement account, including any catch-up contributions.
This section fully applies to individuals who earn $145,000 or more. They may fully deduct the income that they contribute to a 401(k) account up to the standard annual limit. They cannot deduct any income that they use for catch-up contributions and must pay taxes on that money. They must put this money into a Roth account, which will return its growth untaxed.
Specific tax impact will depend entirely on an individual’s income. Take, for example, someone who earns $150,000 and makes the maximum catch-up contributions. Without addressing other deductions or other tax implications, the impact on their income tax would look like this:
Currently they would be able to deduct this contribution, allowing them the following deduction:
Income – $150,000
Top Tax Bracket: 24% for income between $89,076 – $150,000
Tax Deduction – $7,500
Remaining Taxable Income – $142,500
Tax Deduction – 24% x $7,500 = $1,800
Final Income Taxes – $24,928
Income tax deductions always come from the highest income bracket first. In this case, the individual’s top tax bracket is 24%. They can deduct $7,500 from the money currently taxed at 24%, giving them a deduction worth $1,800 in total tax savings.
Starting in 2024, this same person will not be able to deduct catch-up contributions. Assuming the same catch-up contribution limit (which will increase each year), this person’s new taxes will look like this:
Income – $150,000
Tax Deduction – $0
Remaining Taxable Income – $150,000
Final Income Taxes – $26,728
The individual has functionally $1,800 less with which to invest. However, while it will make retirement saving more expensive up front, it will also incentivize employers to establish more Roth options in their retirement plans. These plans have much larger tax advantages in the long run, since ultimately the investor pays no taxes on the larger amount withdrawn in retirement, rather than the smaller amount invested up front.
For individuals looking to avoid this tax issue, a good option would be to open an IRA. These are pretax accounts, and you can have both a 401(k) (or equivalent) and an IRA at the same time. While IRAs have much lower maximum contribution limits, you can generally invest almost as much in an IRA as you could invest through catch-up contributions, making this a good equivalent investment strategy.
This Issue Has Been Mistaken for a Mistake
The new tax cap is not a mistake. The original text of SECURE 2.0 contained a drafting error related to catch-up contributions. In brief, among its changes, Section 603 deleted a small paragraph in the Internal Revenue Code. The deleted section of the Internal Revenue Code (IRS) establishes that, if the IRS allows a plan participant to make catch-up contributions to a 401(k) or other employer-sponsored plan, those contributions qualify for pretax status.
The idea was to prevent contradictory language in the tax code. But in deleting this section, instead of specifying that it only applies to some taxpayers, Congress potentially made pretax catch-up contributions illegal for everyone. Members of Congress have since stated that this was a drafting error and they intend to correct it, although at time of writing it has not been fixed.
Some reporting has conflated this error with the new tax cap, suggesting that Congress might roll back the $145,000 cutoff. This is inaccurate. The new catch-up contributions cap was intentional.
Bottom Line
If you earn more than $145,000 per year, starting in 2024 you will not be able to deduct catch-up contributions that you make to an employer-sponsored plan. Instead, all such contributions will have to go into a Roth plan, on which you will pay taxes up front but not when you withdraw the gains.
Retirement Planning Tips
A financial advisor can help you build a comprehensive retirement plan, including how to handle catch-up contribution opportunities. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Catch-up contributions can be a great way to add extra liquidity to your retirement account, particularly given that most people will work and save for almost 20 more years. So it’s worth making the absolute most of them.
Eric Reed
Eric Reed is a freelance journalist who specializes in economics, policy and global issues, with substantial coverage of finance and personal finance. He has contributed to outlets including The Street, CNBC, Glassdoor and Consumer Reports. Eric’s work focuses on the human impact of abstract issues, emphasizing analytical journalism that helps readers more fully understand their world and their money. He has reported from more than a dozen countries, with datelines that include Sao Paolo, Brazil; Phnom Penh, Cambodia; and Athens, Greece. A former attorney, before becoming a journalist Eric worked in securities litigation and white collar criminal defense with a pro bono specialty in human trafficking issues. He graduated from the University of Michigan Law School and can be found any given Saturday in the fall cheering on his Wolverines.
So, you find the lazy way to invest very appealing: You like the simplicity and the long-term results. But you don’t want to bother with building your own lazy portfolio of index funds and adjusting it as you get older (same as creating your own target-date fund). At this point in your life, you just want a set-it-and-forget-it solution, at least until you feel more comfortable building your own investment portfolio. Target-date funds seem perfect for the job, but which one is right for you? Let’s walk through choosing a target date fund.
Related >> Investing 101: An Introduction to Index Funds and Passive Investing
Choosing the Fund Family
The first step is to choose the fund family (Fidelity, Vanguard, etc.). This decision cannot be overlooked since each company manages its funds differently; a 2040 target-date fund from T. Rowe Price will be different from a 2040 target-date fund at Fidelity. Each company has its own philosophy and methodology. Let’s compare the three biggest players in this market: Fidelity Freedom Funds, T Rowe Price Retirement Funds, and Vanguard Target Retirement Funds.
Related >> a href=”https://www.getrichslowly.org/the-lazy-way-to-investment-success/”>The Passive Way to Investment Success
The first criteria you can use to compare the fund families is cost, specifically the expense ratio (the total annual cost for things like advertising and managing the fund). As an example, let’s look at the 2040 funds:
Fund Family
Expense Ratio
Fidelity
0.79%
T Rowe Price
0.79%
Vanguard
0.20%
Amazingly, Vanguard’s expenses are roughly a quarter of the other two. This is largely due to the use of actively-managed mutual funds by Fidelity and T Rowe Price; Vanguard only uses low-cost index funds in their target-date funds. If you think 0.59% a year is a pretty small difference, remember that the rough rule-of-thumb for withdrawing money in retirement is only 4% a year. That “small” difference in expense ratios is almost 15% of your potential retirement income!
Another important criteria to consider is the asset allocation used by the target-date fund — how much is invested in stocks, and how much is invested in bonds and other instruments. In particular, you want to look at how that allocation is expected to change as you get older. Investing geeks like me call that the “glide path.”
Choosing Your Target Date
Once you select the fund family, you need to decide on the specific fund to buy. Target-date funds are labeled by retirement year, generally assumed to be when you turn 65. So the 2040 fund is designed for the “typical” person who’s currently 35 and is expected to retire in 2040.
Obviously, no one is forcing you to buy the fund that corresponds to the year you turn 65. There are at least two very good reasons to adjust your target date:
If you plan on retiring much earlier or later than 65, you should consider adjusting your target date. Let’s say you’re 35 and want to retire at 55. Should you buy the target-date fund for 2030, since that’s when you’d retire? Not necessarily. Although the 2030 fund fits your retirement plans, it also assumes people retire around age 65, so your life expectancy is probably much longer than the target audience for the fund. A good compromise might be the 2035 fund, which respects both your early retirement plans and your longer life expectancy relative to others you retire with.
Even if you expect to retire at 65, the amount of risk you want to take is probably not “typical”. An easy way to reduce risk is by selecting a fund with a target date that is five to ten years before when you turn 65. (So, if you plan to retire near 2040, you might choose a 2030 target-date fund.) This lowers the level of risk by holding less in stocks while still considering your investment horizon. And if you want more risk, you can select a target date that is five to ten years past when you turn 65. (If you plan to retire around 2030, you could increase risk by choosing a 2040 target-date fund.)
Even though they’ve received some bad press lately due to their poor performance during the recent stock market crash, target-date funds are still useful investments for many people. They’re certainly better than other strategies commonly used by beginning investors: equal-weighting all funds within a 401(k) plan, picking stocks, or just leaving everything in a money market fund.
If you already use target-date funds, which funds do you own and how did you choose?