retire

Apache is functioning normally

All too often we make investing far more complicated than it really is. I was guilty of this when I first started investing back in 1993. Like the search for the Holy Grail, I was convinced that there was a perfect asset allocation plan. And I searched for it. I spent hours upon hours trying to construct the perfect investment plan.

I’ve mellowed a bit since then. I’ve ditched my micro cap value fund for a much simpler asset allocation. It’s not that a micro cap fund, a China ETF, or mortgage REITs are bad investments. Rather, I’m no longer convinced that such asset classes are necessary to achieve my investment goals. I’m also not convinced such a complicated portfolio will outperform a simpler approach.

This Philosophy informs my responses when I receive email from readers about their own investments. They want to know if they should have a small cap value fund, or REITs, or a dividend fund, or dozens of other asset classes in their investment portfolio. This article and podcast is in response to all of those questions and similar emails I’ll certainly receive in the future.

How the Pros See Asset Allocation

There are a number of excellent sources we can turn to for investment ideas. Here are four of them.

Target Date Retirement Funds

The major mutual fund companies offer target date retirement funds. These fund of funds as they are called, split the amount of your investments into several mutual funds. Reviewing exactly which funds these target date investments to use give us insight into the asset allocation chosen by the likes of Fidelity.

Robo Advisors

Much like target date retirement funds, we can also peer into the asset allocation plans of automated investment services. Three of the most popular are Betterment, Wealthfront, and Future Advisors. Wealthfront, for example, has an excellent white paper on its investment philosophy. It not only shows its asset allocation plans for taxable and retirement accounts, but it also provides an in depth explanation for the asset classes it has chosen.

Investment Books

Any number of investment books provide excellent ideas on asset allocation plans. Two of my favorites are All About Asset Allocation by Ric Ferri and Unconventional Success by David Swenson. I interviewed Ric about his investment philosophy in Podcast 3. I’ve written about David Swenson’s model asset allocation plan as well. Both are worth reviewing.

Bogleheads Forum

The Bogleheads Forum has a wealth of information about investing. Of particular interest to asset allocation plans is what they call Lazy Portfolios. That resource lists a number of asset allocation plans that are easy to implement and maintain. It’s a great resource.

Same Kind of Different as Me

What’s interesting about the above resources is that none of the asset allocation plans is identical. While some are similar, they all take a slightly different approach. So much for the “perfect” asset allocation plan. It doesn’t exist.

As I was pursuing the Bogleheads forum while writing this article, I came across the following comment:

I couldn’t say it better myself.

Alternatives to Stocks

In fact, it’s worth mentioning that plenty of investors look for alternatives to stocks to further diversify their portfolio and have a little fun with their investing, while still growing their nest egg.

For example, Masterworks is an investment platform that lets you buy shares in blue-chip artworks: Pieces by household names like Andy Warhol. The blue-chip art index has outperformed the S&P 500 over the last 18 years, making blockbuster art a quirky but potentially lucrative addition to your personal portfolio. Find out more about Masterworks in our full review.

Of course, all of this raises an important question. How do we choose the asset allocation plan that is best for us?

Related:

The Perfect Asset Allocation Plan for You

Given that there is no one “right” investment plan, the key is to find a solid plan that fits your personality and investment options. You can start with any of the asset allocation models listed above, and then customize it to fit your investing style. To do that, consider these four factors:

  • Risk Tolerance: The starting point is to understand how much volatility you can handle. This comes with experience. As you start to invest, you typically don’t have a lot of money invested. As a result, losing 50% (the 2007-2009 market dropped 57%) seems awful, but the actual dollar loss may not be much. If you have $1 million invested, losing 50% can be traumatic.
  • Complexity: I know some investors that embrace complexity. Their portfolios have literally dozens of asset classes. They don’t invest in one or two international funds, they invest in country-specific ETFs and slice the U.S. market into six or more asset classes. It’s a lot to manage, particularly when it comes time to rebalance. If that kind of complexity is not your cup of tea, keep your portfolio simple. It’s more than reasonable to build a well-diversified portfolio with just three or four asset classes.
  • Boredom: Some would be bored with a 3-fund portfolio. They aren’t interested in a wildly complex portfolio, but they do want some exposure to additional asset classes. These often include REITs, small cap, and emerging markets. If that’s you, and it’s certainly me, expand your portfolio to cover one or more of these asset classes. The key is to find a plan you’ll stick with in good times and bad.
  • Investing Options: Finally, we have to work with the investing options available to us, particularly in a 401k or other workplace retirement plan.

  • Rob Berger is the founder of Dough Roller and the Dough Roller Money Podcast. A former securities law attorney and Forbes deputy editor, Rob is the author of the book Retire Before Mom and Dad. He educates independent investors on his YouTube channel and at RobBerger.com.

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Source: doughroller.net

Apache is functioning normally

When you look at your investment portfolio, does Rube Goldberg come to mind? Goldberg was a Pulitzer Price winning cartoonist famous for drawing complicated contraptions designed to perform simple tasks. In fact, Webster’s New World Dictionary defines a “Rube Goldberg” as a “comically involved, complicated invention, laboriously contrived to perform a simple operation.”

Investing should be simple. It’s not necessary to have a dozen or more mutual funds covering a wide range of asset classes. Such “diversity” complicates the management of your investments and isn’t likely to increase your returns or lower your risk.

Rube Goldberg came to mind when I recently read an email from a reader named Jason:

This is a great email on an important topic. Are we going to invest to mimic the overall market, or are we going to collect a dozen or more holdings? What’s the right approach?

I addressed Jason’s question about “value” funds in the podcast. In short, an index is designed to determine value versus growth based on math. They use ratios such as the p/e (price to earnings), p/b (price to book), and other objective measures of value.

But let’s get back to Jason’s main question – how complicated should investing be? The starting point is the 3-Fund Portfolio.

1. Three-Fund Portfolio

There’s a group loosely referred to as the Bogleheads (named after Vanguard founder, John Bogle)who advocate the Three-Fund Portfolio. The three-funds cover the three main asset classes (I’ve included Vanguard ETFs one could use to build a 3-fund portfolio, but mutual funds and investments from other companies could be used, too):

  • Total Market US Equities (Example: VTI)
  • Total Market Intl EquitiesExample: VGTXS)
  • Total Bond Market (Example: VBMFX)

With those three ETFs, you’d have the investment markets covered, but only three funds to manage, allocate and rebalance. This is the direction I’m heading as I simplify my investing. Note that you could simplify this even further with a target-date retirement fund. Vanguard’s target-date funds, for example, use the above three investment types along with an international bond fund.

2. Slice and Dice

Many investors aren’t satisfied with the above 3-Fund portfolio. They look to further diversify their investments into sub-asset classes. Frankly, I’ve taken the slice and dice approach for more than two decades.

While there is no one way that one can construct a portfolio that goes beyond the core asset classes, here are five common sub-asset classes that many investors want more exposure:

  • Small-Cap – Smaller companies historically have produced higher returns, but also come with more volatility.
  • Value Funds – These funds seek to invest in undervalued companies, and historically have outperformed growth companies (although there is some debate on the relative performance between value and growth).
  • Emerging Markets: As with small caps, emerging markets historically have generated higher returns in exchange for greater volatility.
  • REITs – real estate investment trusts offer stock-like returns with some measure of diversity.
  • Commodities – While the returns aren’t as rich, many believe commodities offer valuable diversity to a portfolio.

I have positions in all of these sectors, although as I mentioned I’m working to simplify my portfolio.

3. Diversity Has Nothing to Do With the Number of Mutual Funds in a Portfolio

It’s critical to understand that even a 3-Fund Portfolio has exposure to each of these asset classes. As an example, a total U.S. equity fund has exposure to small caps, value, REITs, and even commodities. Simply by owning multi-national companies gives exposure to many asset classes.

In the case of VTI, one gets exposure to the following according to Morningstar:

  • Micro-cap: 2.62%
  • Small-cap: 6.47%
  • Mid-cap: 29.02%
  • Real Estate: 3.72%

Further, VTI gives equal weighting to value and growth stocks.

Similarly, a totally international market will have exposure to emerging markets. VGTXS, for example, has 14.52% in emerging markets. The point: Most investors will get little if any benefit from seeking additional exposure to these sub-asset classes beyond what a total market fund provides.

4. Why slice and dice

Having said all of that, there are times when exposure to sub-asset classes is justified. The first is that an investor’s personality is drawn to this type of investing. While this may surprise some, the behavioral side of investing should never be ignored. Those that like to dabble in more complex asset allocation plans won’t hurt themselves, so long as they keep costs low and stick to their plan.

Second, a good argument can be made for additional exposure to real estate. REITs enjoy stock-like returns and add diversity to a portfolio.

5. Problems with slice and dice

There are some realities to a complicated portfolio that should be considered:

  • There’s absolutely no guarantee that it will improve your returns or lower your risk compared to a basic three-fund portfolio. Just because small caps outperformed the general market in the past doesn’t mean they will in the future. In his book Don’t Count on It!: Reflections on Investment Illusions, Capitalism, “Mutual” Funds, Indexing, Entrepreneurship, Idealism, and Heroes, John Bogle says that small caps have outperformed the general market mainly because there were a couple of years where they did very well compared to the overall market. There’s no guarantee such performance will repeat itself.
  • Each additional investment added to a portfolio increases the portfolio’s complexity. Additional funds add to the burden of monitoring investments and rebalancing them. It often requires one to allocate across multiple account types, which further complicates the whole affair. (See the Rube Goldberg image above for more details.)

My own feeling is both the three-fund portfolio and the slice and dice portfolio will work, but complication is the real difference. And for what it’s worth, robo advisors like Betterment use somewhat complicated portfolios. The difference is that they handle all of the rebalancing for you.

6. My Own 401(k) plan

Portfolio allocations can be more complicated with 401(k) plans. Unlike an IRA, we have limited investment options, many of which are expensive. Nevertheless, I’ve worked hard to simplify my own 401(k) portfolio by investing in just three funds. In the process, I’ve tried to create a standalone portfolio that doesn’t require additional allocations from non-retirement assets or other retirement plans. The plan will be fully diversified on its own.

Here are the three funds I use in my plan:

  • Dodge and Cox International Stock Fund (DODFX) – 40%
  • Fidelity S&P Index Fund (FXSIX) – 40%
  • Vanguard Total Bond Fund (VBTLX) – 20%

The Dodge and Cox fund is an actively managed fund with an expense ratio of – .64%. It’s a great fund in my opinion, and the fee is actually not high for actively managed funds. My total cost for keeping all three funds is .29%, even with the Dodge and Cox fund. With just three funds, rebalancing is easy. I don’t feel that slicing and dicing into a variety of funds will have a material effect on the long-term performance of my 401(k).

I’m not entirely closed to the idea of adding some additional asset classes to my plan, particularly REITs. Whatever you choose, however, work hard to keep it simple.

  • Rob Berger is the founder of Dough Roller and the Dough Roller Money Podcast. A former securities law attorney and Forbes deputy editor, Rob is the author of the book Retire Before Mom and Dad. He educates independent investors on his YouTube channel and at RobBerger.com.

    View all posts

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Source: doughroller.net

Apache is functioning normally

(Personal Capital is now Empower)

The internet has done wonders in the world of Investment Tracking. With websites like Mint and now Power Wallet, tracking your finances for free online is a snap. But one thing that’s been missing is a robust tool to automatically track your investments.

Best Investment Tracking App

Sites like Mint do allow you to link your investment accounts. But they don’t help you understand your asset allocation or investing expenses in any meaningful way. And that brings me to a site I’ve recently starting using called Empower.

Empower is the best investment tracking tool that I’ve ever used. It solves several problems for me:

  • It automatically links to my investment accounts, keeping my holdings updated throughout the trading day;
  • It tracks the fees I’m paying for each mutual fund and ETF I own;
  • It provides detailed asset allocation data for my investments, much like the X-Ray feature of Morningstar;
  • It alerts me when my asset allocation is over or under-weighted as compared to a target asset allocation model determined based on my age and tolerance for risk; and
  • It offers retirement income calculations and projections based on your investments, projected social security, pensions, annuities, and other retirement income sources.

I’ve enjoyed the tool so much, that I thought a detailed review was in order.

Getting Started

Empower is a free tool. To get started, you simply create an account with your email address and password. Once you have access to the site, you can connect just about all of your bank and investment accounts into Empower.

I had no trouble connecting accounts from Citi, Capital One 360, Scottrade and Fidelity. And once all of your accounts are connected, the fun begins.

The Dashboard

The Dashboard is the one place you’ll find high level information about all your finances. While I use Empower primarily for my investments, you can also track your checking and savings accounts. In fact, they offer what is called a Cash Manager that lets you see all of your spending in one place.

Investment Tracking

Empower does a great job of tracking investments real-time. And just as importantly, the layout of the site and the way in which information about your investments is displayed is the best I’ve seen (note, the image is not of my personal investments):

What you can’t see from the above screen shot is what happens as you roll the cursor over parts of the screen. On the graph at the top left, you’ll see your investment balance by date. And as you roll the cursor over the colored ring top right, you’ll see details about each of your investment accounts.

And what’s really cool is when you click on an individual account in the list at the bottom. As you can see from the screenshot above, the graph highlights the portion of your total attributed to that account, and the colored ring breaks out the portion of the circle related to the selected account.

Now the truth is that while the above is really cool, it’s just information. It doesn’t really give you any analysis that you can actually use. But the next few features do.

Mutual Fund and ETF Expenses

As I’ve said many times, keeping investment expenses low is one of the most important factors for successful investing. And Empower gives you two tools to help you. The first is a breakdown of your investment costs by mutual fund or ETF.

In my case, total investment costs are a real eye-opener. Empower breaks down the cost by fund or ETF, so that you can focus your analysis and determine whether you need to make any changes. Through using the tool, it became clear to me that there are a couple of funds I need to dump for less expensive alternatives.

Cryptocurrency

Empower now offers the ability to track your cryptocurrency within the dashboard. Since last year, Empower saw its users increase the value of linked accounts by about 28% – so they’ve decided to start including the ability to track crypto now, too.

Since more people are starting to invest in things like Bitcoin, it only makes sense that you’d be able to track your tokens. Currently, you have the ability to track thousands of tokens across hundreds of different cryptocurrency exchanges. This is, of course, in addition to the loads of other benefits you’ll get from Empower.

401(k) Fee Analyzer

The second tool to help fight the high cost of investing is revolutionary. It’s called the 401k Fee Analyzer.

The first time you run this tool, it will base its analysis on data not specific to your retirement funds. But you can get additional data on 401k expenses from your employer or broker to get more accurate results.

What’s so great about the analyzer is that it doesn’t stop with just the expense ratios of the funds and ETFs you own. That part’s easy. It also looks at the costs funds charge you for trading, which aren’t reflected in the expense ratio. And it looks at administrative costs charged to run the 401k, which are often passed down to employees.

If you have a 401k, this tool by itself makes it worth checking out Empower. And it’s a good reminder as to why most folks should transfer their 401k to a rollover IRA when they leave their employer.

Asset Allocation Tools

The next handy tool is its asset allocation feature. The first thing it does is breaks down all of your investments by their asset class. And if a single fund or ETF contains investments that span more than one asset class, as most do, Empower slices and dices the fund to apportion your account into each relevant asset class.

You can click on each investment in the box chart at the top or the list at the bottom to get details of your asset classes. This is extremely helpful when it comes to rebalancing your portfolio.

Investment Checkup

With the click of a button Empower will analyze your investments. It compares your actual asset allocation with your target allocation, and flags asset classes in which you are over or under-weighted. It’s an easy way to see if you need to rebalance.

Note that in the above screenshot heading is a reference to my “target allocation.” You can set this by entering your name, how many years to retirement, and your investing style (e.g., aggressive, conservative). It takes all of 10 seconds, and Empower then generates a target allocation for you.

Robust Retirement Calculator

Finally, Empower offers a free retirement calculator. The tool takes into account your current investments, age, projected social security, projected savings, and just about any other information you want to include. Using monte carlo analysis, it then determines whether you are on track to retire.

As you can see from the screenshot, the retirement planner displays the results in easy to understand graphs. It also makes change the assumptions (e.g., inflation, social security) very easy.

So what’s not to like?

Frankly, not much. One thing I haven’t mentioned is that an advisor is available for a call or a live chat. When you log into your account, you’ll see a picture of your advisor, his or her name, and telephone number. And even better, they don’t hound you. I’ve not heard from my advisor, and that’s how I want it. If I need to speak to him, I’ll give him a call. But it’s good to know that’s an option.

Empower also has mobile versions of its site for iPhone, iPad and Android. I use the iPad app and have had no issues. I’ve not had any issues with linking accounts. Occasionally I have to provide or confirm my login credentials for certain accounts. But that’s it.

But there are three things that could be improved:

  • You can’t enter your own target asset allocation model. Empower creates one for you based on your age, time to retirement, and investing style. This is probably fine for the majority of investors, but a custom option would be nice.
  • The daily updates on stock and bond prices is a bit slow. As compared to Wikinvest, another tool I’ve used before, Empower could be faster
  • It does not include the cost basis of your investments, which would be nice.

So there you have it. Its an excellent tool. If you want to give it a try, visit the Empower website.

Check It Out: Empower Review

Learn More: The Best Stock Tracking Apps

Empower Personal Wealth, LLC (“EPW”) compensates Webpals Systems S. C LTD for new leads. Webpals Systems S. C LTD is not an investment client of Personal Capital Advisors Corporation or Empower Advisory Group, LLC

  • Rob Berger is the founder of Dough Roller and the Dough Roller Money Podcast. A former securities law attorney and Forbes deputy editor, Rob is the author of the book Retire Before Mom and Dad. He educates independent investors on his YouTube channel and at RobBerger.com.

    View all posts

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Source: doughroller.net

Apache is functioning normally

I’ve been investing nearly 25 years, long before online brokers came on the scene. During that time I’ve used several of the best online discount brokers, including Scottrade, OptionsHouse, and even Vanguard’s brokerage services. Based on that experience and a lot of research, I’ve compiled this list of the top options.

Note that I have accounts at each of these firms and have personally tested their trading platforms, research, and other tools. Here’s a quick look at the top brokers.

Compare Discount Brokerage Accounts

Best Online Discount Brokers Firms of 2023

  • TD Ameritrade: Ideal for more experienced traders looking for a rich set of tools and resources.
  • E*TRADE: offers trading platforms and tools for any investment style
  • Ally Invest: Best for new investors and those looking for a very easy website to navigate.
  • Fidelity: Best for those looking for a robust broker with offices nationwide.
  • You Invest by J.P. Morgan: Best for free trades and cash bonuses

Over the years I’ve learned three important things about brokerage firms.

First, there are a lot of them. You’ve probably heard of many discount sites that allow you to trade stocks online, but I’m guessing there are a lot of online brokers you’ve never heard of (Sogotrade may be one example).

Second, while on the surface they can all seem similar, when you dig deep into what these brokers offer, you’ll find big differences. For example, not all of them offer the same account types. With some you can’t buy mutual funds, while others offer more mutual funds than most. And the stock trading tools available to you vary from one discount broker to the next.

And the third thing I’ve learned is that the cost of these discount firms can be tricky to understand, and in the end, may not be the most important factor. Because I watch every dime we spend, it may seem odd that cost isn’t the most important factor to me (after all, we are talking about “discount” sites, not full-service brokerage firms). The reality, however, is that unless you are an active trader, the cost of a few trades a year will be small.

Summary Of The Best Online Discount Brokers

TD Ameritrade

The now least expensive discount broker on our list, TD Ameritrade, offers some of the best online trading tools. Its platform “Trade Architect” is my favorite portal to use, specifically designed for casual investors like myself. If you’re looking for a more hardcore approach, they also have a thinkorswim platform that offers more data, more 3rd party research and more functionality.

Again, decided to cater to both casual and advanced investors by creating two separate mobile apps.

  • TD Ameritrade Mobile (for the casual investor)
  • Mobile Trader (for the advanced investor)

TD AmeritradeSummary:

  • Trade Stocks: $0 flat fee
  • Margin Rates: -0.75% to +1.25% of a base rate (base rate = 8.25% as of 11/12/2020)
  • Broker Assist Fee: $25.00
  • Mutual Funds (Load): $0
  • Mutual Funds (No Load): $49.99
  • Minimum Deposit: None
  • Sign up Bonus:N/A

For more information check out our TD Ameritrade review or visit TD Ameritrade.

E*TRADE

E*TRADE has been on a buying spree. Back in 2014 TradeMonster and OptionsHouse merged. Now E*TRADE has acquired the combined entity. E*TRADE offers trading platforms and tools for any investment style. It offers low costs even for infrequent traders, like myself. E*TRADE also offers E*TRADE Pro for active traders. And of course, it offers an excellent mobile experience.

E*TRADE Summary:

  • Trade Stocks: $0
  • Trade Options: $0 ($0.65 per contract or $0.50 per contract w/ 30+ trades per quarter)
  • Margin Rates: Ranges from 7.00% to 10.50% based on debit balance
  • Mutual Funds: $0 to $19.99 per trade

Read More: E*TRADE Review

Ally Invest

I’ve banked at Ally for years. Its website is one of the easiest to use among all banks, including online banks. Its fees are low to non-existent, and its banking rates are some of the best you’ll find on deposit accounts. So it was no surprise that Ally brought the same consumer-friendly approach to investing.

At Ally Invest stock and ETF trades are just a flat fee of $4.95. For you options traders out there, Ally charges just $0.65 per contract plus a $4.95 base. If you have a $100,000+ average daily balance and/or more than 30 trades per quarter the cost per stock or ETF trade drops to $3.95 and options contracts fall to $0.50 + $3.95 base. It’s hard to imagine a lower cost.

Ally also offers a Cash Enhanced Robo Portfolio. Like other robe-advisors such as Betterment, Ally Invest manages the portfolio, including dividend reinvestment and rebalancing. Ally charges 0% for the service. The minimum investment is just $100.

Capital One Investing

Formerly ShareBuilder, Capital One Investing offers a full range of trading services. In addition to online trading, it also offers managed portfolios. While its fees are generally reasonable, its managed portfolios require a $25,000 minimum investment and charge 0.90% of assets under management. Due to the fees, we don’t recommend Capital One Investing’smanaged portfolio.

Capital One Investing Summary:

  • Trade Stocks: $6.95 flat fee
  • Trade Options: $0.75 + $6.95 base
  • Margin Rates:5.20% to 8.20%
  • Mutual Funds: $0 or $19.95
  • Bonus: Up to $600 based on the amount of deposit

Merrill Edge

Merrill Edge is one of my favorite platforms. In addition to online DIY investing, they offer a managed portfolio. You can invest with an advisor, if you so choose. And the website is incredibly easy to use.

Managed portfolios require a $5,000 minimum and cost 0.45% of assets under management. While this fee isn’t the lowest, it’s reasonable for those looking for some extra help.

  • Trade Stocks: $6.95 flat fee
  • Trade Options: $0.75 + $6.95 base
  • Margin Rates:5.50% to 9.625%
  • Mutual Funds: $0 or $19.95
  • Bonus: Up to $600 based on amount of deposit

How Much Will You Pay To Buy And Sell Equities Online

All of the firms make a point to advertise how much you pay to buy or sell stocks, mutual funds, options, or other equities. Today most trades at discount sites run from about $2.50 to $12 per trade. The key to remember, however, is that many of these firms charge additional fees, depending on how you use your account. These additional fees may include fees for large buy or sell orders, fees to buy or sell stocks trading at less than $1, account maintenance fees, account inactivity fees, and of course interest if you buy on margin.

Because these fees vary among discount brokers, the starting point is to understand how you will use your stock trading account. Will you trade frequently or just once or twice a month (or quarter)? Do you want to set up an automatic investment plan? Will you be buying stocks and mutual funds, or do you also plan to trade options? The answers to these questions will help you narrow the selection and ultimately pick the best broker for you investing needs.

Factors To Consider Other Than Cost

But just like most anything we buy, the cost is just one of many factors to consider. And the same is true when selecting a discount broker. So what are the factors besides cost that we should consider when selecting a discount stock broker? There are several, and they include ease of use, customer service, types of accounts offered, investing tools, type of investments you intend to buy, and account minimums. I’ve highlighted these and other factors below in the summary of the best online discount brokers. But just like cost, it’s important to know your investing goals when you evaluate your options. For example, account minimums may be a non-issue for you if you plan to invest a significant amount of money. Likewise, if you are looking for a specific account time (like an IRA), you can quickly eliminate those discount stock brokers that do not offer that account type.

Discount Broker Consolidation

Several brokers have acquired other online trading platforms. Ally Invest was previously TradeKing, until the online bank purchased the broker in 2016. TD Ameritrade has entered into an agreement to purchase Scottrade. E*TRADE acquired OptionsHouse.

The flurry of acquisitions has left the industry in a state of flux. How smoothly will customer accounts transfer to their new home? How will the loss of competition in the space affect fees and features?

Time will tell. As the dust settles, we’ll continue to update this list.

  • Rob Berger is the founder of Dough Roller and the Dough Roller Money Podcast. A former securities law attorney and Forbes deputy editor, Rob is the author of the book Retire Before Mom and Dad. He educates independent investors on his YouTube channel and at RobBerger.com.

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Apache is functioning normally

You’ll find amenities galore and a wide range of communities and rent prices among the best apartments in Phoenix.

As one of the best places to live within Arizona, Phoenix has plenty to offer those on the hunt for a new home. You get a bevy of scenic views, cool amenities for those hot days and access to luxury. It’s no wonder people are looking to rent in neighborhoods across this desert city.

Whether selecting a home in a more high-end spot, gravitating toward downtown or settling into the suburbs, most of the 1.6 million inhabitants of Phoenix moved here from somewhere else. They started off their journey just like yours; each trying to find the best apartments in Phoenix to call home.

To make your search easier, here are 25 of the best apartments in Phoenix to consider.

Offering upscale living with plenty of opportunities for entertainment and relaxation, Fairways on Thunderbird has a great amenities package. In addition to a pool and spa, media center and business center, you’ve got a picnic area with barbecues to use. There’s even a clubhouse with billiards.

Close to freeways and shopping, this community offers studio, one-bedroom and two-bedroom apartments. Most floor plans also come in under the average rent price in Arizona.

One of the few green communities on best apartments in Phoenix list, North Mountain Village offers up a modern, urban feel. Along with the two playgrounds and three pool areas, you get access to a breakfast/coffee concierge when you live here.

With studio, one-bedroom and two-bedroom units, this quiet community is pet-friendly and within walking distance to shops and restaurants. There’s even a dog park nearby.

The lush greenery and a fun stucco aesthetic at Vaseo will catch the eye of just about anybody.

On-site, you’ll find basketball courts and tennis courts for the athlete. A movie theater is there for the pop-culture fan. Complimentary charging stations for eco-vehicles make things great for the environmentally conscious. The playground and pool are also open for a little rest and recreation.

A variety of floorplans make this a dynamic community. One-bedroom and two-bedroom units vary in price. But if you live here, expect to pay a little more than the average rent rate in Arizona.

Located in the urban village of Ahwatukee, Pacific Bay Club is close to shops, boutiques and restaurants. All combined, they provide so much appeal, most residents never feel like leaving.

Pets are welcome in the one- and two-bedroom units and you’ll find a dog wash area on site. However, expect to pay a little more for the location and the extra amenities. With a variety of floorplans, most units rent for more than what you’d pay on average in the state.

Situated right near Desert Sky Mall, Del Mar Terrace is conveniently located within Phoenix. It’s a great spot to commute from. The on-site soccer field provides a unique recreational opportunity, and the onsite market and preschool make the community feel like its own little village.

One- and two-bedroom units are all within a very affordable range. Monthly rent is considerably less than the average you’d expect to pay throughout Arizona.

Plenty of trees and polished landscaping give the Villages at Metro Center a homey feel. The community is also across the street from Metro Center Mall when the shopping bug bites. Units come with covered parking and private patios or balconies. Additionally, there are three resort-inspired pools, a clubhouse and a playground

With studio, one-, two- and three-bedroom units available there’s a floor plan to meet anyone’s needs. Pets are also welcome, and most units fall under the state’s average monthly rent.

A sleek and colorful aesthetic gives Novella a fun feel. The design fits the tone of the neighborhood, known for its vibrant, up-and-coming vibe and its variety of shops and restaurants.

These luxe, three-bedroom units include all the high-end amenities that come with the community. These include a barbecue area, fire pit, lounge space and pool.

The eye-catching yellow doors will draw you into the newly renovated space at Amara. Located near the downtown campus of Arizona State University, this community is also close to plenty of entertainment, shopping and dining.

New interiors and a great pool put the studio, one- and two-bedroom units in demand, and the price is right too. All units have a lower monthly rent than the state’s average.

A senior living community with a long list of amenities, Phoenix Manor is a great place to retire to. This is a smoke-free space with a dog park, two heated pools and a nine-hole putting green. Two clubhouses, a library, lounge and coffee bar round out the special spots. You’ll also find invites to social actives like bingo and dances to make it easy to get to know your neighbors.

This community is all about creating an elegant and independent lifestyle. Studio, one-bedroom and two-bedroom units are all available. Most even price out under what the average tenant pays each month throughout the state.

An urban vibe permeates the boutique apartment complex of MODE Midtown. Another green community, living here is all about location. Nestled among the East Alvarado Historic District and Central Arts District, you’re close to so much local culture. There are art galleries, parks, boutiques and unique eateries. You’re also close to the Phoenix Art Museum, the Heard Museum, the Arizona Opera and the Phoenix Theatre.

Affordable one- and two-bedroom floor plans give you plenty of space both inside and out. Large rooms and a nice-sized patio are the perfect combination for comfortable living.

A covered playground, basketball court and pet play area means every resident at San Marina can find happiness and activity. There’s also a hot tub, pool and clubhouse. It’s in West Phoenix, putting you near great shopping and dining. You’re also minutes from outlet shops and close to State Farm Stadium.

One- and two-bedroom apartments, priced well below the state’s monthly rent average, give you plenty of choices. And, none of them will take a big bite out of your budget.

Water-scape views make Riverwalk stand out in the middle of Phoenix’s desert landscapes. Close to Scottsdale, the Camelback Corridor and Papago Park, you’re never far from, excellent shopping, dining, hiking and biking. You’ve even got a golf course around the corner.

Within the community itself, you’ll have access to a 24-hour heated, Mediterranean-style pool and spa. There’s also a cabana, sand volleyball court and a playground.

Live in a little luxury with these condominiums, some of the best apartments in Phoenix.

Upscale amenities and excellent service make 59 Roosevelt another solid community to consider calling home. A resort-style pool, clubhouse and community lounge provide residents with spots to relax and socialize.

Two- and three-bedroom units feature oversized closets, stainless appliances and hardwood floors. You’re conveniently located to shopping and dining as well. Commuting is also easy via the South Mountain 202 Freeway and I-10.

If you live a more active lifestyle, consider calling Los Vecinos home. Not only will you find a playground, swimming pool and picnic area, but plenty of athletic options. Right out your door are basketball courts, a soccer field and a volleyball court. Perfect your skills in one sport or more while meeting your neighbors while you do it.

This community is also a win based on its location. It’s close to great dining, shopping and public parks as well. Studio, one- and two-bedroom apartments rent below the average for the state, for an affordable find.

Twenty-four-hour customer service makes The Cove stand out as a great Phoenix find. Combining comfort with a resort lifestyle, here, luxury awaits. One-, two- and three-bedroom apartments rent with all the expected amenities.

Only blocks away from a grocery, and great dining options, you’re also within range of a lot of activity. This includes the Phoenix National Raceway, Ak-Chin Pavilion and American Family Field of Phoenix. With all the perks, rent prices are slightly higher than the state average.

Up in North Mountain, Azura is an allergen-free apartment community. It’s both pretty to look at and functional to live in. You’ll find a 24-hour fitness center, three pools, a dog park and more.

From this vantage point, you also have access to plenty of hiking trails and scenic landscapes. There’s no shortage of great pubs, bars and casual eateries as well.

Studio, one- and two-bedroom apartments are affordably priced. They rent under the state average, making it possible to get coveted amenities at a great rate.

Walking distance to shopping plazas makes it a no-brainer to check out Village Square. This apartment community is in Paradise Valley. You’re close to Phoenix Mountain Preserve as well as plenty of parks with biking and hiking trails. You also have easy access to downtown.

This ideal location, coupled with amenities like a media center, business center and pool, comes at a very reasonable price. One- and two-bedroom units rent for under $1,000 a month.

A modern feel makes Rise on Thomas something a little different. With studio, one-bed and two-bedroom apartments, you have plenty of choices when picking your perfect floor plan. The community features a fitness center and swimming pool, too. You’re able to stay in shape and cool off on all those hot days without going far from home.

Rent prices are close to what you’d pay, on average, throughout Arizona. The location is also central to downtown, Biltmore Fashion Park and Phoenix Children’s Hospital.

Giving off more of a house vibe, the best features of Thunderbird Villas are the garages and the balcony/patio most units have. You’ll also find renovated interiors and plenty of shops and restaurants nearby.

These townhomes are in South Phoenix, an area rich in local history and culture. Two-bedroom units have starting rental prices below the state average. Rents may stretch slightly above though, based on the amenities within.

Taking all its tenants’ needs into consideration, The Curve at Melrose is full of amazing amenities. Not only that, but the look of the community is hip and modern. You’ll want to hang out in the common spaces. This is all to keep up with the vibe throughout the Melrose District. This Downtown Phoenix neighborhood is known for being vibrant, eclectic and very urban.

Specific amenities throughout the community include a business center with a conference room, a Starbucks coffee bar, valet trash service and charging stations for electronic vehicles. You’ll also find a great pool area with a hot tub, a 24-hour fitness center, a clubhouse and even complimentary beach cruiser rentals.

Living in a park-like atmosphere gives Verde Vista wide appeal. The community has two pools, a picnic and grill area and a covered playground. When the days aren’t too hot, you can also use the soccer field and basketball and volleyball courts.

Floor plans are spacious. And, everything in the studio, one-bedroom and two-bedroom units has gotten remodeled recently. The price is right, too, with all units renting for under $1,000.

Congregate around the fire pit at Atwater. Get to your know neighbors in this pet-friendly, recently-renovated community. There’s also 24-hour maintenance, a barbecue and picnic area, pool and conference room.

A part of the Camelback East neighborhood, living here puts you beside Squaw Peak and entitles you to amazing views. You’re also nearby some dining gems and top-notch hiking. Two- and three-bedroom options mean plenty of space and like-new amenities.

What’s not to love about Desert Star? Studio and one-bedroom apartments are affordably wrapped up with amazing amenities. Not only is there a fitness center, but also a jogging track, basketball court and tennis court. You get a pool and two jacuzzis. For the kids, there’s also a playground. It’s fun for all.

This community’s location within Deer Valley also puts you in walking distance to Turf Paradise. This horse racetrack is the third-largest sport’s attraction in the entire state. You’re also not far from great shopping and restaurants.

A nice outdoor grilling space is just the start at Boulder Creek. This community prides itself on service. You have access to a 24-hour wellness center and 24-hour emergency maintenance. You’re also located near Arizona State University, Sky Harbor Airport and the Phoenix Zoo. When nature calls, you’re across from Papago golf course and park as well.

Priced below the state’s average, you’ll find studio, one-bedroom and two-bedroom units for rent.

With a sleek look, Proximity 16th Street brings plenty of updates to this South Phoenix community. A smoke-free residence, you’ll find charging stations for electric vehicles as well as smart thermostats, doors and locks within each unit. There’s Wi-fi access at the resort-style pool and video doorbells, as well.

A brand-new community along the Western Canal, one of the best amenities is Bark Park, the community’s dog park. This isn’t the only pet-conscious feature though. You’ll also find in-home doggie doors that go out to private patios.

The price tag matches the perks. One-, two- and three-bedroom units all price higher than the state’s average.

Renting the best apartments in Phoenix

There are so many choices when it comes to renting in The Valley of the Sun. Make sure you come prepared when the hunt begins. No matter where you start your search, it’s an exciting process to find apartments for rent in Phoenix. This is thanks to the variety of vibrant and picturesque neighborhoods all around town.

We looked at all available multifamily rental property inventory from January to June 2021 on Rent. to determine which properties with a Phoenix mailing address are most viewed by organic internet searches. The information included in this article is used for illustrative purposes only. The data contained herein does not constitute financial advice, availability or a pricing guarantee for any apartment.

Source: rent.com

Apache is functioning normally

Throughout your working career, you pay employment taxes that help fund Social Security, which provides income when you retire. In 2023, nearly 67 million people will receive Social Security benefits, collectively totaling more than $1 trillion.

There are strict rules about when you can claim Social Security benefits. You can start collecting retirement benefits as early as age 62, but if you can delay claiming your benefits, your monthly benefit amount can continue growing until you reach age 70.

Learn more about Social Security benefits, early retirement age, and the advantages and disadvantages of filing for your benefits early and late.

Key Points

•   Social Security benefits provide income for retirees, with the amount depending on their earnings and the age at which benefits are claimed.

•   The full retirement age (FRA) for Social Security benefits varies based on the year of birth.

•   Benefits can be claimed as early as age 62, but the monthly amount is reduced compared to claiming at FRA.

•   Delaying benefits past FRA can increase the monthly amount through delayed retirement credits, up to a certain point.

•   It’s important to consider shortand long-term financial needs before deciding when to claim Social Security benefits.

What Are Social Security Benefits?

Social Security is a social insurance program created in 1935 to pay workers an income once they retired at age 65 or older. When people talk about Social Security benefits, they’re referring to a monthly payment that replaces a portion of a worker’s pre-retirement income.

The amount you receive depends on how much you earned and paid in Social Security taxes during the 35 highest-earning years of your career. Generally speaking, the higher your income, the bigger your monthly check will be — up to a point. Also important is the age at which you claim benefits. Typically, the later you receive benefits, the higher your monthly check will be.

Note that retirees aren’t the only ones who are eligible for Social Security benefits. People with qualifying disabilities, surviving spouses of workers who have died, and dependent beneficiaries may also qualify for benefits.

Recommended: When Will Social Security Run Out?

At What Age Can You Collect Social Security?

When the Social Security program began, the full retirement age (FRA) was 65, and that’s still what many in the U.S. think of as the average retirement age. However, as life expectancy in the U.S. has increased, the Social Security Administration (SSA) has adjusted the FRA accordingly.

The chart below illustrates FRA by year of birth.

If You Were Born In Your Full Retirement Age Is
1943-1954 66
1955 66 and 2 months
1956 66 and 4 months
1957 66 and 6 months
1958 66 and 8 months
1959 66 and 10 months
1960 or later 67

Recommended: At What Age Should You File for Social Security?

What Is the Early Retirement Age for Social Security?

You can choose to claim retirement benefits as early as age 62. However, SSA will reduce your benefit by about 0.5% for every month you receive benefits before your FRA. For example, if your full retirement age is 67 and you file for Social Security benefits when you’re 62, you’d receive around 70% of your benefit.

On the other hand, if you wait to claim benefits after your FRA, you’ll accrue delayed retirement credits. This increases your benefit a certain percentage for every month you delay after your FRA. For example, if your full retirement age is 67 and you delay receiving benefits until age 70, you’ll get 124% of your monthly benefits. Note that the benefit increase stops when you turn 70.

Recommended: When Can I Retire? This Formula Will Help You Know

Can You Claim Social Security While You’re Still Working?

When you claim your Social Security benefits, the SSA considers you retired. However, you can continue working after retirement and receiving benefits at the same time, though they may be limited.

If you’re younger than FRA for the entire year, the SSA will deduct $1 from your payment for every $2 you earn above an annual limit. In 2023, that limit is $21,240. In the year you reach full retirement age, the SSA will begin deducting $1 for every $3 you make above a different earnings limit — $56,520 in 2023.

No matter their work history, your spouse has the option to claim Social Security benefits based on your work record. That benefit can be up to 50% of your primary insurance amount, which is the benefit you’d receive at FRA. Your spouse can begin receiving spousal benefits at age 62, but they will receive a reduced benefit.

Pros and Cons of Claiming Social Security Early

The main advantage of filing for Social Security early is that you’ll have access to retirement funds sooner. This can be a boon to individuals who need extra money to get by each month. To help you maximize every last dollar, consider using a spending app to create budgets, track spending, and monitor bills.

The main disadvantage of filing early is that you may permanently reduce your monthly benefit amount. This could be a factor to keep in mind as you determine whether you’re on track for retirement.

So how do you decide when to file for your benefits? Consider your “break-even point.” This is the age at which receiving a delayed higher benefit outweighs claiming benefits earlier.

Here’s an example of how that works. Let’s say your FRA is 67 and your annual benefit is $24,000. If you claim your benefit at age 62, your benefit drops to $16,800 a year. If you delay until age 70, your benefit would be $29,760 a year.

By adding up each year’s worth of benefits and comparing them across different potential retirement ages, you find your break-even point. So in that last example, claiming your benefit at FRA breaks even with early filing at age 78. If you expect to live until this age or longer, you may consider filing for Social Security at full retirement age. Delaying until age 70 breaks even with claiming at FRA at age 82. So if you expect to live until 82 or longer, you may consider delaying your benefits.

Recommended: How Can I Retire Early?

The Takeaway

Social Security is an important source of guaranteed income during retirement and can help ensure you can cover recurring expenses like housing payments and utilities. Your monthly payment amount is determined by how much you’ve earned during your working career and the age at which you claim Social Security benefits. You’re eligible to receive your full benefits when you reach full retirement age (FRA). If you file before then, the monthly payment will be reduced. If you file later, your monthly payment can increase, up to a point. Consider your short- and long-term financial needs carefully before deciding when to claim Social Security.

Whether you’re planning to continue working past your FRA or are preparing for retirement, using a money tracker app can help you manage your overall spending and saving. The SoFi Insights app connects all of your accounts in one convenient dashboard. From there, you can see all of your balances, spending breakdowns, and credit score monitoring, plus you can get other valuable financial insights.

Stay up to date on your finances by seeing exactly how your money comes and goes.

FAQ

Can I take Social Security at age 55?

You cannot claim Social Security benefits at age 55. The earliest you can file for benefits is age 62.

What happens to my Social Security if I retire at 55?

If you retire at 55, you will have to wait seven years, until age 62, before you are eligible to claim early Social Security benefits. Retiring early may also affect the size of your benefit if you are leaving work in your top-earning years.

What is the average Social Security benefit at age 62?

The average monthly Social Security retirement benefit in 2023 is about $1,827 for those filing at full retirement age. Filing early at age 62 would reduce that benefit by 30% to $1,278.90.

Photo credit: iStock/svetikd

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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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Source: sofi.com