5 Ways to Increase Your Retirement Savings

A common quote attributed to Albert Einstein is, “Compound interest is the eighth wonder of the world.” It is difficult to determine if he actually ever said that, but it does not matter. You save and invest money and earn a positive return (hopefully). And then that earned money earns more money! And that money earns money. And on and on.

It can be difficult to find the extra money to add to your retirement savings and let it grow and maximize the power of compounding interest over time.

Here are five things that you can start applying today to increase your retirement savings and build that nest egg as big as you can by the time you retire.

Use a Raise to Increase Your Contribution 

This is one of the easiest ways to save more for retirement. It can be hard to make the decision to live on less. Increasing your contribution means less money in your paycheck to live on.

However, say for example you get a 5% annual raise. Rather than opting for the extra channels in your cable package, instead contribute another 2-3% to your 401(k). Since it is extra money anyway, you will not have to take a hit to your quality of life.

Look for Areas to Reduce Your Spending 

Look for those areas like eating out or your morning coffee to cut unnecessary expenses. Do you really need a $3 cup of coffee? The average price of a Starbucks coffee is $2.75. It costs about a quarter to brew it at home. That is a $2.50 savings. 5 days a week/ 52 weeks a year, and that adds up to $650 a year in savings you could be putting toward retirement.

Ok, Ok. Hands off your Starbucks. Fair enough. The point is that for most people if they really give it some thought and write down what they spend their money on every month, they would find that there are certainly things that they spend money on routinely that they can live without. Put that extra money towards your retirement savings.

Pick up a Side Hustle has a list of 99 side hustles you can choose from that you can do in your spare time to earn some extra cash. Some things require some unique talent, but other things like driving for Uber or Lyft, taking online surveys, or selling your junk on ebay are things almost anyone can do to earn extra cash that you can use to boost your retirement savings.

Take Advantage of Catch-up Contributions 

If you are age 50 or older, you can take advantage of something known as catch-up contributions. There are limits to how much you can contribute to your 401(k) or IRA. But if you have not maxed out your contributions over the years, the government may allow you to catch up by increasing the amount you can contribute.

Each type of retirement plan has a different catch up limit, so you should consult your tax professional or the IRS website before making catch up contributions.

Open an IRA 

401(k) plans will have a contribution limit of $19,000 starting in 2019. You may be able to contribute an additional $6,000 into an IRA on top of that. So, if you are already maxing out your 401k provided by your employer, consider opening an IRA to take advantage of an additional $6,000 in tax-deferred retirement savings.

These are just a few ways to boost your retirement savings to help build that nest egg faster. Remember, the more you contribute, the more there is to compound over a longer period of time. A little bit now can go a long way toward giving yourself a comfortable retirement.

What are Fixed-Income Mutual Funds?

What are Fixed Income Mutual Funds?

Mutual funds are investments that allow a pool of investors to combine their money and have it managed by a professional manager. Mutual funds are typically longer-term investments which may have higher fees than other types of investments.

Depending on the fund, you may end up paying a management fee for the manager to manage the funds, as well as load fees when you buy or sales fees when you choose to sell the fund. You should read the prospectus carefully to determine what fees you will be charged before investing in any  mutual fund.


Fixed income mutual funds are mutual funds that own fixed-income securities such as municipal bonds, corporate bonds, treasury bonds, preferred stocks, dividend paying stocks, real estate and money market instruments.

There are advantages and disadvantages associated with fixed income funds over traditional mutual funds. The main advantage is a steady income stream that can be then reinvested back into the fund.


There are five basic types of fixed-income mutual funds.

Treasury-Inflation Protected Securities (TIPS) Fixed Income Funds

Tips funds are funds that provide some protection against inflation by investing in TIPS bonds. TIPS bonds adjust the interest and principal on a semi-annual basis to keep pace with inflation or deflation based upon the consumer price index (CPI). Upon maturity, the principal paid is the higher of the adjusted principal or the original principal.

Municipal Fixed Income Funds

Municipal fixed income funds hold a basket of municipal bonds. Municipal bonds, also called “munis,” are issued by city, county, and state governments to help finance their operations and bridge the gap of budget shortfalls. Generally, munis are exempt from federal taxes, and in some instances state taxes —if you purchase them in the state which you reside.

Investment Grade Corporate Fixed Income Funds

Investment grade corporate fixed income funds only invest in securities that are considered investment grade. Bond rating firms, such as Standard and Poor’s (S&P) and Moody’s, use a letter scale (upper and lower case) to rate a bond’s creditworthiness on a scale from D (lowest) to AAA (highest). Bonds that are considered investment grade have a rating of BBB (S&P) and Baa (Moody’s) and higher.

High-Yield Fixed Income Bond Funds

High-yield fixed income bond funds buy high-yield bonds. Often referred to as “Junk Bonds,” high-yield bonds are corporate-issued bonds with ratings below that of investment grade. As their name suggests, high-yield bonds typically have higher yields than investment grade or municipal bond. But as indicated by their lower credit rating, they also carry higher inherent risk as well.

International Fixed Income Funds

Typically, a “currency play,” international fixed income bond funds aim to take advantage of fluctuating U.S. dollar by purchasing bonds issued in a foreign currency that is expected to appreciate or depreciate against it.


There are many things to consider when deciding on whether or not fixed income mutual funds are right for you. As with any investment, it is important to know the risks and potential rewards involved and weigh them against your overall investment goals. A qualified professional can help guide you in the right direction.

You should carefully review the prospectus of each fund prior to investing. It is your responsibility to understand the investment prior to placing any money in a mutual fund. Many funds hold a variety of securities regardless of what the name of the fund is. You should also understand the cost associated with the mutual fund prior to making the investment.

What is portfolio management and why is it important?

What is Portfolio Management?

There is an incredible range of investment opportunities available to investors today. It seems you cannot watch TV or browse the internet for even five minutes without seeing an advertisement for the latest brokerage firm offering trades for under ten dollars and the tools and information you need to make money. They make it seem so easy. Anybody can do it, right?

Not anyone can do it nor should they

The truth is that portfolio management is complex and takes time and education to do properly. A multitude of questions first need to be answered before even attempting to decide which investments to choose for your portfolio. Among those things to consider are:

·Investment goals such as retirement or income

·Level of acceptable risk

·Amount you have to invest

·Period of investment

And once all those questions are answered, then comes the hard part: Which types of investments do you choose? Asset classes include:

·Real estate

·Stock equities


You can quickly get lost in a sea of opportunity and become confused as to which direction to take to meet your specific goals and objectives.

Portfolio Management

While some people take the time to educate themselves and over time gain the experience necessary to manage their own portfolios, many investors turn to professional portfolio managers for help with their investments. A professional portfolio manager can help you determine both your short -and long-term goals, assess the level of risk you are willing to accept, and help you choose the right investment vehicles based on your specific goals, objectives and risk tolerance.

The three key elements a professional can help you with are asset allocation, diversification, and rebalancing.

Asset allocation

A portfolio manager can help you decide which asset classes to invest in and how much to invest in each class. All asset classes do not move in tandem with each other and some are more volatile than others. Depending on your tolerance for risk, your investments may be weighted more heavily toward one class or another.


Diversification means spreading out your investments within each asset class you choose. It is difficult to consistently predict individual winners and losers within an asset class, even for professionals. Diversification spreads the risk and reward out among subsectors of an asset class creating broader exposure and hopefully capturing the success of the entire asset class over time.


Throughout the year a portfolio manager will move investments around to capitalize on opportunities such as extended stock market rallies or rising bond yields. This may cause an investor’s portfolio allocation to move away from their original allocation.

Rebalancing occurs when your portfolio manager sells certain assets and purchases others to realign your portfolio with your overall tolerance for risk and investment goals.

This brief article merely touches on the complexity of portfolio management. In reality, professionals take years honing their education and skills to be able to effectively manage the wealth of their clients. While it is not impossible to manage your own portfolio, the rewards are often worth the costs of having your portfolio managed professionally.

What are Index Funds?

An index, for example, the S&P 500, measures the performance of stocks across different industries. While indexes have different criteria for which stocks are included, the end result is an average measure of how stocks in that index sector are performing. The S&P 500 measures the 500 largest companies listed on the NYSE or NASDAQ, giving us an overview view of some of the most well known companies.

An index fund is a type of mutual fund designed to mimic an index, however the actual composition of the fund may be different then the index. The index may be a broad market index or may be concentrated in one sector of the market such as health care or technology.

Advantages Of Investing In Index Funds


  • Range of Market Exposure 

An index fund gives you the advantage of a diversified portfolio that spreads the risk among multiple companies. Some companies may do very well, a handful more could do moderately, and a couple could perform poorly.

  • Low Fees 

Index funds tend to have lower fees than other investment options because they are often passively managed instead of actively managed. We will look more at passively managed investments in a moment, but one reason they may be attractive is that they take less work to manage, meaning they may have lower costs and fees.

  • Low Tax (Low Turnover)

Holding investments for longer than one year may give you a tax advantage compared to holding an investment for less than 12 months. Index funds tend to have a lower turnover, which means they are not constantly buying and selling holdings. At the end of the day, this may result in a more stable asset with less tax liability.

Index Funds and the Greater Investment Strategy

Index and other types of mutual funds are a common asset class for investors seeking a diversified portfolio to put their money where they may earn a higher return than placing it into a savings account. Depending on how aggressive or conservative the investor want to be, funds may make up a larger or smaller percentage of a portfolio.

Passive Vs Active Management

An actively-managed investment is one where a financial professional, like a fund manager, is more heavily involved in running the investments. The fund manager spends more time evaluating the holdings and deciding whether it is time to buy or sell the stock. In contrast, a passively-managed investment is more hands off.

Conservative Vs Aggressive Investments 

The goal of an index is to recreate the market average, not to seek the gamble of incredible returns.

A more aggressive investment is looking in a specific place to earn a return. For example, a fund that invests only in small cap companies in the tech sector could make the right choices and end up holding the next major company at just the moment when it skyrockets in value. But, there is also the chance that the wrong selections could bring the investment crashing down.

The advantages of the index fund make it an attractive asset for investors who either do not have a tolerance for losing money in more aggressive investments or for those who want to strike balance between the two strategies.

Credit Score: Hate it or Love it, Be sure to Guard it

The Importance of your Credit Score 

Credit scores affect more than just your ability to open a credit card or take out a loan. In some cases, a poor credit score can affect your ability to get a job or your relationship with your spouse. If credit scores can have such a big impact on our lives, it is important to understand where it comes from and how to have the best score possible.  

A credit score is a number that is calculated based on a system that translates your credit history into a statistic. It is used by lenders to guess whether you will be likely to pay back a loan. The number itself comes from the credit bureau compiling the information. The three largest credit bureaus are TransUnion, Experian, and Equifax. These agencies compile information about you to assemble your individual credit score.  

Though it is easy to dismiss a credit score as just a number, your credit score affects the interest rate at which you will repay a car loan or mortgage. Moreover, according to the Federal Reserve, it can also predict the longevity of your relationships. It is not just any number, so it is essential that we treat it that way.

Your credit history creates your credit score. Your history can include credit cards, loans, and mortgages, though the most common source is a credit card. The easiest way to get a credit score is to be included on someone else's credit card or start using one yourself. However, though it can be easy to start generating credit, the goal is to maintain, improve, and guard your score over time.

Choose your credit card carefully

Know your spending habits before you choose a credit card. For example, if you are always traveling, you may want to find a card that does not charge foreign fees. Pay attention to the annual fees, interest rates, and any other spending requirements of the card. Though choosing a card does not affect your credit score directly, choosing a card that fits your lifestyle can be a strategic approach to managing monthly payments that will directly affect your score.

Pay On-time

A big part of guarding your credit includes paying on-time. An easy way to ensure you are paying on-time is to set up an automatic payment on your account. The automatic setup will send the payment on your behalf. Also, another part of paying on-time is not spending more than you have. If you spend more than you earn, it will be challenging to pay on-time.

Use Less

Utilizing less of your credit line shows that you are using your credit responsibly. The rule of thumb is to utilize 10-30% of your credit line. This utilization may boost your credit score.

Credit History

Credit history is a factor of time. Having a solid credit history over several years may increase your credit score. It is about consistency over time. When it comes to your credit history, the longer you hold a credit card and make on time payments, the better. Which means the earlier you start, the better.\ 

Credit Score Requests

If you request your credit score too many times from a credit bureau, it may affect your credit score negatively. Asking for your credit score as little as 2-3 times may affect your credit score and it will remain on your history for about two years. Today, many credit card companies provide a credit score gauge on your account. With this tool, you can monitor your credit score.

Your credit score is more than just a number. A good credit score is a route to, potentially, save thousands of dollars. It is a significant number and is best to be guarded as such.