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Does your savings plan need a tune up?
It's smart to take your vehicles in for regular maintenance visits to avoid a breakdown or costly repair. Creating a similar maintenance schedule for your retirement savings plan is equally smart. There are many choices for building a retirement nest egg: stocks, bonds, real estate, high-yield savings accounts, etc. Each choice has its pros and cons, depending upon your financial plan and the economy. Remember, the strategy you made at 40 may need updating by the time you reach 55.
- Check under the hood
If you're 10 years or less from retirement, it's time to examine your financial plan. Have your circumstances changed since you established your plan? Weigh factors like working part-time in retirement, the value of a pension or other assets, etc. Add expenses for new items like long-term care insurance or increased medical services. - Safety first
Your retirement goals may include risky hobbies like racing or skydiving—but shouldn't include high-risk investments. The ideal retirement portfolio should be a mix of stocks, bonds and shorter-term cash investments, such as CDs. Generally, it is advisable to move money into "safer" investments the closer you get to the point in time when you actually need to use the money. - Keep cash within reach
Stocks, bonds, real estate...these investment options must be liquidated before you can use the cash. That can take time, and you could be forced to sell at a loss. An interest-earning savings account of 12 to 18 months' worth of living expenses, plus a cushion to handle surprises, will keep this money working for you.
AAA has partnered with Discover Bank to offer Certificates of Deposit, Money Market Accounts and CD IRAs. With these and other available resources, your "tuned-up" savings plan will keep you humming down the road to retirement.
Call 1-888-728-3096 or go online to AAA.com/Deposits for more information.
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6 Tips for Saving on your next car purchase
The 2011 models are rolling in, which means now is a great time to get a deal on a new car—including "left-over" 2010 models and previously owned vehicles.
- Gain an advantage in the car buying process—Arrive at the dealership with financing in hand.
- Find a car within your budget—Experts advise that no more than 15-20 percent of your total monthly budget should go to all car-related expenses.
- When buying a pre-owned vehicle, check out the vehicle's history—Who owned it? Where was it driven? Has it been in a flood or accident?
- Consider a Certification Program—Many manufacturers now offer a "certified vehicle program" and back selected cars with extended warranties.
- Match length of loan to length of ownership—Make sure your loan has no prepayment penalty should you decide to sell or trade in early.
- Car loans work just like mortgage loans—You can refinance! Even a percentage point or two can save hundreds of dollars over the life of the loan.
Perform research, get tips, and even buy your car online with the AAA Car Buying Program available at AAA.com.