Is the Nest Egg Cracking?
Financial stories are everywhere these days. Gas prices continue to rise, inflation is threatening, and the stock market seems to rise and fall with any little news story. If you’re planning for retirement—or are already retired—now may be a good time to review your investment options to ensure the safety of your nest egg.
Early in the retirement planning years, it’s okay to have a highly diversified portfolio with aggressive investments. But as retirement gets closer, you will want to move your investments from aggressive to low risk. And here’s where rising interest rates are actually your friend.
While the rest of the country is worried about climbing interest rates on their mortgages, credit cards and other loans, savings accounts, such as Certificates of Deposit (CDs) or Money Market accounts, are benefiting with some of the highest yields seen in years. AAA has teamed with MBNA America Bank, N.A. to offer members CDs, Money Market Deposits and Individual Retirement Accounts (IRAs).
Investors nationwide have more than $20 billion on deposit with MBNA America. MBNA accounts are FDIC insured up to $100,000 per depositor and only require a low $2,500 minimum opening balance. (If your account is an IRA, the required minimum opening balance is just $1,000.)
MBNA offers Traditional IRA Money Market and CD accounts as well as Roth IRA CDs. Simplified Employee Pension (SEP) plans are also available at the same great yields as the other MBNA Deposit Accounts. In many cases, investing in an IRA can help defer income tax obligations, and existing IRAs can be transferred or rolled over to MBNA to begin earning high yields.
Apply online to open a new Money Market or CD account. To establish a CD or Money Market account as an IRA or SEP, please call an MBNA IRA specialist at 1-800-201-8207 and mention priority code HA06U. IRA specialists are available Monday through Friday, from 8 a.m. to 6 p.m. (Eastern time).
If you prefer, you can print out this New Account Form, fill it in, and mail directly to MBNA.
Review your retirement savings strategy at least annually to ensure the ol’ nest egg is safe and sound.
AAA Member Newsletter editorial provides a forum for personal finance and investment information and ideas. The article should not be construed as investment advice. An investor’s best course of action must be based on individual circumstances.
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Solid Savings Ideas that Add Up
You’re probably already aware of the big things you need to do to prepare for retirement, such as enrolling in an IRA, paying off high-interest debt, making extra payments on your home mortgage (to save thousands in interest), and taking advantage of employer-sponsored retirement savings plans (free money!). But are there any little things you can do now that will make a difference then?
The Consumer Federation of America offers a bunch of tips on saving small that adds up to huge returns. Among them:
Okay, but all these little things don’t really add up to much, do they? Well, if you could manage to cut out and save just $25 per week at 5% interest, in 10 years you’d have $16,873; in 20 years you’d have $44,684; and in 40 years you’d have $166,090.
And if you saved $50 per week… $33,745 in 10 years; $89,369 in 20 years; and $332,181 in 40 years.
The secret is to get in the habit of paying yourself first. Your bank can help you by automatically moving money into your savings account. Because it’s a small weekly amount, you won’t miss it, and the long-term rewards can be huge.
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