Here are three of the week's top pieces of financial advice, gathered from around the web:
Any saving is good saving
Don't let unexpected expenses derail your savings plan, said Ann Carrns at The New York Times. More than 70 percent of Americans say they have difficulty saving because of costs they didn't anticipate, according to a recent study by the Pew Charitable Trusts. More than a quarter say such outlays crop up most months. "But if unplanned expenses occur so often, can they really be a surprise?" If you own a car, for instance, it will eventually need to be repaired. To build up your emergency savings, set up automatic transfers from checking to savings each month. The old rule of thumb calls for accumulating six months of income, but that "may be unrealistic for many people." A more reasonable goal, like one month of income, should be enough to cushion many of those "inevitable bumps" in the road.
Dividends to the rescue
Dividends saved plenty of portfolios from going into the red in 2015, said Gail Marks-Jarvis at the Chicago Tribune. Without extra cash payments from dividends, investing in the S&P 500 "would have been a loser last year," with the stock market index down 0.7 percent. But when dividends are thrown in, that loss turned into a slim 1.4 percent gain. The "bad news" is that dividend increases are slowing markedly "as companies face pressure growing in a sluggish global economy." In the fourth quarter of 2014, companies posted a $12 billion increase in dividends; in the last quarter of 2015, it was just $3.6 billion. Half of all dividend cuts came from the energy industry, which has been battered by an oil glut expected to last throughout this year. Weak corporate earnings are also expected to eat into payouts.
The catch with catch-up contributions
Catch-up 401(k) contributions can make a big difference in retirement — if you can afford them, said Beth Pinsker at Reuters. Workers older than 50 can contribute up to $6,000 this year in catch-up contributions to a 401(k), in addition to the $18,000 regular limit. That added savings could amount to an extra $1,000 a month in retirement, according to Fidelity. "Most employees, however, do not even come close to the regular limit, let alone put in extra." Just 8 percent of clients at Fidelity and 16 percent at Vanguard avail themselves of catch-ups. Unsurprisingly, richer savers are more likely to enjoy the benefits. Maxing out a 401(k) and adding catch-up contributions requires saving more than 20 percent of earnings for those making less than $100,000.