What the experts say
The advantages of immediate annuities
Many people are baffled by annuities—“and justifiably so,” said Walter Updegrave in CNN.com. Annuities come “in a dizzying array of types and variations” and most are “maddeningly complex.” The least complex, though, are immediate annuities. The concept is straightforward: Invest a lump sum with an insurance company, broker, or agent and receive a “guaranteed monthly payment for life” regardless of the performance of financial markets. The compromise is that in return for that guaranteed monthly payment, you usually forfeit access to the money you’ve placed in the annuity. So you won’t be able to “dip into that money for emergencies or unexpected expenses.” Your payment’s size is dictated by your age and current interest rates. “The older you are and the higher interest rates are, the higher the payment you’ll receive.”
Bequeathing an IRA to loved ones
“An IRA is a powerful vehicle to build a nest egg to fund your golden years,” said Rachel Sheedy in Kiplinger.com. And after many years of “tax-advantaged, compounded growth,” it’s not unusual for money to be left in the account when the owner passes away. That money, when left to heirs, “can continue to grow in an IRA, potentially for decades into the future.” Bequeathing an IRA is fairly easy, but inheriting one is less so. Part of the complication: “All heirs aren’t the same.” Whether you’re a spouse or nonspouse is significant. Nonspouses must be named on the account’s beneficiaries form in order to maintain the IRA’s status as a tax shelter. “Keep that beneficiary form updated, because the beneficiary form trumps a will.”
How to manage rising gas prices
“Gasoline prices have been creeping up the past few weeks,” said Herb Weisbaum in NBCNews.com. Simply shopping around—something most drivers don’t do—can easily save you $60 or more per month in major cities, according to the consumer app GasBuddy. Try to fill up whenever you see a station with a good price, regardless of whether you’re close to empty; if you wait until your tank is nearly dry, you’re likely to pay more. Only pump premium gas if your car’s manufacturer specifies you need it. The way you drive also has “a huge impact” on your car’s fuel economy. Experts say that speeding and stopping abruptly can cause massive fuel economy losses. Driving at 65 mph instead of 75 mph, for instance, can add between 5 and 7 miles per gallon.