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Yahoo
3 hours ago
- Business
- Yahoo
6 Unique Money Challenges First-Generation Americans Face — and How To Overcome Them
Being a first-generation American often comes with unique financial challenges. From setting goals and building credit to planning for retirement, the journey can feel overwhelming without inherited financial knowledge or support. For You: Check Out: GOBankingRates spoke with financial experts who shared six key considerations to help first-generation Americans navigate and thrive in the U.S. financial system. 1. Navigating Unfamiliar Financial Systems One of the first challenges is learning how to navigate a completely new financial system. Without parent guidance, even basic tasks like opening a bank account or understanding interest rates can feel intimidating or overwhelming. Start by searching for free online resources and looking into local community programs or nonprofits that offer financial literacy workshops. Many cities have support centers that provide tools for budgeting, building credit and planning for the future. 2. Building Credit From Scratch Andrew Lokenauth, money expert and founder of Be Fluent in Finance, said his parents arrived in the U.S. from Guyana with just $20 in their pockets. Their experience taught him some unique lessons about building wealth from scratch. Lokenauth said starting his credit journey was rough. His parents never had credit cards — they operated strictly in cash. 'I remember getting rejected for my first card application and feeling completely lost,' Lokenauth said. 'Started with a secured card with a tiny $300 limit. It took me about two years of careful management to build up to a 750+ score. Now I help other first-gen folks navigate this process.' Explore More: 3. Balancing Personal Financial Goals With Family Obligations Lokenauth said he understands the emotional and financial pressure of supporting family back home while also trying to balance your own personal financial goals. 'Every month, I'd send about 15% of my income to help relatives overseas,' he said. 'I found a balance by setting up a separate 'family support' account and being upfront about what I could realistically give. I had to learn to say no sometimes — something many first-gen Americans struggle with.' 4. Understanding Tax Implications U.S. tax rules are notoriously complex, especially if you're managing international remittances or trying to claim dependents abroad. 'The U.S. tax system might as well be rocket science when your parents can't help,' Lokenauth said. 'I made some expensive mistakes early on. Now I understand how to maximize deductions for sending money overseas and when it's possible to claim foreign relatives as dependents.' It's a good idea to work with a tax professional familiar with international tax issues, especially if you support family members abroad or receive gifts from foreign relatives. 5. Building Generational Wealth When it comes to building generational wealth, passing along knowledge is just as important as any investment you can make. 'Being first-gen means we can blend the best of our parents' financial wisdom, like living below our means, with modern wealth-building strategies,' Lokenauth said. 'We're creating our own playbook that honors our roots while building a stronger financial future.' 6. Planning for Retirement Without Inherited Financial Knowledge or Support Many first-gen Americans didn't grow up hearing about 401(k)s, pensions or retirement savings. That makes the idea of planning for retirement even more daunting. 'Get as close as you can to maxing out your employer retirement plan, especially if it offers automatic enrollment,' said Dennis Shirshikov, head of growth and engineering at and an adjunct finance professor at CUNY. 'Increase your contributions by 1% each year until you get to 15%.' He also recommends exploring tools that make retirement planning more accessible. 'One nontraditional tool is a subscription-based financial coaching app that connects you to a certified coach for a flat monthly fee, making personalized retirement planning accessible to those who might not otherwise be able to afford professional advice,' Shirshikov said. Bottom Line First-generation Americans face distinct financial hurdles, but with the right knowledge and a little planning, those challenges can become building blocks for long-term success. Staying informed, setting clear goals and boundaries, and taking steady steps forward can help create lasting financial security — for you and future From GOBankingRates 5 Steps to Take if You Want To Create Generational Wealth I'm a Financial Advisor: My Clients Who Retire Early All Do These 3 Things 4 Things You Should Do if You Want To Retire Early Dave Ramsey: The 3 Worst Mistakes People Make When Trying To Build Wealth This article originally appeared on 6 Unique Money Challenges First-Generation Americans Face — and How To Overcome Them Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
15 hours ago
- Business
- Yahoo
Secret to retire five years earlier 'without earning more money': 'Not sexy but it works'
Most Aussies think the key to retiring earlier is simply to "earn more" money. But the reality is that most people already have all the ingredients for an early retirement. It's not about making more money. It's about using the money you already have in a smarter way. You can retire years earlier without getting a single extra dollar in your paycheque, by simply making better decisions with the money that's already coming into your bank account. It's not sexy, but it works. There are five things you need to focus on to retire (at least) five years earlier. RELATED One change that could leave Aussies $830,000 better off at retirement Expert's 'crucial' money tactic to retire with $2.9 million Australia's 'ancient enemy' returns sparking major Centrelink warning It's a decision-making problem If you earn the average income (or more) in Australia, you're not struggling with options - you're struggling with strategy. People that earn well often still feel trapped because they've got the balance wrong between investing and lifestyle spending. Your mortgage, school fees, car, and sprinkle in some entertainment spending and the odd bit of travel… It all stacks up, and before you know it you get early doesn't need to mean drastic lifestyle sacrifices - but it does mean turning off autopilot. Every financial decision, whether and how much to invest, upgrading your home, paying down debt vs saving - they all have a compounding effect. And most people are compounding in the wrong direction. ACTION STEP: List your five biggest financial decisions from the last year. Then be honest with yourself - did these moves make the future you wealthier, or just maintain your comfort today? You need to shift your focus forward. It's about control vs income If you were to track every dollar that hits your bank account over the next year, then intentionally reallocate 10 per cent to 20 per cent of this money to setting up your future - think investments, debt recycling, or strategic super contributions - the numbers start to look very different. Particularly if you're coming into your peak earning years of your 40s and 50s, finding a way to free up a solid chunk of money each month, and then investing it into growth investments like shares can have you building a seven-figure portfolio well before retirement age. If you start in your 40s, and you can easily set up to pull back from work at 55 rather than 60, maybe even sooner. And that's without touching your super, selling your house, or relying on an inheritance. The secret isn't hustle, it's discipline. ACTION STEP: Set up a bank account system with separate accounts to automate your saving and investing success. Use one account for fixed costs, one for your lifestyle, and another for savings and investing. Automate your transfers to remove decision fatigue and save first and spend after, not the other way around. Tax savings are the accelerator If you want to retire sooner, it's critical you reduce your annual ATO donation. There are legal, smart ways to reduce your tax bill; using negative gearing, debt recycling, investing through trusts, and salary sacrificing to super. Most Aussies are leaving tens of thousands of dollars on the table every single year - and that's money that could be working for you to set up your early retirement. It's common in our planning work, particularly for higher income earners, for their financial position and strategy to evolve randomly over time. We find that by tightening up their tax strategy, they're often able to free up $2,000-$3,000 monthly that can then be funnelled directly into income producing investments. When you follow this process through over time, it will often mean financial security years sooner. ACTION STEP: Learn and action the key tax-smart strategies like negative gearing, debt recycling, and tax effective investing. These aren't just buzzwords, they're powerful tools you can use to keep more of your income and grow your investments faster. You don't need to become an expert, but you do need to understand the game well enough to play it smarter. Play offence not just defence Too many people focus only on saving, budgeting, or paying down debt. That's defence, and it's absolutely necessary, but it won't win you the game. Instead, you've got to play offence - and that means investing. I don't mean gambling on crypto or trying to pick the next Afterpay. I mean boring, consistent investing into assets that will grow in value and generate you an income that can replace your salary. To put it another way, no one retires early because they cut out their daily latte. People retire early because they built assets that work harder than they do. ACTION STEP: Pick an EFT or managed fund to align with your investing goals, and set up a recurring direct debit. Even a modest amount invested consistently can change everything. Decide on purpose Early retirement isn't about cutting back, it's about clarity. You need to be laser focused on what you want your money to actually do for you. Once you're clear on this, every decision becomes easier. Do you need the $2 million house, or the $1.5 million property that allows you to invest an extra $500,000 over the years ahead? Do you want the $5,000 per month lifestyle now, or a $10,000 per month lifestyle at 55 with no boss? There's no right answer for everyone, but there is a right answer for you. And if you're not asking those questions you're just drifting, and drift is expensive. The wrap You don't need more, you need to use it better. This isn't about scraping by, it's about taking control. If you've already built a decent income, the hard part is done. Now it's time to get intentional with how you use that money. Align your spending with what actually matters, reduce the drag, and invest with purpose. Ben Nash is a finance expert commentator, podcaster, financial adviser and founder of Pivot Wealth. Ben's new book, Virgin Millionaire; the step-by-step guide to your first million and beyond is out now on Amazon | Audiobook. If you want some help with your money and investing, you can book a call with Pivot Wealth here. Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstances before acting on it, and where appropriate, seek professional advice from a finance professional.
Forbes
a day ago
- Business
- Forbes
CD Rates Today: July 30, 2025 - Earn As Much As 4.94%
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations. Today's highest CD rate is 4.94% for a jumbo 6-month CD. CD rates from online banks are commonly twice as high as the national average rates. CD ladders let you leverage high rates without locking up all of your money long-term. The best interest rates on CDs (certificates of deposit) currently top out at 4.94%, depending on the term. Here's a look at how CD rates are trending, along with an overview of the best rates for various terms. A CD is a kind of savings account with a fixed interest rate for a given term. You can access your principal and interest payments once the CD term expires; if you withdraw money before that time, you'll incur an early withdrawal penalty . Traditionally, the longer a CD term, the higher the yield, but that dynamic hasn't held in recent years. Make sure you select a CD that matches up with when you'll need the money. Three-month CDs are a good option for short-term savings goals. The current average rate on a three-month CD sits at 1.29%, but the highest rate is 4.62%. The average rate is unchanged from a week ago. If you're interested in a short-term CD with high yields, consider a six-month CD . The best rate today is 4.94%. The current average APR for a six-month CD is 1.76%, about the same as last week. The highest interest rate currently available on a 12-month CD—one of the most popular CD terms—is 4.84%. If you find a rate in that vicinity, you've found a good deal. Last week, the rate was lower at 4.64%. The average APY, or annual percentage yield, on a one-year CD is now 1.84%, unchanged from a week ago. If you can hold out for two years, 24-month CDs today are being offered at interest rates as high as 4.52%. That's the same as this time last week. The average APY for the CD is 1.64%, flat to last week's average. Today, the highest rate on a three-year CD stands at 4.26%, so you'll want to shop around for that rate or something near it. The average APY is 1.57%. The highest rate available today for a five-year CD is 4.26%. The average APY is 1.58%, similar to last week. If you opt for a five-year CD, make sure you're aware of the early withdrawal penalty. It's not unusual to lose one full year's worth of interest or more if you break open a five-year CD before it matures. The best rate today on jumbo CDs is 4.94% for a 6-month term. As with non-jumbo, various term lengths are available. The average APY for the 6-month CD is currently 1.81%. Most jumbo CDs require a minimum deposit of $100,000—and some even require $250,000. However, there's no universally agreed-upon definition regarding what qualifies as a "jumbo" CD. Some banks and credit unions slap the label "jumbo" on CDs you can open with $50,000, $25,000 or even less. Related: CD Interest Rates Forecast: How Good Will They Get? Digital banks tend to have an edge over traditional outfits thanks to lower overhead costs and the need to offer top-of-market yields to attract new customers. Take Chase Bank (traditional), Capital One (hybrid) and Synchrony Bank (online). Be sure to compare a few options with the types of banks you're most comfortable with. Other top CD rates by banks include: To open a CD , start by establishing an account with a bank and making a one-time, upfront payment, which constitutes your principal. Many banks require you to deposit a minimum amount—which can be anywhere from hundreds to thousands of dollars—to open a CD. At credit unions, CDs are often referred to as share certificates. The timer on your CD term begins once you deposit your principal. You begin earning interest, and the bank or credit union will provide you with monthly or quarterly statements reflecting how much you're accumulating. Since early withdrawal penalties eat into your earnings, it's in your best interest to avoid tapping your CD before the term matures. In some cases, you may even face early withdrawal penalties so stiff they cut into your principal. If you want the best interest rate on your savings, CDs are usually your best bet, outpacing even the best high-yield savings accounts and best money market accounts . You will have to do without the money for as long as the term lasts; otherwise you'll owe an early withdrawal penalty. Even still, you may not be that impressed since potential investments, such as stocks, tend to outperform CDs over the long haul. Why settle? The issue is that stocks, and even bonds, are much more volatile than CDs. Stocks crashed nearly 20% in 2022, while bonds dropped 13%. Imagine a fifth of your savings going "poof" over the course of a year. Not a happy thought, is it? CDs and stocks perform different roles in your overall financial plan. CDs are a depot for a portion of your savings you don't need immediately, while stocks provide solid long-term returns. You don't want to risk cash you're depending on. The Federal Deposit Insurance Corp. provides you with up to $250,000 in coverage in the event the bank issuing your CD ever fails. For share certificates purchased from federal credit unions and most state-chartered credit unions, the National Credit Union Administration insures your money up to the same limit. CD rates generally fluctuate the most following the Federal Reserve's decisions to raise, lower or maintain the federal funds rate. The federal funds rate is the rate at which banks lend money to each other overnight. The Fed makes decisions about the funds rate eight times per year when the Federal Open Market Committee (FOMC) meets. Related: CD Interest Rates Forecast: How Good Will They Get? Curinos determines the average rates for certificates of deposit (CDs) by focusing on specific CDs and excluding others. Certain types, such as promotional offers, relationship-based rates, private, youth, senior, student/minor, affinity, bump-up, no-penalty, callable, variable, step-up, auto transfer, club, gifts, grandfathered, internet-only and IRA CDs are not considered in the calculation. Frequently Asked Questions (FAQs) You build a CD ladder by saving your money in multiple CDs with cascading term lengths. For instance, you might buy a one-year CD, a two-year CD, a three-year CD, a four-year CD and a five-year CD. As each of the shorter-term CDs matures, you replace it with a new five-year CD. Follow this plan and you'll have one better-yielding five-year CD maturing each year. If you're ever having a bad year, you could take some of the cash from the expiring CD and use it to pay bills instead of pouring it all into a fresh CD. Comparison shop to track down the best CD rates . Banks and credit unions compete by offering alluring yields to land your business, so shopping around is a must before you purchase any bank CD or credit union share certificate. CDs usually come with zero fees, meaning your money won't be nibbled at by the monthly maintenance fees that are typical with many savings, checking and money market accounts. You will likely be charged an early withdrawal penalty if you end your CD term early. Make sure you won't need access to your cash in the meantime.
CBS News
3 days ago
- Business
- CBS News
5 common annuity mistakes to avoid now, retirement experts say
A common fear among retirees is running out of money. Though inflation isn't as high as it was in previous years, the cost of living is considerably higher today than it was just five years ago, and those on a fixed income are uniquely vulnerable. And, as fears of a recession and other economic hurdles loom, many people nearing retirement are eyeing annuities as a source of income security. An annuity is a contract that allows you to exchange a lump sum payment or a series of payments today for a guaranteed future income. They're a popular retirement tool for someone concerned about running out of money before they die, and annuities come in all different forms, including fixed, variable and indexed. But while they can be useful, annuities can also be a complex financial tool, and it's easy to make a mistake that could derail your retirement plan. Here's what to know about the common annuity mistakes people make now. Find out how the right annuity can help you reach your retirement goals now. To help you navigate the world of annuities, we spoke with several retirement experts to find out some of the common missteps retirees make and what you can do to avoid them. Perhaps the most common mistake retirees make with annuities is not fully understanding how they work, experts say. Not only are annuities complicated, but unlike many other retirement savings tools, they're also difficult (and sometimes expensive) to get out of. "I think the biggest mistake we see with prospective clients is they often don't understand what they were sold, how they work, what the fees are, and how they benefit from the product," says Tyler End, a certified financial planner (CFP) and CEO and co-founder of Retirable. "Often, there's a sales pitch promising upside with limited or no risk that sounds great, but people don't always understand the intricacies behind the product that actually make it a bad fit for their situation." To avoid this pitfall, End recommends working with a reputable professional, such as a CFP, who can confidently explain how the annuity works and why it may be the best option for your situation. And, the advisor you work with should deliver you a complete financial plan, not just sell you an annuity, End says. That financial plan may include Social Security benefits, your 401(k), and other savings and income vehicles, in addition to the annuity. "If it sounds too good to be true, it probably is," End says. "We often hear from customers that their 'investment' can only go up and has no fees. Digging into the contracts reveals another story, and they are stuck with surrender charges if they want to get out. Remember, annuities are an insurance contract first and foremost." Explore your annuity options and lock in a great rate today. There are many types of annuities on the market, including fixed, variable, and indexed annuities, immediate and deferred annuities, qualified and nonqualified annuities, and more. When shopping for an annuity, it's critical to choose the one designed to meet your specific goal. "Annuities aren't all built the same—some focus on income, others on principal growth," says Fradel Barber, a ChFC and CEO of The World Changers, a company focused on financial education in the insurance industry. "If someone buys an income-based annuity but expects to see their account value grow, they're going to be disappointed. That mismatch can throw off their entire retirement plan." Barber recommends starting with your actual goal and working backward. Do you want a steady source of income? To make your retirement savings last as long as possible as long as possible? To make sure your spouse is protected if something happens to you? Once you know your goal, you can work with a professional to choose the best type of annuity to accomplish it. An annuity is designed as a long-term investment, and you're likely to run into trouble (and lose money in the process) if you hope to tap into that money early. "It's paramount that seniors don't see their annuity as a substitute for a bank account. It is not a liquid asset where cash can be taken out whenever they need it," says Jeff Lorenzen, CEO at American Equity. "There are often hefty penalty charges for early withdrawal, and while some contracts do offer hardship provisions, accessing funds can be costly, and the situations where access is permitted will be limited." Sure, unforeseen situations can arise where you have to withdraw money when you didn't plan on it. You still need to put safeguards in place, though, including a robust emergency fund, to minimize the chances of having to withdraw from your annuity. Inflation is one of the greatest fears of many retirees, and for good reason. Most people retire with a fixed amount in their savings, but the cost of living continues to rise, making it more likely they'll run out of money. And unfortunately, some retirees don't take inflation into account when they choose an annuity. "Most retirees invest in fixed annuities, which pay a fixed amount, which is not inflation-adjusted," says Rami Sneineh, a licensed insurance producer and the vice president of Insurance Navy. "The payout may appear to be adequate, but in the long term, inflation may reduce its value over several years or decades." Let's say you retired in 2010 with an annuity that provided $4,000 of income per month. Fast forward to June 2025, and you would have needed roughly $6,000 to maintain the same standard of living, according to the Bureau of Labor Statistics inflation calculator. To protect your future self, Sneineh recommends looking for an annuity that provides a cost-of-living adjustment to ensure your buying power doesn't decline over time. Scams often target people in financially vulnerable situations, and that includes current and soon-to-be retirees. And, in addition to all the scams on the market, you may also run into financial advisors who don't have your best interests in mind when recommending an annuity. But carefully choosing who you buy an annuity from can help weed out scams and bad actors. "Avoid clicking on online ads that promise annuity rates and bonuses that seem too good to be true," says Chris Orestis, president at The Retirement Genius. "When working with a financial advisor, make sure that they are allowed to sell annuities from multiple companies and are showing you multiple options." An annuity can provide financial security and peace of mind for someone worried about running out of money during retirement. But with the complexity of most annuity contracts and the sheer number of options on the market, it can be far too easy to end up with a product that doesn't fit your needs. The most important first step of buying an annuity is working with a financial professional who has your best interests in mind. From there, make sure you've explored all of your options and choose an annuity that best fits your goals. Don't commit to anything until you fully understand the product and its terms. And remember that annuities aren't right for everyone. In the end, you and your advisor might decide that a different financial product is a better fit for reaching your goals.
Yahoo
23-07-2025
- Business
- Yahoo
One change that could leave Aussies $830,000 better off at retirement
Most people think building wealth is about how much you save or how smart you are with your investing. But what makes the real difference isn't your income, your investment knowledge, or even your budget — it's how early you start. Consider an example of two people with the same goal of growing their money through investing. One starts investing just a few dollars a day from the age of 20. The other waits until they get to age 40, when their financial position is more settled, they're earning more, and they're able to invest a more 'meaningful' amount of $500 monthly. But when we look at the numbers, you can see that by waiting, the damage is done. Even though the late starter is investing more than triple the amount of money, they end up with less than half the amount of money at the end. This is the power of time — it works silently in the background, and if you ignore it, the cost is huge — even if you're doing everything else right. RELATED Expert's 'crucial' money tactic to retire with $2.9 million Centrelink's 'balancing' move could provide cash boost or expose debt Commonwealth Bank's fresh alert for millions over mass text messages The power of time (and compounding) Going back to our example, we've got two people, Emma and James. Emma starts investing $5 daily from the age of 20, and James is our late starter who invests $500 monthly from the age of 40. Because Emma starts early, her money has more time to grow — and that's where the magic of compounding comes even though she's investing less money overall, her money starts growing sooner. And through compounding, Emma benefits from growth on her growth, which cranks up her investment balance over time. Based on the Australian long-term (30-year) average sharemarket return of 9.8 per cent, Emma's $5 daily investment would grow to be worth more than $1.48 million by the time she's 65. For James, even though he's putting away $500 monthly, or more than triple what Emma is investing, he starts 20 years later. By the time he reaches age 65, his money has grown to just under $650,000. This is a solid result, but is $830,000 less — or less than half of the final amount Emma has from her much smaller investment. For James to 'catch up' to Emma given his delayed start, he'd need to invest around $1,250 monthly — or almost 10 times the daily investment amount Emma is putting in — all because he starts later. The cost of waiting It's not about earning more. It's not about investing huge amounts of money. It's about giving your money time to work for you. When you start early, you don't need to be perfect. You don't need to pick some hot stock that takes off. You just need to get started. Small amounts of money, invested regularly and consistently, are how regular people can build a life-changing amount of money. It isn't 'sexy', and doesn't need to be 'risky' — but it is effective. Waiting even a year to get started with investing can cost you a lot more than you think. Delaying by 12 months might not seem like much, but following our example above, waiting just one year to start your $5 daily investment (starting at age 21 vs 20), your final balance drops by $140,000. But it gets worse. If you delay to age 25, that's over $580,000 you'll miss out on. And if you wait until age 30, you're giving up a whopping $940,000 in investment growth. That's the opportunity cost of inaction — it's not just about not investing now, it's about future options you're missing. The earlier you start, the less effort it takes — and every year you wait, the cost of your inaction grows. This is the hidden danger of inertia. Most people don't realise the real cost of waiting, because it doesn't really feel like you're losing money. But you are, because you're giving up future wealth that only time can create for you. That's why time is your greatest asset. The longer you wait, the more effort it will take to catch up, and for most people that gap simply becomes too much — and they end up settling for an outcome well below where they really want to be. This works for anyone And the best part of all of this is that investing $5 daily is something that's possible for almost anyone. It doesn't require a huge income, lots of time, or heaps of experience in investment markets. Instead of stressing about trying to save hundreds or even thousands of dollars, simply automate a small daily investment and let it grow. Thankfully today, technology is making this easier, with dozens of investment accounts that can help you easily automate a regular investment. Follow this approach, and over time your investment growth will outpace how much money you're putting in — and eventually it will do more of the work than you ever could on your own. Most people spend too much time trying to predict the perfect time to invest, or waiting for their financial situation to get more comfortable so investing is 'easier'. But the real winners are the people that crack on and get started, and focus on being consistent over a longer period of time. The wrap Investing doesn't need to be some big, bold action you take once you have heaps of money. It just has to be consistent, and the sooner you start, the more you'll be rewarded. Don't wait until you make more money, or saving is easier, or even until you're more of an investing expert. You just need to make the decision — $5 a day today, or thousands monthly later trying to catch up. Because when it comes to getting ahead, how soon you start is the single thing that will make the biggest difference. Ben Nash is a finance expert commentator, podcaster, financial adviser and founder of Pivot Wealth. Ben's new book, Virgin Millionaire; the step-by-step guide to your first million and beyond is out now on Amazon | Audiobook. If you want some help with your money and investing, you can book a call with Pivot Wealth here. Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstances before acting on it, and where appropriate, seek professional advice from a finance in retrieving data Sign in to access your portfolio Error in retrieving data
