I am 79 years old. How should I invest? | Finance news

One other ebook I applaud is Jonathan Clements’ “How to Think About Money.” “We want to seize control of our finances, so we have more control over our lives,” he writes. The aim, he notes, isn’t to get wealthy. “The goal is to have enough money to lead the life we want.”

Lastly, Benjamin Graham’s basic, “The Intelligent Investor,” continues to be the “best book about investing,” in response to Warren Buffett. The third version is now out.

There are additionally a quantity of free online programs by way of platforms comparable to Coursera or edX. Some current choices embrace: Monetary Planning for Younger Adults, obtainable from the College of Illinois, and Finance for Everybody: Good Instruments for Determination-Making, taught by College of Michigan professors.

Podcasts, too, are entertaining and academic. Proper right here on Yahoo Finance, there’s “Financial Freestyle” with Ross Mac. Others to take a look at: Jordan Grumet’s “Earn and Invest” and Morningstar’s “The Long View.”

I’m 73, single, retired from my public service work final 12 months, receiving a pension. I’ve collected Social Safety since age 70, and began taking out Required Minimal Distributions from my 457(b) and conventional IRA accounts this 12 months. However I’m nonetheless working half time with a completely different employer (no pension, no retirement plan), receiving a W-2.

Am I nonetheless certified to put $8,000 pre-tax money into an IRA account for the 12 months 2024? (The gross income from my part-time job is more than $8,000.) Is there an income restrict for conventional IRA deductions in my state of affairs?

Congrats on ready till age 70 to show in your Social Safety checks. Which means you should have the largest potential quantity shifting ahead in comparison with beginning them back at your full retirement age.

By pushing back tapping your advantages out of your IRA till age 70, you earned delayed retirement credit. These got here to roughly an 8% annual increase in your benefit for annually till you hit 70 when the credit stopped accruing.

Learn more: What’s the retirement age for Social Safety, 401(okay), and IRA withdrawals?

Now, as for these contributions, you sure can contribute. There’s no age restriction on making common contributions to conventional or Roth IRAs.

A standard tax-deductible IRA, should you’re not coated by a retirement plan at work, has no income restrictions. For those who count on to be in a decrease tax bracket within the subsequent few years, the quick tax deduction and pushing back that tax invoice is smart. Though you’re already taking your RMDs, new contributions can whittle down your taxable income.

However should you’re already in a low tax bracket, I’d think about a Roth IRA.

Contributions to a Roth IRA aren’t deductible. They’re made with after-tax {dollars}, so you do not report the contributions in your tax return, however you’ll be able to take money and any earnings out tax-free should you maintain the account for at the very least 5 years.

How a lot you’ll be able to set apart does rely in your complete income. For tax 12 months 2024, your modified adjusted gross income restrict for single filers is $146,000 with a diminished quantity up to $161,000. For 2025, the income restrict for contributing is between $150,000 and $165,000.

Since RMDs are by no means required in Roth IRAs, that is a great solution to keep on saving.

For the 2024 tax 12 months, the utmost contribution is $7,000, or $8,000 for these 50 or older who take benefit of the $1,000 catch-up contribution. That’s you. And you may contribute to a 2024 IRA till the April 15 tax submitting deadline in 202 5 .

I need to buy a car on the finish of April 2025. I am saving for a down fee between from time to time so I can take out a decrease loan quantity. I am additionally paying down my debt so my credit rating will increase, serving to me with a higher rate of interest on my loan. I are not making a lot progress on both. Which of the 2 do you advocate concentrating on more?

For those who can put the brakes on shopping for a car for a bit longer, do it. I like to recommend specializing in slashing your debt. I’m not sure what form of debt you’re whittling down, but when your rate of interest is sky-high, it’s a must to take control of that first.

Elevating your credit rating takes time, and including new debt will not be your best option should you can maintain off on that large buy.

Learn more: 10 tricks to improve your credit rating in 2025

If you’re paying off revolving credit card debt that retains rolling over month to month, it’s daunting. The average credit card rate of interest is over 20%. That’s fairly arduous to get out from beneath with out some actual elbow grease. You need to pay a lot more than your minimal month-to-month quantity to make a dent.

Your debt degree is a large consider your credit rating calculation. The upper your credit rating, the decrease your annual proportion price (APR) will probably be in your car loan. The average auto loan rate of interest for new automobiles within the third quarter of 2024 was 6.6%, whereas the average used car loan rate of interest was 11.7%, in response to Experian’s State of the Automotive Finance Market report.

Of us with glorious scores — 800 and better — can discover charges as low as 5.25% for new car loans, however that may triple for debtors with poor credit scores, in response to Experian analysis.

There are a few colleges of thought on how to pay down your present debt. With the so-called avalanche methodology, you repay debt with the best rate of interest first. Different people go for the snowball methodology, which entails specializing in smaller money owed first. I’m within the avalanche college, however no matter works best for you issues.

Different strikes to kick up your rating: If you understand you’re going to buy a new car, as an example, don’t open new credit card accounts, or close accounts. You need to show that you understand how to handle credit by paying balances on time. By no means miss a fee or due date. All it takes is one late fee to smash your rating and make lenders cautious.

Along with your credit rating, different elements contribute to your rate of interest, such because the lender and the size of the loan, which brings us back to saving up a greater down fee.

I really feel your frustration. To get the best car loan, you’ll in all probability need sizable financial savings for a down fee, which could be as a lot as 20% for a new car and nearer to 10% for a used one. So saving up is important, however in my expertise, getting your debt beneath control and your credit rating cleaned up has to return first.

Because of the readers who felt comfy sending alongside your questions. Preserve ’em coming.

Kerry Hannon is a Senior Columnist at Yahoo Finance. She is a profession and retirement strategist, and the writer of 14 books, together with “In Control at 50+: How to Succeed in The New World of Work” and “Never Too Old To Get Rich.” Comply with her on Bluesky.

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