Last week, Anne posted some shocking survey results regarding the state of American workers’ retirement accounts. But even if you’ve been diligently saving for decades, you could still benefit from a few pointers on how to make that money survive as long as you do.

Here are some tips to keep the tarnish off your golden age:

1. Revisit your asset allocation. As you approach retirement, you’ll want to adjust your investment strategy to make it more conservative — but you don’t want to put everything under the mattress. The retirement experts at T. Rowe Price recommend keeping at least 20 percent of your investments in stocks after retirement to keep your return going strong.
2. Delay retirement by a year or two. When your savings balances are at an all-time high, that’s when you reap the most benefit from compounding interest. Staying in the workforce a year or two longer allows you to collect big on investment returns (presuming the stock market is cooperating).
3. Minimize your withdrawal rate. Again, this is a strategy to allow compounding interest to work its magic for longer. Tap your non-retirement assets early — for example, downsizing your house and drawing on your profits from the sale. If you do dip into your retirement accounts immediately, keep your withdrawal rate to under 4 percent and your savings are almost guaranteed to outlive you (that’s a good thing!).
4. Play catch-up late in the game. The IRS allows you to increase your IRA contributions to $6,000 per year once you’re over the age-50 threshold. Take advantage of the opportunity if possible.
5. Seek out new retirement vehicles. Do you have freelance, self-employment, or hobby income? If so, you can open a SEP-IRA and contribute up to 25 percent of your income tax free. (Check here to see if you’re eligible.)

You can learn a lot from people like Glenn, who owed $250,000 because of skyrocketing interest rates and frequent late payments, or Marcia, who was always about $7,000 – $10,000 behind because she made a habit of paying only the minimum payment. Here are a few other highlights:

- Beef up on your personal finance knowledge – This is what Econ4U is here for! Check out Money Matters for detailed answers to some of your finance questions or use the Glossary to learn about some of those terms you keep hearing, like debt to income ratios. Or take a quiz to see how much you already know!

-Spend virtually – Make a budget and stick to it. Knowing where your finances will stand at the end of the month, before it even begins is a great way to curb impulse spending. Forcing yourself to shop online can help you buy only what you need – and what you’ve already budgeted for.

- Admit you have a problem – If you are addicted to using plastic, admitting it is the first step to recovery. Programs like Debtors Anonymous can help.

-Find the right lending option – Finding the lending option that works best for you is ultimately the most important thing we can learn from these individuals’ stories.  You can read about different ways to borrow and manage credit here.

Take control of your finances today before they spiral further out of control. Educating yourself and committing to addressing your credit card debt now is a decision you will be proud of later.

Amazon.com may be the best thing that ever happened to those of us who don’t want to be seen perusing the self-help section of the local bookstore. If you’re in need of a money makeover, these bestsellers can point you in the right direction.

1. The Wealthy Barber by David Chilton. This no-nonsense guide shows that even blue-collar workers can fill their piggybanks to bursting — all it takes to start is saving 10 percent of your income for the long term.
2. Smart Women Finish Rich by David Bach. Here’s one for the ladies: Women are statistically more likely to let the men in their lives handle the money, but this unintimidating book shows that financial savvy can be empowering.
3. The Millionaire Next Door by Thomas J. Stanley and William D. Danko. The secret to getting rich is not frittering your money away on the trappings of wealth, write Stanley and Danko, who extensively surveyed people with more than $1 million in the bank.
4. Your Money and Your Man by Michelle Singletary. This book is a must-read for any couple combining their finances. Singletary spells out the three C’s — communication, compromise, and common goals — that will help you avoid endlessly fighting over money.
5. Pay Yourself First by Jesse B. Brown. Written for an African-American audience, this book explains how to get and stay out of debt, start investing, and avoid financial pitfalls (especially if you make less than $30,000 per year).

“The percentage of American workers with virtually no retirement savings grew for the third straight year.”

Let’s take a look at the numbers.

Percentage of workers with less than $10,000 in savings

2010- 43%
2009- 39%

Percentage of workers with less than $1,000 in savings

2010- 27%
2009- 20%

Percentage of workers who have something saved for retirement

2010- 69%
2009- 75%

Take a closer look at that last figure: It means that 31% of workers have nothing saved for retirement! The survey also found that only 16% of respondents were confident in their ability to save enough for a comfortable retirement.

Most financial advisors agree that retirement savings should be close to 80% of pre-retirement income – meaning putting away at least 6 percent of your salary per year is a great start if you start early enough, thanks to the miracle of compounding interest.

Check out our Money Matters article on retirement savings for more helpful tips on 401(k)s and planning ahead. And start saving now! There are no do-overs when it comes to saving for your future.

Image courtesy of Moneyning.

According to the ASPCA, here are some of the expenses you can look forward to during the first year of pet ownership:

And that doesn’t include regular expenses like food (average of $120 for medium-size dogs, $115 for cats), vaccinations ($235 for dogs, $160 for cats), and treats and toys ($55 for dogs, $25 for cats) — those rawhide bones and catnip mice really add up. If you can’t make it home to let your dog out at lunch, you may be paying $50 per week to hire a dog walker. And keep in mind that exotic animals like ferrets and parrots will probably incur higher vet bills, particularly for emergency care.

In all, proper care for a pet can easily top $1,000 per year. To a true animal lover, those costs may seem like a bargain compared with what you get in return. But particularly for families where cash is tight, waiting to get a pet until your financial situation improves may be the best thing you can do.

Not sure if you can swing it? Fill out this pet-ownership worksheet by ValueYourMoney.org.

In this economy, it’s easier to cut expenses than to increase your income. Need an instant budget makeover? These five tips will put money in your pocket nearly immediately. Check it out:

1. Look for little ways to save on discretionary purchases. It adds up over time, so stock snacks or soda in your desk rather than hitting up the vending machines.
2. Slash your monthly bills. Many service providers are willing to offer discounts to keep you as a customer. It never hurts to ask, so call your cable provider or gym membership administrator to see if you qualify for any deals. And while I’m sure you’ve heard it a thousand times from a certain animated gecko, 15 minutes could save you a lot of money on your insurance — car or otherwise.
3. Are you still buying books and paying to rent DVDs? Beyond hard covers and paperbacks, most libraries now have extensive DVD collections. Brush up on previous years’ Oscar winners for free so you can recognize the clips from those montages on Sunday night.
4. Know when price increases go into effect. For example, gas is typically more expensive on Saturdays — when everyone needs to fill up to run errands — than on Tuesdays. Save some of your money by knowing when to find the best deals. Gasbuddy.com can help you find the lowest price in your area, too.
5. Make your money work for you. Shop around for the best interest rates on savings and money-market accounts at Bankrate.com.

Imagine you’re buying a house, and borrowing $200,000 to do it. What is the total cost of the loan? Well 6% of $200,000 is $12,000. But that’s just for the first year. Under a standard payment plan, you’ll end up paying $231,676 in interest – 116% of the original loan amount.

Let’s look at student loans next: The standard interest rate for a PLUS Loan is 8.5% APR. If you borrow $40,000 for college and are on a 20-year repayment plan, you’ll end up paying $43,311 in interest – 108% of the original loan amount.

Do you carry a balance on your credit card? Among American households with credit card debt, the average amount is about $11,000. At a typical 18% APR, if you start paying down your balance with $300 per month, it will take about 4 years, and you’ll pay $5,090 in interest – 46% of the original loan amount.

One more example: two-week “payday” loans usually cost about $15 for every $100 borrowed. So if you get a payday loan for $400, you’ll pay $60 in interest – 15% of the original loan amount.

See the pattern here? Long-term loans generally have lower annual interest rates. But over a few decades, even a low rate can really add up. The best strategy is to pay cash when you can, and only borrow when you need to. And if you have a little spare money at the end of the month, use it to get ahead on your bills and you’ll save big in the long run.

This chart compares the total costs of these different loan types:

As Suzi posted earlier, “Here Comes the Bride” is often followed by “Here Come the Bills.” There’s no doubt that marriage and money are inextricably linked, so this week, we offer a few financial paths to wedded bliss.

1. Talk early and often about money. Talking about spending habits and priorities before you walk down the aisle is important, especially if you are financial opposites.
2. Prepare for a tax bite that first year of marriage. If you’ve never heard of the “marriage penalty,” make sure you read this article on how your tax bill may go up right after you say your “I Do’s.”
3. Plan monthly check-ins to make sure you’re on track. Lest you end up like financial columnist Edmund Andrews and his wife, who racked up $50,000 in debt in two years of marriage.
4. Your debt becomes your spouse’s debt — and vice versa. Don’t make the mistake of thinking your spouse’s financial peccadillos are his or hers alone. If your spouse’s debt goes into collections, you could be the one holding the bag — even if you aren’t a joint cardholder.
5. Divorce is even less fun in a recession. Not everyone gets a happily ever after, but the National Marriage Project reports that more unhappy couples are putting off divorce until after the recession ends.

Your $18,000 wedding? It may really end up costing you between $90,000 and $200,000. That $2,000 dress? Think: $10,000 to $22,000. The $10,000 food bill for your guests? Try $50,000 to $110,000.

That’s because the biggest cost of every dollar you spend is invisible. It’s all the money you’d accumulate if you saved it instead. Over long periods, this cost dwarfs the mere sticker price, often by a factor of several times.

Thinking about the long term rate of return (and compound interest) on the money you plan to spend on your wedding is worth a look.  It’s easy to cut corners and still keep the day special if you look at all the elements and find ways to save.

There are lots of great ways to budget your wedding and avoid lavish overspending.  Also check out TheKnot.com for some helpful thoughts on wedding costs.

Plan a wedding under $10,000, Ways to Save Money, or the most important, 10-Hidden Wedding Costs.

Do you have any cost-saving tips of your own? Share them in the comments.

United States Better Business Bureau- 2008 Statistics

Is this to say that using a bank to house your savings is a bad idea because there have been complaints filed against them?  Certainly not.  It does however remind us to shop around when looking for the best place to meet your needs when it comes to financial services and credit options.

A credit card is not the answer to everyone’s credit needs just as a short-term loan might work better for some than for others.  Educating yourself on the types of credit options available and the places to get them is the best thing you do.  Check out our Money Matters section on Borrowing and Managing Credit.

Looking to better educate yourself on another aspect of personal finance – like how to select a financial advisor – check out our new Money Matters piece on selecting a financial advisor.