I Can’t Afford $1,800 Car Insurance – What Are My Options as a New Driver in NY?

2025-12-05 02:08:56 By David Brown

Many cash-strapped Americans may be at risk of severely underestimating the costs associated with owning and maintaining a vehicle over time. Undoubtedly, owning a car grants you a degree of freedom that’s unmatched. However, Americans will be paying for that freedom, and its value, I believe, is questionable, especially in an era where it’s all too convenient to catch a ride on an Uber or Lyft.

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Not to mention it’s also worry-free, given there’s no need to worry about parking, navigation, and, of course, that dreaded traffic too and from one’s destination. It’s not just more convenient to go down the path of a ride-hailing service, though.

In many instances, it’s also the more financially responsible choice, especially for young, new drivers who’ve already taken a hit to the chin with the car purchase (or financing), driving lessons, licensing fees, and all the sort. With limited experience also comes a hefty insurance bill that may make owning a car a move that sets one back significantly.

In this piece, we’ll check in on a posting I came across on Reddit, asking what one’s options were as a new driver in New York City. Indeed, that’s not only an expensive city, but one that can be pretty frustrating to drive in, given the bumper-to-bumper traffic. 

Key Points

  • Owning a car in NYC has become obscenely expensive for this young driver.

  • Selling the car and going the ride-hailing route seems smart.

  • Shopping around for insurance rates is a must for those keen on car ownership.

  • Millions of Americans keep making 5 basic mistakes with insurance and keep overpaying every year, sometimes by thousands of dollars. But, it’s easy to avoid if you know how. 

What’s one to do as a new driver in NYC?

Driving in the Big Apple is about as tough as it gets, especially for those with limited experience. Add the priciness of the city (which also applies to car insurance) into the equation, and the big question that someone in our Reddit user’s shoes, I think, should be whether or not it still makes sense to drive or if it’s a smarter move to take an Uber or even catch a cab. Indeed, there’s no shortage of taxis in New York City.

Indeed, a $1,800 per month sum for insurance, I think, just does not make sense, especially for a young urban professional who’s just getting started in their career. While owning a car is a must for some who desire a certain lifestyle, I do think that foregoing vehicle ownership is the financially wise decision for the long term, even if one can continue to afford the hefty parking fees and absurdly high car insurance rates. 

Personally, I’d sell the car as soon as possible and look into a ride-hailing subscription (think Uber One) to drive costs of getting around NYC even more affordable. Of course, ditching the vehicle isn’t going to be everyone’s cup of tea, especially for those who’ve inherited a vehicle. Additionally, New York City has some of the best public transit in the world. Catching a ride on the subway, walking, or even skateboarding may not align with everyone’s lifestyle. However, I do think that the considerable savings and added steps to one’s day make forgoing the car the strongest option.

What about for those who simply must drive?

For such folks who just have to drive (maybe there’s a baby who’s in need of a car seat), I’d suggest shopping around for car insurance rates because, to put it frankly, $1,800 per month doesn’t make much sense, in my view.

That’s not only expensive; it’s an obscene amount that I could amount to more than a car’s value in less than two years! If a young driver has a track record of incidents (I have no idea if this is the reason the rate is so high), perhaps there is no other way to trim that bill than to take the hit to the chin and build a track record of safe driving over the years. 

In any case, this young driver should re-evaluate the true costs of car ownership and ask themselves if it’s getting in the way of their long-term financial goals. NYC is a tough place to drive, and with such high insurance rates, I think the opportunity costs of owning the vehicle are just way too high.

Most Americans Overpay Without Realizing It

Car insurance is one of those monthly bills most Americans pay without a second thought. But the truth is, millions of drivers are overpaying simply because the haven’t bothered to get updated rates.

But there are dozens of easy ways to lower your rates. If you’re a safe driver, have moved in the last few years, if you’re a safe driver, or forgot to check about bundling you’re leaving free money on the table.

I was able to save $530 on my insurance, simply by applying to new providers with updated information. And it only took a few minutes!

👇 Use the form at the bottom of this article to see if another provider can lower your bill without sacrificing coverage.👇

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Personal Finance

I Make $150,000 in Southern California But It Feel Like I’m Drowning Financially

2025-12-05 02:08:56

It should go without saying that no matter how much money you make, it’s perfectly reasonable to feel stressed out about finances these days. This is especially true if you feel like you make a good living but also live in a high-cost-of-living area that leaves you feeling house-poor. nextstayCCSettingsOffArabicChineseEnglishFrenchGermanHindiPortugueseSpanishFont ColorwhiteFont Opacity100%Font Size100%Font FamilyArialText ShadownoneBackground ColorblackBackground Opacity50%Window ColorblackWindow Opacity0%WhiteBlackRedGreenBlueYellowMagentaCyan100%75%50%25%200%175%150%125%100%75%50%ArialGeorgiaGaramondCourier NewTahomaTimes New RomanTrebuchet MSVerdanaNoneRaisedDepressedUniformDrop ShadowWhiteBlackRedGreenBlueYellowMagentaCyan100%75%50%25%0%WhiteBlackRedGreenBlueYellowMagentaCyan100%75%50%25%0%-->-->Key PointsThis Redditor lives in Southern California, one of the most expensive places in the country.The family’s combined $150,000 salary leaves them struggling to make ends meet.This family absolutely needs to establish a budget so they can properly account for every dollar they make and spend.It sounds nuts, but SoFi is giving new active invest users up to $1k in stock, see for yourself (Sponsor)-->-->This level of stress over bills is exactly what one Redditor is feeling, according to their post in r/MiddleClassFinance. Living in Southern California is already expensive, but they are worried about how they will continue to earn $150,000 and barely make everything work. $150,000 in Southern CaliforniaFor this Redditor with a family of four, earning $150,000 was already a struggle to live on, but adding a child in college has made everything significantly worse. Unfortunately, their child wasn’t eligible for any kind of financial aid due to the family’s household income, as per FAFSA rules, which means the already struggling budget is even more challenging. As for their overall budget breakdown, the family is paying $2,150 for their mortgage and utility bills, $180 for cell phones, $1,400 for both health and car insurance, spending an average of $800 per month on groceries, and approximately $200 per month on dining out. Now add to this $850 in car loans, $250 for gas every month, plus another $2,200 across 401(k), kids’ college expenses, property taxes, and sports activities, and it’s clear that this family is barely able to survive. Admittedly, the Redditor states that they don’t have a method for tracking spending, which is clearly an issue that needs to be addressed. However, their $1,800 mortgage is manageable, so there is some positive news here. Out of their $7,700 in monthly expenses, they are likely taking home around $8,400 after taxes.This means that their financial buffer after all expenses and savings is just $700, or around 5% of their gross income, so it’s understandable that the family is feeling stressed. Lifestyle Inflation At WorkHere’s the thing for this Redditor, and what is likely making them feel stressed, and it’s something called “lifestyle inflation.” Taking on the responsibility of paying for the kids’ college apartment at $800 for both rent and utilities, as well as other kids’ private lessons and two vehicle payments, all means this family has an inflated sense of what is affordable. If you subtract just some of these things, such as college rent, two vehicle payments, and kids’ activities, they would be at a far more comfortable 46% in fixed costs compared to 67%. Not only would this provide them with a greater financial buffer, but they would also be able to contribute more to a retirement fund. Start With Some Important StepsIn the case of this family and the Redditor, it’s pretty clear what needs to be done first, as the Redditor has already acknowledged: tracking their expenses. Whether it’s through an app on the computer or phone or on a piece of paper every month, this family needs to visualize every dollar coming in and going out to see where they stand. From here, cutting discretionary spending is the next move, but they won’t be able to do this, at least not smartly, without a budget in place. They already have a fairly reasonable mortgage payment, so refinancing isn’t feasible; however, additional financial aid options should be explored for the college student. Is there anything else available from the school that might be helpful? This Redditor’s child isn’t the only one in this position, as $150,000 in Southern California isn’t a huge salary, so someone else has likely explored other financial aid options. Perhaps most importantly, it is to try to figure out a way to lower the vehicle costs. At this point, this family should have two vehicles they own outright and are just paying insurance for each month. Being able to add 11% of their after-tax budget to the financial pot for retirement or an emergency fund will go a long way. Separately, has the family explored combining both home and vehicle insurance, and if so, is there a discount available that might bring down the cost? All of these things are worth exploring, and it still leaves the door open to look at alternatives like finding a less expensive cell phone carrier, like a prepaid brand, where 4 lines are only $100 instead of $180 for two years locked in. Want Up To $1,000? SoFi Is Giving New Active Invest Users up to $1k in StockLooking to grow your money but unsure where to begin? SoFi Active Invest is offering a limited-time promotion—open an account, fund it with $50 or more, and you could receive up to $1,000 in complimentary stock for Active Invest accounts.From $0 commission trading to fractional shares and automated investing, this app is designed to simplify investing for everyone, whether you’re just starting or already experienced. Its easy to sign up and secure your bonus.(sponsor)DISCLOSURE:INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUEBrokerage and Active investing products offered through SoFi Securities LLC, member FINRA(www.finra.org)/SIPC(www.sipc.org).Advisory services are offered by SoFi Wealth LLC, an SEC-registered investment adviser. Information about SoFi Wealth’s advisory operations, services, and fees is set forth in SoFi Wealth’s current Form ADV Part 2 (Brochure), a copy of which is available upon request and at www.adviserinfo.sec.gov.Probability of Member receiving $1,000 is a probability of 0.026%; If you don’t make a selection in 30 days, you’ll no longer qualify for the promo. Customer must fund their account with a minimum of $50.00 to qualify.Other fees, such as exchange fees, may apply. Please view our fee disclosure to view a full listing of fees.Investing in alternative investments and/or strategies may not be suitable for all investors and involves unique risks, including the risk of loss. An investor should consider their individual circumstances and any investment information, such as a prospectus, prior to investing. Interval Funds are illiquid instruments, the ability to trade on your timeline may be restricted. Brokerage and Active investing products offered through SoFi Securities LLC, Member FINRA(www.finra.org) /SIPC(www.sipc.org).There are limitations with fractional shares to consider before investing. During market hours fractional share orders are transmitted immediately in the order received. There may be system delays from receipt of your order until execution and market conditions may adversely impact execution prices. Outside of market hours orders are received on a not held basis and will be aggregated for each security then executed in the morning trade window of the next business day at market open. Share will be delivered at an average price received for executing the securities through a single batched order. Fractional shares may not be transferred to another firm. Fractional shares will be sold when a transfer or closure request is initiated. Please consider that selling securities is a taxable event.Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire investment Before trading options please review the Characteristics and Risks of Standardized Options [HYPERLINK: https://www.theocc.com/getmedia/a151a9ae-d784-4a15-bdeb-23a029f50b70/riskstoc.pdfInvesting in an Initial Public Offering (IPO) involves substantial risk, including the risk of loss. Further, there are a variety of risk factors to consider when investing in an IPO, including but not limited to, unproven management, significant debt, and lack of operating history. For a comprehensive discussion of these risks please refer to SoFi Securities’ IPO Risk Disclosure Statement [HYPERLINK https://www.sofi.com/iporisk/]. This should not be considered a recommendation to participate in IPOs and investors should carefully read the offering prospectus to determine whether an offering is consistent with their investment objectives, risk tolerance, and financial situation. New offerings generally have high demand and there are a limited number of shares available for distribution to participants. Many customers may not be allocated shares and share allocations may be significantly smaller than the shares requested in the customer’s initial offer (Indication of Interest). For more information on the allocation process please visit IPO Allocation [HYPERLINK https://support.sofi.com/hc/en-us/articles/360058602892-How-does-SoFi-allocate-IPO-shares].

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Personal Finance

My husband wants me to retire in my 40s but I don’t know if it’s financially realistic

2025-12-05 02:08:56

For many couples out in the world today, the question of when to retire is naturally starting to come up more and more. With a tough job market, the decision to try and save up as much as possible so you can exit the workforce early is becoming increasingly attractive. nextstayCCSettingsOffArabicChineseEnglishFrenchGermanHindiPortugueseSpanishFont ColorwhiteFont Opacity100%Font Size100%Font FamilyArialText ShadownoneBackground ColorblackBackground Opacity50%Window ColorblackWindow Opacity0%WhiteBlackRedGreenBlueYellowMagentaCyan100%75%50%25%200%175%150%125%100%75%50%ArialGeorgiaGaramondCourier NewTahomaTimes New RomanTrebuchet MSVerdanaNoneRaisedDepressedUniformDrop ShadowWhiteBlackRedGreenBlueYellowMagentaCyan100%75%50%25%0%WhiteBlackRedGreenBlueYellowMagentaCyan100%75%50%25%0%-->-->Key PointsThis Redditor and her husband are trying to figure out how to retire early, even with an age gap.The challenge they are facing is how to navigate using two 401(k) accounts with an age gap retirement.The reality is that there are some options available, but they have strict requirements.Are you ahead, or behind on retirement? SmartAsset’s free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don’t waste another minute; learn more here.(Sponsor)-->-->For one Redditor posting in the r/ChubbyFIRE subreddit, there is now a question of how to handle an age gap retirement between her and her husband. The hope is that they can both retire simultaneously, but given the age gap, this would require some 401(k) math magic to work. An Age-Gap CoupleAccording to the Redditor’s post, there is a 12-year age gap between her and her husband. On top of this, they were also set to have a child right around the time this was posted on Reddit, so the child is almost one year old at this point. However, this story isn’t about the child at all, but is something many age-couples have to navigate around, trying to find the right time for both parties to retire. The Redditor is thinking about retiring at 55, but that would put her husband at 67. An alternative scenario is to have him retire at 55, but then she would only be 43, and that would leave her another 16.5 years before she could access her own 401(k). Obviously, this leaves some pretty big questions as to how this couple should move forward, especially when the Redditor indicates her husband could walk away from work at any time. While we don’t know financial specifics, as this couple is posting in r/ChubbyFIRE, it’s likely their net worth is at least $3 million. As a result, the husband is now thinking that his wife, the Redditor, can or should retire in her 40s so they can travel together. On the other hand, there is also a consideration about waiting until their kids (assuming there will be a second or third) are either in college or have already graduated. So, how should this couple move forward? Kids Change EverythingOne thing that this Redditor hasn’t seemingly taken into consideration is how the arrival of a child changes everything. It’s not just the financial impact of raising a child that can change their retirement math, since raising a child in today’s world costs hundreds of thousands of dollars. No, the money isn’t the focus or worry here, but it’s all about how much someone may want to be around and help with the kids. Is this family planning to let a nanny or daycare do much of the lifting during the day while they are both working?  It doesn’t seem as if this couple has really sat down and sat through, or at least acknowledged, how much a child, never mind multiple children, will change their retirement plans dramatically. Look at Rule 72tLet’s ignore the subject of children for the moment and strictly look at this from a financial perspective. At the very top of the list is the idea that this Redditor might not want to retire early on, as she won’t have access to her 401(k). However, there are two considerations here that should be really focused on. The first is a strategy where the couple initially retires and lives on the husband’s 401(k) and uses this money until the Redditor turns 59.5 and can tap into her 401(k) without any penalties. This said, there is one other option, but only with an understanding of how careful they would need to be. Under rule 72(t) and SEPP, the Redditor could conceivably gain early penalty-free access to her employee-sponsored 401(k) account if she meets certain conditions. According to the IRS, Rule 72(t) indicates there is an opportunity to take a series of substantially equal periodic payments. Anyone who goes down this road must take the distributions, even if they don’t need them, for at least five years or until they reach 59.5, whichever is longer.If the Redditor did so under these conditions, she would not be subjected to the 10% penalty, but would still need to pay any applicable taxes for the year, and any money withdrawn. It would require a “triggering” event, but it’s an excellent idea for someone who has substantial retirement savings and wants to use this money as a bridge to Social Security, Medicare, pensions, etc. If You have $500,000 Saved, Retirement Could Be Closer Than You Think (sponsor)Retirement can be daunting, but it doesn’t need to be. Imagine having an expert in your corner to help you with your financial goals. Someone to help you determine if you’re ahead, behind, or right on track. With SmartAsset, that’s not just a dream—it’s reality. This free tool connects you with pre-screened financial advisors who work in your best interests. It’s quick, it’s easy, so take the leap today and start planning smarter!Don’t waste another minute; get started right here and help your retirement dreams become a retirement reality.(sponsor)

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Personal Finance

I Died. Here’s How I Want My Wife to Handle Our Finances

2025-12-05 02:08:56

It should go without saying that for any relationship, there is always the fear of the unknown, especially in the event one person dies suddenly and leaves the other trying to navigate life, including finances, without the direction of their better half.nextstayCCSettingsOffArabicChineseEnglishFrenchGermanHindiPortugueseSpanishFont ColorwhiteFont Opacity100%Font Size100%Font FamilyArialText ShadownoneBackground ColorblackBackground Opacity50%Window ColorblackWindow Opacity0%WhiteBlackRedGreenBlueYellowMagentaCyan100%75%50%25%200%175%150%125%100%75%50%ArialGeorgiaGaramondCourier NewTahomaTimes New RomanTrebuchet MSVerdanaNoneRaisedDepressedUniformDrop ShadowWhiteBlackRedGreenBlueYellowMagentaCyan100%75%50%25%0%WhiteBlackRedGreenBlueYellowMagentaCyan100%75%50%25%0%-->-->Key PointsFor this spouse, it’s important that his wife is prepared in the event of his untimely passing.One of the first things he needs to do is to go through the entire financial situation the family has right now.The Redditor should also instruct a lawyer to help in the event of his death.Are you ahead, or behind on retirement? SmartAsset’s free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don’t waste another minute; learn more here.(Sponsor)-->-->This is a sad but true reality for far too many people every year, and it has this Redditor thinking based on their post in r/personalfinance. As the individual responsible for household finances and income, this Redditor is worried about how to help his wife in the event of his untimely passing.I Am Dead. What Does My Wife Do Next?In this particular story, the Redditor is rightfully concerned about his situation, given that he handles the household finances, which includes being the sole provider, as well as being the one who handles all of the budgeting and investments, etc.The last thing he wants is for his wife to struggle down the road. The good news is that he has a “hefty” life insurance policy that would help the wife stay out of the workplace, at least for “many, many years.”All of this said, he does want to put together an “in case of my death, break open” kind of information packet to help guide her on what to do next. This would include, but is not limited to, instructions on filing the insurance claim, expectations for the claim amount, passwords for all accounts, and guidance on managing the family’s current investment portfolio.The Redditor came to r/personalfinance hoping to find some information from other individuals on this subreddit as to how they have handled something similar. Do they have a template they used that could be shared, or any advice on how they have handled something that’s pretty tough to talk about with a spouse and or children?The Best Steps to Take Right NowGet Her Involved in Finances As Soon As PossibleThe idea of getting the wife involved and aware of finances now could fit anywhere on this list, but it’s as essential as it gets. The Redditor doesn’t have to put her in charge of anything, but there is no reason she needs to remain uninformed about their current financial situation, the life insurance policy, etc. Also, give the lawyer a list of every important document she might need to help navigate everything, like birth certificates, etc.It’s really hard to emphasize just how important this advice is right now, and it’s one of the things I would tell someone I care about to emphasize most. If there isn’t a joint account, set one up right now, today, as you never know what can happen.Get Legal and Financial AdviceGiven that we are talking about at least some level of money that would help the wife avoid working for a while, talking to an estate attorney is the first place to start. Ensuring that all aspects of a will and/or a living will are in order should be the first step. Best of all, the lawyer can advise or direct the wife to a financial manager who can help navigate the process of filing the life insurance policy and managing the breakdown of all current investments.Setting up time with a financial planner will be critical in helping the wife navigate this sudden influx of financial responsibility. This individual can discuss with the wife how to manage her spending to maximize the longevity of the life insurance money and investment accounts. In fact, the couple should schedule a meeting with a financial manager together, ensuring they are both on the same page for the future and reducing potential stress.Set Up a Password ManagerFor the Redditor’s spouse, and this is something I have done, is to set up a password manager that contains information on how to access every single financial account. Better yet, don’t just add financial information here, but also include instructions on how to access email and contact a lawyer, as well as any other relevant details. Most password managers have a notes section, and the Redditor can instruct his wife to start there.Contact the Social Security AdministrationSomewhere in the Redditor’s notes, he needs to add a reminder to contact the Social Security Administration. Depending on the circumstances, the Redditor’s wife might be eligible for survivor benefits, and she also wants to be able to draw spousal benefits. It might be nothing, but it’s worth a phone call.If You’ve Been Thinking About Retirement, Pay Attention (sponsor)Retirement planning doesn’t have to feel overwhelming. The key is finding expert guidance, and SmartAsset’s simple quiz makes it easier than ever for you to connect with a vetted financial advisor. Here’s how:Answer a Few Simple Questions. Get Matched with Vetted Advisors Choose Your  Fit Why wait? Start building the retirement you’ve always dreamed of.Get started today! (sponsor)

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Personal Finance

What I Learned Trying to Factor Social Security Into My Retirement Plans

2025-12-05 02:08:56

-->-->Key PointsA Reddit poster wants to know howSocial Security fits into their retirement income.It’s important to recognize the role those benefits will play, especially given the potential for cuts.Don’t plan to retire only onSocial Security, and, if possible, make it a more minor income stream for maximum protection. Are you ahead, or behind on retirement? SmartAsset’s free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don’t waste another minute; learn more here.(Sponsor)-->-->nextstayCCSettingsOffArabicChineseEnglishFrenchGermanHindiPortugueseSpanishFont ColorwhiteFont Opacity100%Font Size100%Font FamilyArialText ShadownoneBackground ColorblackBackground Opacity50%Window ColorblackWindow Opacity0%WhiteBlackRedGreenBlueYellowMagentaCyan100%75%50%25%200%175%150%125%100%75%50%ArialGeorgiaGaramondCourier NewTahomaTimes New RomanTrebuchet MSVerdanaNoneRaisedDepressedUniformDrop ShadowWhiteBlackRedGreenBlueYellowMagentaCyan100%75%50%25%0%WhiteBlackRedGreenBlueYellowMagentaCyan100%75%50%25%0%Social Security is an extremely important income source for many retired Americans today. Unfortunately, a lot of retirees rely too heavily on Social Security. And a result, many are struggling financially.In this Reddit post, we have someone asking how to factor Social Security into their retirement income strategy. They’re aware that Social Security may face cuts in the near future, and they want to make sure they’re covered.It’s an important question to be asking, and one that more people should bring up in the course of their retirement planning. Here’s what to know.Your benefits will only replace a portion of your incomeOne big misconception about Social Security is that the benefits you get in retirement will replace all or most of your former paycheck. In reality, if you earn an average salary, you can expect Social Security to replace about 40% of it in retirement, assuming benefits are not reduced broadly.That, however, is not something you can assume. Social Security is facing a severe financial shortfall in the coming years as many baby boomers retire. Not only will that strip the program of key payroll tax revenue, but it will also result in an influx of claimants, putting a big strain on the program’s resources.Social Security can use its trust funds to keep up with scheduled benefits until they run out. The latest projections from the program’s Trustees have that happening in 2034 (assuming both trust funds are combined), though that timeline could change.The point, though, is that in a best-case scenario, you can expect Social Security to replace about 40% of your pre-retirement wages. If benefits are cut on a broad level, they may only end up replacing closer to 30%.You can count on Social Security, but only to a pointThere’s nothing wrong with factoring Social Security into your retirement income picture. Even if benefitsarecut in the future, they’re not going away completely.However, it’s best to accumulate a large enough nest egg so that Social Security only plays a minor role in your retirement finances. That way, if benefit cuts become more substantial, you won’t be left in the lurch.It’s a common rule of thumb for retirees to need 70% to 80% of their former income to live comfortably once they stop working. To play it ultra-safe, you may want to assume that Social Security will only replace 30% of your previous income in case benefit cuts happen. That means that the bulk of your retirement income would need to come from savings of yours, or from another source.If you’re getting closer to retirement, run some numbers to estimate your annual income needs. Then, create an account on SSA.gov to see what monthly benefit you’re looking at from Social Security, and reduce that number by about 20% to account for potential cuts.From there, see what gap you’re looking at. That tells you how much income needs to come from your savings or another source. That source could be a pension, a part-time job, or both.It’s also a good idea to sit down with a qualified financial advisor to discuss the role Social Security should play in your retirement finances. An advisor can not only tell you what to expect, but help you create a savings and investing strategy that’s designed to set you up with enough income to enjoy your retirement to the fullest.If You have $500,000 Saved, Retirement Could Be Closer Than You Think (sponsor)Retirement can be daunting, but it doesn’t need to be. Imagine having an expert in your corner to help you with your financial goals. Someone to help you determine if you’re ahead, behind, or right on track. With SmartAsset, that’s not just a dream—it’s reality. This free tool connects you with pre-screened financial advisors who work in your best interests. It’s quick, it’s easy, so take the leap today and start planning smarter!Don’t waste another minute; get started right here and help your retirement dreams become a retirement reality.(sponsor)

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Personal Finance

I’m Concerned About Yieldmax; Are We Just Financial Junkies Chasing Quick Fixes?

2025-12-05 02:08:56

-->Key PointsHigh dividend paying YieldMax ETFs have changed the paradigm in many investor minds about dividends for income, rather than as a leverage tool for wealth building.Old school investors who segregate growth and income investments as separate entities often fail to look at the bigger picture, albeit with a different set of risks involved.Deploying dividend compounding and other techniques used by portfolio managers for decades in a new way does not invalidate them, but should be judged by their results.It sounds nuts, but SoFi is giving new active invest users up to $1k in stock, see for yourself (Sponsor)-->-->Although not the sole issuer of high dividend, covered call ETFs, YieldMax’s name has certainly become the one most associated with this niche, but expanding, ETF sector. With dividends in the double digits paying out monthly, or in some cases, weekly, the notion of dividends solely as the province of retirees seeking regular income for their golden years has been turned on its head. Many who ascribe to the FIRE (Financial Independence, Retire Early) ethos, which includes the new generation of DIY Gen-Z investors with RobinHood brokerage accounts have leaped onto the YieldMax bandwagon.nextstayCCSettingsOffArabicChineseEnglishFrenchGermanHindiPortugueseSpanishFont ColorwhiteFont Opacity100%Font Size100%Font FamilyArialText ShadownoneBackground ColorblackBackground Opacity50%Window ColorblackWindow Opacity0%WhiteBlackRedGreenBlueYellowMagentaCyan100%75%50%25%200%175%150%125%100%75%50%ArialGeorgiaGaramondCourier NewTahomaTimes New RomanTrebuchet MSVerdanaNoneRaisedDepressedUniformDrop ShadowWhiteBlackRedGreenBlueYellowMagentaCyan100%75%50%25%0%WhiteBlackRedGreenBlueYellowMagentaCyan100%75%50%25%0%Old school investors who have long kept growth and income securities in separate baskets have derided these new dividend investors as “financial crackheads” who fail to understand risk and investment principles. On the other hand, many of the FIRE-minded investors have effectively used their high dividends to compound their earnings and accelerate their wealth building. A look at each camp’s respective arguments has both pros and cons.DRIP Dividend Compounding and The YieldMax EdgeThe monthly or weekly frequency of YieldMax ETF dividend distributions can turbocharge a DRIP program’s dividend compounding effect, resulting in more noticeable gains in a shorter time period that with quarterly dividends.The power of compounding is succinctly illustrated in the fable, “The King, The Commoner, and The Dividend”. A King wished to reward a Commoner and planned to offer him 10,000 gold coins for instant wealth. The Commoner, to the King’s surprise, asked only  for a single gold coin per month with a  dividend coin for each previous month. The King readily agrees to the seemingly trifling sum.Month 1: Commoner receives 1 coinMonth 2: Commoner receives 2 coins – 1 + 1 dividend for 3 totalMonth 3: Commoner receives 3 coins – 1 + 2 dividends for 6 total. As the months turn to years, the dividends generate their own dividends. In a decade’s time, the Commoner becomes the wealthiest person in the realm, while the King’s fortune has been depleted. The underlying moral of the story is that the slow and steady gain is ultimately more lucrative than the big one-time score. Compounding dividends has often been compared to a snowball, hence thesnowball effectanalogy: If one pushes a snowball down a snowy hill, it continues to pick up snow as it rolls down, winding up to the size of a boulder by the time it reaches the base of the hill. In the same fashion, small dividend reinvestments made on a regular and consistent basis can result in a massive portfolio over time, all without the need to augment the portfolio via additional savings contributions. Of course, adding extra funds is like adding kerosene to a bonfire, and will further accelerate the growth effect.One of the most popular ways of late to build wealth through dividend compounding among FIRE devotees is through the use of a Dividend Reinvestment Plan (DRIP). It puts dividend reinvesting on autopilot, allows for dollar cost averaging, and eschews the need to try to time the market with additional buy orders.  In fact, a DRIP program can often be deployed withlittle to zero fees, thus maximizing dividend funds for investment, as opposed to being frittered away on expenses. In the case of dividend generating securities, the snowball effect will usually make its presence felt after a few years, comparable to the fable. However, the effect becomes more readily apparent and exponentially more effective when the DRIP process is working on a monthly or weekly basis. The YieldMax ETF platform is predicated on the ETFs tracking volatile tech stocks. A short maturity  covered call option collar strategy is deployed to generate dividends from the high delta option premiums. As a result, the dividends for popular YieldMax ETFs like MSTY (which track MicroStrategy) and NVDY (which tracks Nvidia) pay out monthly. In the case of ULTY, there is a portfolio of 30 or more actively traded volatile stocks against which a mix of call and put options may be open at any given time, in addition to synthetic options. The YieldMax Ultra Option Income Strategy (ULTY) has a distribution yield of roughly 88% at the time of this writing and pays distributionsweekly. A DRIP program operating with dividend reinvestments annually based on quarterly payouts can take several years for the compounding effect to manifest a notable difference. However, a monthly or weekly dividend reinvestment, even in smaller increments, exponentially magnifies the compounding effect, and results can be readily acknowledged in a few months under a DRIP program. “Income Funds Are For Income”Many old school investors see investing for income and investing for growth as two separate camps that should not intersect.An experienced investor who bought some YieldMax ETFs comes from the old school of investing mindset. His purchase of YieldMax ETFs was due to the income factor. He took to Reddit to express his concerns, which included:Younger investors seeking monthly or weekly dividends are ignoring negative consequences and risks to collect and then reinvest those dividends for a rush not unlike the one from a hit of crack cocaine.He fails to see how reinvesting dividend distributions back into the same ETF is better than investing directly into the underlying stock and just riding it up for growth.His perspective on YieldMax ETFs is that they should be viewed as a vehicle for perpetual income, not perpetual reinvestment. Most YieldMax and comparable covered-call ETFs are still too new for a comprehensive analysis as to their actual and historical risks and how they’ve weathered market trends in both the bullish and bearish directions. He cautions that failure to monitor changes in distributions can lull younger investors into a false sense of security that will result in reacting too late to prevent losses.Commoner Compounding On Steroids and The Flexibility of Dividend IncomeMany younger investors appreciate high dividend ETFs as a basis for compounding dividends in a wealth building DRIP program that can switch to an income source when between gigs.A hallmark of the digital age is enhanced speed in all matters, thanks to the number crunching power of computing. Gen-Z is often stereotyped for their impatience and desire for instant gratification, but their familiarity with technology and its speed advantages often underlies that attitude. While there is a certain level of bravado that is ubiquitous with every younger generation, not all of it is predicated on recklessness and ignorance. While the Reddit poster makes a valid point about holding an underlying stock for the capital appreciation gains to realize growth, there are also risks involved when those stocks take a short-term downturn.  For example, many stocks dropped precipitously in April when President Trump announced his reciprocal tariff policy, which spooked many investors who have never seen a bearish market streak. Hearing horror stories from older relatives about the 2008 subprime mortgage banking meltdown and the late 1990s dot-com bubble likely spooked many into looking for another avenue towards wealth building to achieve their FIRE agendas. What the older investor doesn’t see is that the Gen-Z  FIRE fan investor in YieldMax who uses a DRIP program is focused onwealth building, not capital gains, per se. As such, the DRIP program, fueled on a monthly or weekly basis, is effectively a standard dividend reinvestment program on steroids. Additionally, Gen-Z has a much larger demographic involved in the gig economy, supplemented by side hustles, as opposed to the 9-5 office timeclock punching of previous generations. When there are lulls between contracts, the income from YieldMax ETFs can come in handy to bridge the income gap during those periods. While the Reddit poster is also correct that the history of Yield Max ETFs and other covered call, high dividend funds is still limited, their large, annual dividend distributions create another possibility: the chance for one to recoup their principal investment in the ETF in under 5 years, especially for those ETFs with market prices in single digits, such as ULTY, which has an 88% distribution yield at the time of this writing. Such a scenario mitigates the risk of capital erosion reducing the ETF to zero before recoupment. Nevertheless, focusing a DRIP program exclusively on an ETF with that kind of risk can reach a point of diminishing returns, so portfolio diversification to 20-25% of conventional growth investments might be prudent for the following reasons:Covered Call ETFs have limited upside in favor of the option premiums that deliver the dividends. Having some involvement in the pure upside of some of these high flying stocks can help to participate in those gains.A portfolio that is heavily weighted towards the ETFs from only one or two issuers runs a potential regulatory risk if the SEC halts trading of those ETFs due to an investigation or an alleged violation. The success of covered call options is predicated upon a bull market with an option market appetite for call options wagering on upside appreciation.  A market that turns bearish or goes sideways can dry up the demand for those call options and consequently shrink the premiums and the dividend income. Want Up To $1,000? SoFi Is Giving New Active Invest Users up to $1k in StockLooking to grow your money but unsure where to begin? SoFi Active Invest is offering a limited-time promotion—open an account, fund it with $50 or more, and you could receive up to $1,000 in complimentary stock for Active Invest accounts.From $0 commission trading to fractional shares and automated investing, this app is designed to simplify investing for everyone, whether you’re just starting or already experienced. Its easy to sign up and secure your bonus.(sponsor)DISCLOSURE:INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUEBrokerage and Active investing products offered through SoFi Securities LLC, member FINRA(www.finra.org)/SIPC(www.sipc.org).Advisory services are offered by SoFi Wealth LLC, an SEC-registered investment adviser. Information about SoFi Wealth’s advisory operations, services, and fees is set forth in SoFi Wealth’s current Form ADV Part 2 (Brochure), a copy of which is available upon request and at www.adviserinfo.sec.gov.Probability of Member receiving $1,000 is a probability of 0.026%; If you don’t make a selection in 30 days, you’ll no longer qualify for the promo. Customer must fund their account with a minimum of $50.00 to qualify.Other fees, such as exchange fees, may apply. Please view our fee disclosure to view a full listing of fees.Investing in alternative investments and/or strategies may not be suitable for all investors and involves unique risks, including the risk of loss. An investor should consider their individual circumstances and any investment information, such as a prospectus, prior to investing. Interval Funds are illiquid instruments, the ability to trade on your timeline may be restricted. Brokerage and Active investing products offered through SoFi Securities LLC, Member FINRA(www.finra.org) /SIPC(www.sipc.org).There are limitations with fractional shares to consider before investing. During market hours fractional share orders are transmitted immediately in the order received. There may be system delays from receipt of your order until execution and market conditions may adversely impact execution prices. Outside of market hours orders are received on a not held basis and will be aggregated for each security then executed in the morning trade window of the next business day at market open. Share will be delivered at an average price received for executing the securities through a single batched order. Fractional shares may not be transferred to another firm. Fractional shares will be sold when a transfer or closure request is initiated. Please consider that selling securities is a taxable event.Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire investment Before trading options please review the Characteristics and Risks of Standardized Options [HYPERLINK: https://www.theocc.com/getmedia/a151a9ae-d784-4a15-bdeb-23a029f50b70/riskstoc.pdfInvesting in an Initial Public Offering (IPO) involves substantial risk, including the risk of loss. Further, there are a variety of risk factors to consider when investing in an IPO, including but not limited to, unproven management, significant debt, and lack of operating history. For a comprehensive discussion of these risks please refer to SoFi Securities’ IPO Risk Disclosure Statement [HYPERLINK https://www.sofi.com/iporisk/]. This should not be considered a recommendation to participate in IPOs and investors should carefully read the offering prospectus to determine whether an offering is consistent with their investment objectives, risk tolerance, and financial situation. New offerings generally have high demand and there are a limited number of shares available for distribution to participants. Many customers may not be allocated shares and share allocations may be significantly smaller than the shares requested in the customer’s initial offer (Indication of Interest). For more information on the allocation process please visit IPO Allocation [HYPERLINK https://support.sofi.com/hc/en-us/articles/360058602892-How-does-SoFi-allocate-IPO-shares].

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Personal Finance

Dave Ramsey Said to Claim Social Security at 62- Here’s Why You Shouldn’t Follow His Advice

2025-12-05 02:08:56

-->-->Key PointsAge 62 is the earliest age to claim Social Security.Financial guru Dave Ramsey thinks it could make sense to file for benefits then.The problem is that filing at 62 reduces your benefits, and many retirees can’t afford that.Are you ahead, or behind on retirement? SmartAsset’s free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don’t waste another minute; learn more here.(Sponsor)-->-->nextstayCCSettingsOffArabicChineseEnglishFrenchGermanHindiPortugueseSpanishFont ColorwhiteFont Opacity100%Font Size100%Font FamilyArialText ShadownoneBackground ColorblackBackground Opacity50%Window ColorblackWindow Opacity0%WhiteBlackRedGreenBlueYellowMagentaCyan100%75%50%25%200%175%150%125%100%75%50%ArialGeorgiaGaramondCourier NewTahomaTimes New RomanTrebuchet MSVerdanaNoneRaisedDepressedUniformDrop ShadowWhiteBlackRedGreenBlueYellowMagentaCyan100%75%50%25%0%WhiteBlackRedGreenBlueYellowMagentaCyan100%75%50%25%0%Once you’re old enough to claim Social Security, you’ll have to make a tough decision. The earliest age to sign up for benefits is 62. But if you don’t wait until full retirement age (FRA) to take benefits, they’ll be reduced on a permanent basis.FRA is 67 if you were born in 1960 or later. If your FRA is 67 but you claim Social Security at 62, you’re looking at reducing your monthly benefits by 30% — for life.You’d think financial guru Dave Ramsey would be against claiming Social Security at 62. Ramsey is a huge proponent of helping people attain financial security and steer clear of debt. He’s the type of person you’d think would encourage peoplenotto reduce a major income stream.Instead, Ramsey actually thinks claiming Social Security at 62 makes sense. But here’s why you may not want to do it.Why Ramsey supports claiming Social Security at 62Ramsey’s logic on Social Security is easy to understand. As he says, “In most cases, it actually makes more sense to take your retirement benefits sooner instead of waiting later. Why? Because your retirement payments die when you die.”Ramsey’s logic is that you might as well make the most of Social Security while you can. If you wait until age 67 to take benefits in order to avoid a reduction but end up passing away at 71, you’ll lose out financially compared to having claimed benefits at 62.Still, there’s a real danger in following Ramsey’s advice. It’s important to understand that claiming Social Security at 62 is a very risky move under certain circumstances.Why you may not want to listen to RamseyIf you have a nice amount of savings for retirement and you expect to use your Social Security as extra income, then you may want to do what Ramsey suggests and take benefits at 62. However, if you don’t have much, or any, retirement savings, then claiming Social Security at 62 is a move you might seriously regret.The Federal Reserve puts median retirement savings among Americans 65 to 74 at just $200,000 as of 2022. That might seem like a lot of money, but it actually isn’t given that it could need to last for 10 years, 20 years, or longer.In fact, many financial experts recommend a 4% withdrawal rate for retirement savings. If you use that rate, a $200,000 nest egg amounts to $8,000 in annual income.If that’s your situation, and your only non-Social Security income is $8,000 a year, then you probably can’t afford to reduce your monthly benefits for life by claiming them early. In that scenario, you might need all of the income from Social Security you can get.Also, Ramsey’s logic in claiming benefits early is that you don’t know how long you’ll live, and that if you pass away at a fairly young age, you could lose out on Social Security by waiting to file beyond age 62. However, the flipside is that you could end up living a lot longer than expected. In that case, reducing your monthly benefits for life could be problematic if your nest egg eventually runs out.This isn’t to say that claiming Social Security at 62 is never a good idea. Before you follow Ramsey’s advice, though, think about your personal situation. You may also want to consult a financial advisor to see what they recommend based on your savings, income needs, health, and retirement goals.If You’ve Been Thinking About Retirement, Pay Attention (sponsor)Retirement planning doesn’t have to feel overwhelming. The key is finding expert guidance, and SmartAsset’s simple quiz makes it easier than ever for you to connect with a vetted financial advisor. Here’s how:Answer a Few Simple Questions. Get Matched with Vetted Advisors Choose Your  Fit Why wait? Start building the retirement you’ve always dreamed of.Get started today! (sponsor)

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Personal Finance

With $90,460 in Debt, What Is The Realistic Path Out?

2025-12-05 02:08:56

No matter how you cut it, debt is a very real part of our world, as much as we try to live on a budget. According to a recent CNBC study, the average American has approximately $90,460 in debt, which seems impossible to escape.nextstayCCSettingsOffArabicChineseEnglishFrenchGermanHindiPortugueseSpanishFont ColorwhiteFont Opacity100%Font Size100%Font FamilyArialText ShadownoneBackground ColorblackBackground Opacity50%Window ColorblackWindow Opacity0%WhiteBlackRedGreenBlueYellowMagentaCyan100%75%50%25%200%175%150%125%100%75%50%ArialGeorgiaGaramondCourier NewTahomaTimes New RomanTrebuchet MSVerdanaNoneRaisedDepressedUniformDrop ShadowWhiteBlackRedGreenBlueYellowMagentaCyan100%75%50%25%0%WhiteBlackRedGreenBlueYellowMagentaCyan100%75%50%25%0%-->-->Key PointsThe hope for most young people is that they can live debt-free, but it’s getting harder and harder to do so.In this individual Redditor’s case, they are finding themselves struggling with an oversized car payment and credit card debt.The single most important thing is to set and live with a substantial budget that accounts for every dollar.It sounds nuts, but SoFi is giving new active invest users up to $1k in stock, see for yourself (Sponsor)-->-->This is precisely how one Redditor feels based on a post they put up in r/personalfinance. Indicating that they feel like they are drowning in debt, this individual doesn’t know what to do, and whether regaining control of their finances will ever be possible again.Drowning in Debt In 2025Kicking things off, this Redditor is listing off her monthly fixed costs, which include rent at $1,250, a car payment of $568 per month, and car insurance that’s approximately $150 per month. As of the middle of August 2025, she was also facing credit card debt, with balances of $2,056 on her Apple Card, $1,700 on her Bank of America card, $4,500 on Citibank, and another $700 balance on a Discover card.While these numbers might not seem like a lot, for someone who is 23 years old and working as a bartender making between $3,000 and $6,000 monthly, they feel like they are drowning. There is also no help being received from anyone (e.g., parents), so the Redditor is responsible for all bills and emergency expenses that come up.On the plus side, this is good news, having moved out to live with roommates and no longer having to help out with her mom financially.Credit Karma to the RescueThis said, she has already gone through Credit Karma to refinance her vehicle, which helped her reduce the monthly payment to $411 for the car at 5.24% for 60 months. This is a big drop from her previous 9% interest at 75 months, but the $150 savings is already feeling more freeing.How to Develop Good Spending HabitsWhether you’re in your 20s like this Redditor or someone much older, it’s never too late to develop good spending habits. You’re going to start by creating good budgeting habits, which means meticulously tracking your cash flow.Build Your BudgetThis means being able to account for every dollar that comes in and every dollar that goes out. How this Redditor or someone else creates a budget is up to them, as using a piece of paper or a spreadsheet is not crucial.What does matter is that you know exactly how much you are spending on everything, so you can visualize where you can save and how you can create some extra cash flow. Make a list of everything you’re spending money on, like a car and car insurance, gas, groceries, cell phone bill, utilities, health insurance, and everything else, so it’s all visualized, including streaming services, which the Redditor smartly indicates she might be getting rid of.In other words, this needs to be a FULL budget as other Redditors point out, so nothing is missing from the equation.Pay Down DebtIn the case of this Redditor and anyone else in a similar position, once you have a firm grasp on your budget, it’s time to start paying down debt. While a car note isn’t considered bad debt, the credit card balances this Redditor has must be reduced before she does any non-emergency spending.Ideally, she could look at getting a credit card that has zero-interest for 15 months or so to consolidate her highest-rate cards or all of them into one card if she can. While it’s not going to be fun, paying off debt has to be her highest priority.This Redditor is a prime candidate for the snowball method, by paying off the smallest debt first, like her Discover card. Once this card is paid off, she should take the amount being paid to Discover and add it to the next highest balance, the Bank of America card, and so on until every card is paid off.Don’t Ignore Any OptionJust as this Redditor did with Credit Karma by refinancing her car loan, this is a prime example of what everyone in a similar debt situation should do. The hope is that you can find help from either your credit card company, a mortgage company that might help you refinance, or even consider moving to a different, less expensive place.The most important financial lesson here is that you shouldn’t ignore any option that might be on the table, including seeking financial counseling. There are plenty of local resources where most people live that are willing to help young adults establish good financial habits.Want Up To $1,000? SoFi Is Giving New Active Invest Users up to $1k in StockLooking to grow your money but unsure where to begin? SoFi Active Invest is offering a limited-time promotion—open an account, fund it with $50 or more, and you could receive up to $1,000 in complimentary stock for Active Invest accounts.From $0 commission trading to fractional shares and automated investing, this app is designed to simplify investing for everyone, whether you’re just starting or already experienced. Its easy to sign up and secure your bonus.(sponsor)DISCLOSURE:INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUEBrokerage and Active investing products offered through SoFi Securities LLC, member FINRA(www.finra.org)/SIPC(www.sipc.org).Advisory services are offered by SoFi Wealth LLC, an SEC-registered investment adviser. Information about SoFi Wealth’s advisory operations, services, and fees is set forth in SoFi Wealth’s current Form ADV Part 2 (Brochure), a copy of which is available upon request and at www.adviserinfo.sec.gov.Probability of Member receiving $1,000 is a probability of 0.026%; If you don’t make a selection in 30 days, you’ll no longer qualify for the promo. Customer must fund their account with a minimum of $50.00 to qualify.Other fees, such as exchange fees, may apply. Please view our fee disclosure to view a full listing of fees.Investing in alternative investments and/or strategies may not be suitable for all investors and involves unique risks, including the risk of loss. An investor should consider their individual circumstances and any investment information, such as a prospectus, prior to investing. Interval Funds are illiquid instruments, the ability to trade on your timeline may be restricted. Brokerage and Active investing products offered through SoFi Securities LLC, Member FINRA(www.finra.org) /SIPC(www.sipc.org).There are limitations with fractional shares to consider before investing. During market hours fractional share orders are transmitted immediately in the order received. There may be system delays from receipt of your order until execution and market conditions may adversely impact execution prices. Outside of market hours orders are received on a not held basis and will be aggregated for each security then executed in the morning trade window of the next business day at market open. Share will be delivered at an average price received for executing the securities through a single batched order. Fractional shares may not be transferred to another firm. Fractional shares will be sold when a transfer or closure request is initiated. Please consider that selling securities is a taxable event.Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire investment Before trading options please review the Characteristics and Risks of Standardized Options [HYPERLINK: https://www.theocc.com/getmedia/a151a9ae-d784-4a15-bdeb-23a029f50b70/riskstoc.pdfInvesting in an Initial Public Offering (IPO) involves substantial risk, including the risk of loss. Further, there are a variety of risk factors to consider when investing in an IPO, including but not limited to, unproven management, significant debt, and lack of operating history. For a comprehensive discussion of these risks please refer to SoFi Securities’ IPO Risk Disclosure Statement [HYPERLINK https://www.sofi.com/iporisk/]. This should not be considered a recommendation to participate in IPOs and investors should carefully read the offering prospectus to determine whether an offering is consistent with their investment objectives, risk tolerance, and financial situation. New offerings generally have high demand and there are a limited number of shares available for distribution to participants. Many customers may not be allocated shares and share allocations may be significantly smaller than the shares requested in the customer’s initial offer (Indication of Interest). For more information on the allocation process please visit IPO Allocation [HYPERLINK https://support.sofi.com/hc/en-us/articles/360058602892-How-does-SoFi-allocate-IPO-shares].

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Personal Finance

How I’m Navigating My Selfish Brother as Executor of Our Inheritance

2025-12-05 02:08:56

It should go without saying that navigating an inheritance among family can be one of the most stressful things in the world. No matter how much money is on the table, the mere idea that there is money to be split among family can bring out the very worst in people. nextstayCCSettingsOffArabicChineseEnglishFrenchGermanHindiPortugueseSpanishFont ColorwhiteFont Opacity100%Font Size100%Font FamilyArialText ShadownoneBackground ColorblackBackground Opacity50%Window ColorblackWindow Opacity0%WhiteBlackRedGreenBlueYellowMagentaCyan100%75%50%25%200%175%150%125%100%75%50%ArialGeorgiaGaramondCourier NewTahomaTimes New RomanTrebuchet MSVerdanaNoneRaisedDepressedUniformDrop ShadowWhiteBlackRedGreenBlueYellowMagentaCyan100%75%50%25%0%WhiteBlackRedGreenBlueYellowMagentaCyan100%75%50%25%0%-->-->Key PointsThis Redditor is in a challenging situation as their brother isn’t fulfilling their duty as the executor of their father’s estate.The four siblings should be splitting the proceeds from a house sale evenly, but one sibling is blocking this from happening.The siblings have been calm for long enough, and it’s now time to involve a lawyer.Are you ahead, or behind on retirement? SmartAsset’s free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don’t waste another minute; learn more here.(Sponsor)-->-->Unsurprisingly, this Redditor is learning this firsthand as they are navigating how to deal with a selfish sibling. Sadly, the Redditor, according to their post in r/inheritance, recently had their father pass away, leaving a house to be split among four children. Handling a Selfish ExecutorThe Redditor provides a whole lot of detail, but the summary here is that after their father recently passed away, they and three other siblings were left a home and a beneficiary IRA. The IRA was automatically divided upon the father’s death, so everyone got what they were owed almost immediately. So far, so good, but things took a turn for the worse when the brother was appointed executor of the estate. The four siblings are looking to split the father’s home between them, as the will requested, and with the house appraised at approximately $400,000, each sibling is hoping to receive around $100,000 gross. The situation worsens when the brother, henceforth known as “Bob” by the Redditor’s post, complains that his siblings should give up their share of the home because he already lives there, despite being terrible with money. The thing is, Bob promised to pay out each sibling from his IRA inheritance, thereby giving himself complete control of the home. It doesn’t take much imagination to see how this has gone, and now, nine months after the father passed away, Bob has yet to provide dates as to when he plans to buy out the rest of his siblings’ share of the home. Understandably, the rest of the family is getting frustrated and wants to just put this issue to rest. Bob Isn’t Handling This WellFrom the Redditor’s post, it’s abundantly clear that Bob is doing little more than stomping his feet and having a temper tantrum about this whole situation. This is akin to a toddler screaming, “It’s not fair,” when you make them stop watching Bluey for the 74th time today. With the house being appraised in February 2025, the siblings know the true value of the home, and there is a good chance it hasn’t changed much since. However, Bob has always been an individual who, as soon as he gets money, spends it, so he’s having an issue with paying out $300,000, whether he has it or not. The thing that’s worrying the family is that the longer this goes on, the more likely it is that Bob uses up his IRA inheritance and won’t be able to afford to pay off each sibling for the home. This leaves the family in a bit of a sticky situation. It’s Time to Lawyer UpLook, nobody likes getting to this point with family, no matter the circumstance, and especially not when money is involved, but Bob has let this go on long enough. With him being the executor, the rest of the family is beholden to him to a timeline to make good on the promise to pay, which he has yet to do, and will likely drag it on as long as possible. This means the advice I would like to give this individual, whether a stranger or a friend, is to lawyer up. It’s time to start thinking about how to move forward, which involves documenting every conversation with Bob about the inheritance and making notes about his reactions and behavior. The best advice is to hire a real estate attorney and discuss the rights of the siblings and the available legal standing. At the same time, the family can give Bob one more chance to be cooperative as a family, and if not, it’s time to consider mediation or a lawsuit. The bottom line is that I would tell this individual that Bob isn’t above the law and that if Bob can’t come to an agreement with the family after one final sitdown, it’s time to take what’s yours by any legal means necessary. There shouldn’t be any feelings of guilt, as this entire situation is of Bob’s own making, and the family has already let this go on for long enough. If You have $500,000 Saved, Retirement Could Be Closer Than You Think (sponsor)Retirement can be daunting, but it doesn’t need to be. Imagine having an expert in your corner to help you with your financial goals. Someone to help you determine if you’re ahead, behind, or right on track. With SmartAsset, that’s not just a dream—it’s reality. This free tool connects you with pre-screened financial advisors who work in your best interests. It’s quick, it’s easy, so take the leap today and start planning smarter!Don’t waste another minute; get started right here and help your retirement dreams become a retirement reality.(sponsor)

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Personal Finance

I’d Hold High Income ETFs to Beat the SPY

2025-12-05 02:08:56

The S&P 500 is wandering into uncharted territory as it looks to wander above the 6,500 mark going into the last four months of the year. It’s never been so concentrated at the top, and with valuations on the rise (it may find itself closing in on a 30 times trailing price-to-earnings (P/E) multiple), some wonder if theSPDR S&P 500(NYSEARCA:SPY) is overdue for a correction.nextstayCCSettingsOffArabicChineseEnglishFrenchGermanHindiPortugueseSpanishFont ColorwhiteFont Opacity100%Font Size100%Font FamilyArialText ShadownoneBackground ColorblackBackground Opacity50%Window ColorblackWindow Opacity0%WhiteBlackRedGreenBlueYellowMagentaCyan100%75%50%25%200%175%150%125%100%75%50%ArialGeorgiaGaramondCourier NewTahomaTimes New RomanTrebuchet MSVerdanaNoneRaisedDepressedUniformDrop ShadowWhiteBlackRedGreenBlueYellowMagentaCyan100%75%50%25%0%WhiteBlackRedGreenBlueYellowMagentaCyan100%75%50%25%0%-->-->Key PointsThe high-income ETFs could have a good run versus the SPY, as valuations stretch further into year’s end.If a mild correction or consolidation is ahead, the JEPI could be a relative winner over the SPY.Are you ahead, or behind on retirement? SmartAsset’s free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don’t waste another minute; learn more here.(Sponsor)-->-->The SPY is concentrated and getting more expensive. Time for a shift to income and value?Though the top-heaviness of the index is not a bad thing (it’s been a good thing in recent years, given the outperformance of mega-cap tech and the Mag Seven names), I do think that some caution is warranted, especially as the P/E skews more towards the high side of the historical range. Of course, high P/E ratios do not necessarily suggest a crash is around the corner. Betting against the market with all this momentum could prove dangerous, especially if the AI boom really delivers next year.While I’m no fan of chasing hot markets, I do acknowledge that we’re in a different kind of environment. And, with that, a more nuanced perspective is required, given that agentic AI could certainly pave the way for faster earnings growth. Could digital labor reduce R&D spend while allowing firms to become as productive as ever? Time will tell. There’s certainly a scenario that exists where today’s high market multiples are more than deserved.Time to shift to high-income ETFs and value plays?In any case, those keen on beating the SPY (or S&P 500) may wish to skew more towards lower-cost stocks or income-focused ETFs, especially since not every bid-up AI “winner” can deliver upon expectations put ahead of them. If evenNvidia(NASDAQ:NVDA) stock can fall following remarkably strong earnings, so, too, can other high-momentum names leading this market.Could the lukewarm reception to Nvidia’s latest second-quarter results be a sign that expectations for AI names have grown high enough that the tech-led bull market may be in for more modest results moving forward? It’s tough to say. The AI boom isn’t about to slow down. However, that doesn’t mean the broad markets can’t as AI progress looks to catch up with the hype.The JEPI: An intriguing income ETFIn this piece, we’ll have a look at an income-focused ETF that I think can allow one to fare well (perhaps even better) than the SPY, especially if 2026 is the year where gains are harder to come by for AI stocks. Consider theJPMorgan Equity Premium Income ETF(NYSEARCA:JEPI), which has an 8.4% yield and 0% in returns on a year-to-date basis.Though the covered call ETF caps potential upside, I do see the ETF as winning out (at least on a relative basis) in climates that see the SPY move sideways to lower. So, if you’re concerned about the near-30 times P/E of the SPY and are fine with trading off some upside for extra income, a name like JEPI could walk away as a relative outperformer.Of course, the ideal scenario would see a volatile flat-lined market that allows for generous premiums on call options. Though JEPI isn’t immune to pain from sudden market scares (shares are still recovering from that first-half plunge), I am a fan of the security for those who think the SPY could begin to drag its feet after clocking in what now looks like three straight years of incredible performance. Personally, I think the odds of a year-long consolidation in the SPY are high. And in such a scenario, I see JEPI as an interesting name to consider.Get Ready To Retire (Sponsored)Start by taking a quick retirement quiz from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes, or less.Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.Here’s how it works:1. Answer SmartAsset advisor match quiz2. Review your pre-screened matches at your leisure. Check out the advisors’ profiles.3. Speak with advisors at no cost to you. 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Personal Finance

I Make $40,000 a Year – What Should I Do With My $800,000 Inherited Roth IRA?

2025-12-05 02:08:56

Investing money in a brokerage account is a valuable starting point to building long-term wealth, especially if you’re also capitalizing on retirement accounts. You  can build your own wealth and pass it on to your kids if you stay financially disciplined. nextstayCCSettingsOffArabicChineseEnglishFrenchGermanHindiPortugueseSpanishFont ColorwhiteFont Opacity100%Font Size100%Font FamilyArialText ShadownoneBackground ColorblackBackground Opacity50%Window ColorblackWindow Opacity0%WhiteBlackRedGreenBlueYellowMagentaCyan100%75%50%25%200%175%150%125%100%75%50%ArialGeorgiaGaramondCourier NewTahomaTimes New RomanTrebuchet MSVerdanaNoneRaisedDepressedUniformDrop ShadowWhiteBlackRedGreenBlueYellowMagentaCyan100%75%50%25%0%WhiteBlackRedGreenBlueYellowMagentaCyan100%75%50%25%0%A low-income Redditor who earns $40,000 per year recently received an $800k Roth IRA and a $400k money market account as an inheritance. The individual is single and has one teenage child. It’s good to speak to a financial advisor if you can, but I’ll give some thoughts as if I were coaching a friend. -->-->Key PointsA Redditor who earns $40,000 per year just received an $800k Roth IRA inheritance.These are some of the strategies the Redditor can use to preserve wealth, get out of debt, and strengthen their long-term finances.It sounds nuts, but SoFi is giving new active invest users up to $1k in stock, see for yourself (Sponsor)-->-->Calculate Your Monthly ExpensesI can’t offer any suggestions on what to do with the money if I don’t know more information about someone’s finances. The advice for managing the $800k Roth IRA and $400k money market account will be different if someone spends $5,000 per month or $20,000 per month. The Redditor is earning $40,000 per year, which comes to roughly $3,333 per month before taxes.This isn’t the time to get bold and make high-risk investments. Someone who is earning $3,333 per month may be more vulnerable to debt, such as credit card debt. Squaring off those balances first with the money market account may be the best first step to take.We don’t know the APY on the money market account, and I would want to know that if this person wanted suggestions from me. However, if it yields 3% APY, the $400k account is generating $12,000 per year, which comes to $1,000 per month. The Redditor can consider a CD ladder to lock in a higher rate for a longer period of time, but it may not be necessary right now. The money market provides additional income, but it is taxed as ordinary income, which results in a higher tax bill.Let The Roth IRA Grow UndisturbedThe Redditor has enough money in the money market account to get out of debt and make expenses more feasible. However, the Roth IRA funds should stay put. Assets in a Roth IRA grow tax-free, and you don’t even pay taxes on any withdrawals. If you receive a Roth IRA as an inheritance, you have 10 years to withdraw all of the money from that retirement account. Waiting until the 10th year to withdraw money from the Roth IRA allows more of your money to grow tax-free. It’s the best setup.Keeping money in the Roth IRA instead of withdrawing from the account also makes the 49-year-old less susceptible to lifestyle inflation. One thing I would mention to anyone in this situation is that they are still only earning $40,000 per year. Receiving a big inheritance doesn’t justify someone who earns $40,000 per year upgrading to an $80,000 per year lifestyle. That’s why most lottery winners end up broke. They upgrade their lifestyles because they don’t have financial discipline, and then end up right back at square one.Put The Money Right Back Into A Brokerage AccountThe 49-year-old will inevitably have to withdraw money from their Roth IRA, especially in the 10th year. However, it doesn’t make much sense for the 49-year-old to use this account for any purchases. It’s better to put the money right back to an index fund in your brokerage account.If optimized correctly, the $800k Roth IRA can fund the 49-year-old’s future retirement. It does not seem like the 49-year-old has a nest egg of their own, and I would mention this in a conversation about money. Let the money continue to grow after withdrawing it from the Roth IRA so you can give it to your teenage child as an inheritance when the time comes. Some brokerage firms can connect you with a financial advisor for free, especially since the Roth IRA has $800k in it. That way, the 49-year-old can speak with an experienced financial professional who can map out a plan.Want Up To $1,000? SoFi Is Giving New Active Invest Users up to $1k in StockLooking to grow your money but unsure where to begin? SoFi Active Invest is offering a limited-time promotion—open an account, fund it with $50 or more, and you could receive up to $1,000 in complimentary stock for Active Invest accounts.From $0 commission trading to fractional shares and automated investing, this app is designed to simplify investing for everyone, whether you’re just starting or already experienced. Its easy to sign up and secure your bonus.(sponsor)DISCLOSURE:INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUEBrokerage and Active investing products offered through SoFi Securities LLC, member FINRA(www.finra.org)/SIPC(www.sipc.org).Advisory services are offered by SoFi Wealth LLC, an SEC-registered investment adviser. Information about SoFi Wealth’s advisory operations, services, and fees is set forth in SoFi Wealth’s current Form ADV Part 2 (Brochure), a copy of which is available upon request and at www.adviserinfo.sec.gov.Probability of Member receiving $1,000 is a probability of 0.026%; If you don’t make a selection in 30 days, you’ll no longer qualify for the promo. Customer must fund their account with a minimum of $50.00 to qualify.Other fees, such as exchange fees, may apply. Please view our fee disclosure to view a full listing of fees.Investing in alternative investments and/or strategies may not be suitable for all investors and involves unique risks, including the risk of loss. An investor should consider their individual circumstances and any investment information, such as a prospectus, prior to investing. Interval Funds are illiquid instruments, the ability to trade on your timeline may be restricted. 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Please consider that selling securities is a taxable event.Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire investment Before trading options please review the Characteristics and Risks of Standardized Options [HYPERLINK: https://www.theocc.com/getmedia/a151a9ae-d784-4a15-bdeb-23a029f50b70/riskstoc.pdfInvesting in an Initial Public Offering (IPO) involves substantial risk, including the risk of loss. Further, there are a variety of risk factors to consider when investing in an IPO, including but not limited to, unproven management, significant debt, and lack of operating history. For a comprehensive discussion of these risks please refer to SoFi Securities’ IPO Risk Disclosure Statement [HYPERLINK https://www.sofi.com/iporisk/]. This should not be considered a recommendation to participate in IPOs and investors should carefully read the offering prospectus to determine whether an offering is consistent with their investment objectives, risk tolerance, and financial situation. New offerings generally have high demand and there are a limited number of shares available for distribution to participants. Many customers may not be allocated shares and share allocations may be significantly smaller than the shares requested in the customer’s initial offer (Indication of Interest). For more information on the allocation process please visit IPO Allocation [HYPERLINK https://support.sofi.com/hc/en-us/articles/360058602892-How-does-SoFi-allocate-IPO-shares].

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