Why Inflation Hurts the Aged Maximum

There is a convincing reason for the aged to work even after retirement from work in certain countries especially if their retirement benefits are not large enough and inflation is more than the optimum level. Inflation at best captures average price of a predetermined basket of goods. Individuals, however, have different preferences for goods. Even if inflation is kept at the optimum level, it might affect certain people unfavorably if their preferences for goods are on the wrong side. For example, if a retiree just makes both the ends, an increase on house rent of $20 per month, will force the retiree to cut his consumption of preferred goods or to find alternative residence. In both the cases, the retiree forgoes satisfaction by reducing usual consumption considering the logistic cost involved in shifting the residence. On the aggregate level, it is negative for the economy. As inequality in many advanced and developing countries widens more and more in recent times, a favorable social benefit policy is imperative. This also calls for attention to early financial planning before retirement, failing which a person’s retirement life will be in jeopardy. Financial education is in the interest of the State rather than its citizens.

The best social benefit that a central bank and a government can provide to people is controlling inflation and keeping it at an optimum level. The following data best depicts the financial pressure due to inflation that is higher than optimum level.

Suppose, your monthly expenditure is $5000 at present cost. If you are retiring after 24 years, then what will be your monthly income requirement? It depends upon where you are living, and who your central bank is.

If your central bank is keeping the inflation at 2%, then your monthly requirement will be $8040, after 24 years.
AT 3% inflation, it will be $10145, after 24 years.
At 4% inflation, it will be $12795, after 24 years.
AT 5% inflation, it will be $16120, after 24 years.
AT 6% inflation, it will be $20240, after 24 years.
@7% your monthly requirement will be $25385.
@8% your monthly requirement will be $31665.
@9% your monthly requirement will be $39500.
@10% your monthly requirement will be $49270.

If you have any specific goal such as buying a home at your retirement, then you will have to look for inflation index of home. If you can buy a home for $100,000 today it will cost you $1 million after 24 years at 10% inflation. It is impossible for a person who just makes both the ends. Everyone needs surplus income and the surplus income has to be invested intelligently.

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Top Money Market Accounts Info: What Is an MMA? What Perks Do the Best Online Banks Offer?

As soon as you can afford to start investing, one of the first things you should look into is a money market account. This is a very low-risk way to invest your cash, and there is a potential for a decent pay off, as long as you choose one of the top money market accounts with a leading online bank.

It’s a good idea to put your money into one of these types of accounts instead of a regular savings account since the former comes with potentially high annual yield rates (at least 2% with online banks).

It is important not to confuse MMAs with money market funds. With an MMA account, your money will be insured against losses by the FDIC. With an MMF account, your money will not be protected. The money market funds are a type of mutual fund that invests in highly liquid instruments such as cash and cash equivalent securities. While they do come with a low level of risk, they still aren’t as secure as an option as the top money market accounts.

How do you know which bank to put your money in? As mentioned above, it’s best to choose an online bank with an AYP of at least 2%. Keep in mind that the APY might go down over time if you don’t put a minimum amount of money in the account every month. This varies from bank to bank and is something you’ll definitely want to look into.

Top Money Market Accounts Minimum Deposit

Another thing to consider is the minimum deposit, as many banks do require these. If there is a minimum requirement to open up an account, make sure you can really afford to put that amount of money in the account. If you think you might need to access some of the money throughout the month, you’ll need a bank that won’t charge you a penalty for doing so, just as long as you don’t go over the monthly transaction limit (which is usually around 6).

Look into miscellaneous perks that some internet banks offer with their top money market accounts. These are the things that simplify online banking: 24/7 account access, top-notch customer service and tech support, online deposit options like PayPal, and 0 service or maintenance fees. The process of opening a new account and making your first deposit should be very quick and easy.

Now that you have a better understanding of what to look for in online banks and top money market accounts, you can start looking over your options. CIT Bank is definitely a great place to start as it offers all of the perks above, and only has a $100 minimum requirement for starting an account.

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Top 10 Savings Accounts Info: Which Online Banks Offer the Highest APY? What Is the Best Savings?

The ideal savings accounts are those that will help you grow your money and give you the freedom to do just about whatever you want with it. It shouldn’t cost very much money to maintain a savings account, either. It’s recommended that you stick with an online bank since they are able to provide better APY than what the traditional brick and mortar banks can offer. To help you with your decision, here are the top 10 savings accounts right now (in no particular order):

• Popular Direct – 2.55% APY for “Ultimate Savings”

• TAB Bank – 2.40% APY

• Citibank – 2.36% APY for “Priority Account Package”

• MySavingsDirect – 2.15% – 2.40% APY

• VIO Bank – 2.52% APY

• Citizens Access – 2.20% APY

• HSBC Direct – 2.20% APY

• Comenity Direct Bank – 2.35% APY

• CIT Bank – 1.55% – 2.35% “Savings Builder” APY

• Barclays – 2.10% APY

Of course, there is much more to the top 10 savings accounts than just the APY. Will you be required to keep a minimum amount of money in the account in order to get the APY? Will there be any penalties if you have to access any of the money and use it?

Maintenance Fees in the Top 10 Savings Accounts

Ideally, there should be no monthly maintenance fees just to hold a competitive account open, nor should you have to pay anything to transfer money into the account over the internet.

Keep in mind that the APY percentages mentioned above might not be for every single month. Some are just for an introductory period. In order to keep those percentages, you will likely be required to make a minimum deposit, or maintain a certain amount of money in the account. Only choose one of the top 10 savings accounts that is FDIC approved, as this means that the money is insured. Financial institutions have an “FDIC Member” logo right on their front page to show off their status.

Take the time to read about the transfers and withdrawals (if any) you will be allowed to make with the money in the account. Some transfers / withdrawals are subject to limitation and some are not. Across the board, online savings accounts usually have a limit of 6 withdrawals per month. If you think you will need more than that, and then be very careful with how much you put into this account in the first place. Only put in money you know for sure you can live without each month, and let it grow with interest.

Of the top 10 savings accounts, CIT Bank is one that gets a lot of positive reviews. There are no monthly fees on its accounts, and you can really rack up the interest over the coming year if you select the “Savings Builder” account.

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