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How should I invest my nest egg for maximum retirement Income?

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I’m in my mid 60s and have about $1.2 million I would like to invest for the maximum income possible for the rest of my life. I don’t care for stocks or bonds because I hate the idea of seeing the value of my savings drop if the market has a correction. And I don’t understand annuities. Any suggestions?—M.B.

You’ve got a number of conflicting wants and needs that you’d do well to sort out if you hope to come up with a sensible plan to convert your nest egg into income that can support you the rest of your life.

You say, for example, that you want “the maximum income possible,” yet you seem bent on ruling out stocks and bonds, investments that, in combination, have a solid record of being able to deliver the size returns you need to generate a high level of income for the long term.

You also express concern about the value of your savings dropping during market downturns. That’s understandable. No one enjoys seeing his nest egg take a hit, especially the gut punch of a severe bear market. But this aversion to seeing even a temporary decline is incompatible with your desire for maximum income. The more you dampen up-and-down swings in the value of your retirement portfolio, the more you reduce your return potential, which makes it tougher to get the higher retirement income you seek. You can’t have it both ways, a shot at maximum income and total stability.

Finally, you say you want this income to last for life. But you then seem to suggest that annuities — a type of investment specifically designed to create a payout you can’t outlive — are a no-go. I agree that annuities can be difficult, sometimes almost impossible, to understand. And I don’t want to suggest that you must own an annuity. Still, if you really want retirement income you can count on for the rest of your life, I think it’s at least worth considering whether an annuity might make sense.

All of which is to say that I think you need to consider setting a more realistic goal when it comes to retirement income — namely, creating a plan that can get you a reasonable amount of sustainable income given your resources, while limiting volatility to a manageable level rather than trying to do away with it altogether.

Related: 4 steps you should take when buying an annuity

The first step toward creating such a plan is to get a handle on how much income you’ll need to cover your retirement expenses. You can do that by going to an online budgeting tool like BlackRock’s Retirement Expense Worksheet, which has room for you to enter dozens of retirement expenses ranging from essential outlays for housing, food, health care and transportation to more discretionary expenditures for travel, entertainment and charitable donations.

Once you’ve toted up your expenses, you can then see how much of those costs you’ll be able to pay for with assured income from sources like Social Security and any pensions. If you haven’t already begun drawing Social Security, you can see what size monthly check you might receive by going to the Social Security Administration’s Retirement Estimator tool.

More likely than not, there will be a gap — i.e., your expenses will exceed the amount you’ll collect from Social Security and any pensions. The simplest way to fill that gap is to draw enough from savings each year to cover the expenses that Social Security and any pensions can’t. Question is, how do you do this without running through your savings too quickly?

Start by being judicious about withdrawals. If you want your nest egg to last 30 or more years — a reasonable assumption given today’s long life spans — you should probably limit yourself to an initial withdrawal of no more than 3% to 4% of the value of your savings. You can then increase that amount each year by the inflation rate to maintain your purchasing power.

Assuming an initial withdrawal of 4% and annual inflation of 2% would, in your case, translate to withdrawing $48,000 the first year of retirement (4% of $1.2 million), about $49,000 the second year ($48,000 plus 2% inflation), roughly $50,000 the third year ($49,000 plus 2% inflation), etc. You can always withdraw more, but the more you pull out, the greater the chance you may exhaust your savings too soon.

How you invest your retirement savings also plays a role in determining how long your nest egg might last. I get that you have an aversion to seeing the value of your savings decline during periods of market turmoil. To totally avoid that possibility, however, you would pretty much need to invest all your savings in cash equivalents like money-market accounts and CDs. Problem is, these investments generate such low returns that, even if you limit yourself to a withdrawal rate of 3% to 4%, you would still run a not insignificant risk of outliving your savings.

So unless you’re willing to cut back on the amount you withdraw each year — or accept a higher risk of running out of money before you run out of time — you need the more generous returns that a diversified portfolio of stocks and bonds (or, more likely stock and bond funds) can deliver.

Related: Should I move half of my savings into an annuity?

That doesn’t mean you have to invest all, or even most, of your savings in stocks. Even a small dollop of stocks, as little as 30% or so, can provide enough return potential to substantially reduce the risk of outliving your savings compared with an all-cash equivalents portfolio. Which means you should have plenty of leeway for finding a mix of stocks and bonds that can get you the retirement income you need without subjecting your nest egg to wild swings in value.

You can get an idea of what stocks-bonds mix might be right for you (and how different mixes have fared in the past) by completing this risk tolerance-asset allocation questionnaire. To see how long your nest egg might last at different withdrawal rates and with various combinations of stocks and bonds, check out this retirement income calculator.

Up to this point, we’ve been talking probabilities of how long you might be able to draw a given amount of income from savings, not certainties. But there is a way to create income that’s guaranteed to last as long as you do: buy an annuity. Granted, annuities can be complex and confounding. But there is one type that, relative to other annuities at least, is fairly easy to understand: an immediate annuity.

You turn over a lump sum of savings to an insurer and in return get monthly payments for life. Today, for example, a 65-year-old man who invests $100,000 in an immediate annuity would receive about $550 a month for life; a 65-year-old woman would get $530 a month; and a 65-year-old couple (man and woman) would receive about $470 a month as long as either is alive. (This annuity calculator can show you how much income you’d receive based on your age, sex and amount invested.)

But even this relatively straightforward annuity comes with conditions you need to understand, one of the most significant being that in return for guaranteed income for life you typically give up all or most access to the money you’ve invested. Which is one reason I think anyone who feels they might want more guaranteed income than Social Security alone will provide should consider this two-pronged strategy: Invest enough of your savings in an annuity so that the annuity’s payments along with income from Social Security and any pensions will cover all or most essential expenses; then invest the rest in an appropriate mix of stocks, bonds and cash you can draw on as needed to pay any additional expenses. If such a strategy appeals to you, be sure to check out these tips for choosing an annuity before committing to one.

Given the wariness expressed in your question, you may very well decide that even a relatively conservative mix of stocks and bonds — in conjunction with an annuity or not — isn’t right for you. And that’s fine. I’m sure you won’t have trouble finding advisers suggesting plenty of other ways to go. Remember, though, that any realistic strategy to convert savings to sustainable retirement income will necessarily involve trade offs and compromises, not mention varying levels of fees. Just make sure that before you sign on, you know exactly what those trade offs, compromises and fees are.

CNNMoney (New York) First published May 23, 2018: 10:17 AM ET

Trump’s tax plan isn’t as big of a threat to H&R Block as he says

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Details of GOP tax plan released

President Donald Trump may talk a lot about creating jobs, but there’s one kind he wants to eliminate: Tax preparers.

“I want to put H&R Block out of business,” Trump said on the campaign trail.

“H&R Block probably won’t be too happy,” he said again in February.

Trump is confident that his tax plan will simplify the code enough to make individual filing a snap “If we can do it on one page,” Trump said at a press conference on Monday. “Now, in some cases, it may be two pages.”

In fact, Trump thinks it will be so simple that some taxpayers will be able to do away with their accountants altogether. But so far, tax professionals don’t seem very worried.

Trump is taking aim at a huge industry: The Bureau of Labor Statistics reports there are 70,000 tax preparers in the U.S., which may be an undercount. (H&R Block (HRB) claims 70,000 “tax professionals” in its own franchises, and that doesn’t include all of the tax lawyers at big firms like PricewaterhouseCoopers and Accenture). According to a study by an economist at the University of California, Los Angeles, Americans spend $200 billion a year just filing their federal income taxes.

Yet despite Trump’s promise to render professional tax preparers obsolete, the GOP’s tax plan will still leave them with plenty of work to do.

The so-called Big Six’s Unified Framework — a nine-page statement of principles agreed to by the White House and Congressional leaders — does a few things to make the tax code less complex. It would compress the existing seven individual tax brackets down to three, eliminate “most” itemized deductions and get rid of the alternative minimum tax and the estate tax.

On the corporate side, it would drop the overall corporate tax rate from 35% to 20%, while scrapping some deductions and exemptions for specific industries.

Related: The White House explains itself: Why corporate tax cuts mean higher wages

But those measures don’t affect most Americans, only 30% of whom choose to itemize rather than take the standard deduction, according to the Tax Foundation.

At the same time, the plan envisions other changes that would make filing taxes more complex.

For example, it expands the child tax credit and adds a $500 credit for dependents like elderly parents, while maintaining exemptions and deductions for mortgage interest, retirement savings, higher education, and charity. (The non-partisan Tax Policy Center has pooh-poohed the GOP’s promise to enable individuals to file their taxes on a postcard, pointing out that plenty of worksheets would still be required to figure out how to fill out that postcard’s fields.)

On the corporate side, the Big Six plan adds a new loophole, which allows businesses to expense their new investments. All of these exemptions may or may not serve as valuable incentives, but they don’t help simplify the tax code.

Meanwhile, the GOP introduces a large dose of complexity by proposing to tax “pass-through” businesses — which include sole proprietorships and partnerships — at 25%, rather than the top individual tax rate of 39.6%. This reduced rate will incentivize businesses to restructure themselves as pass-throughs if they can.

“Any time you get any kind of rate differential for different sources of income, you warm the hearts of every tax planner everywhere,” says Joe Thorndike, a tax historian with the non-profit research firm Tax Analysts. “That’s great for them, because that’s going to create an enormous opportunity to reorganize.”

Trump’s team argues that by cutting the corporate tax rate to 20%, it will make it less attractive for big multinational corporations to lower their taxes through complicated accounting maneuvers like transfer pricing and earnings stripping. Many economists agree.

Related: The IMF says Trump won’t deliver tax reform

“A somewhat lower rate would both reduce incentives to profit shifting and also help smaller firms compete better with their larger counterparts,” says Fatih Guvenen, a professor at the University of Minnesota who has studied corporate tax practices.

However, another part of the GOP plan — known as “territorial taxation” — would make profits earned overseas tax-free forever, which will always compare favorably to even the lowest corporate tax rate. That creates an incentive in the other direction, to classify income as foreign rather than domestic, explains Tax Policy Center senior fellow Steven Rosenthal.

“There are aspects of the Big Six framework that will create new gaming,” Rosenthal says.

So even if big corporations stop spending money on complex accounting maneuvers that help shift their profits around, they will still need tax lawyers for plenty of emerging lines of business.

“I’m not too terribly worried the tax business is going to change dramatically,” says Ramon Camacho, a principal in the international tax practice at RSM US. “But there’s always something else to do. Just move into litigation!”

And what about the H&R Blocks of the world? They’ve already been building software that allows taxpayers to file their returns from the comfort of their couches, no human assistance required. In the meantime, they don’t seem all that worried about Congress deregulating them out of their jobs. Any change in the tax code, after all, creates demand for professional advice.

“It could be simpler, but there’s no scenario where it would be simple, the U.S. tax code,” said H&R Block CEO Tom Gerke on the company’s most recent earnings call. “Every time we get into one of these reform processes, we can’t resist adding to it as well.”

CNNMoney (New York) First published October 19, 2017: 8:58 AM ET

6.8 million Americans will get an average refund of $80 from their health insurers

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health insurance refund
Thank Obamacare for your refund.

More than 6.8 million Americans will get a refund from their health insurer this summer.

Total value of the rebates will be $332 million, with an average of $80 going to each family. They’ll be issued by August 1.

Thank the Affordable Care Act for the windfall. Under one of the law’s provisions, insurers must issue refunds if they spend more than 20% of what customers pay in premiums on administration and marketing expenses, instead of medical care.

Related: Thankful for Obamacare

Insurers were first required to issue these refunds in 2012, shelling out a total of $1 billion to consumers. The total dollar amount of refunds has decreased each year since then, as insurers have adjusted to charging less for premiums and operating more efficiently. Insurers paid back $504 million to customers in 2013.

Hobby Lobby ruling could change business

The market for individual insurance policies has made the biggest gains in efficiency, spending 11.5% of premiums on overhead costs last year, down from 15.3% in 2011.

Individuals will either receive a check in the mail, a direct reimbursement to a bank account, or as a discount to future premiums.

CNNMoney (New York) First published July 24, 2014: 3:43 PM ET

Sharp drop in international student visas worries some US colleges

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Tuition-free college comes with strings

A sharp decline in the number of international student visas has many of America’s colleges and universities on edge — and some say the Trump administration’s tough stance on immigration might be partly to blame.

The number of F-1 visas issued to foreign students seeking to attend college and other types of academic institutions in the United States decreased by 17% in the year that ended September 30, 2017, according to recent State Department data.

“The current administration’s ‘America First’ mantra is causing [international students] a great deal of anxiety and fear,” said Earl Johnson, vice president of enrollment and student services at the University of Tulsa in Oklahoma. “Also, the cost of college tuition, on average, has gone up 40% in the last 10 years. It’s weighing on them.”

That’s bad news for schools that have large international student populations. Nearly 20% of the University of Tulsa’s 4,400 enrolled students hail from overseas.

Johnson said his school has experienced declines in international enrollment for a few years now and it is starting to hurt revenue. The university has even placed a school official in China to recruit more students from overseas.

university of tulsa students
At the University of Tulsa, international students make up 20% of the student population.

F-1 visa approvals were trending higher for nearly a decade when they peaked at more than 600,000 in 2015. But they have dropped off dramatically since.

The United States issued a total of 393,573 F-1 visas in fiscal 2017, down from 471,728 in 2016. The government did not release the total number of F-1 visa applications it receives in a given year or how many applications were rejected.

The biggest decline in visa approvals in 2017 was seen among students from Asian countries, particularly those from China and India which typically account for the largest number of F-1 visas.

Related: College tuition is still getting more expensive

A number of factors could be driving the declines, said Allan Goodman, president of the nonprofit Institute of International Education.

While students are evaluating the cost of studying in the US versus somewhere else, they are also tuning in to the political rhetoric on immigration. “Inevitably, it does lead them to ask, ‘Will I be welcome here?” said Goodman.

university of tulsa
University of Tulsa is hoping to boost applications from international students.

But there are other factors that are also playing a role, he said. In China specifically, a 2014 change in visa policy allows Chinese students to obtain an F-1 visa for a five-year period instead of one, freeing them from having to renew their visa each year. That change alone could contribute to the recent declines, said Goodman.

Worldwide competition for international students is also heating up, he said. The United States used to account for almost half of all international students worldwide. Now about 24% of all international students come here, said Goodman.

Instead, they are going to countries like Canada, Germany and Australia, which are making it easier for international students to stay in the country after they graduate and become part of the workforce.

Related: Despite DACA uncertainty, these Dreamers are still determined to go to college

Meanwhile in the United States, the government’s tougher stance on its popular H-1B foreign work visa, a common visa pathway for highly-skilled foreign workers, is making it harder for new graduates to remain in the country and could be deterring overseas students from applying to American colleges.

While neither the law nor any regulations regarding foreign student visas have changed, the State Department said it has revised its guidance to US consulates that review and approve the applications. The agency said it now emphasizes that the consulates “must refuse” any applicants if they are “not satisfied that the applicant’s present intent is to depart the United States at the conclusion of his or her study.”

“We believe that studying in the U.S. continues to provide the best educational opportunities in the world, introduces international students to networks that provide benefits and advantages well after their studies conclude, and gives graduates a life-long connection to the U.S,” a State Department official said.

“Having international students benefits the United States in many areas, in science and technology, even the number of Nobel laureates we produce,” said Goodman.

And international students add diversity to the classroom, he added. “Most Americans don’t study abroad. At the very least, they get a sense of the outside world from the eight to 10 different nationalities in their classroom,” he said.

“It’s a fairly uncertain time for all higher education institutions in the US,” Johnson said. “Right now we feel the glass is half full. We are seeing a greater number of started applications from students overseas, but we have to wait and see how many complete their applications for the fall.”

CNNMoney (New York) First published March 12, 2018: 7:33 PM ET

How to build a career in diversity and inclusion

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Melinda Gates: We need 'more diverse teams'

Forty years ago, business leaders couldn’t imagine entire career paths in diversity management, let alone schools offering diversity and inclusion specialties.

But now, chief diversity officers at Facebook, Google and other high-profile companies are taking deeper looks at how companies hire, promote and welcome employees from all backgrounds.

The business world is finally paying attention — and so are prospective leaders.

But what does it take to succeed in this growing field?

Know the psychology

“I certainly didn’t grow up thinking ‘I’m gonna be the head of diversity at a company somewhere,'” says Candice Morgan, head of inclusion and diversity at Pinterest. “I didn’t know that was a career path.”

In college, Morgan studied psychology and business, where she fell in love with classes like “Business Across Cultures.” In her psychology classes, she learned more about how cultural and ethnic differences affect the ways we interact. In her business classes, she focused on how companies can help prepare employees for those interactions.

At Pinterest, Morgan works with colleagues beyond the human resources and recruitment teams. She even collaborated on a new product feature released last year, allowing users to filter their search results by skin tone.

She also spends a lot of time talking to employees about their experiences and dreams for their careers. Enabling them, she says, is key to her work.

“I split inclusion work into three areas: are people showing up? Are they developing? And are they advancing into leadership positions?” she says. “All of that is part of the metrics or the output.”

Know the business

Rosanna Durruthy, head of global diversity, inclusion and belonging at LinkedIn, says she also spends a good amount of time thinking about relationships at work.

“There are still businesses or industries where the [lack of] representation creates ‘onlyness,’ as I describe it,” she says. “They may be the only one who represents their demographic: the only woman or the only person of color.”

But as she tells future diversity leaders, you also have to know the business. What does it take to be successful at this organization? What goals are important to leaders? Are these goals accessible for all employees?

These questions, Durruthy says, are important to understanding the work of a diversity and inclusion officer. They help remake the culture of the company, not just the look of its workforce.

Know the people

Two years ago, Tufts University launched its diversity and inclusion leadership program, an interdisciplinary program aimed at preparing students for diversity roles across industries. The idea, says Robert Cook, dean of the graduate school of arts and sciences at Tufts, is that students in the program learn from a variety of different fields, all of which can combine to prepare them for a position that’s becoming ever more popular.

“Increasingly, it’s a profession. Increasingly, it’s getting greater attention from all sorts of institutions,” he says. “What we want to do is give people the leadership skills to understand how organizations work, as well as the analytical skills so that they can be effective at their jobs.”

Ciara Trinidad, program manager for inclusion and diversity at Netflix, says she’s learned to appreciate how all these different pieces come together. From there, she says, good diversity and inclusion leaders have to make sure that message permeates all levels of the organization, beyond just the recruitment team or the executive team.

“Companies are like ‘we care so much about diversity and inclusion, but if you were to go and ask a lower-level manager, ‘Why do you care about diversity and inclusion?’ they would have no idea,” she says. “That’s the problem.”

Correction: An earlier version of this story incorrectly reported Ciara Trinidad’s title at Netflix.

CNNMoney (New York) First published August 22, 2018: 12:03 PM ET

Why do annuities have such a bad reputation?

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Running out of money in retirement is such a major concern that many workers fear it more than death itself. And while aggressively funding an IRA or 401(k) during your working years will help lower your risk of depleting your savings in your lifetime, it won’t guarantee that you don’t wind up strapped for cash when you’re older.

An annuity, on the other hand, can help eliminate that risk. An annuity is a contract between you and an insurance company. With an annuity, you’re essentially paying a lump sum of money in exchange for guaranteed payouts for life. Those payments might start right away or begin at some point in the future.

Sounds like a pretty good deal, right? Not necessarily.

While annuities are a smart investment in theory, there’s a reason they tend to get a bad rap. For one thing, they can be awfully confusing and come with their own complicated tax rules and implications. Furthermore, annuities are only as good as the companies that issue them. If you buy an annuity and the insurance company behind it goes under, your so-called guaranteed income stream disappears.

But if there’s one aspect of annuities that really drags their name through the mud, it’s none other than fees. And that’s something you need to be aware of before you buy.

What will your annuity cost you?

Let’s be clear: Most investments come with fees in some shape or form. But annuities take that concept to a whole new level.

First of all, annuities are frequently (though not always) sold by pushy sales reps who land huge commissions for getting you to buy them. Those commissions can easily hit the 10% mark, and they’re often built into the annuity’s operating costs, which means that charge is passed along to you, the buyer.

Speaking of operating costs, it’s not unheard of for annuities, particularly variable ones, to charge 3% to 4% in annual fees. Actively managed mutual funds, by contrast, might charge as little as half that amount. Granted, you’re not getting guaranteed income for life with a mutual fund, but it’s something to consider nonetheless.

Another thing to know about annuities is that they typically come with surrender charges, which means that if you attempt to back out of your contract, you’ll be hit with a hefty fee there as well. That fee can be as high as 7% during the first year of your annuity, though it’ll typically decline by about 1% annually during your surrender period until it goes away completely. That said, some annuities allow you to withdraw a small portion of your account value each year without facing a surrender charge, but that depends on the specifics of your contract.

So are all of those fees worth the guaranteed income? Part of it depends on how long you end up living. If you pass away sooner than expected, you may not end up recouping those fees, or your initial investment, for that matter.

Is an annuity right for you?

Despite their complexities and sizable fees, annuities can be a smart choice under some circumstances because unlike your IRA or 401(k), they essentially guarantee income for life, provided you pick the right insurer. That said, it generally pays to max out your retirement plan contributions before buying an annuity. But if you’re sitting on extra cash and don’t want to bear the risk of investing it on a long-term basis, an annuity might work out in your favor.

The same holds true if your health is fantastic and you have a strong family history of longevity. That’s because the longer you live, the greater your chances of getting the most out of your annuity.

Related links:

• Motley Fool Issues Rare Triple-Buy Alert

• This Stock Could Be Like Buying Amazon in 1997

• 7 of 8 People Are Clueless About This Trillion-Dollar Market

On the other hand, if you can’t wrap your head around annuities enough to understand how they work, you may be better off putting your money elsewhere. Remember, annuities technically aren’t risk-free, and if the idea of buying one doesn’t sit well with you, that’s reason enough to explore alternatives for establishing an income stream for life.

CNNMoney (New York) First published May 25, 2018: 10:43 AM ET

Trump promises tax reform won’t impact 401(k) plans

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Inside the GOP's tax blueprint

President Trump vowed Monday that the tax break for 401(k) plans will be kept in place under the administration’s tax reform proposal, despite reports to the contrary.

“There will be NO change to your 401(k). This has always been a great and popular middle class tax break that works, and it stays!” he tweeted early Monday.

Republicans have been discussing sharp reductions in the amount of money that could be invested tax-free in the popular retirement accounts, according to reports over the weekend in numerous news outlets. Among those working on tax reform, the 401(k) deduction has been part of those discussions for months.

To offset deficit increases caused by tax cuts, some popular tax deductions will need to be eliminated. For example, the deduction for state and local taxes is on the chopping block in current discussions.

Related: 401(k) contribution limit will rise to $18,500 next year

Despite Trump’s tweet Monday, there have been numerous instances where his promises have not been born out by actual legislation.

He promised repeatedly to make no cuts in Medicaid, then pushed for a replacement for Obamacare that would have made sharp cuts in money for Medicaid. He has repeatedly said that his tax plan would benefit middle income taxpayers and not the wealthy — even though independent analysis of the plan shows that it is the wealthy who stand to benefit the most.

CNNMoney (New York) First published October 23, 2017: 8:19 AM ET

3 factors that will drive your life insurance premiums through the roof

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smokers life insurance

What you’ll pay for a life insurance policy can vary dramatically; men pay higher premiums than women, older policyholders pay more than younger ones and smokers pay more than non-smokers.

But just how much does your age, gender or smoking habit cost you? InsuranceQuotes.com evaluated life insurance premiums for the top 25 carriers in the nation to find out.

Men pay an average of 38% more than women for the same coverage.

Here’s one area where women have a financial edge. Men are at a greater risk of cardiovascular disease, various cancers and accidental injuries and that makes them more risky to insurers. The average life expectancy of an American man is also five years younger than a woman’s, meaning an insurer is more likely to pay out on a man’s policy than a woman’s.

Smokers pay more than three times as much as non-smokers for the same policy.

Insurers can charge smokers three times as much as non-smokers, insuranceQuotes.com found.

Related: Stressful jobs that pay badly

A non-smoking 45-year-old woman, for example, pays $45 a month for a $500,000 term life policy. If she smokes, however, the premium shoots up to $167 a month. That’s $1,462 more a year.

If you can kick the habit, however, you can save big. Tell your insurer that you’ve been smoke-free for two years and they will usually lower your premium to the rate for non-smokers, said Laura Adams, an analyst for insuranceQuotes.com.

“That’s pretty generous,” said Adams. “It’s almost like you never smoked.”

Related: Why you don’t need to buy extra rental car insurance

But don’t tell your insurer that if it’s not true. If you do die of a smoking-related cause and your insurer finds out you never quit, they can deny the benefit entirely.

Get coverage young and save — but only if you need it

Most people don’t feel the need to buy life insurance until they have a child. And in general, that’s a pretty good rule of thumb.

If you have children in your 20s or early 30s you could save significantly on premiums by opening a policy while you’re young.

Premiums for 35 year olds cost about 27% more than those for a 25 year old.

“Term life [policies are] popular because they’re relatively inexpensive and people don’t need policies for their entire life,” said Adams. Many parents buy 20-year term policies to see their children through their college years.

CNNMoney (New York) First published July 24, 2014: 7:58 PM ET

McDonald’s boosts tuition benefits because of the new tax law

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5 stunning stats about McDonald's

McDonald’s is tripling the amount of money it offers some restaurant workers who want to pursue a college degree.

The company said it will allocate $150 million over five years to expand its existing tuition assistance benefit, an investment “accelerated by changes in the US tax law.”

Starting May 1, eligible restaurant employees can receive $2,500 a year, up from $700 previously, and managers can receive $3,000 a year, up from $1,050. The benefit is retroactive to January 1.

McDonald’s is also loosening the eligibility requirements. Employees will now qualify after 90 days of employment, instead of nine months, and will need to work a minimum of 15 hours a week, down from 20 hours.

Almost 400,000 workers are expected to be eligible for the program, nearly double the number previously, a spokesperson said.

16,400 employees were awarded tuition assistance under the more limited eligibility requirements since it launched in April 2015, according to the company website.

“By offering restaurant employees more opportunities to further their education and pursue their career aspirations, we are helping them find their full potential, whether that’s at McDonald’s or elsewhere,” said CEO Steve Easterbrook in a statement.

Workers can use the money to take classes at a community college, trade school, or four-year college of their choosing.

The average annual cost of tuition and fees at a community college is $3,570.

Related: Hotel industry wants to pay for their workers’ college degrees

About 55% of companies offer tuition assistance programs, according to the Society For Human Resource Management.

Some companies even cover the entire cost of a degree for workers. Starbucks, for example, has partnered with Arizona State University’s online program to make tuition free for full- and part-time baristas. Though unlike McDonald’s, Starbucks workers must pay up front and be reimbursed at the end of each semester.

Ten major hotel companies have recently launched a new tuition benefit to attract and retain good employes. Eligible workers will be able to get an online associate’s degree at no cost and an online bachelor’s degree at a subsidized cost.

CNNMoney (New York) First published March 29, 2018: 1:35 PM ET

When will you be a millionaire?

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See how savings rates and investment returns affect when your nest egg hits 7 figures.

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