Millions of Tax Returns Remain Unprocessed as IRS Grapples With Backlog

To live comfortably as a senior, you'll need savings. And it's a good idea to house the bulk of your savings in an IRA or 401(k) for the tax benefits involved. Both of these accounts allow you to invest your money so it ideally grows into a much larger sum over time.But should you invest all of the money you're earmarking for retirement? Or should some of it sit in a savings account so you have some cash on hand?Your strategy should hinge on your ageWhen retirement is many decades away, it's smart to invest your money -- pretty much all of it. Keeping it in cash might earn you around 2% a year or so in interest (keeping in mind that today's bank account APYs of 4% and higher really aren't the norm). But investing it might earn you 10% a year, since that's the stock market's average return over the past 50 years. So you want to capitalize on that growth opportunity.However, as you get closer to retirement, it's a good idea to move some of your long-term savings into cash instead of keeping it invested. The reason? Once you retire, you're likely going to be withdrawing from your nest egg regularly. But what if the stock market suddenly tanks?In that case, you risk taking permanent losses by having to sell investments for money at the wrong time. The same thing could happen to the bond market, too. If you own a lot of bonds and have to sell them at a loss, you're in the same unfavorable position.That's why it's important to keep some of your retirement savings in cash -- but only once you're nearing retirement. You probably don't want to keep a portion of your nest egg in cash in your 30s or 40s. But if you're 62 years old and expect to retire at 65, that's a good age to start turning some of your assets into cash.The right amount of cash to have on handDuring your working years, you should aim to have enough cash in an emergency fund to cover three months' worth of living costs at a minimum. For retirement, you'll really want more like one to two years' worth.The reason? Any market downturn that impacts your portfolio could be lengthy. You want to give yourself the opportunity to ride out a downturn while still being able to cover your bills.If you keep one to two years' worth of expenses in cash, you'll be able to avoid selling assets for that long. In fact, if you're the more conservative type when it comes to risk, you could even opt to keep three years' worth of expenses in cash. You'll lose out on some growth by doing that, but it might give you more peace of mind.With that said, different people have access to different income streams in retirement. If you own a rental property that generates steady income, for example, you may be able to get away with keeping a little less cash on hand.But for the typical person, one to two years' worth of cash in the bank is generally best. Just don't make the mistake of moving that money over too early in life.

Any time you're looking to open a certificate of deposit -- no matter the length of its term --  you need to make sure you can afford to part with your money for that long. There can be steep penalties for cashing out a CD before it comes due. So if you're not certain you're comfortable keeping your money tied up, a savings account may be a better choice. That way, you can access your money whenever you need to.CDs come in a variety of terms, and for many banks, the longest amount of time you can open a CD is five years, or 60 months. You may be thinking of opening a five-year CD in 2024. But before you do, carefully consider the benefits and drawbacks.The upside of opening a five-year CDA CD will generally pay more interest than a savings account because you're committing to keeping your money where it is for a preset period. You also get the benefit of a guaranteed interest rate. It's for this reason that a five-year CD could especially make sense in 2024.Inflation has been cooling over the past year. And because of that, there's talk of the Federal Reserve cutting rates in the new year. If the Fed goes this route, it could make personal loans less expensive to sign and credit card balances more manageable for those who owe money. But it could also result in lower interest rates across the board on savings accounts and CDs.That's why you may want to lock in a five-year CD sooner rather than later. The generous rates banks are paying today are, frankly, not likely to last much longer. If you open a five-year CD in 2024, you can guarantee yourself a generous rate through 2029. By contrast, if you open a one-year CD in 2024, by 2025, you may find that rates are already much lower, making CDs less appealing on a whole.The downside of opening a five-year CDAs mentioned, there can be costly penalties for cashing out a CD before it matures. At Capital One, the penalty for an early withdrawal from a five-year CD is six months' worth of interest. So let's say you have a $10,000 CD paying 4% a year. That's $400 in annual interest, but it also means that withdrawing your money early will cost you $200. And to be clear, you'll face that penalty whether you cash out your CD two months early or two years early. Meanwhile, a lot can happen in five years. You could fall in love, get engaged, and end up having a wedding to pay for. You could get a new job that requires you to relocate and absorb the cost. Or, you could have a baby, find yourself overwhelmed by the expense of child care, and end up desperate to tap your CD to cover your tab at daycare.As such, you'll want to be really careful about opening a CD with a five-year term. While doing so may be a good way to snag a generous interest rate on your money without running the risk of losing out on principal like you would by investing, you run another risk. So think things through before moving forward with a CD that has you tying up your money for 60 months.

The cost of auto insurance has skyrocketed in recent years, leaving many people scrambling to find discounts on car insurance. But how do you know which companies provide high-quality auto insurance at an affordable price? Not every car insurance company has the same reputation for trustworthy claims handling and friendly customer service. Sometimes the "cheapest" car insurance is not the best policy for your situation.What if you try to save money on car insurance by switching to a lower-priced company, but end up regretting it after you get in an accident? Fortunately, The Ascent has got your back. We've researched the auto insurance industry and scoured pricing data to find the best car insurance companies for discounts.Read on to see our list of the best options to help you save money on car insurance.1. NationwideHow cheap is Nationwide car insurance compared to the national average? Here's a quick pricing breakdown:National average annual car insurance premium: $3,017Nationwide's average annual premium: $2,697Why we chose Nationwide for our list of best cheap car insurance companies:Nationwide is one of the best insurance companies for bundling homeowners and auto insurance. You can combine coverages and save money overall. When you spend a bigger share of your monthly budget with one insurance company, it can often give you a better deal.Nationwide offers pay-per-mile car insurance. Do you work from home, or live in a walkable neighborhood? Are you not driving as often as you used to? Nationwide offers SmartMiles®, a special plan that lets you pay for car insurance based on the amount of miles you drive. The less you drive, the more you can save on car insurance.Nationwide has received a high ranking in auto insurance customer satisfaction by J.D. Power.Read our Nationwide review2. GeicoHow cheap is Geico car insurance compared to the national average? Here's a quick pricing breakdown:National average annual car insurance premium: $3,017Geico's average annual premium: $2,106Why we chose Geico for our list of best cheap car insurance companies:Geico is one of the absolute cheapest car insurance companies, promising to save you 15% or more on car insurance.Along with delighting TV audiences with its friendly Australian spokeslizard, Geico gets high marks for customer service and efficient claims handling.Geico offers special coverages like rideshare insurance for Uber and Lyft drivers, and an Auto Repair Xpress® program to get your car fixed faster after an accident.Read our Geico review3. USAAHow cheap is USAA car insurance compared to the national average? Here's a quick pricing breakdown:National average annual car insurance premium: $3,017USAA average annual premium: $1,844Why we chose USAA for our list of best cheap car insurance companies:USAA car insurance is super affordable, with a lower average annual premium than any other company on our list. USAA members save an average of $707 per year on car insurance by switching to USAA from other insurers.USAA offers generous coverage and benefits, such as free accident forgiveness after five years. It also provides special policy discounts for good students and for military-specific situations like keeping a car on a military base.USAA car insurance gets exceptionally high customer satisfaction ratings; people just absolutely love this insurance company. Keep in mind that USAA car insurance is only available to members of the military, veterans, and their families.Read our USAA review4. State FarmHow cheap is State Farm car insurance compared to the national average? Here's a quick pricing breakdown:National average annual car insurance premium: $3,017State Farm average annual premium: $2,770Why we chose State Farm for our list of best cheap car insurance companies:State Farm offers special discounts for drivers under age 25 who complete its Steer Clear® program. They also offer good student discounts of up to 25%. This makes State Farm a great choice for insuring teenage drivers.State Farm offers helpful optional coverages, including rideshare insurance, and travel expense coverage in case you're in an accident more than 50 miles from home.State Farm's nationwide network of insurance agents can provide helpful advice, local personalized service, and a wide range of insurance coverage for home, auto, life insurance, and more.Read our State Farm review5. Erie Auto InsuranceHow cheap is Erie Auto Insurance compared to the national average? Here's a quick pricing breakdown:National average annual car insurance premium: $3,017Erie Auto Insurance average annual premium: $2,273Why we chose Erie Auto Insurance for our list of best cheap car insurance companies:ERIE Rate Lock® is a special feature that keeps your car insurance rates the same, year after year. Your rate will only change if you add or remove a driver or vehicle, or change the address where your car is parked.Erie Auto Insurance offers a multi-policy discount of up to 20%. Bundle and save!Special policy features are available, like free roadside assistance, and a diminishing deductible for every consecutive year you can go without making a claim.Read our Erie Auto Insurance reviewCheap car insurance doesn't have to be lower-quality car insurance. It really is possible to save money on car insurance, while still receiving peace of mind and financial protection. The exact amount of premium that you have to pay will depend on where you live, your driving record, your vehicle, and other factors. But all the companies on this list can potentially help you save money. That's why we chose them as the best car insurance companies for discounts.

Incomes vary widely across the United States, with some people making many times the amount that others earn. If you've ever wondered how your personal finances stack up, and what "class" your income officially puts you in, here's what you need to know.What income do you need to be upper, middle, or lower class?Based on 2021 data, here's what you would need to earn in order to be in each class:Lower class: This is defined as the bottom 20% of earners. Those in the lower class have an income at or below $28,007.Lower middle class: This is defined as individuals in the 20th to 40th percentile of household income. Earnings among this group are between $28,008 and $55,000Middle class: The middle class is officially those whose earnings put them in the 40th to 60th percentile of household income. The income range is $55,001 to $89,744.Upper middle class: Anyone with earnings in the 60th to 80th percentile would be considered upper middle class. Those in the upper middle class have incomes between $89,745 and $149,131.Upper class: Finally, the upper class is the top 20% of earners and they have incomes of $149,132 or higher.Take a look at these numbers and see where you fall based on your own earnings. And remember, this is a snapshot in time -- your earnings can change throughout your life, and so can your class designation.Will your success be determined by your income and class?It's probably not a surprise that those in the upper classes or in the upper middle class do have a higher net worth than those in the lower class or the lower middle class. But the disparity is greater than you might think. While the median net worth of those with incomes of $149,132 or higher is $805,400, the median net worth of those in the lower class is just $12,000.Your income impacts how easy it is for you to build wealth. If you make more money, it is easier to save it and invest it in a brokerage account where it can work for you. If you make less money, then you may struggle even to cover the necessities out of your checking account, much less to buy valuable assets that help you grow richer over time.But that doesn't mean people who don't make a lot of money can't be a financial success. A lot depends on what you do with the money you actually have, including how much you spend and how much you save.There are plenty of people who make over $100,000 a year who live paycheck to paycheck, and plenty of people with incomes that put them squarely in the lower or lower middle class who have diligently saved and grown quite wealthy over many years.Here's how you can improve your standingDon't be discouraged if you aren't in the class you hope to be. For one thing, you have opportunities to increase your income by taking the following steps:Learning new job skills: You could obtain a certification, take part in a management training program at work, or take some classes to develop skills that may help you get promoted (such as computer training courses or public speaking classes), depending on your industry.Take on a side hustle: The average side hustle brings in $483 per month, which is a good amount of extra money that could make a meaningful difference in your income.Work some extra hours: If your company allows you to work overtime, take advantage of it, as many people are paid time and a half for overtime hours.Negotiate your salary: According to Pew Research, when workers negotiated for higher pay, 28% said they received the extra money they asked for and 38% indicated they were given more than originally offered but less than their ask. Whether you are getting a new job or staying at your current job but feel you're underpaid, it doesn't hurt to make a request for more money -- especially if you can find salary data to back up the fact that others in your industry are paid more.And even if your earnings never put you in the top 20% of earners, you can still have a rich life and end up with the financial security you deserve -- especially if you prioritize saving as much as you can for as long as you can.

Does it feel as if everything is so much more expensive than it used to be? Well, you're not imagining it. We're still coping with higher inflation than usual (thankfully lower than it was during summer 2022, at least). As of the last Consumer Price Index Summary report, inflation was holding steady at 3.2% between October 2022 and October 2023. So if you're hoping to spend less money on your everyday purchases (and who among us isn't?), shopping at dollar stores seems like the natural choice.Dollar stores are everywhere -- Statista reports that there were over 37,000 of them in the U.S. last year. Plus, shopping at dollar stores comes with some perks -- for example, they can be a great place to buy low-cost gift wrap and greeting cards (why spend more for something that will be thrown out in short order?).If dollar store shopping works well for you and your personal finances, I absolutely get it, and think you should keep saving money in any way you can. But my own issues with dollar stores supersede my desire to save money. Here's why I avoid dollar stores.1. I have concerns about product safetyChances are good that you've been impacted by a product recall at least once in your life -- manufacturers and sellers implement these to get potentially unsafe products out of the hands of consumers. Earlier this year, Family Dollar undertook a recall of almost 300 drugs and other medical products that had been stored improperly and then sold at stores in almost two dozen states.The fact that so many different products, from toothpastes to allergy medicines to painkillers, were affected is extremely concerning and points to bigger issues with how dollar stores handle their supply lines and distribution. (Some of this relates to staffing problems; see below for more on that.) Dollar stores certainly aren't the only retailers who occasionally have to recall products for safety issues, but it's definitely a reason I would never buy medication or similar items from a dollar store.2. I don't like the way they operateDollar stores have a nasty habit of moving into rural areas of our country and undercutting local small businesses with their seemingly lower prices on essential items. In some places, they can even push out grocery stores, making dollar stores the only place to buy grocery items. And since the number and types of items sold are limited (particularly the selection of fresh produce, assuming it's available at all) at dollar stores, this can be extremely limiting for consumers.Going beyond the impact on local businesses and the food supply, dollar stores have also gotten in trouble with the federal government for not providing a safe working environment for staff members. As recently covered by Last Week Tonight with John Oliver (as well as other outlets), dollar stores can be severely understaffed, terribly disorganized, and even beset by rats and violent criminals. I've lived and worked in small rural towns, and the residents there deserve better. In some places, locals are fighting back -- NPR reported that 50 communities in the U.S. have put limits on new dollar stores opening in their area.3. I'd rather spend more upfront for items that lastWhile paying less for an item you buy is a more straightforward way to find savings, dollar stores don't always sell the highest quality of a given item. I'm fortunate that I am able to put a bigger charge on my credit card for a purchase and in exchange, have it last for longer. Batteries, tools, and toys are all examples of items best avoided from dollar stores because they just aren't as well made or long lasting as items you might pay more for from brands you've heard of.I can buy an eight pack of AAA batteries from Dollar Tree for $1.25. But if those batteries end up leaking, or even just not lasting very long, I'll use them up more quickly than I would if I sprung for Duracells from Amazon. There are other ways for me to save on higher-quality items, such as waiting for holiday sales or buying in bulk, rather than buying them at dollar stores.Personal finances are just that -- personal. So just because dollar store shopping isn't a fit for me doesn't mean it isn't for you. I do recommend taking the time to compare prices using product sizes, however, as this is one way you might be fooled into thinking dollar store prices are lower. That way, you'll be able to tell in real numbers whether you're saving money.