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How You Can Save Money for Retirement

save money for retirement

A 2018 study by Northwestern Mutual found that nearly two-thirds of Americans who have a plan to save money for retirement are certain they’ll outlive their savings. Moreover, one in five Americans (21 percent) have no retirement savings at all, and another 78 percent are concerned about not having enough money saved for the future. Here is how you can save money for retirement.

These statistics are worrying and something needs to be done. Saving for retirement means doing more than enrolling in a company 401k to ensure financial security during your golden years. It also means finding the freedom to enjoy your retirement, which is what actually makes those years golden.

If you haven’t considered saving for life after work, now might be the best time to get started.

However, if you’re already retired, proactive financial planning can help you save money right now. You don’t have to spend the next three decades stressing out or worrying about running out of money at any moment. Here are eight ways to help you save money for retirement and guarantee it lasts as long as you do after retirement.

Minimize Your Fixed Expenses

One of the many ways you can save money for retirement is by minimizing essential expenses like shelter, transportation, insurance, debt payments and food. Owning two or three cars might have been necessary for your family before retirement. But, since you’re no longer commuting to work, sell one of your cars.

You’ll make a little money in the short term, and it can save you on maintenance costs and monthly auto insurance payments long-term.

Downsizing your home may be a good option for you too. Chances are your children have grown and are no longer living with you, which means you need less space. A smaller home will also help you save money on utilities and repairs. Consider moving to a retirement community as well. This may bring some fun and new friendships into your life and simplify life after work.

Maximize Credit Card Points

Taking advantage of credit card points isn’t only attractive for young professionals who travel a lot. It could be a great way for you to save money for retirement.

Imagine taking your 80-year-old parents on vacation to Europe or booking a luxury family trip to your dream destination. Here’s the best part. You get everyone to fly first-class using your points and miles, saving over $25,000 on flights. Yes, that happens more often than you think. And you can do it as well.

Simply sign up for the perks your credit card offers (cash backs, travel miles, points, etc.) and take advantage of them.

Always Ask About Senior Discounts

Whether you’re visiting a national park, shopping for a new piece of furniture, or buying your favorite dish at a local restaurant, ask if there are any discounts for seniors available. Keeping track of all the stores that offer senior discounts can be daunting. So, make it a habit of asking for one. You’ve earned it, and it only takes a few seconds to ask.

Consider a Reverse Mortgage

A reverse mortgage is a type of loan that lets homeowners over the age of 62 borrow from their home’s equity and receive funds as structured monthly payments, lump sum, or line of credit. According to the CEO of All Reverse Mortgage, Michael Branson, if you’re a retiree with considerable home equity and are looking to supplement your retirement income, a reverse mortgage might be ideal.

The entire loan balance becomes due when the last surviving borrower passes away, vacates the home permanently, or sells the home.

However, If your current home is unsuitable for aging in place (e.g., two stories, large yard with high maintenance or upkeep), you may also use a reverse mortgage to buy a new home. That lets you relocate and right-size into more senior active communities for a more enjoyable retirement.

Maximize Your Social Security Benefits

According to Social Security Administration data, 9 out of 10 elderly individuals receive social security benefits (they’re eligible at 62). Social security benefits represent around one-third of the income made by the elderly nationwide.

Among social security beneficiaries, 21% of married couples and about 45% of unmarried people rely on these benefits for 90% or more of their income.

Since so many see social security as their main source of retirement income, they often can’t wait to take out benefits as soon as they reach retirement age. It’s important that you consider your longevity before making social security decisions. If you delay drawing on social security until you’re 70, monthly payments will be 32 percent higher than what you’d have received at your retirement age.

Have a Retirement Spending Plan

Truth be told, you need a guide that will help you track and monitor your spending and live within your means. And that’s exactly what a retirement savings plan does by putting you in control of your money.

Not having an appropriate spending plan as you save money for retirement can lead to overspending, which can become a threat to your financial well-being. The last thing you want is to run out of money while you still have many more years to live.

Be Smart About Investing

It’s not uncommon for retirees to leave their money lying in the bank due to a fear of investing. The truth is you may be losing money to inflation if you leave it in the bank. While it’s not wise to make risky investments after retirement, you shouldn’t shy away from a little bit of investing. Try investing a portion of your cash in stocks instead of letting it sit in a savings account.

Work Just a Little Longer to Save Money for Retirement

With so many part-time, remote, and freelance job opportunities available, you can take on a new role with more vacation time, flexible working conditions, or less responsibility. You really don’t have to return to any previous roles.

Find a new role you’re passionate about and keep working. Waiting a few extra years to retire can greatly increase your income, social security benefits, and retirement assets.

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How to Invest in 5G – The Definitive List of Stocks

invest in 5G

One of the newer investing themes some are diving into is 5G stocks, but many pick from. Most 5G stocks are about more than just 5G, so it’s important to look at what other themes they represent. Some 5G stocks are also a bet on the Internet of Things, while others are mobile carriers with exposure to the telecommunications market. Here is how to invest in 5G and the definitive list of stocks.

If you look at any list of the top 5G stocks, you’ll see a variety of different approaches to selection.

The key to identifying the best 5G stocks goes beyond looking at which ones have exposure to 5G technology.

Some stocks are obvious, like Apple, Verizon or T-Mobile. However, these stocks have even greater exposure to other things than 5G. In fact, it could be argued that they aren’t really 5G stocks at all because their exposure to other markets is much greater than their exposure to 5G technology. In fact, their 5G exposure is more incidental rather than a core part of their valuations.

Thus, it’s best to dig deeper when picking out some 5G stocks to invest in. Some common 5G-related themes to look at include chip makers and telecommunications infrastructure providers. When trying to choose stocks, you should consider these other themes, which are why the companies’ exposure to 5G technology.

Let’s take a look at some 5G stocks you might not have even thought of.

Micron

This may be a contrarian play because CNBC’s Jim Cramer called Micron the one chip maker everyone hates. He’s actually wrong about everyone hating Micron because well-known hedge fund manager Monish Pabrai actually loves it. In fact, Micron may very well be his favorite tech stock.

Pabrai hasn’t talked about his thesis for Micron, so it’s unclear whether he likes it as a 5G play. However, it’s clear from the company’s website how important 5G is to it, and the good news is that it’s not only a bet on 5G but also the Internet of Things.

Micron’s exposure to 5G technology comes in two areas: low-power-consumption DRAM and multi-chip packages designed for specific applications. The company said it takes a holistic approach to 5G, which makes it unique. Micron specializes in memory for devices, providing vast exposure to 5G technology.

Not only does Micron produce low-power DRAM that’s used in thousands of devices, but it also produces automotive-grade memory, which gives the company exposure to the autonomous vehicle market as well. This is a nice bonus that makes Micron one well-rounded 5G stock.

Qualcomm

Another way to approach 5G from the internal components of devices is with Qualcomm, which modems for mobile devices. Qualcomm is benefitting from the growing number of smartphones that are equipped with 5G technology.

In their second-quarter earnings report, the company’s management said that they expect 175 million to 225 million 5G smartphones to be shipped this year. A significant number of those smartphones will ship with Qualcomm modems inside.

One bad thing about Qualcomm is that there could be less upside to its shares than with some of the other stocks on this list. The median price target for Qualcomm stock is $121, and the shares trade above $110.

However, if you look at Qualcomm in a long-term investing horizon, there is still plenty of time for its stock to increase, thanks to the long runway on 5G growth.

Skyworks Solutions

If you like Apple for its 5G-equipped iPhones, you will probably want to look at Skyworks Solutions, which provides 5G chips for Apple’s iPhones and iPads. About half of the company’s revenues come from Apple, so the more iPhones and iPads selling, the better off Skyworks Solutions and its investors will do.

One other reason to like Skyworks Solutions is that it should benefit from ongoing trade tensions with China. The U.S. has banned 5G devices from China, which means good things for Apple because it eliminates all China’s competition.

Skyworks Solutions is also an Internet of Things play through its Sky5 platform, which supports 5G network infrastructure and user equipment.

Broadcom

Another chipmaker that’s commonly named as a 5G stock is Broadcom. Unlike Qualcomm, Broadcom doesn’t sell standalone cellular modems, but it manufactures many chips that play a role in 5G technology.

The company won a contract to provide 5G chips to Nokia, although that isn’t its only customer. Apple has bought Broadcom chips as well. Broadcom doesn’t advertise its 5G technology as much as Qualcomm, Micron, and Skyworks Solutions do — but it clearly is benefitting from the transition to 5G.

Broadcom should benefit from 5G for many years because as the 5G standards become more and more advanced, the company will have to update its chips, and its customers will keep buying the newer chips to keep up with their competition.

Nokia

Looking beyond internal components for 5G devices, we start to look at names like Nokia. Most consumers think of Nokia as a now virtually defunct handset maker, but the company doesn’t make its big money in handsets anymore. Nokia’s big business is in mobile infrastructure equipment.

In fact, the company said in a press release earlier this year that it had 63 commercial 5G contracts worldwide. It also says that it is the only network supplier whose 5G technology contracted by all four major mobile carriers in the U.S., all three of South Korea’s carriers, and three of Japan’s nationwide carriers.

Nokia also said it’s the only vendor with a “globally available end-to-end product portfolio” covering all 5G network elements, from radio, core, cloud, and transport to management, automation, and security.

While Nokia stock does look rather cheap than some of the other 5G stocks on this list, it’s also interesting that a battle is starting to break out over the stock. Bloomberg reported this month that the Finnish government is buying shares of Nokia to demonstrate that wants to protect the Finnish company when the U.S. has also expressed an interest in taking up an ownership stake in it.

Ericsson

Nokia isn’t the only way to play the infrastructure part of 5G technology. Ericsson also makes 5G infrastructure equipment. The company advertises itself as the first company to launch live commercial 5G networks on four continents.

Ericsson said its Core solutions support 2.5 billion subscribers from 2G to 5G, amounting to one-third of the world’s population. The company’s network features interoperability with six major chipset vendors, so a wide variety of 5G devices can use it. It collects $5 per phone in royalties from smartphone manufacturers due to the patents it holds, according to data from Strategy Analytics.

Ericsson is also a less expensive stock compared to some of the other 5G stocks on this list. Some have been concerned that the coronavirus pandemic would cause mobile carriers to delay their spending on 5G equipment. Still, so far, that hasn’t been the case for Ericsson, according to the company’s second-quarter earnings report.

Crown Castle

Another mobile infrastructure provider that will benefit from the 5G transition is Crown Castle, the biggest provider of communications infrastructure in the U.S. The company provides cell towers and other equipment for mobile infrastructure. The company provides fiber technology and solutions, making it more than just a 5G play.

Crown Castle said earlier this year that it expected to see a strong ramp in 5G mobile infrastructure spending during the second half of the year. The company also said it didn’t see any impacts on its business from the COVID-19 pandemic.

This year, its CEO also said that they were preparing to deploy 10,000 small cell nodes this year alone. He said it takes about 18 to 36 months to get small cell nodes on air due to negotiations with utilities and municipalities.

Crown Castle is on the expensive side of 5G stocks, but that doesn’t mean it isn’t a good investment. The shares have been range-bound since the second half of May. Other than a deep dive in March during the market selloff, Crown Castle shares have been fairly steady. One other thing to note about Crown Castle is that it’s also a real estate play via its cell phone towers. Additionally, the company pays a dividend, and some investors specifically seek out dividend-paying stocks.

American Tower

This company is a competitor to Crown Castle, and it also is paying a dividend to its investors.  The stock is also on the expensive side, and it’s also been range-bound since the second half of May. Also, like Crown Castle, it’s a real estate play because of its cell phone towers. Both companies are structured as real estate investment trusts.

One thing American Tower highlights more than other companies is its solutions for providing good 5G connections inside buildings. The company says 80% of 5G data is consumed indoors, so it’s important to provide strong 5G connections inside buildings. Building owners must also keep in mind that customers a variety of different mobile carriers. Therefore, owners have to support each carrier inside their venue.

The company also markets its technology for use in the Internet of Things, especially its fiber technology, so there is additional technology exposure. Further, American Tower’s CEO said 5G would require cell towers to be closer together, which means more business for American Tower and Crown Castle. American Tower should also benefit from DISH Network’s mobile network’s build-out to position it as a fifth major carrier in the U.S.

Qorvo

One chip maker that doesn’t get a lot of attention is Qorvo, a U.S.-based chipmaker that provides radio-frequency systems for wireless and mobile data connections. One interesting thing about the company is that it doesn’t just make chips for mobile devices. It also provides chips to base station manufacturers, meaning exposure to mobile devices and the infrastructure side of 5G.

Among the infrastructure products offered by the company are front end modules, digital step attenuators, discrete switches, driver amplifiers, gain block amplifiers, gaN HEMTs, high-frequency amplifiers, infrastructure power amplifier modules, low noise amplifiers, phase shifters, power amplifiers, RF filters, switch LNA modules and voltage controlled attenuators.

Qorvo’s products for mobile devices focus on radio frequency solutions for 5G. The company recently boosted its guidance because the demand for its 4G and 5G mobile products came in better than expected. The company also has exposure to the Internet of Things through its wireless products.

Qorvo stock surged after the chipmaker said it expects to see up to $1.03 billion in revenue, up from their previous high-end guidance of $955 million. Other chipmakers’ stocks also surged on the guidance news from Qorvo.

Ciena

Another company that isn’t mentioned much in the 5G conversation is Ciena, which provides equipment and software solutions. The software connection is what makes this company different from all the others on this list.

Ciena’s 5G software solutions are designed to reduce network complexity and drive the migration from 4G to 5G for network operators. The software is used in radios, data centers, and “everything in between.” The company utilizes “intelligent automation, next-generation routing platforms, advanced professional services to support the delivery of differentiated 5G services… and ultra-reliable Low-Latency Communications.”

One negative about Ciena’s stock is its recent guidance is weak compared to other companies with exposure to 5G. Unlike other 5G plays, Ciena has noticed an impact from the COVID-19 pandemic on its sales.

Ciena’s peer Infinera also saw its stock fall as a result of Ciena’s weak guidance. Ciena guided its revenue to fall by 13% to 17% year over year during the fourth quarter. The firm is warning investors of “limited visibility” for the foreseeable future.

Other 5G stocks

The number of companies that benefit from the 5G revolution is pervasive, but those named here maybe some of the best bets. Some other companies could benefit, such as chipmaker Analog Devices. Other companies like Marvell Technology Group could also see some benefit, but they have broader exposure to other technology areas beyond 5G.

When it comes to investing in 5G, there is a lot to think about. Investors should consider how well-exposed companies are to the 5G transition and what other areas of exposure they offer. Many companies are benefiting from the shift to 5G, so this is one area where there will be many winners and many opportunities for investors to make money.

Disclosure: I have no position in any stocks mentioned or any other equities in the sector.

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