Category: Finance

Everyone has financial dreams—some are right around the corner, like taking a much-needed vacation or buying a new gadget. Others, like planning for your child’s education or retiring comfortably, take years of effort and planning. These aspirations, big or small, shape our financial goals.

But not all goals are created equal. To manage your money wisely and make real progress, it’s important to understand the difference between short-term and long-term financial goals. Each type serves a unique purpose and demands a different approach when it comes to saving and investing

In this blog, we’ll explore what are short term and long term goals, how to prioritize them, and why aligning them with the right investment strategy matters.

What Are Short Term and Long Term Goals?

Financial goals can be broadly categorized based on the time horizon required to achieve them. Here’s a simple breakdown of what are short term and long term goals:

• Short-Term Financial Goals: These are goals you want to accomplish in the near future—typically within less than three years. They’re often essential, time-sensitive, and require liquidity.
• Long-Term Financial Goals: These goals are set for the distant future, generally seven years or more. They usually involve significant life milestones and require long-term planning and disciplined investing.

Understanding the difference between short term and long term goals helps you plan your savings and investments accordingly.

Examples of Short-Term Financial Goals

Short-term goals are often immediate financial priorities that support your stability and security. Some common examples include:

• Creating and maintaining an emergency fund
• Paying off high-interest debt (like credit cards or personal loans)
• Purchasing insurance (life, health, vehicle)
• Planning a vacation within the next year
• Buying a two-wheeler
• Covering education fees or rent deposits

These goals are typically less capital-intensive but extremely important for your financial foundation. They require investments with high liquidity and low risk.

Examples of Long-Term Financial Goals

Long-term goals are generally centered around major life aspirations or commitments. Common long term financial goals include:

• Saving for retirement
• Funding a child’s higher education or wedding
• Buying a home or repaying a long-term mortgage
• Achieving financial independence or early retirement
• Building a large corpus for a dream business or project

Since these goals have a long horizon, they allow you to take calculated risks and leverage the power of compounding.

Key Differences Between Short Term and Long Term Goals

Now that you know what are short term and long term goals, let’s look at how they differ in approach, planning, and execution.

Aspect	Short-Term Financial Goals	Long-Term Financial Goals
Time Frame	Less than 3 years	More than 7 years
Purpose	Manage immediate needs and stability	Achieve future aspirations and milestones
Urgency	High	Moderate to low (initially)
Risk Appetite	Low (to preserve capital)	Moderate to High (allows growth over time)
Investment Options	Liquid funds, fixed deposits, recurring deposits	Equity mutual funds, PPF, NPS, EPF, SIPs
Monitoring	Frequent	Periodic
Flexibility	More flexible	Less flexible (needs long-term commitment)

Understanding the difference between short term goal and long term goal helps you avoid using long-term investments for short-term needs or vice versa, which can derail your financial journey.

How to Prioritise Your Goals

Given the limited financial resources most people have, you can’t chase all goals simultaneously. Here’s a logical sequence to follow:

1. Clear High-Interest Debt

Before anything else, repay high-interest debt like credit cards. These eat into your savings and delay progress toward any goal.

2. Secure the Basics

Protect your family with term life insurance and health insurance. Then build an emergency fund worth 3-6 months of expenses. These are non-negotiable short term financial goals.

3. Fund Essential Short-Term Goals

Cover any immediate, time-bound needs such as rent advances, school fees, or planned vacations. These should be well-planned to avoid dipping into your long-term investments.

4. Start Investing in Long-Term Goals Early

Even if your primary focus is short-term, begin small investments toward long term financial goals like retirement or education. The earlier you start, the better you benefit from compounding.

How to Invest Based on Goal Type

Tailoring your investment strategy based on the goal duration is the key to success.

For Short-Term Financial Goals

• Focus on capital safety and liquidity.
• Investment avenues: Liquid mutual funds, ultra-short duration debt funds, fixed deposits, recurring deposits.

For Long-Term Financial Goals

• Prioritize growth over time through high-return instruments.
• Investment avenues: Equity mutual funds (via SIPs), National Pension System (NPS), Public Provident Fund (PPF), Employees’ Provident Fund (EPF), stocks, long-term ETFs.

Remember, the difference between short term and long term goals also determines your risk appetite and investment product selection.

Common Mistakes to Avoid

1. Mixing Funds Across Goals
   Don’t use long-term funds for short-term needs—it disrupts compounding and might result in losses due to market volatility.
2. No Goal Clarity
   Not knowing the time horizon or exact requirement can lead to under-investing or investing in the wrong product.
3. Ignoring Inflation
   Especially for long term financial goals, not accounting for inflation can severely impact your corpus.
4. Starting Late
   The earlier you start with long-term goals, the less you’ll need to invest monthly. Delaying them makes the journey harder and more expensive.

Why Goal Categorisation Matters

Knowing the difference between short term and long term goals allows you to:

• Allocate your funds better
• Avoid unnecessary financial stress
• Stay on track even during emergencies
• Use appropriate investment tools
• Maximize returns over time

At Fincart, we work closely with individuals to understand their financial aspirations and help them categorise, prioritize, and plan accordingly.

How Your Life Stage Influences Financial Goals

While time horizon is a key factor, your life stage also plays a crucial role in determining your financial goals—and how you approach them. The definition of short term financial goals or long term financial goals may vary depending on where you are in your journey.

Early Career (20s–30s)

This is the stage where individuals are just starting out with limited income and possibly education loans. At this stage:

• Short-term goals include building an emergency fund, repaying student loans, or buying health insurance.
• Long-term goals may start with retirement savings via EPF/NPS or a small SIP.

The key is to develop strong financial habits and avoid lifestyle inflation early on.

Mid-Career (30s–40s)

This stage brings higher income and greater responsibilities (family, children, EMIs).

• Short-term goals include school fees, vacation funds, or insurance top-ups.
• Long-term goals revolve around children’s education, homeownership, and retirement planning.

You should aim for a balanced portfolio and protect your assets with adequate insurance coverage.

Late Career (50s and above)

With major goals either met or nearing, the focus shifts to wealth preservation and health expenses.

• Short-term goals may include travel, medical funds, or helping children start out.
• Long-term goals now focus entirely on retirement income, estate planning, and financial freedom.

Understanding how your life stage influences your short and long term financial goals ensures that your planning remains relevant and efficient.

Blending Short and Long-Term Planning

You don’t have to wait to complete short-term goals before working on long-term ones. A blended approach often works best:

• Allocate a higher percentage of income to short-term goals initially
• Begin with small SIPs for long-term goals
• As short-term goals get completed, divert freed-up money toward long-term investments

This method ensures that you stay prepared for today while securing your tomorrow.

How to Track and Adjust Financial Goals Over Time

Setting financial goals is not a one-time activity. It’s an evolving process that requires ongoing review. Markets change, incomes shift, priorities evolve—and your plan must reflect those changes.

Here’s how to effectively track and adapt:

1. Use Goal-Based Tools or Apps

Use platforms that allow you to assign values, time horizons, and track progress. Many robo-advisors offer visual dashboards that show how close you are to your targets.

2. Annual Review of Goals

Revisit your financial goals every year:

• Has your income increased?
• Have your expenses gone up?
• Are there new goals to be added or existing ones to be updated?

Adjust your SIP amounts, rebalance your investments, or shift your allocations based on these insights.

3. Emergency Adjustments

Life is unpredictable. If an emergency arises, pause some low-priority goals and redirect funds to more pressing needs.

4. Celebrate Milestones

Achieving a goal—short-term or long-term—is a big deal. Reward yourself modestly. This reinforces positive financial behavior and keeps you motivated.

By actively tracking your financial progress, you’re more likely to succeed in fulfilling both your short and long-term ambitions.

The way forward

In summary, the difference between short term goal and long term goal lies in the time frame, purpose, risk profile, and investment strategy. Both are essential components of a solid financial plan. While short-term goals provide immediate security and stability, long-term goals help you achieve major life milestones.

By understanding what are short term and long term goals, and aligning your savings and investments with them, you can walk the path of financial wellness more confidently.

Whether you’re just starting your financial journey or looking to streamline existing goals, Fincart’s financial advisors can help you create a customized plan that balances your short-term needs and long-term dreams.

In a world where everyone is always connected online, scams have become more sophisticated, targeting specific demographics with alarming precision. One group increasingly in the crosshairs? Couples over the age of 50.

This demographic, often sitting on substantial retirement savings and home equity, has become an attractive target for cybercriminals. But it’s not just about the money. These scams can also strain marriages, erode trust, and leave long-term emotional damage. What’s more alarming is that many of these scams disguise themselves as harmless emails, phone calls, or social media messages. Couples may not realize they’ve been duped until it’s too late.

Below are seven online scams currently preying on couples over 50 and how to recognize them before they take a serious toll on your finances and relationship.

1. Romance Scams That Target One Partner

Romance scams have traditionally focused on singles, but increasingly, scammers are targeting individuals in relationships. They use dating apps, social media, and even email to lure one partner into a secret online relationship. These scams often start as innocent messages but quickly escalate to emotional manipulation. Scammers create believable stories about being stranded overseas, facing sudden medical emergencies, or needing help with travel costs.

The targeted partner may start hiding these interactions from their spouse, sending small amounts of money at first, then larger sums as the scammer’s lies intensify. This creates not only financial loss but also marital friction when the deception is uncovered. Some couples report these scams nearly leading to separation or divorce, as trust is shattered on both financial and emotional levels.

2. Tech Support Scams Masquerading as Urgent Alerts

Tech support scams have evolved beyond the typical pop-up warning. Many now arrive via email or text, often disguised as urgent alerts from popular software companies or banks. These scams claim your account has been hacked or compromised, and they urge immediate action. The scammer then asks for remote access to your computer or smartphone to “fix” the issue.

What victims don’t realize is that these scammers install malicious software to steal banking information, passwords, and other sensitive data. Couples frequently fall victim because one partner may trust the scammer, allowing access before discussing it with their spouse. Once the scammer has control, they can drain bank accounts or steal identities in minutes.

3. Social Security and Medicare Impersonation

Impersonation scams are nothing new, but recently, there’s been a surge in scams pretending to be from Social Security or Medicare. These scams often target couples jointly because of the intertwined nature of benefits. Victims typically receive a phone call or email claiming their Social Security benefits are being suspended due to suspicious activity or unpaid debts. The scammer pressures them to “verify” personal information to avoid losing their income.

Similarly, fake Medicare representatives may offer new cards or claim eligibility changes, asking for Social Security numbers or banking details. Many couples comply out of fear of losing critical benefits, only to later discover their personal data has been used to commit fraud or open new lines of credit in their names.

4. Investment Scams Disguised as Retirement Opportunities

Investment fraud aimed at retirees is nothing new, but many scams now explicitly target couples nearing or in retirement. These scams often advertise on social media, YouTube, or even podcasts that cater to seniors. Pitches typically involve promises of guaranteed returns through gold IRAs, cryptocurrency, or “government-backed” programs. They often present a sense of urgency, warning about inflation or economic collapse.

Couples are convinced that acting fast will “protect their retirement,” but they end up wiring money into fake investment accounts that vanish overnight. Because these scams often involve joint finances or retirement savings, both partners suffer the consequences, leading to stress and blame within the relationship.

5. Fake Charity Scams Exploiting Generosity

Scammers are well aware that older adults tend to be generous, especially toward causes like veterans, animal welfare, or disaster relief. In many cases, couples jointly decide to donate to charitable organizations. Fraudsters take advantage by creating fake charities with convincing names and websites. Some even spoof legitimate organizations, making them harder to detect.

They typically strike after disasters, such as hurricanes or wildfires, sending emails and texts urging immediate donations. Many couples fall victim because they feel pressured to act quickly, thinking they are making a difference. Unfortunately, these “charities” pocket the money, and it never goes to the intended cause. Couples often don’t discover the scam until they later attempt to confirm their donation or receive no tax documentation.

6. Sweepstakes and Lottery Scams Targeting Joint Accounts

Another common tactic targeting older couples involves fake sweepstakes and lottery winnings. These scams usually claim the couple has won a large cash prize, vacation, or vehicle. Victims are told they need to pay processing fees, taxes, or insurance before collecting their winnings. The scam often pressures couples to wire funds or provide banking details for direct deposit.

Because many couples hold joint accounts, scammers take advantage of the assumption that one partner can act on behalf of both. In some cases, one spouse wires money without consulting the other, leading to disputes later on. By the time the scam is revealed, the couple’s funds are often gone, and the scammer has disappeared without a trace.

7. Online Shopping Scams Targeting Retirement Purchases

As older adults increasingly shop online, scammers have shifted their tactics toward this demographic, especially targeting couples looking for retirement-related purchases. Fraudulent ads often appear on social media, promoting heavily discounted items such as RVs, travel packages, medical devices, or exercise equipment for “senior health.”

These scams frequently involve fake checkout pages where victims input payment details, only to receive nothing, or, worse, cheap counterfeit products. Couples may not realize they’ve been scammed until weeks later, especially if the purchase seemed like a shared decision or if one partner handled the transaction alone.

Not only do these scams result in financial loss, but they can also lead to arguments over who made the decision and whether proper caution was exercised.

Protecting Your Relationship and Finances from Online Scams

Online scams targeting couples over 50 aren’t just financial threats. They can cause long-term damage to relationships, trust, and emotional well-being. The key to protecting yourself and your partner is communication and awareness. Discuss financial decisions openly, especially those involving online transactions, donations, or investments.

Consider taking cybersecurity workshops together or reviewing online safety checklists from reputable organizations. Never allow strangers remote access to your devices, and always verify the legitimacy of charities, investment offers, or government communications before responding. Being proactive can help prevent both financial and emotional losses.

Have you or someone you know encountered an online scam that targeted couples?

Read More:

Behaviors That Make You a Target for Financial Scams

8 Healthcare Scams That Target Older Adults

If you need to borrow money, you might consider applying for a personal loan. You can use a personal loan for all sorts of things but given the different types of personal loans out there, knowing which to use for different purchases can be difficult.

What Is a Personal Loan?

A personal loan is a flexible loan that you can use for a wide variety of purposes. Unlike loans designed for a specific thing, like a mortgage or auto loan, a personal loan can be used for nearly any legal purpose.

There are different types of personal loans. One of the most basic distinctions is between secured and unsecured personal loans.

📊 Learn more: Dive into the latest personal loan statistics for 2024, including rates, debt levels, and borrower trends in our comprehensive overview.

Unsecured Personal Loan

Unsecured personal loans are one of the most common types of personal loans, and most personal loans you see advertised will fall into this category.

An unsecured personal loan doesn’t require any collateral. The lender offers the loan based purely on your credit history, financial situation, and a promise that you’ll repay the loan. This contrasts with secured loans, like mortgages, where an asset serves as collateral for the loan.

The obvious benefit of unsecured personal loans is that you don’t need to have anything of value to offer as collateral. You also don’t have to go through the process of letting the lender examine your collateral and make sure it’s worth enough to secure your loan, which can speed up the lending process.

However, because there’s no collateral, lenders are more choosey about offering these loans. You’ll need strong credit to qualify for these loans, and your interest rate will be higher than it would be with a secured loan.

👉 Learn more: Find out exactly what documents and information you need to apply for a personal loan with our comprehensive guide.

Secured Personal Loan

Secured personal loans are the opposite of unsecured personal loans. When you apply for one of these loans, you need to offer a form of collateral.

Many lenders will accept a Certificate of Deposit (CD) or savings account balance as collateral for these loans. For example, if you have $5,000 in a CD at a bank, that bank may be willing to offer you a secured loan. The size of the loan that you can qualify for will depend on the value of your collateral and your credit score.

👉 Learn more: Our detailed analysis answers the question: Is getting a personal loan a good idea for you? Find out now.

Because you’re offering collateral to secure the loan, secured personal loans are generally easier to qualify for. Many lenders will also offer lower interest rates on these loans because of the reduced risk that they face.

A major drawback of secured personal loans is the fact that you need to have something of worth to serve as collateral. If you’re in need of a loan, odds are good that you don’t have much savings available and might not have enough to serve as collateral.

Offering something as collateral also puts it at risk. If you’re not able to make payments on your loan, the lender could take possession of the collateral.

It may also take longer to get a secured loan because the lender has to assess your collateral and ensure it’s worth enough to secure the debt.

👉 Learn more: Explore our expert picks for the best personal loans for excellent credit, tailored to maximize your financial options.

Branded Personal Loans

If you’re shopping for personal loans, you may find that some lenders offer specialized or branded personal loans. For example, you may see loans described as vacation loans, home renovation loans, or debt consolidation loans.

These loans are advertised as special types of personal loans for a specific purpose. Some of these loans may offer special features related to their branded purpose. For example, if you apply for a debt consolidation loan the lender may pay your other creditors directly, so you don’t need to handle the money at all.

Keep in mind that personal loans are highly flexible. You can use a personal loan for almost any purpose; the few that are disallowed by most lenders are things such as paying for education, gambling, or illegal activities.

Some branded personal loans may be a good deal. You might find a debt consolidation personal loan that can help you save a lot of money. However, just because a loan is described as being good for a specific purpose does not mean that it is the best loan available. Always shop around and consider generic personal loans before going for a branded one to make sure that you’re getting the best deal.

Bad Credit or No Credit Check Personal Loans

Another common thing to see when looking for personal loans is a loan advertised as a bad credit or no credit check personal loan. These may seem appealing, especially If you don’t have a great credit score or have struggled to get approved for loans in the past.

As with anything, you pay a price for these types of loans. Lenders who are willing to offer loans to people with poor credit or without checking people’s credit need to compensate for that risk somehow. Often, they compensate for that risk with highly unfavorable terms such as high interest rates or large origination fees.

If you need a personal loan, but don’t have good credit You should still avoid these loans due to their predatory terms. You’ll get a much better deal if you are able to qualify for a secured personal loan. If you don’t have enough assets to serve as collateral, you are likely to be better off if you spend some time working to improve your credit and apply for a traditional personal loan instead.

👉 Learn more: Learn the step-by-step process of securing a personal loan with a co-signer in our comprehensive guide.

Payday Loans

A payday loan is a type of bad credit or no credit check loan. They share some characteristics with personal loans, but it is important to know that payday loans are highly predatory and should be avoided whenever possible.

Like bad credit or no credit check personal loans, payday lenders typically don’t look at your credit score when you apply for a payday loan. These loans have massive fees High interest rates and short repayment periods. For example, if you get a payday loan today, you might be expected to pay it off in 2 weeks. The idea is that you use the loan to make it the next payday and use your next paycheck to pay back the balance.

Payday loans typically come from specialized lenders, so if you look for loans from reputable Banks and online lenders, you are not likely to find them. Their high fees and interest rates can make it easy to get trapped in a cycle of debt, so try to avoid these loans except as a very last resort

🔓 Learn more: Unlock financial opportunities with our recommendations on the best personal loans for good credit and fair credit, designed to match your credit profile.

Other Types of Consumer Loans

Personal loans are a type of consumer loan, which is a wide category of loans that describes pretty much any type of loan that a regular person could apply for. Some examples include personal loans, mortgages, auto loans, and credit cards.

When looking to borrow money, it’s important to make sure that you’re applying for the right type of loan. Some types of purchases, such as a home or a car, have unique loan types designed specifically for those purchases. Trying to use a credit card or a personal loan will likely result in you paying more than if you used a specially designed loan.

Personal Lines of Credit

Personal lines of credit are similar to personal loans in many ways. Like personal loans, they’re highly flexible and can be used for many different purposes. They can also come in both secured and unsecured varieties.

What makes them different is that a line of credit is a pool of funds that you can draw from multiple times while a loan is a lump sum of cash that you can only access once.

That makes personal lines of credit more useful for people who have unpredictable financial needs. If you have a one-time expense and you know the size of that expense, you can apply for a personal loan for the correct amount. With a personal line of credit, you can take money out of the line of credit when the need arises and do so multiple times if you find that you need to draw money more than once.

Common Uses for Personal Loans

Personal loans can be used for many different reasons.

One of the most common reasons is for debt consolidation. If you have multiple credit card balances and other small loans, you can use one personal loan to pay off those balances. That leaves you with a single monthly payment to make and may reduce the amount of interest you pay.

Home renovations and vehicle repairs are also common uses for personal loans.

You can also use a personal loan for unexpected expenses. Because they have lower interest rates and credit cards tend to, using a personal loan in this way may help you save money.

Many people use personal loans for weddings, vacations, and similar costs. Be careful: you’ll be paying off that loan long after the party or the trip is over!

🚨 Learn more: Learn how to protect yourself from personal loan scams by recognizing the warning signs in our latest guide.

Bottom Line

Personal loans are highly flexible loans that you can use for a variety of purposes. There are many types of personal loans, but they all offer money that can be used for a range of personal needs.

If you need money for something, applying for a personal loan can be one way to get that cash. Just keep in mind that you will be paying that loan back with interest. It’s best to use these loans for essentials, not luxuries, and to avoid borrowing if your credit isn’t up to par!

Nio stock is one of the hottest in the electric vehicle stocks world right now. As of December 23, 2022, a share of Nio is $10.97. So, Nio is trading at a reasonable price. But the question is, is it worth it? After all, Nio is a new company (comparing to Tesla, for example); it is not profitable yet; and it’s a Chinese company. 

Buying Nio stock, as buying any individual stock, should be approached with caution. The electric vehicle (EV) industry is on the rise. And Nio is a leader in that industry (at least in China). Therefore, the potential for the stock’s growth is high. However, before deciding to purchase Nio shares, you must do your research.

If you’re curious how to go about buying Nio stock here’s how to do it.

If you need help figuring out if Nio is a stock worth buying, a financial advisor near you may provide some guidance.

Buy Nio Stock: Learn About the Company

Before we address the question of how to buy Nio stock, we need to know about Nio. Nio was founded in 2014 by William Li. It is a public traded company involving in electric cars and clean energy. It’s often referred to as the Tesla of China. The company is headquartered in Hefei, China and has several offices (called Nio houses), in China, and Europe, including Germany, and Norway.

Specifically, Nio designs, develops, manufactures, and sells smart electric vehicles in China. It offers five, six, and seven-seater electric SUVs, as well as smart electric sedans. The company is also involved in the provision of energy and service packages to its users; design and technology development activities; manufacture of e-powertrains, battery packs, and components; and sales and after sales management activities.

In addition, it offers power solutions, including Power Home, a home charging solution; Power Swap, a battery swapping service; Power Charger, a fast-charging solution; Power Mobile, a mobile charging service through charging vans; Power Map, an application that provides access to a network of public chargers and their real-time information; and One Click for Power valet service, where it offers vehicle pick up, charging, and swapping services.

Further, the company provides repair, maintenance, and bodywork services through its NIO service centers and authorized third-party service centers; statutory and third-party liability insurance, and vehicle damage insurance through third-party insurers; courtesy vehicle services; roadside assistance; data packages; and auto financing and financial leasing services. Additionally, it offers NIO Certified, a used vehicle inspection, evaluation, acquisition, and sales service.

Nio is listed on the New York Stock Exchange (NYSE) and all prices are listed in US Dollars. Nio employs 15,204 staff and has a trailing 12-month revenue of around $43.1 billion.

Buy Nio Stock In 2 Ways

There are a 2 main ways to buy Nio stock. You can buy a Nio share through a brokerage account or through a financial advisor.

Buy NIO Stock Through a Brokerage Account

The easiest way to buy a Nio share is through a brokerage account. Here are some steps by steps:

• Compare brokerage platforms to help you find the one that fits you. Webull, Ameritrade, Vanguard, Fidelity, Robinwood are great brokerage firms to to buy Nio stock from.
• Open your brokerage account by completing an application with your information.
• Confirm your payment information
• Research the Nio stock. Find the stock symbol (NIO) and research it to decide if it is a good investment for you.
• Buy your Nio stock now or later. You can buy your desired number of shares with a market order or use limit order to delay your purchase until the stock reaches a desired price.

Should You Buy Nio Stock?

The fact that Nio has been growing does not mean its stock will be hot as well. Taking the time to research the company can help you make an informed decision as to whether you should add it to your portfolio.

Does Nio Stock Fits into Your Portfolio? 

If you’ve decided that Nio is right for you personally, then the next step is to decide if its stock will align with your investment goals and risk tolerance.

Nio is in the electric vehicle sector, and that means it can add diversification to your portfolio.

For many people especially beginner or conservative investors, the best way to do that is through mutual funds or index funds. Rather than buying individual stocks, they invest in mutual funds that expose them to a range of different stocks.

So, if one stock within the fund is not performing well, the other stocks balance it out, thus spreading the risk. A Vanguard mutual fund and many other companies will likely hold shares of Nio when they are available.

How much you should invest in Nio?

Before you decide to buy Nio stock, whether it’s a thousand shares or 50 shares, you should be thinking how much money to invest.

Nio stock was in the 60’s at some point. Expect it to get to that point and beyond again.

Regardless of the price, you should invest your money in a stock that is likely to grow in value in the long term. In other words, make sure Nio stock is a good value stock before you buy it.

One of the best indicators of whether a stock has a good value is the PE ratio. The P/E ratio measures the price of the stock relative to the company’s earnings or profits, giving you a good sense of the stock’s value.

So, the P/E ratio is very important in evaluating a stock.

Another indicator is a dividends. Dividends is money the company pays yearly or quarterly to its shareholders.

Most companies pay out dividends. But the ones that have consistently paid dividends, during good and tough time, are usually good ones. The downside of owning Nio share is that the company does not pay out dividends.

So, the stock price alone does not tell the whole picture of a stock.

Buy Nio Stock: The Bottom Line

Nio stock might be a good buy for you. However, your decision to purchase Nio shares will be based on your research of the company and whether this type of stock fits into your investment portfolio. But if you’re looking for a great EV stock, then Nio could be a worthwhile buy.

20 Questions to Know If You’re Ready for Retirement

Finding the right financial advisor that fits your needs doesn’t have to be difficult. SmartAsset’s free tool matches you with fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is leally bound to act in your best interests. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.

 

From its humble beginnings in 2008 to today, Bitcoin’s history has been relatively short but very eventful. The original protocol for this popular digital currency was created in 2008 by Satoshi Nakamoto, believed to be a pseudonym for an unknown developer or group of developers. 

Nakamoto launched the Bitcoin network just a year later and began mining the currency— an estimated 1 million bitcoins were mined in the early years.

The creator(s) of this first-of-its-kind asset developed the cryptocurrency in response to the Great Recession of 2007-2009, spurred by a distrust of the traditional banking system and concerns about its stability. 

Given the recent values of Bitcoin, it’s hard to believe the currency first started trading on exchanges in 2010 at under $0.10. Since then, it’s experienced astronomical growth and some pretty wild price swings.

At its most recent high, one bitcoin was worth over $64,000—a far cry from trading for pennies in its earliest days. 

Whether you’re thinking of investing in Bitcoin or you’ve held this cryptocurrency for several years, it’s fun to look back at this groundbreaking asset’s history. Read on for insights on Bitcoin milestones, historical returns, and how its returns compare to those of other assets.

Bitcoin Performance Milestones

Since being created, Bitcoin has experienced several milestones. Here’s a look back at some of the most significant moments in the short history of this cryptocurrency:

• In June 2011, Bitcoin saw its first significant price spike, climbing to a value of $29.60 (up from just $0.30 in January) before declining again later that year.

• The second half of 2013 marked another major spike—from $68 on July 4th to $1,237 on December 3rd before declining again.

• One of Bitcoin’s most significant increases happened in 2017, with its value surging from around $1,000 at the start of the year to $19,345 by mid-December. 

• The Bitcoin hype cooled in 2018, resulting in significant declines—its lowest value was around $3,232 in December of that year.

• In 2019, Bitcoin saw another spike, hitting $13,813 on June 26th before declining.

• Bitcoin dropped by over 75% in 2022

• Bitcoin continues to hover around the $30k mark in 2023

Bitcoin Total Return (10 Year, 5 Year, 3 Years, 1 Year)

While Bitcoin isn’t exempt from the volatility cryptocurrencies often experience, it’s delivered some impressive returns over the years. Here’s a look at Bitcoin’s annual returns from 2010 to 2022:

Bitcoin 10-Year Return Chart
Year	Return (%)
2011	1,473
2012	186
2013	5,507
2014	-58
2015	35
2016	125
2017	1,331
2018	-73
2019	95
2020	301
2021	90
2022	-81.02
2023

And here’s a look at monthly returns, if you feel like getting a deeper dive:

Bitcoin Monthly Returns
Year	Jan.	Feb.	Mar.	April	May	June	July	Aug.	Sept.	Oct.	Nov.	Dec.
2010	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	210.99%	N/A	44.09%
2011	73.33%	65.38%	-8.77%	346.09%	149.71%	84.21%	-17.08%	-38.58%	-37.32%	-36.77%	-8.62%	58.92%
2012	16.10%	-11.31%	N/A	N/A	4.65%	29.15%	39.76%	8.66%	22.05%	-9.68%	12.23%	7.48%
2013	51.07%	63.55%	178.70%	49.66%	-7.48%	-24.31%	8.92%	32.76%	0.64%	48.82%	470.94%	-33.15%
2014	16.49%	-38.87%	-22.53%	0.22%	10.90%	1.15%	-7.18%	-18.28%	-19.43%	-12.96%	10.97	-15.12%
2015	-31.34%	16.27%	-3.90%	-3.43%	-2.52%	14.91%	7.42%	-19.12%	2.82%	31.92%	21.44%	13.75%
2016	-13.98%	17.95%	-4.71%	7.91%	17.92%	26.68%	-7.19%	-7.72%	5.97%	14.89%	6.27%	29.75%
2017	0.22%	23.18%	-9.26%	25.28%	70.38%	7.70%	16.23%	64.23%	-7.91%	47.94%	54.18%	39.25%
2018	-25.88%	0.67%	-32.86%	33.25%	-18.85%	-14.71%	20.79%	-9%	-5.67%	-4.06%	-36.54%	-8.18%
2019	-7.34%	11.04%	7.49%	29.70%	60.85%	36.41%	-6.81%	-4.84%	-13.65%	10.48%	-17.55%	-4.64%
2020	29.91%	-8.62%	-24.94%	34.56%	9.57%	-3.38%	24.06%	2.74%	-7.46%	28.04%	42.77%	46.97%
2021	14.37%	36.41%	30.11%	-1.78%	-35.38%	-6.09%	18.63%	13.42%	-7.02%	39.90%	-7.22%	-18.75%
2022	-16.70%	12.18%	5.41%	-17.3%	-15.56%	-37.32%	16.95%	-13.99%	-3.1%	5.53%	-16.26%	-0.86%
2023	39.83%	0.02%	23.1%	2.73%	-6.96%	11.97%	-4.07%	-11.29%	3.91%	28.52%	8.81%
2024

While Bitcoin has experienced some wild monthly price swings and a couple of years where its value has declined, you can see that its declines have been eclipsed by some incredible gains. Now let’s explore how Bitcoin’s value has changed over 10, 5, 3, and 1 years.

Bitcoin 10-Year Return

Let’s say you bought one bitcoin on August, 3rd 2013, for $1,106.75, its price at the time. If you held that one bitcoin until August 3rd, 2023, it would’ve been worth $29,310.44, and your total ROI for the 10 years would be 2,546.8%.

Bitcoin 5-Year Return

We’ll also assume you purchased one Bitcoin for this example. A single bitcoin was valued at $965.31 on August, 3rd, 2018, and its value climbed to $29,310.44 by August 2023. Using our calculation above, your total ROI for those five years would be 294.1%.

Bitcoin 3-Year Return

A single bitcoin was valued at $11,246.20 in August 2020, and its value climbed to $29,310.44 at the end of 2021. Your total ROI for those three years would be 160.6%.

Bitcoin 1-Year return

If you purchased a single bitcoin in August 2022, you would’ve paid around $22,626.83. In one year, that value would’ve increased to $29,310.44. Your total returns for that year would be 29.54%.

Bitcoin Multi-Year Returns Compared

	Initial value	Final value	ROI (%)
15 years (2008-2023)	$0.000764	$29,310.44	3,839,387,524,500%
10 years (2013-2023)	$1,106.75	$29,310.44	2,546.8%
5 years (2018-2023)	$7,438.67	$29,310.44	294.1%
3 years (2020-2023)	$11,246.20	$29,310.44	160.6%
1 year (2022-2023)	$22,626.83	$29,310.44	29.54%

How Much You’d Have If You Invested $1,000 in Bitcoin 10, 5, 3, or 1 Year Ago

Instead of buying one bitcoin, let’s say you decided to invest $1,000 into Bitcoin. Here’s a look at how this $1,000 investment would’ve performed if you bought and held your Bitcoin for 10, 5, 3, and 1 years.

	Initial Price	Number of Bitcoins purchased	Final Value
10 years (2013-2023)	$13.30	75.19	$2,203,358.14
5 years (2018-2023)	$13,880	0.072	$2,110.35
3 years (2020-2023)	$7,200	0.139	$4,073.15
1 year (2022-2023)	$16,605.10	0.0602	$1,765.11

While Bitcoin’s earliest investors would have benefitted the most from buying and holding their Bitcoin, those who’ve invested recently also fared well.

How Does Bitcoin Compare to Other Asset Classes?

If you’re curious how Bitcoin returns compare to those of other asset classes, here’s how its annual and total returns compare to gold, real estate, and the S&P 500.

(Spoiler alert: Bitcoin outperformed all three assets by an enormous margin.)

Bitcoin vs. Gold

If you compare Bitcoin’s returns to gold’s returns, you’ll notice a stark difference. Bitcoin has an average annual return of 1,576% and a total return of 18,912% from 2010 to 2022, while SPDR Gold Shares had an average annual return of just 5.14% and a total return of 61.67% over the same period. 

Year	Bitcoin Return (%)	SPDR Gold Shares (GLD) Return (%)
2005	–	17.76
2006	–	22.55
2007	–	30.45
2008	–	4.92
2009	–	24.03
2010	9,900	29.27
2011	1,473	9.57
2012	186	6.6
2013	5,507	-28.33
2014	-58	-2.19
2015	35	-10.67
2016	125	8.03
2017	1,331	12.81
2018	-73	-1.94
2019	95	17.86
2020	301	24.81
2021	90	-4.15
2022	-81.02	-0.77
2023	156.15	12.69

Bitcoin vs. Real Estate

Let’s see if real estate fared any better compared to Bitcoin. The cryptocurrency delivered a whopping 1,576% average annual return and an 18,912% total return from 2010 to 2021, while the Vanguard Real Estate ETF had an average annual return of 13.49% and a total return of 161.91% over the same period.

So, real estate saw slightly higher returns than gold, but it still didn’t come close to Bitcoin’s returns.

Year	Bitcoin Return (%)	Vanguard Real Estate ETF Return (%)
2005	–	12
2006	–	35.2
2007	–	-16.38
2008	–	-36.98
2009	–	29.76
2010	9,900	28.44
2011	1,473	8.62
2012	186	17.67
2013	5,507	2.42
2014	-58	30.29
2015	35	2.37
2016	125	8.53
2017	1,331	4.95
2018	-73	-5.95
2019	95	28.91
2020	301	-4.72
2021	90	40.38
2022	-81.02	-26.21
2023	156.15	11.79%

Bitcoin vs. S&P 500 (Stock Market)

The S&P 500 didn’t fare too much better in its head-to-head with Bitcoin. From 2011 to 2023, the Vanguard S&P 500 ETF delivered an average annual return of 15.74% and a total return of 173.14%. While those numbers aren’t too shabby, Bitcoin’s average annual return for the same period was a whopping 819%, and its total return was 9,012%.

Year	Bitcoin Return (%)	VOO, Vanguard SP500 ETF Return (%)
2011	1,473	2.09
2012	186	15.98
2013	5,507	32.33
2014	-58	13.63
2015	35	1.35
2016	125	11.93
2017	1,331	21.78
2018	-73	-4.42
2019	95	31.46
2020	301	18.35
2021	90	28.66
2022	-81.02	-18.15
2023	156.15	26.33%

How Does Bitcoin Compare to The Best Performing Stocks?

We’ve analyzed how Bitcoin compares to gold, real estate, and the stock market, but how does it stack up against some of the best-performing stocks? Here’s how this popular cryptocurrency stacks up against major companies like Amazon, Apple, Berkshire Hathaway, JP Morgan, Microsoft, Visa, and Walmart.

We looked at the average annual and total returns for each asset. This data assumes you bought the asset in 2010 and held it until 2023. 

Asset	Average annual return (%)	Total return (%)
Bitcoin	1,576%	18,912%
Amazon	35.54%	426.48%
Apple	33.22%	398.61%
Berkshire Hathaway	14.31%	171.76%
JP Morgan	13.53%	162.40%
Microsoft	23.92%	287.04%
Visa	23.10%	277.37%
Walmart	10.08%	120.94%

The Bottom Line – Bitcoin Historical Returns

While some investors may be skeptical about cryptocurrency, citing concerns over market volatility and a high risk of loss, Bitcoin’s performance over time paints a rosy picture. With its longevity and astronomically high returns, Bitcoin has been worth the risk for many investors—especially early adopters. 

Of course, historical performance doesn’t guarantee future returns. So if you’re considering investing in cryptocurrency, only invest what you can afford to lose.

I love participating in loyalty and reward programs. They’re almost always free, gets you free “stuff,” and there’s really no downside. The only risk is that you overspend, which I’m not prone to do.

And if you don’t participate, you invisibly subsidizing the folks who do. It’s like not using a rewards credit card, you still pay a premium but you don’t get any rewards.

What gets especially challenging is when you start hoarding points. This happens a lot with travel rewards because you want to wait until there are transfer bonuses you can take advantage of, less so with reward points from coffeeshops or restaurants.

Look at what happened to this poor soul:

After six months of inactivity, nearly 5 entrées worth of points expired in his Chipotle account!

Points never go up in value. You should spend them!

There are two risks with hoarding points:

1. They expire worthless, or,
2. They devalue those points.

And what makes it even harder is that programs have different expiration policies. Some expire a set time after the point is earned. Some expire if there’s a period of inactivity (you haven’t shopped there in a while). Some do both.

As for devaluation… it is common for companies to adjust their policies. Sometimes they devalue points and miles outright. Sometimes they change how the redemption process works. Sometimes they change what you can redeem the points for!

It’s hard to keep track of each stores policy so I’ve put together this guide to helping you understand them. Take note of the expiration policy as well as the last time they devalued points.

It’s important to verify anything you see with the company directly because programs change constantly and I won’t be able to keep it 100% up to date.

Table of Contents

1. ☕ Coffee Shops
1. 1. Starbucks Rewards
2. 2. Dunkin’ Rewards
3. 3. Costa Coffee Club
2. 🍔 Fast Food Restaurants
1. 1. McDonald’s Rewards
2. 2. Burger King Royal Perks
3. 3. Wendy’s Rewards
4. 4. Chick-fil-A One
5. 5. Panera Bread MyPanera
6. 6. Pizza Hut Hut Rewards
7. 7. Chipotle
8. 8. Church’s Texas Chicken Real Rewards
3. ✈️ Airline Loyalty Programs
1. 1. Delta SkyMiles
2. 2. American Airlines AAdvantage
3. 3. United MileagePlus
4. 4. Southwest Rapid Rewards
5. 5. JetBlue TrueBlue
4. 🏨 Hotel Loyalty Programs
1. 1. Marriott Bonvoy
2. 2. Hilton Honors
3. 3. World of Hyatt
4. 4. IHG One Rewards
5. 5. Choice Privileges

☕ Coffee Shops

1. Starbucks Rewards

• How it works: Earn 2 Stars per $1 spent with a registered card or app.
• Expiration: Stars expire 6 months after the month they were earned.
• Last devaluation: In February 2023, Starbucks increased the number of Stars required for most redemptions, with some items requiring up to 100% more Stars. <a href=”https://onemileatatime.com/news/starbucks-rewards-devaluing/” target=”_blank”>Learn more</a>​One Mile at a Time

2. Dunkin’ Rewards

• How it works: Earn 10 points per $1 spent.
• Expiration: Points expire 6 months after they are earned.
• Last devaluation: In October 2022, Dunkin’ overhauled its rewards program, increasing the points required for free drinks and eliminating free birthday drinks. Learn more.

3. Costa Coffee Club

• How it works: Collect 1 Bean per drink purchase; 10 Beans earn a free drink.
• Expiration: Beans expire 12 months after the last transaction.
• Last devaluation: No recent devaluation reported.

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🍔 Fast Food Restaurants

1. McDonald’s Rewards

• How it works: Earn 100 points per $1 spent.
• Expiration: Points expire 6 months after the month they were earned.
• Last devaluation: No significant devaluation since the nationwide launch in July 2021.​

2. Burger King Royal Perks

• How it works: Earn 10 Crowns per $1 spent.
• Expiration: Crowns expire 6 months after they are earned.
• Last devaluation: No recent devaluation reported.

3. Wendy’s Rewards

• How it works: Earn 10 points per $1 spent.
• Expiration: Points expire 12 months after they are earned.
• Last devaluation: No recent devaluation reported.​

4. Chick-fil-A One

• How it works: Earn points with every purchase; the amount varies based on the item.
• Expiration: Points do not expire, but rewards do.
• Last devaluation: No recent devaluation reported.​

5. Panera Bread MyPanera

• How it works: Earn rewards based on visit frequency and spending.
• Expiration: Rewards typically expire 60 days after issuance.
• Last devaluation: No recent devaluation reported.​

6. Pizza Hut Hut Rewards

• How it works: Earn 2 points per $1 spent.
• Expiration: Points expire 6 months after they are earned.
• Last devaluation: No recent devaluation reported.

7. Chipotle

• How it works: Earn 10 points per $1 spent.
• Expiration: Points expire after 180 days of account inactivity.
• Last devaluation: Last devaluation was in October 2022, when the free entree went from 1,400 to 1,625 points. Learn more.

8. Church’s Texas Chicken Real Rewards

• How it works: Earn 10 points per $1 spent.
• Expiration: Points expire 9 months after they are earned.
• Last devaluation: Program launched in 2023; no devaluation reported since inception.​

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✈️ Airline Loyalty Programs

1. Delta SkyMiles

• How it works: Earn miles based on the ticket price and Medallion status.
• Expiration: Miles do not expire.
• Last devaluation: In 2024, Delta discontinued Medallion Qualification Miles (MQMs) and introduced changes to the Medallion Status qualification process. Learn more.

2. American Airlines AAdvantage

• How it works: Earn miles based on the ticket price and elite status.
• Expiration: Miles expire after 24 months of inactivity.
• Last devaluation: In 2022, American Airlines introduced Loyalty Points, changing how elite status is earned. Learn more.

3. United MileagePlus

• How it works: Earn miles based on the ticket price and Premier status.
• Expiration: Miles do not expire.
• Last devaluation: No recent devaluation reported.​

4. Southwest Rapid Rewards

• How it works: Earn points based on the fare and fare type.
• Expiration: Points do not expire.
• Last devaluation: In March 2025, Southwest adjusted the number of Rapid Rewards points customers earn per dollar spent on flights. Learn more​.

5. JetBlue TrueBlue

• How it works: Earn points based on the fare and fare type.
• Expiration: Points do not expire.
• Last devaluation: No recent devaluation reported.​

---

🏨 Hotel Loyalty Programs

1. Marriott Bonvoy

• How it works: Earn points for stays and other activities.
• Expiration: Points expire after 24 months of inactivity.
• Last devaluation: In 2025, Marriott increased award costs at some top properties, with some hotels now requiring up to 200,000 points per night. Learn more.

2. Hilton Honors

• How it works: Earn points for stays and other activities.
• Expiration: Points expire after 24 months of inactivity.
• Last devaluation: No recent devaluation reported.​

3. World of Hyatt

• How it works: Earn points for stays and other activities.
• Expiration: Points expire after 24 months of inactivity.
• Last devaluation: No recent devaluation reported.​

4. IHG One Rewards

• How it works: Earn points for stays and other activities.
• Expiration: Points expire after 12 months of inactivity.
• Last devaluation: In 2023, IHG revamped its rewards program.

5. Choice Privileges

• How it works: Earn points for stays and other activities.
• Expiration: Points expire after 18 months of inactivity.
• Last devaluation: No recent devaluation reported.

If there is another company you want added to the list, let me know!

[Updated on January 30, 2025 with screenshots from FreeTaxUSA for the 2024 tax year.]

TurboTax and H&R Block are the two major tax software for filing personal tax returns. A low-cost alternative to TurboTax and H&R Block software is FreeTaxUSA. FreeTaxUSA isn’t only for simple returns. It can still handle more complex transactions, such as the Backdoor Roth.

Just as a refresher, a Backdoor Roth involves making a non-deductible contribution to a Traditional IRA followed by converting from the Traditional IRA to a Roth IRA. Both the contribution and the conversion need to be reported in the tax software. For more information on Backdoor Roth, please read Backdoor Roth: A Complete How-To.

What To Report

You report on the tax return your contribution to a Traditional IRA *for* that year, and you report the conversion to Roth *during* that year.

For example, when you are doing your tax return for year 2024, you report the contribution you made *for* 2024, whether you actually did it in 2024 or between January 1 and April 15, 2025. You also report the conversion to Roth *during* 2024, whether the contribution was made for 2024, 2023, or any previous years. Therefore a contribution made in 2025 for 2024 goes on the tax return for 2024. A conversion done during 2025 after you made a contribution for 2024 goes on the tax return for 2025.

You do yourself a big favor and avoid a lot of confusion by doing your contribution for the current year and finishing your conversion in the same year. I call this a “planned” Backdoor Roth or a “clean” Backdoor Roth — you’re doing it deliberately. Don’t wait until the following year to contribute for the previous year.  Contribute for 2025 in 2025 and convert it in 2025. Contribute for 2026 in 2026 and convert it in 2026. This way everything is clean and neat.

If you are already off by one year, it depends on whether you’re handling the contribution part or the conversion part right now. If you contributed to a Traditional IRA for 2024 in 2025 or if you recharacterized a 2024 Roth contribution to Traditional in 2025, please follow Split-Year Backdoor Roth IRA in FreeTaxUSA, Year 1. If you contributed to a Traditional IRA for 2023 in 2024 or if you recharacterized a 2023 Roth contribution to Traditional in 2024 and converted in 2024, please follow Split-Year Backdoor Roth IRA in FreeTaxUSA, Year 2. If you recharacterized a 2024 Roth contribution to Traditional in 2024 and converted in 2024, please follow Backdoor Roth in FreeTaxUSA: Recharacterize & Convert, Same Year.

Here’s the scenario we’ll use as an example:

You contributed $7,000 to a traditional IRA in 2024 for 2024. Your income is too high to claim a deduction for the contribution. By the time you converted it to Roth IRA, also in 2024, the value grew to $7,200. You have no other traditional, SEP, or SIMPLE IRA after you converted your traditional IRA to Roth. You did not roll over any pre-tax money from a retirement plan to a traditional IRA after you completed the conversion.

If your scenario is different, you will have to make some adjustments to the screens shown here.

Before we start, suppose this is what FreeTaxUSA shows:

We’ll compare the results after we enter the Backdoor Roth.

Convert From Traditional IRA to Roth

The tax software works on income items first. We enter the conversion first even though the conversion happened after the contribution.

When you convert from a Traditional IRA to a Roth IRA, you will receive a 1099-R form. Complete this section only if you converted *during* 2024. If you only converted in 2025, you won’t have a 1099-R until next January. Please follow Split-Year Backdoor Roth IRA in FreeTaxUSA, Year 1 now and come back next year to follow Split-Year Backdoor Roth IRA in FreeTaxUSA, Year 2. If your conversion during 2024 was against a contribution you made for 2023 or a 2023 contribution you recharacterized in 2024, please follow Split-Year Backdoor Roth IRA in FreeTaxUSA, 2nd Year.

In our example, by the time you converted, the money in the Traditional IRA had grown from $7,000 to $7,200.

Click on “Add a 1099-R” when it asks you about the 1099-R.

It’s just a regular 1099-R.

Enter the 1099-R exactly as you have it. Pay attention to the code in Box 7 and the checkboxes. It’s normal to have the same amount as the taxable amount in Box 2a, when Box 2b is checked saying “taxable amount not determined.”  Pay attention to the distribution code in Box 7. It’s code 2 if you’re under 59-1/2 and code 7 if you’re over 59-1/2. The IRA/SEP/SIMPLE box is also checked.

Right after you enter the 1099-R, you will see the refund number drop. Here we went from a $1,540 refund to $264. Don’t panic. It’s normal and temporary. The refund number will come up when we finish everything.

We did not inherit this IRA.

It asks you about Roth conversion. Answer Yes to conversion and enter the converted amount.

You are done with this 1099-R. Repeat if you have another 1099-R. If you’re married and both of you did a Backdoor Roth, pay attention to whose 1099-R it is when you enter the second one. You’ll have problems if you assign both 1099-R’s to the same person when they belong to each spouse.

Click on “Continue” when you’re done with all the 1099-R forms.

It asks you about the basis carried over from previous years. If you did a clean “planned” backdoor Roth every year, you can answer “No.” Answering “Yes” and entering all 0’s on the next page has the same effect as answering “No.” If you have gone back and forth before you found this guide, some of your previous answers may be stuck. Answering “Yes” here will give you a chance to review and correct them. If you have a basis carryover on line 14 of Form 8606 from your previous year’s tax return, answer Yes here and enter it on the next page.

The values should be all 0 if you did a “clean” planned backdoor Roth. If you had a small amount of earnings posted to your Traditional IRA after the conversion and you didn’t convert the earnings, enter the account’s value in the second box from your year-end statement.

We didn’t take any disaster distribution.

Now continue with all other income items until you are done with income. Your refund meter is still lower than it should be but it will change soon.

Traditional IRA Contribution

Find the IRA Contributions section under the “Deductions / Credits” menu.

Answer Yes to the first question. An excess contribution means contributing more than you’re allowed to contribute. We didn’t have that.

Enter the amount you contributed to the Traditional IRA in the first box. Leave the answer to “Did you switch or recharacterize” at No. We converted. We didn’t recharacterize. We didn’t repay any distribution either.

Your refund number goes up again! It was a refund of $1,540 before we started. It went down a lot and now it’s back to $1,496. The $44 difference is due to paying tax on the $200 earnings before we converted to Roth.

We didn’t contribute to a SEP, solo 401k, or SIMPLE plan. Answer Yes if you did.

Withdraw means pulling money out of a Traditional IRA back to your checking account. Converting to Roth is not a withdrawal. Answer ‘No‘ here.

All values are zero when you did a “clean” planned Backdoor Roth. If you had a small amount of earnings posted to your Traditional IRA after you converted and you didn’t convert the earnings, enter the balance of your Traditional IRA from your year-end statement in the second box.

You see this screen only if your income falls below the income limit that allows a deduction for your Traditional IRA contribution. You don’t see this if your income is above the income limit. Answering Yes will make your contribution deductible but it will also make your conversion taxable. Although it works out to be a wash in the end, it’s less confusing if you answer No here and make the entire amount that could be deducted nondeductible.

It tells us we don’t get a deduction because our income was too high or because we chose to make our contribution nondeductible. We know. That’s why we did the Backdoor Roth.

Taxable Income from Backdoor Roth

After going through all these, let’s confirm how you’re taxed on the Backdoor Roth. Click on the three dots on the top right above the IRA Deduction Summary and then click on “Preview Return.”

Look for Line 4 in Form 1040.

It shows $7,200 in IRA distributions in line 4a and only $200 is taxable in line 4b. If you are married filing jointly and both of you did a backdoor Roth, the numbers here will show double.

Tah-Dah! You put money into a Roth IRA through the backdoor when you aren’t eligible to contribute to it directly. You pay tax on a small amount of earnings if you waited between contributions and conversion. That’s negligible relative to the benefit of having tax-free growth on your contributions for many years.

Troubleshooting

If you followed the steps and you are not getting the expected results, here are a few things to check.

The Entire Conversion Is Taxed

If you don’t have a retirement plan at work, you have a higher income limit to take a deduction on your Traditional IRA contribution. FreeTaxUSA gives you the option to take a deduction when it sees that your income qualifies. Taking the deduction makes a corresponding amount of the Roth conversion taxable. Answering “No” in the “Do you want to take your IRA deduction?” page will have you taxed only on the earnings in your Roth conversion.

Self vs Spouse

If you are married, make sure you don’t have the 1099-R and the IRA contribution mixed up between yourself and your spouse. If you inadvertently assigned two 1099-Rs to one person instead of one for you and one for your spouse, the second 1099-R will not match up with a Traditional IRA contribution made by a spouse. If you entered a 1099-R for both yourself and your spouse but you only entered one Traditional IRA contribution, you will be taxed on one 1099-R.

Retirement may feel like a distant concern, especially when you’re focused on building your career or managing daily expenses. But without a proper plan, the future can become financially uncertain—particularly in India, where most private-sector employees lack pension coverage and government-backed social security is limited. 

Rising healthcare costs, inflation, and longer life expectancy make it critical to secure your post-retirement years through disciplined saving and smart investments. Retirement planning isn’t just about saving money—it’s about ensuring independence, comfort, and peace of mind in your later years.

This article explores the key benefits of retirement planning, particularly for Indian earners across all income levels.

What Is Retirement Planning?

Retirement planning is the process of setting financial goals, saving, and investing to ensure a steady flow of income post-retirement. It involves estimating your future expenses, choosing the right investment tools, and accounting for inflation, healthcare, and lifestyle needs.

A solid plan ensures that you don’t outlive your savings and can maintain financial independence in your golden years.

Why Is Retirement Planning Crucial in India?

Unlike some developed countries, India doesn’t offer universal social security. While government employees have pensions and Provident Funds, the private sector lacks such extensive support. Rising healthcare costs, increased life expectancy, and the nuclear family structure further stress the need for retirement planning.

That’s where understanding the benefits of retirement planning becomes essential.

Top 10 Benefits of Retirement Planning

1. Financial Independence After Retirement

One of the most significant benefits of retirement planning is ensuring financial independence. With proper planning, you won’t have to rely on children or relatives to support you in old age.

Key Tip: Start saving at least 10–15% of your monthly income in a structured investment product like EPF, NPS, or mutual funds.

2. Power of Compounding

When you begin early, your savings have more time to grow through the power of compounding. Even small contributions can turn into substantial wealth over time.

Example: ₹5,000 invested monthly at 10% annual return for 30 years = ₹1.13 crore.

3. Beating Inflation

Inflation erodes the value of money over time. What costs ₹50,000 a month today might cost ₹2 lakh per month 30 years later. A proper retirement plan includes inflation-adjusted savings goals and helps maintain your purchasing power.

4. Covers Healthcare and Emergency Costs

Medical expenses increase as you age. Health insurance alone may not be enough. A retirement corpus provides a cushion to handle hospitalizations, surgeries, or long-term care.

Bullet Benefits:

• No dependence on credit or loans
• Peace of mind during medical emergencies
• Provision for long-term treatments

5. Enables Early Retirement Goals

If you dream of retiring at 50 instead of 60, retirement planning makes it possible. With disciplined savings and investing, you can accumulate enough wealth to take early retirement and pursue your passions.

6. Tax Savings and Efficient Investment Choices

Several retirement plan services offer tax benefits under Sections 80C, 80CCD, and 80D. Investments in NPS, PPF, and pension plans not only build your corpus but also reduce your tax liability.

Tax-Saving Instruments:

• NPS: Deduction up to ₹2 lakh (80C + 80CCD(1B))
• PPF: Tax-free maturity under Section 10(11)
• Senior Citizens Savings Scheme (SCSS): Safe investment with tax benefits

7. Access to Diversified Investment Options

With time on your side, you can explore a mix of high-risk and low-risk investments. Early retirement planning allows you to include:

• Equity mutual funds (for growth)
• Debt funds and PPF (for safety)
• Retirement-focused ULIPs
• Annuity plans for regular income

8. Customized Planning for Private Sector Employees

Private sector employees don’t enjoy post-retirement pensions like government workers. A retirement plan helps:

• Replace your salary with passive income
• Choose investment avenues aligned with your risk profile
• Ensure consistent monthly payouts post-retirement

9. Reduced Burden on Family

Another underrated benefit of retirement planning is reduced stress on your loved ones. By ensuring you’re financially secure, you won’t need to depend on children for your day-to-day needs or emergencies.

10. Helps You Build a Legacy

Once your retirement needs are taken care of, your surplus wealth can be passed on to your children or donated to a cause. Estate and will planning can be integrated into your retirement plan to ensure a smooth wealth transition.

Psychological and Lifestyle Benefits of Retirement Planning

While the financial side of retirement planning is crucial, its emotional and lifestyle benefits are equally valuable. A well-structured retirement plan not only secures your future but also enhances your overall quality of life.

Planning early helps reduce the constant worry about “what happens next?”—a concern that intensifies as one nears retirement. When you’re financially prepared, you’re mentally at ease, and this peace of mind directly impacts your physical and emotional well-being.

Here are some often-overlooked lifestyle and psychological advantages:

• Reduced Mental Stress: Knowing you have a financial cushion allows you to face retirement with confidence, minimizing anxiety related to money or medical emergencies.
• Better Relationships: Financial readiness reduces the chances of dependency-related stress between spouses, children, and extended family. It encourages honest discussions and shared goals within the family.
• Clearer Life Goals: Retirement planning encourages you to think beyond work—what passions or hobbies do you want to pursue? What dreams have you delayed?
• Flexible Living Choices: Whether it’s relocating to a quieter town, downsizing, or travelling during off-seasons, a healthy corpus lets you make lifestyle decisions on your own terms.
• Sense of Purpose: A well-funded retirement allows you to engage in purposeful activities like volunteering, mentoring, or community work—bringing a renewed sense of fulfillment.

In essence, the benefits of retirement planning stretch beyond money management. They create a foundation for a balanced, satisfying life—free from daily financial worries and rich in opportunity for growth, connection, and contentment. As you plan for your golden years, remember: peace of mind is just as important as wealth.

How to Choose the Right Retirement Plan in India

Picking the right plan depends on your age, risk appetite, income, and long-term goals. Here are some guiding steps:

➤ Know Your Future Needs

Estimate monthly expenses post-retirement, healthcare costs, lifestyle choices, and inflation.

➤ Define the Retirement Age

Your investment horizon matters. The earlier you start, the smaller your monthly investment needs to be.

➤ Identify Income Sources

Pensions, rental income, dividends, or annuities—know what inflows you’ll have.

➤ Choose the Right Instruments

Use a mix of equity, debt, and government schemes for balance and stability.

➤ Seek Professional Guidance

Reputable retirement plan services can help create a custom roadmap aligned with your goals.

Popular Retirement Planning Instruments in India

Investment Option	Risk	Returns	Tax Benefit
NPS	Moderate	8–10%	Yes
EPF	Low	~8%	Yes
PPF	Low	~7.1%	Yes
Mutual Funds (SIP)	High	10–12%	No
SCSS	Low	8.2%	Yes
Annuity Plans	Low	5–6%	Yes

Why Use Retirement Plan Services?

Retirement plan services can:

• Help assess your risk profile
• Create personalized savings strategies
• Provide tax-optimized investment options
• Monitor your portfolio and suggest changes
• Keep your plan aligned with life changes

When Should You Start Retirement Planning?

The best time? As soon as you start earning.

• If you’re in your 20s: Start small, but start now.
• If you’re in your 30s or 40s: It’s not too late—opt for aggressive investing.
• If you’re nearing retirement: Focus on safety, stability, and annuity-based income.

Mistakes to Avoid in Retirement Planning

• Delaying the start
• Underestimating inflation
• Ignoring healthcare expenses
• Putting all money in one investment
• Not reviewing your portfolio periodically

Summary: Securing Your Golden Years

Understanding the benefits of retirement planning can transform the way you manage your financial future. From gaining financial independence to building a legacy, the advantages are multifold. 

Given India’s rising cost of living, changing family structures, and limited social security, being prepared is not just wise—it’s essential.

Start your retirement journey today with the right plan, strategic investments, and professional advice. Because the sooner you start, the stronger your financial future becomes.

FAQs: Benefits of Retirement Planning

Q1. What are the key benefits of retirement planning?

Ans: The key benefits of retirement planning include financial security, beating inflation, tax savings, medical coverage, and ensuring a stress-free life after retirement.

Q2. What retirement plan services are available in India?

Ans: Retirement plan services include personalized retirement advisory, NPS investment help, mutual fund SIP planning, annuity planning, insurance selection, and tax-saving strategies.

Q3. Is it too late to start planning at 40?

Ans: Not at all. While earlier is better, starting at 40 gives you enough time to build a solid retirement fund with focused investments.

Q4. How much money do I need for retirement in India?

Ans: Ideally, you should have a corpus equal to 25–30 times your annual expenses at the time of retirement.

Q5. Are retirement planning services worth it?

Ans: Yes, they help optimize your savings, reduce tax liabilities, and ensure you reach your retirement goals without unnecessary risk.

What are the latest Post Office Small Savings Scheme Interest Rate for July – September 2025? What is the interest rate for PPF, SSY, SCSS, KVP, or NSC schemes for 2025?

The Ministry of Economic Affairs is scheduled to announce the interest rates for all Post Office Small Saving Scheme Interest Rates on a quarterly basis. In line with this, the department has communicated the relevant interest rates for the Post Office Small Savings Scheme for the period of July-September 2025 on 30th June 2025.

Previously, interest rates were announced on an annual basis. However, starting from the fiscal year 2016-17, interest rates will be determined on a quarterly basis. I have previously authored a comprehensive article on this topic, and I am including the link to that article below.

Below is the timetable for change in interest rates for all Post Office Savings Schemes.

Post Office Small Savings Scheme Interest Rate July – September 2025

On 30th June 2025, the Finance Ministry declared that the interest rates for different small savings schemes will stay the same for the quarter beginning 1st July 2025.

The interest rates for different Small Savings Schemes during the first quarter of FY 2025-26, which will commence on 1st July, 2025, and conclude on 30th September, 2025, will remain consistent with those announced for the first quarter (1st March 2025 to 30th June 2025) of FY 2025-26, according to a notification issued by the finance ministry. Refer to the below image for the same.

Hence, the applicable rate of Post Office Small Savings Scheme Interest Rate July – September 2025 is as below.

Post Office Savings Schemes Interest Rates July – September 2025
Sl No.	Scheme Name	Current Interest Rate	Revised Interest Rate
1	Savings Deposit	4.00%	4.00%
2	Term Deposit 1 Yr	6.90%	6.90%
3	Term Deposit 2 Yrs	7.00%	7.00%
4	Term Deposit 3 Yrs	7.10%	7.10%
5	Term Deposit 5 Yrs	7.50%	7.50%
6	RD-5 Yrs	6.70%	6.70%
7	NSC-5 Yrs	7.70%	7.70%
8	Post Office Monthly Income Scheme (MIS)	7.40%	7.40%
9	Public Provident Fund (PPF)	7.10%	7.10%
10	Senior Citizen Savings Scheme (SCSS)	8.20%	8.20%
11	Kisan Vikas Patra (KVP)	7.50%	7.50%
12	Sukanya Samriddhi Scheme (SSY)	8.20%	8.20%

Note – KVP will now double in 115 months.

I have tabulated the same in the image format also for your reference.

Features of Post Office Savings Schemes

Now let us glance at the Post Office Small Savings Schemes features. This will give you more clarity in choosing the right product for you.

# Post Office Savings Account

Like Bank Account, Post Office also offers you the savings account to its customers. The few features are as below.

• Minimum Rs.500 is required to open the account.
• Account can be opened single, jointly, Minor (above 10 years of age), or a guardian on behalf of a minor.
• Minimum balance to be maintained in an account is INR 500/- , if balance Rs. 500 not maintained, a maintenance fee of one hundred (100) rupees shall be deducted from the account on the last working day of each financial year and after deduction of the account maintenance fee, if the balance in the account becomes nil, the account shall stand automatically closed.
• Cheque facility/ATM facility are available
• Interest earned is Tax-Free up to INR 10,000/- per year from the financial year 2012-13
• Account can be transferred from one post office to another
• One account can be opened in one post office.
• At least one transaction of deposit or withdrawal in three financial years is necessary to keep the account active, else account became silent (Dorment).
• Intra Operable Netbanking/Mobile Banking facility is available.
• Online Fund transfer between Post Office Savings Accounts/Stop Cheque/Transaction View facility is available through Intra Operable Netbanking/Mobile Banking.
• The facility to link with IPPB Saving Account is available.
• Funds Transfer (Sweep in/Sweep out) facility is available with IPPB Saving Account.

# Post Office Fixed Deposits (FDs)

• Minimum of Rs.1,000 and in multiples of Rs.100. There is no maximum limit.
• FD tenure currently available is 1 yr, 2 Yrs, 3 Yrs and 5 Yrs.
• Account can be opened single, jointly, Minor (above 10 years of age) or a guardian on behalf of minor.
• Account can be opened by cash /Cheque and in case of Cheque the date of realization of cheque in Govt. account shall be date of opening of account.
• Account can be transferred from one post office to another
• Single account can be converted into Joint and Vice Versa .
• Any number of accounts can be opened in any post office.
• Interest shall be payable annually, No additional interest shall be payable on the amount of interest that has become due for payment but not withdrawn by the account holder.
• The annual interest may be credited to the savings account of the account holder at his option.
• Premature encashment not allowed before expiry of 6 month, If closed between 6 month to 12 month from date of Opening, Post Office Saving Accounts interest rate will be payable.
• 5 Yrs FD is eligible for tax saving purposes under Sec.80C.

# Post Office Recurring Deposit (RD)

• Minimum is Rs.100 a month and in multiple of Rs.10. There is no maximum limit.
• Account can be opened single, jointly, Minor (above 10 years of age) or a guardian on behalf of minor.
• Tenure of RD is 5 years.
• Account can be opened by cash / Cheque and in case of Cheque the date of deposit shall be date of clearance of Cheque.
• Premature closure is allowed after three years from the date of opening of the account.
• Account can be transferred from one Post Office to another Post Office.
• Subsequent deposit can be made up to 15th day of next month if account is opened up to 15th of a calendar month and up to last working day of next month if account is opened between 16th day and last working day of a calendar month.
• If a subsequent deposit is not made up to the prescribed day, a default fee is charged for each default, default fee @ 1 Rs for every 100 rupee shall be charged. After 4 regular defaults, the account becomes discontinued and can be revived in two months but if the same is not revived within this period, no further deposit can be made.
• If in any RD account, there is a monthly default amount, the depositor has to first pay the defaulted monthly deposit with default fee and then pay the current month deposit.
• There is rebate on advance deposit of at least 6 installments, Rs. 10 for 6 month and Rs. 40 for 12 months Rebate will be paid for the denomination of Rs. 100.
• One loan up to 50% of the balance allowed after one year. It may be repaid in one lumpsum along with interest at the prescribed rate at any time during the currency of the account.
• Account can be extended for another 5 years after it’s maturity.

# Post Office Monthly Income Scheme (MIS)

• Maximum investment is Rs.9 lakh in a single account and Rs.15 lakh jointly (It is revised during the Budget 2023). Earlier it was Rs.4.5 lakh for a single account and Rs.9 lakh for joint accounts.
• Account can be opened single, jointly, Minor (above 10 years of age) or a guardian on behalf of minor.
• Any number of accounts can be opened in any post office subject to maximum investment limit by adding balance in all accounts (Rs. 4.5 Lakh).
• Single account can be converted into Joint and Vice Versa.
• Maturity period is 5 years.
• Interest can be drawn through auto credit into savings account standing at same post office,orECS./In case of MIS accounts standing at CBS Post offices, monthly interest can be credited into savings account standing at any CBS Post offices.
• Can be prematurely en-cashed after one year but before 3 years at the discount of 2% of the deposit and after 3 years at the discount of 1% of the deposit. (Discount means deduction from the deposit.).
• Interest shall be payable to the account holder on completion of a month from the date of deposit.
• If the interest payable every month is not claimed by the account holder such interest shall not earn any additional interest.

# Post Office Senior Citizen Savings Scheme (SCSS)

I have written a detailed post on this. Refer to the same at ” Post Office Senior Citizen Scheme (SCSS)-Benefits and Interest Rate“.

Note – Effective from 1st April 2023, the maximum limit is currently Rs.30 lakh. Earlier it was Rs.15 lakh. This change happened during Budget 2023.

# Public Provident Fund (PPF)

I have written various posts on PPF. Refer the same:-

# National Savings Certificate NSC (VIII Issue)

• Minimum Rs.1,000 and in multiple of Rs.100.
• No maximum limit.
• Account can be opened single, jointly, Minor (above 10 years of age) or a guardian on behalf of minor.
• Tax Benefit under Sec.80C is available.
• Tenure is 5 years.

# Kisan Vikas Patra (KVP) Account

• Minimum Rs.1,000 and in multiples of Rs.100. There is no maximum limit.
• Account can be opened single, jointly, Minor (above 10 years of age) or a guardian on behalf of minor.
• The money will be double at maturity. However, as the interest rate changes on a quarterly basis. The maturity period also varies once in a quarter.

# Sukanya Samriddhi Account Yojana (SSY)

I have written various posts on this. Refer the same:-

Conclusion – While inflation appears to be moderating, and RBI reduced the repo rate consistently, many assumed that this time Government will reduce it’s interest rate. However, luckily the interest rates not changed for this quarter also. This I think is the positive news for many investors 🙂

So you want to help the environment, but you don’t think that you have enough time? Here are 10 simple things that you can do in under a minute that will help the environment and save you money at the same time:

1. Use Half The Amount (time: none):

Try using half the amount of the products you use every day. Most of your everyday household products will work just as well when you use half the amount that you are currently using. Some that you might consider using this method with are laundry detergent, shampoo, cleaning supplies, etc.

2. Cold / Cold Wash (time: under 5 seconds):

A knob turn on your washing machine can save about $100 a year in energy costs. Simply move the water temperature knob to a cold/cold wash setting instead of a hot/cold wash. Since the greatest cost of washing clothes is heating the water, a cold/cold wash can save a significant amount.

3. Put A Towel In The Dryer (time: under 15 seconds):

Go and get the most absorbent towel you can find and place it near your Dryer. Each time you put in a new load of clothes to dry, also throw in the towel. This absorbent towel will reduce the time it takes for the entire load to dry and will save approximately 10% of the energy use.

4. Turn Down Your Water Heater Temperature

This takes under under 5 seconds for gas water heaters – electric water heaters are a bit more complicated and while adjusting them can be done in under a minute if you are mechanically inclined, you may want to have someone do it for you if you aren’t): Most water heaters are set at a higher temperature than they need to be. Adjust your water heater down to 130°F and you will save 3% to 5% on the cost of heating your water for every 10°F the temperature is reduced. On the gas water heaters, all it takes is a turn of the temperature knob to accomplish this.

5. Adjust Your Thermostat (time: under 10 seconds):

With summer just around the corner, adjust your thermostat up a degree or two and for each degree you do so, you will save 3% to 4% on the cooling costs of your house.

6. Turn The Water Off When Brushing/Washing (time: under 5 seconds):

The average bathroom faucet runs at about 2 gallons of water per minute. That means every time you brush your teeth or when you wash your hands with the faucet running, you use about 4 gallons of water. If you brush your teeth twice and wash your hands three times per day, it adds up to 600 gallons of water per month.

7. Turn Off Your Car Engine (time: under 5 seconds):

If your car is going to be idling for more than 45 seconds, it’s more fuel-efficient to turn the engine off and restart the car again when you are ready to move.

8. Close Cooling Vents (time: under 5 seconds for each vent):

There is no reason to cool the portions of your house that you are not going to be in. Walk around your house and close the cooling vents in all the rooms where you don’t spend a lot of time. This will help your air conditioner work less (and thus save energy and money) than if you had all the vents open. Just be sure that there is not a temperature sensor in the room when you close the vents.

9. Replace Light Bulbs (time: under 30 seconds per light bulb):

If you haven’t done so already, replace your regular light bulbs with compact fluorescent light bulbs (CLF). CLFs last ten times as long and only use 25% of the energy that a regular light bulbs uses. Over the life of each light bulb, you should save approximately $40 in energy consumption.

10. Turn Off Your Lights (time: under 5 seconds):

One of the easiest ways to save money and help the environment is to simply turn the light switch off when you leave the room. There is no reason to keep lights on when there is no one there.

It really doesn’t take much time or effort to make a difference. In less than 10 minutes, you can make a significant contribution to the environment and save yourself some money at the same time.

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