Whatever you do in or with the bank costs you money, from talking to a teller to withdrawing a large amount of cash. Agreed they are all petty charges but add them up and you will see the big picture. Even getting your statement printed on a sheet of paper costs you these days. Sometimes I think the bank has forgotten that it is in business because its customers keep their cash there!

 

Thinking up new fees is the bank’s money-raising strategy which brings in an estimated $12 billion a year. Yep, the banks are having a rough time but that doesn’t mean that you have to pay for it. Bank fees are here to stay, but here’s how to avoid some of them:

 

A study by the Pew Charitable Trusts found that disclosure documents averaged 111 pages long. The Consumer Financial Protection Bureau is being pressed to require banks to publish a one-page disclosure of all fees. But do your best to understand what you’re up against, you can only fight things you know about.

 

A big demand may come with direct deposit. "Often, something as simple as having direct deposit of your paycheck or Social Security payment is enough to get monthly maintenance fees waived." But often you’ve got to ask for the waiver, it won’t be offered automatically.

 

Customers who are likely to be rewarded with waived fees are those with multiple accounts, such as checking, savings, a credit card, mortgage or car loan, in other words, the more business you do with your bank, the more leverage you have in staving off fees.

 

Some banks allow you, at no charge, to get email or text message alerts of balances. This can help you avoid fees for overdrafts and minimum balances. This service generally isn’t offered, however, unless you request it. Some online money management sites also provide such alerts.

 

If you have an interest-earning checking account, you may pay an average of $14 a month in fees unless you keep a balance in the thousands, according to a recent study by Bankrate.com. But on non-interest checking accounts, the monthly fee averages less than $5 a month, waived with a balance of $585. To save on fees, consider a non-interest account.

 

In September the Bank of America announced plans to impose a $5-per-month fee for the privilege of using their debit cards. About 700,000 people moved their accounts to lower-fee credit unions. In November the $5 fee was dropped. So if you’re considering a move this might be the time to politely remind your big bank that it isn’t the only game in town. New customers take note: Some banks now levy fees for closing accounts opened within the previous 90 or 180 days.

 

Online banks such as Ally, ING Direct and EverBank have lower overhead than brick-and-mortar banks, which can mean lower fees. Banking online with your current institution also may help you avoid increasingly common charges for paper statements.

Although most of the financial arrangements are not finalized until well after the divorce takes place, there is always speculation when a high net worth divorce is on the horizon. Remember, not so far back when Tiger Woods and Elin Nordegren went through their highly-public divorce? The final settlement was estimated at around $100 million.

 

It will make the “major divorce” list, but it won’t be made public. This one is between Mel Gibson and his wife Robyn Gibson, with estimates of the settlement running to around $450 million, half of Gibson’s net worth of $850 million.

 

I am speechless! Robyn Gibson has walked out of her marriage clutching about 450 million dollars! She and Gibson were married for 26 years and have one daughter, six sons and three grandchildren. Does Robyn know how much money 450 million dollars is? What is Robyn going to do with it? Let’s say she spends a million on a new home for each of her children and 5 million on a new home for herself, she will be left with 439 million. If she invests it in the bank and gets only 3 percent on it she will be earning 13 million a year or over a million a month. Robyn, just working your way through the interest is going to be a challenge.   

 

Robyn is not alone, in fact she will be joining an exclusive club whose members are women who have walked out of marriages with full briefcases. Take a look at a few of them:

 

Ever heard of this woman? She was married to Australian golfer Greg Norman and her settlement was $103 million. Norman and Andrassy married in 1981 and were divorced in 2006 after 25 years.

 

Leading actress Amy Irving was once married to Steven Spielberg. On their divorce she received an estimated $100 million settlement after a judge controversially vacated a prenuptial agreement written on a napkin.

 

It had been speculated that the divorce settlement between Roman and Irina Abramovitch settlement could have left her the world’s richest ever divorcee. But according to a Russian business daily, Mrs. Abramovich will get a mere $300 million, much less than the $5.5 billion suggested by the British press. The figure includes the value of homes in Britain and in the Moscow region, as well as a yacht, and private plane.

 

For almost two decades, Saudi billionaire entrepreneur and arms dealer Adnan Khashoggi held the record for the most expensive divorce settlement in history. Although they filed for divorce in 1974, it took Soraya until 1979 to sue her ex-husband for the rights to cash in the wake of their breakup. The settlement amount was $874 million.

 

Anna Murdoch Mann, newspaper mogul Rupert Murdoch’s ex-wife, received $1.7 billion, $110 million in cash, from the couple’s infamous 1999 split, in what is called the "most expensive" divorce settlement in history.

Life is an ever-changing scene. We have no idea what will be tomorrow, or next year or at the time we are about to retire. We have to find some sort of balance that makes sense today and will make sense in the future, not an easy task. Will taxes go up? What about inflation? How much do I need in retirement to continue my lifestyle? With so many questions, spread out across so many years, it’s hard to know if you’re saving too much or too little unless you do a little planning.

 

Most retirement investment planning, at least when you’re in your early twenties, focuses on two accounts – a 401(k) and an IRA, typically a Roth IRA. The contribution limits are $16,500 for the 401(k) and $4,000 for the IRA, higher if you are permitted a catch-up contribution due to your age. If you were to max out your contribution to both, that’s a hefty $20,500 a year towards your retirement. That’s a lot of money for anyone to be contributing and I’d argue that contributing $20,500 each year until you retire is too much. Unless you make a lot of money, contributing that amount will put a significant strain on your current lifestyle and that’s a tradeoff that you may not want to make.

 

How much will you need in retirement? Ask ten people and you’ll get ten numbers. They will all be wrong. I do something simple, I calculate how much money I need to live on today and use the 4% rule. The 4% rule is a retirement rule of thumb that says you can only spend 4% of your nest egg each year if you want it to last for the rest of your life. With appreciation and interest, a 4% drawdown is ideal. That means if you want $40,000 a year in income, you’ll need a $1 million in retirement savings. If you want $80,000 a year, that’s $2 million. Calculating how much you need will depend on your lifestyle, so that’s up to you.

 

From there, you’ll want to set the finish line at 65 (or whenever), and calculate how much you need to save each year in order to reach that number. Then, calculate how much those savings will grow given rates of appreciation (minus inflation). You can use whatever growth rate you feel comfortable with, I personally use 7% (and 3% inflation). That will give you how much you need to save each year.

 

One point I purposely overlooked was taxes. Contributions to your 401(k) are tax deductible but you pay income taxes on the disbursements during retirement. If you need $80,000 a year and it comes entirely from a 401(k), you’ll need to save for more because you’ll be taxed on that income. I conveniently ignored it because it complicates things and I just figured that any Social Security payments would help offset that tax so that the math would come out close enough. I could be wrong but for the sake of simplicity, that’s where we’re going. 

 

So, are you on track with your retirement savings?