How much money you can actually save by ditching cable

Remember when staying in to watch TV was a cheap date and/or family night? Well, it’s gotten really expensive. I’m not talking about actual TV sets, because that’s a whole separate article. However, cable and satellite TV services have gone up over the years. Between channel lineups, DVRs, taxes, and fees, it’s gotten to a point where TV has become a luxury item for a lot of people.

According to the Leichtman Research Group, the average subscriber spends $103.10 on pay TV each month. No wonder so many people are looking to cut the cord—or at least cut out that large monthly payment.

Some can't fathom life without The Big Bang Theory, The Walking Dead, Game of Thrones, This Is Us, or even WWE, but there are ways to save and still enjoy TV. Whether you opt to cut the cord completely or sign up for a streaming service, a small investment can save the average person well over $1,000 a year. Here's how the math breaks out:

How much money can you save by ditching cable?

As we said above, the average subscriber spends $103.10 per month on pay TV services, according to the Leichtman Research Group. This amount does not include the costs of internet access, though approximately 83% of those with pay TV also have internet so we can assume those costs are fixed and separate.

That leaves a little over $1,200 in potential savings in a given year by ditching cable. Of course, you probably still want to watch TV. Here are three likely scenarios:

For people who just watch Netflix and occasionally network TV... We'd recommend getting a Roku Premiere+ ($79.99 on Amazon), a decent OTA antenna ($49.99 on Amazon), and a subscription to Netflix. That comes out to about $130 upfront and $10 per month for Netflix, or $250 for the year. Add Amazon Prime for another $99 and your total cost is about $350, saving you over $800.

For people who watch Netflix, OTA TV, and some live cable channels... Take the above package and add Sling TV's "Blue" service to get live channels like FX, Comedy Central, HGTV, Food Network, Bravo, and even some Fox and NBC in select markets for $25/mo with a cloud-based DVR. Now your total is up to about $650, saving you just under $600.

For people who want the full cable experience... If you really love cable TV but you hate your cable company, you could get the entire package above, but amp it up with add-ons like Sling's Lifestyle, Sports, and News extra packages for another $20 per month. You could even add HBO for a further $15/mo and watch shows like Game of Thrones.

That would get you over 70 live channels, HBO, Amazon Prime, Netflix, a Roku, and an OTA antenna for a total of $70 per month and about $350 up front. That costs about the same as cable over the first year, but you'd save the $350 in subsequent years and be able to cancel or modify services whenever you want, so you can only pay for HBO when your favorite shows are on.

If that all sounds enticing, then here are some of our favorite pieces of gear to get your cord-cutting adventure started:

Antennas

If you’re planning to cut the cord to pay TV, an antenna is an absolute must. That one-time cost can bring you many hours of free broadcasts—and most of the big networks will come in high-definition. Check AntennaWeb.org and TVFool.com to see what networks may be available in your area, as well as the best way to point the antenna. Don’t have one of those yet? Here are a few of our favorites.

Antennas Direct ClearStream Eclipse Indoor HDTV Antenna - $49.99 on Amazon

This highly rated antenna promises free TV up to 35 miles from broadcast towers. It’s made for indoor use, so you won’t have to get out on the roof to set it up. Just stick it to a smooth surface near your TV and plug the connected coaxial cable into your set. Besides being clingy, it’s made to match any room, with a double-sided, paintable design.

Buy the Antennas Direct ClearStream Eclipse Indoor HDTV Antenna for $49.99 on Amazon

1byone Paper Thin Digital Indoor HDTV Antenna - $14.99 on Amazon

Made for the truly budget-conscious, this model is one of the cheapest indoor antennas you can buy. Don’t be fooled by that price tag, though; this paper-thin HDTV antenna has a paintable design and promises channels up to 35 miles from broadcast towers. It’s not as sturdy as the above model, but if you don’t plan to move it around too much, it’s well worth the price.

Buy the 1byone Paper Thin Digital Indoor HDTV Antenna for $14.99 on Amazon

Antennas Direct DB8e Bowtie Outdoor HDTV Antenna - $130.99 on Amazon

Outdoor antennas aren’t quite the eyesore you remember, but this model from Antennas Direct is on the larger side. That girth allows it to snag channels from all different directions, up to 70 miles from broadcast towers. It even boasts the ability to work while buried under all sorts of heavy foliage!

Buy the Antennas Direct DB8e Bowtie Outdoor HDTV Antenna for $130.99 on Amazon

1byone OUS00-0551 Outdoor HDTV Antenna - $29.99 on Amazon

It may not be the prettiest antenna, but it’s cheap—and highly rated, too. This outdoor 1byone antenna looks a little like the older rooftop devices you remember from back in the day, but can deliver channels in full HD, from up to 80 miles away.

Buy the 1byone OUS00-0551 Outdoor HDTV Antenna for $29.99 on Amazon

DVR

The digital video recorder (DVR) is one of the greatest tech inventions since color TV. It allows you to watch TV on your time, skip commercials, and rewind moments that deserve a second look. Of course, most DVRs are part of that pricey cable/satellite package. Not to fear! There are several DVRs that work with OTA antennas and can also access streaming services like Netflix.

TiVo Roamio OTA 1TB DVR - $346.99 on Amazon

TiVo was the pioneer of the DVR, and they now offer that service to users who rely on OTA TV. Designed for use with an HDTV antenna, the TiVo Roamio DVR can store up to 150 hours of HDTV recordings, with options for commercial skipping and streaming content. It also offers that TiVo interface without the monthly TiVo fees!

Buy the TiVo Roamio OTA 1TB DVR on $346.99 on Amazon

Tablo 4-Tuner Digital Video Recorder - $249.99 on Amazon

The Tablo isn't quite as simple as the TiVo, but you can add your own external hard drive to match your needs. And with 1TB drives dropping to well under $100, this box makes it possible to record, pause, and stream four different programs on up to six devices in your home, without any monthly fees.

Buy the Tablo 4-Tuner Digital Video Recorder on $249.99 on Amazon

Media Streamers

Just like an antenna, having a media streamer is a must for any cord cutter, even if your smart TV has many of the same features built in. These boxes combine a slew of different services in one, and all you need is a TV and an internet connection. Just know that many of those services—like Netflix, Sling TV, and DirecTV Now—do require a monthly fee. (For more information on that, check out “How to stream live TV without paying for cable.”)

Don’t start racking up too many services, though; you could end up spending more than you would for cable! Even if you plan to stick with cable, media streamers are perfect for guest bedrooms and kitchen TVs that may not have access. Here are some of our favorites:

Roku Express Media Streamer - $29 on Amazon

Budget-conscious cord cutters can’t go wrong with the latest from Roku. This affordable streamer can put over 350,000 movies and TV shows on any set with an available HDMI port. (If your older TV doesn't have HDMI, check out the Express+, which supports a composite connection.) A lot of that content comes in full 1080p HD with Dolby audio, and some of it is free as well. In addition to paid services like Netflix, Amazon Video, Hulu, and Sling TV, there are plenty of freebies through YouTube, Crackle, PBS, The CW, ABC, and others.

Buy the Roku Express Media Streamer for $29 on Amazon

Roku Streaming Stick - $48.99 on Amazon

This option is a little more expensive, but packs that same Roku interface and lengthy channel lineup into a device that’s much smaller. Designed to attach to any available HDMI port, it has a quad-core processor, fast dual-band Wi-Fi, and the ability to upscale 720p TV to full 1080p HD. And since it’s so small, you can take it to a friend’s house, a hotel, and anywhere else you may roam.

Buy the Roku Streaming Stick for $48.99 on Amazon

Roku Premiere+ Streaming Media Player - $79 on Amazon

Yes, Roku does have a lot of media players. However, this is the company's cheapest model with support for 4K Ultra HD, High Dynamic Range (HDR), and Wide Color Gamut (WCG) content. After all, even cord cutters love the latest and greatest TV technology! Other features include a quad-core processor, 802.11ac dual-band Wi-Fi, and Dolby audio. And just in case you binge-watch into the wee hours, the remote has a headphone jack giving you an easy way to listen wirelessly with any pair of headphones.

Buy the Roku Premiere+ Streaming Media Player for $79 on Amazon

Amazon Fire TV Stick with Alexa Voice Remote - $39.99 on Amazon

If you like that smaller form factor, this streaming stick can be had for $10 cheaper than the Roku. It doesn’t promise as much content, but is a little more powerful and can be a nice complement to an Amazon Video subscription (which is part of the Prime package). It boasts access to apps and games, as well as music and video content. It also packs in the power of voice control with Amazon Alexa, so you can find content, ask about the weather, or control smart home gadgets from the remote.

Rachel Cericola
How much money you can actually save by ditching cable

Can The 'Rule of 55' Help You Plan For Retirement?

If you’re one of the younger Baby Boomers, retirement planning is something you are most likely spending some time thinking about.

You may have noticed, though, that what you once thought would be somewhat straightforward has turned into a larger puzzle than anticipated. With the number of IRAs, 401(k)s, mutual fund accounts and insurance policies you may have collected over the years, sorting them out and making sense can seem like an insurmountable task.

You’ve worked hard during your career to make sure that your money is working hard for you. The last thing you’d want is to lose some of it because of an oversight on a rule or code that you weren’t aware of. Knowing what taxes or fees you may pay can save you hundreds (if not thousands) of dollars over the course of retirement in not only principles paid but the interest you would not be earning as a result.

For example, most people know that the age of 59 ½ is important, because after that age you can withdraw funds from a tax-sheltered retirement plan and not have to pay a 10% early withdrawal penalty.

But did you know that there’s a way around this where you can take disbursements a little earlier with no penalty?

While we can’t go over every stumbling block you may encounter right now, we’re going to address one of them that can shed some light on what to do with your 401(k) if you decide to (or have to) retire early.

The 'Rule Of 55'

There’s a little-known provision called the Rule of 55. Essentially, the Rule of 55 is a way for investors to draw on their 401(k) assets prior to the typical “magic age” of 59 ½, which is the age at which you’d normally avoid an extra 10% penalty on draws from your retirement account. Per IRS Publication 575, the Rule of 55 allows an employee who retires, quits, or is fired at age 55 to withdraw without penalty from their 401(k). This applies if you leave your job at any time during the calendar year in which you turn 55 or later. This only applies to funds withdrawn from a 401(k). If you retire and roll your 401(k) into an IRA, the rule no longer applies. Keep in mind that taxes must be paid on all distributions.

It’s important to remember that benefiting from the Rule of 55 depends on the year that you “separate from service” -- in other words, leave -- the company you’re working for, not the year you take a distribution. Here are three examples that can give you a closer look at how this rule operates in practice.

Example 1: Susan takes a company buyout.

Susan will turn 55 on August 1, 2017. Her company is offering buyouts, but to qualify, the person must separate from the company by June 30, 2017.

In Susan’s case, she would qualify for the Rule of 55 since she will turn 55 in the year she will separate from service from her company. It doesn’t matter that she’s hasn’t yet turned 55 when she leaves, provided she will do so at some point that year.

Example 2: John is forced out early.

John was unfortunately caught in a company downsizing and was let go as of January 31, 2017. He turns 54 on April 1, 2017.  In this case, even if John waited until April 1, 2018 -- the day he turns 55 -- to withdraw funds, he would still be assessed a 10% penalty.

It doesn’t matter if John waits until he turns 55 since he had already separated from his company prior to 2018, the year he will turn 55.

Example 3: Ben voluntarily leaves and starts consulting.

Ben leaves his company at age 55 and starts a consulting business, but doesn’t like having two retirement accounts to manage. He wants to roll his 401(k) over to an IRA and manage one account, and then be able to take advantage of the Rule of 55 with the money he had in his 401(k). There’s only one problem with this. With an IRA, the age of 55 rule does not apply. Meaning, if Ben rolled over his 401(k) and then took a disbursement from his IRA before age 59 ½, he would be assessed the 10% penalty.

Although Ben does meet the age and separation requirement, the only way he would be able to withdraw funds without a penalty is if he kept his two accounts separate and took disbursements from his 401(k) only until age 59 ½. (There are exceptions to this rule for specific cases, such as a disability. Be sure to consult your financial professional for details.)

Next Steps

Now that you know what the Rule of 55 is all about, the best thing to do is determine if there’s even a slight chance that you might be faced with this situation. Then, sit down with your financial professional to make sure you’re aware of all of your investment accounts, and how each would be impacted in the event you needed to take disbursements from any of them before you turn 59 ½.

And lastly, don’t put this off. Knowing the “rules of the road” and planning ahead can help save money and avoid pitfalls when it comes to retirement income. It’s your money -- you’ve worked hard for it. It should work hard for you in retirement as well.

Securities offered through SII Investments, Inc. (SII), Member FINRA/SIPC . Advisory services offered through Scarborough Capital Management (SCM), a registered investment advisor. SII and SCM are separate companies. Please consult with your representative to confirm on which company’s behalf services are being provided. All information is based upon sources believed to be reliable. However, it cannot be guaranteed. Past performance is not indicative of future results. Neither SII or SCM provide tax or legal advice. Please consult your professional for advice.

Gregory Ostrowski
Can The 'Rule of 55' Help You Plan For Retirement?

House Rejects Puerto Rico Healthcare Amendment

The House Rules Committee rejected an amendment that would‎ allocate Medicaid funding to Puerto Rico at an equal level to US states.‎ Medicaid in Puerto Rico is currently funded under a 'block grant' that will run out this year. When it runs out, the island will receive a set amount of funding that is expected to cover less than one-third of Puerto Rico's Medicaid-related expenses. Medicaid reform was a key element of the recommendations made last year by the bipartisan Congressional Task Force on Economic Growth in Puerto Rico. If the Rules Committee had accepted the amendment, the full House of Representatives would have voted on it during the American Health Care Act debate.

"As Puerto Rico restructures its debt and seeks to prevent austerity, the island needs equal access to healthcare funding," stated Eric LeCompte, who testified to Congress on these issues. LeCompte is the executive director of the religious development coalition Jubilee USA. "Although the amendment failed, it's now clear there is an eventual path to secure this funding for Puerto Rico."
The amendment was submitted by Puerto Rico's Representative Jenniffer González-Colón and Representative Amata Coleman Radewagen of American Samoa. Puerto Rico's Archbishop Roberto González Nieves and Bible Society head Reverend Heriberto Martínez-Rivera sent a letter to Congressional leadership yesterday urging them to act on task force recommendations on Medicaid, Medicare and the Child Tax Credit.

"You moved Congress to act for Puerto Rico," Archbishop González and Reverend Martínez write in a letter sent to Republican and Democratic leadership in the House of Representatives and the Senate. "As our island prepares to restructure its debt, we need you to act again."
Read the text of the amendment

Read the religious leaders' letter to Congressional leadership

Read the Congressional Task Force on Economic Growth in Puerto Rico's recommendations 

###

Jubilee USA Network is an alliance of more than 75 US organizations and 650 faith communities working with 50 Jubilee global partners. Jubilee USA builds an economy that serves, protects and promotes the participation of the most vulnerable. Jubilee USA wins critical global financial reforms and won more than $130 billion in debt relief to benefit the world's poorest people. www.jubileeusa.org

House Rejects Puerto Rico Healthcare Amendment