Archives For Financial Planning

Are You On Track?

September 10, 2019

Keeping up with the Jones’s is not something anyone should strive for – but in the case of saving for retirement, knowing how you compare could help you develop an awareness of the need for saving for retirement. Every situation is different due to guaranteed sources of retirement income; current and future bills; lifestyle; helping others; location of residence; expected longevity, etc. A qualified financial planner can help you determine how much you need to retire.

Here’s the latest from Investopedia on the subject.

https://www.investopedia.com/articles/personal-finance/010616/whats-average-401k-balance-age.asp?utm_campaign=quote-yahoo&utm_source=yahoo&utm_medium=referral&yptr=yahoo

When you contribute to a 401(k) or IRA account, you are able to deduct that contribution amount from your current year’s income. Everyone likes that because it means you’ll pay less in taxes that year. But don’t forget that one day, you or your beneficiary will have to pay taxes on the money withdrawn from the retirement account. The link below shows just how much of a retirement account actually belongs to you.

https://www.marketwatch.com/story/the-money-in-your-401k-and-ira-accounts-doesnt-belong-entirely-to-you-2019-01-24?mod=mw_theo_homepage

How much are you putting away for retirement? This article examines one area (actually, there are many) that may conflict with one’s ability to invest a sufficient sum for retirement.

http://awealthofcommonsense.com/2018/07/are-suvs-ruining-retirement-savings/




This is an interesting survey and article. Some count wealth in terms of dollars or other possessions. Others count wealth in terms of relationships and contentment. Obviously, we need money to live our lives, but true wealth has different meanings to different people.

https://www.bloomberg.com/news/articles/2018-05-15/how-much-money-do-you-need-to-be-wealthy-in-america

 




While Target Date Funds in 401(k) plans have performed well since the Bull Market that began 2009, this article does a good job of exposing the risk in those funds.

https://www.thewealthadvisor.com/article/will-your-target-date-401k-fund-blow-your-retirement?

 




How much income do you need to afford the average home in your state?  The answer may surprise you.  Most of the nation’s housing markets have now almost completely recovered back to pre-housing-bubble levels, with many markets far surpassing those peaks.  Howmuch.net collected average home prices for every state from Zillow, and then plugged the numbers into a typical mortgage calculator.

The states needing the highest salaries to afford the average home start with Hawaii at $153,520, followed by Washington D.C., California, Massachusetts, and Colorado.  The states with lowest salaries needed to afford the average home include West Virginia at just $38,320 followed by Ohio, Michigan, Arkansas, and Missouri.




Do you have at least $10,000 saved for retirement?  If so, congratulations, you’ve managed to put away more than 40% of all working-age Americans.  A recent survey from Bankrate.com found that despite the brisk jobs market and increasing wages, Americans still aren’t saving much.  Only 16% of survey respondents stated they saved at least the recommended 15% of their earnings, while 40% report saving none to just 5%.

Mark Hamrick, senior economic analyst at Bankrate stated that while the economy might be prospering now, it won’t last forever.  “With a steady, significant share of the working population saving nothing or relatively little, it’s virtually guaranteed that they’ll be unable to afford a modest emergency expense or finance retirement,” Hamrick said.  The main reason American’s aren’t saving?  Expenses.  It seems obvious that “Expenses” would be a prime reason for not saving among those on the lower rungs of the income ladder, but shockingly, “Expenses” is also the biggest reason why members of the upper middle class don’t save enough as well.  These folks live beyond their means in McMansions, take hugely expensive frequent vacations, eat out too often and drive unnecessarily fancy automobiles.

Bankrate’s blunt advice: downsize your house, sell the cars, stay home more often and – most importantly – live below your means so that there’s always something left over to save.