When he was a young man, Patrick Eng’s mom instilled in him a retirement saving discipline. In this brief video, he shares her insights and how they have served him and his financial planning clients well.
A caring financial planner will talk with you about more than just money. Experience has taught Lupe Camargo how important it is to have discussions about health with her clients. “Tell me about your health.”
In this brief video, she shares insights about how taking care of your health is just as important to a fulfilling retirement as careful investment planning. Maintaining physical fitness, emotional strength and mental vitality will help you enjoy retirement to the fullest.
While it may feel unusal for a financial advisor to say “tell me about your health,” proactive health care planning is an important part of getting ready for retirement. Long-term care insurance is one important part of that plan. Learn one of the key reasons why in this brief article.
Certified Financial Planner practitioner Mike Larriva talks about your retirement and required minimum distributions (RMDs). In this short video, he offers a quick planning tip that’s worth your time. Taking his suggestion could help make settling your affairs less complicated for your loved ones when you pass away.
For a more in-depth explanation of your retirement and required minimum distributions, read our article, “Understanding RMDs,” below the video. You can also click here to visit IRS.gov for more details on RMDs.
The U.S. Treasury Department recently announced inflation-adjusted figures for retirement account savings. That means you can now save more for retirement in 2019.
Individual Retirement Account (IRA) contributions up to $6,000 are allowed in 2019. That’s a bump of $500, after six years stuck at $5,500. The annual contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan, is now $19,000 for 2019. For people 50 years or older, the “catch-up” annual limit is $25,000 for workplace plans and $7,000 for IRAs.
Pre-tax contributions to your 401(k) plan lower your taxable income in the year of the contribution. For example, if you earn $60,000 this year and contribute $15,000 to your 401(k), your taxable income will be reduced to $45,000. This allows tax-deferred growth on your investment; any pre-tax contributions you make, plus any gains from that investment, will not be taxed until you start taking distributions in retirement.
Save More for Retirement in 2019: Remember, too, you can make changes to your 401(k) election at any time during the year, not just during your company’s open enrollment. Talk with your financial planner if you have questions, want to open a new account, or are considering making changes to the amount you have been saving.
About 58 percent of Americans have less than $1,000 in personal savings, according to a recent survey by gobankingrates.com. If we think about all the federal employees impacted by the current government shutdown, that means six out of 10 will likely experience financial difficulty due to this interruption in their incomes and lack of savings. A government shutdown is rare. Still, it is a powerful reminder to us all to be prepared for unexpected loss of income or large expenses. Consistent saving is a vital habit.
Having an emergency savings account (for things like a broken water heater, automobile repairs or unplanned medical bills) can save you a lot of anxiety. It can save you hundreds of dollars, as well, since late fees for credit cards, car loans or utility bills often run $30 or so per month. Having an emergency reserve will also help you maintain a good credit score during challenging financial times.
When speaking to young adults, I often recommend they keep $1,000 to $1,500 as a minimum target for a checking account. Adults with children or additional financial responsibilities should set a higher reserve target. The savings not only helps in an emergency, it helps you avoid monthly bank fees that can add up quickly. If you can set aside $20 per week (only about $3 a day), you will have accumulated $1,000 by the end of the year.
Once you have your emergency fund in place, you can focus on your retirement savings. Setting up an automatic deposit from your paycheck into a retirement account is one of the easiest ways to save money. That money never reaches your checking account, so it is less likely to be spent. For 401k contributions, start with 5 percent of your salary or enough to receive any company-matching contributions. After a few months, you will hardly miss the smaller amount going into your checking account.
Consistent saving is a vital habit that lasts a lifetime. Taking that first step is important. According to US Census data, the median household income was $60,336 in 2017. For a typical 40-hour work week at that income, $5 is equivalent to about 10 minutes. Wouldn’t investing just 10 minutes (or $5) a day be a worthwhile investment in yourself?