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Category: Financial Freedom

How Much Is Enough For Retirement?

  • Financial Advisor
  • Financial Freedom
  • Financial Planning
  • Retirement
  • 7 min
  • 3 days ago

If you’re thinking about how much is enough for retirement, you’re probably contemplating a retirement and need to know how to pay for it. If you are, that’s good because one of the challenges we face is how we’re going to fund our retirement. Determining then how much retirement savings is enough depends on a …

Continue reading “How Much Is Enough For Retirement?”

The post How Much Is Enough For Retirement? appeared first on GrowthRapidly.

  • January 12, 2021
Tagged 401(k), All, Buying, Buying a house, Debt
Read More
Full view here

If you’re thinking about how much is enough for retirement, you’re probably contemplating a retirement and need to know how to pay for it. If you are, that’s good because one of the challenges we face is how we’re going to fund our retirement.

Determining then how much retirement savings is enough depends on a number of factors, including your lifestyle and your current income. Either way, you want to make sure that you have plenty of money in your retirement savings so you don’t work too hard, or work at all, during your golden years.

If you’re already thinking about retirement and you’re not sure whether your savings is in good shape, it may make sense to speak with a financial advisor to help you set up a savings plan.

Check Out Now

  • 5 Tips to Optimize Your Retirement Account Withdrawals Read Now
  • People Who Retire Comfortably Avoid These Financial Advisor Mistakes

How Much Is Enough For Retirement?

Your needs and expectations might be different in retirement than others. Because of that, there’s no magic number out there. In other words, how much is enough for retirement depends on a myriad of personal factors.

However, the conventional wisdom out there is that you should have $1 million to $1.5 million, or that your retirement savings should be 10 to 12 times your current income.

Even $1 million may not be enough to retire comfortably. According to a report from a major personal finance website, GoBankingRates, you could easily blow $1 million in as little as 12 years.

GoBankingRates concludes that a better way to figure out how long $1 million will last you largely depends on your state. For example, if you live in California, the report found, “$1 Million will last you 14 years, 3 months, 7 days.” Whereas if you live in Mississippi, “$1 Million will last you 23 years, 2 months, 2 days.” In other words, how much is enough for retirement largely depends on the state you reside.

For some, coming up with that much money to retire comfortably can be scary, especially if you haven’t saved any money for retirement, or, if your savings is not where it’s supposed to be.

Related topics:

How to Become a 401(k) Millionaire

Early Retirement: 7 Steps to Retire Early

5 Reasons Why You Will Retire Broke

Your current lifestyle and expected lifestyle?

What is your current lifestyle? To determine how much you need to save for retirement, you should determine how much your expenses are currently now and whether you intend to keep the current lifestyle during retirement.

So, if you’re making $110,000 and live off of $90,000, then multiply $90,000 by 20 ($1,800,000). With that number in mind, start working toward a retirement saving goals. However, if you intend to eat and spend lavishly during retirement, then you’ll obviously have to save more. And the same is true if you intend to reduce your expenses during retirement: you can save less money now.

The best way to start saving for retirement is to contribute to a tax-advantaged retirement account. It can be a Roth IRA, a traditional IRA or a 401(k) account. A 401k account should be your best choice, because the amount you can contribute every year is much more than a Roth IRA and traditional IRA.

1. See if you can max out your 401k. If you’re lucky enough to have a 401k plan at your job, you should contribute to it or max it out if you’re able to. The contribution limit for a 401k plan if you’re under 50 years old is $19,000 in 2019. If you’re funding a Roth IRA or a traditional IRA, the limit is $6,000. For more information, see How to Become a 401(k) Millionaire.

2. Automate your retirement savings. If you’re contributing to an employer 401k plan, that money automatically gets deducted from your paycheck. But if you’re funding a Roth IRA or a traditional IRA, you have to do it yourself. So set up an automatic deposit for your retirement account from a savings account. If your employer offers direct deposit, you can have a portion of your paycheck deposited directly into that savings account.

Related: The Best 5 Places For Your Savings Account.

Life expectancy

How long do you expect to live? Have your parents or grandparents lived through 80’s or 90’s or 100’s? If so, there is a chance you might live longer in retirement if you’re in good health. Therefore, you need to adjust your savings goal higher.

Consider seeking financial advice.

Saving money for retirement may not be your strong suit. Therefore, you may need to work with a financial advisor to boost your retirement income. For example, if you have a lot of money sitting in your retirement savings account, a financial advisor can help with investment options.

Bottom Line:

Figuring out how much is enough for retirement depends on how much retirement will cost you and what lifestyle you intend to have. Once you know the answer to these two questions, you can start working towards your savings goal.

How much money you will need in retirement? Use this retirement calculator below to determine whether you are on tract and determine how much you’ll need to save a month.

More on retirement:

  • Find Out Now 7 Questions People Forget to Ask Their Financial Advisors
  • 7 Mistakes Everyone Makes When Hiring a Financial Advisor
  • Compare Fiduciary Financial Advisors — Start Here for Free.
  • 7 Situations When You Need a Financial Advisor – Plus How to Find One Read More
  • 5 Tips to Optimize Your Retirement Account Withdrawals Read Now
  • People Who Retire Comfortably Avoid These Financial Advisor Mistakes

Working With The Right Financial Advisor

You can talk to a financial advisor who can review your finances and help you reach your goals (whether it is paying off debt, investing, buying a house, planning for retirement, saving, etc). Find one who meets your needs with SmartAsset’s free financial advisor matching service. You answer a few questions and they match you with up to three financial advisors in your area. So, if you want help developing a plan to reach your financial goals, get started now.

The post How Much Is Enough For Retirement? appeared first on GrowthRapidly.

Source: growthrapidly.com

5 Things Keeping You From a Life of Financial Independence

  • Budgeting
  • Financial Freedom
  • First Time Home Buyers
  • 6 min
  • 4 days ago
Couple worried about paying bills

Financial independence can mean different things to everyone. A 2013 survey from Capital One 360 found that 44 percent of American adults feel that financial independence means not having any debt, 26 percent said it means having an emergency savings fund, and 10 percent link financial independence with being able to retire early.

I define financial independence as the time in life when my assets produce enough income to cover a comfortable lifestyle. At that point, working a day job will be optional.

But what about the rest of America? How would you define financial independence? If freedom from debt is what you’re seeking, here are five areas that could be holding you back.

1. Not having clear, financial goals

If you’re not planning for financial independence, chances are you won’t reach it. The future is full of unknowns, but having an idea of when you’d like to achieve financial freedom should be your first step.

Do you want to retire before you turn 65? Do you want to travel the world with your spouse once you reach early retirement? Both goals will require a significant amount of cash stashed away, so it’s important to start saving ASAP to make those dreams come true. (See also: 15 Secrets of People Who Retire Early)

2. Not saving enough

It’s important to identify how much you’re currently saving, and how much you need to save in order to retire when you want to, or reach another major financial goal. Using a calculator like Networthify can help you play with various money-saving scenarios and make realistic projections about retirement.

Another way to make saving money easier is to automate it. Setting up an automatic weekly or monthly transfer from your checking account into your savings account will take the extra task off your already full plate. Even if it’s as little as $5 a week, it’s enough to start building that nest egg. (See also: 5 MicroSaving Tools to Help You Start Saving Now)

3. Not paying off consumer debt

If you’re carrying a credit card balance each month, financing cars, or just paying the minimum on your student loans, compound interest is working against you. Creating an aggressive plan to pay off debt quickly should be a number one priority for anyone who is serious about achieving financial independence. Otherwise, your money is working for your creditors, not you.

If you prefer to tackle credit card debt first, there are several debt management methods you can try, including the Debt Snowball Method and the Debt Avalanche Method. The Debt Snowball Method has you paying off the card with the smallest balance first, working your way up to the card with the largest balance. The Debt Avalanche Method is similar, but here you would pay more than the monthly minimum on the card with the highest interest rate first, working towards paying off the card with the lowest interest rate. Both are highly effective methods, and choosing one really just depends on your preference.

4. Giving into lifestyle creep

A high income does not automatically make you wealthy. As you move up in your career, the temptation to upgrade your lifestyle to match your income will be ever-present. After all, you work hard, so why not reward yourself with the latest gadgets and toys?

However, if you continue to spend and live modestly, you can put more money away for travel or retirement with every pay raise you earn. Financial freedom will be just around the corner if you resist that temptation to upgrade your home, car, and electronics to match your income bracket. (See also: 9 Ways to Reverse Lifestyle Creep)

5. Being driven by FOMO

Fear Of Missing Out, aka FOMO, is the modern version of keeping up with the Joneses. Except now you have access to the Joneses’ social media platforms, and they go on all kinds of fun adventures. Social media is a great tool for keeping in touch, but it can also make you want to spend all your money on lavish vacations, clothes, spa treatments, and other extravagent things. Resist that urge. And block the Joneses on social media if needed. (See also: Are You Letting FOMO Ruin Your Finances?)

Like this article? Pin it!

How would you define financial independence? If freedom from debt is what you're seeking, here are five areas that could be holding you back. | #budgeting #debt #savingmoney

This article is from Toni Husbands of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:
  • 5 Money Moves to Make Before You Turn 40
  • The 10 Commandments of Reaching Financial Freedom
  • 16 Small Steps You Can Take Now to Improve Your Finances
  • The Pros and Cons of Paying Off Your Debt Early
  • How a Credit Card Can Actually Help You Get Out of Debt


  • January 11, 2021
Tagged All, Budgeting, budgeting tips, building, Career
Read More
Full view here
Couple worried about paying bills

Financial independence can mean different things to everyone. A 2013 survey from Capital One 360 found that 44 percent of American adults feel that financial independence means not having any debt, 26 percent said it means having an emergency savings fund, and 10 percent link financial independence with being able to retire early.

I define financial independence as the time in life when my assets produce enough income to cover a comfortable lifestyle. At that point, working a day job will be optional.

But what about the rest of America? How would you define financial independence? If freedom from debt is what you’re seeking, here are five areas that could be holding you back.

1. Not having clear, financial goals

If you’re not planning for financial independence, chances are you won’t reach it. The future is full of unknowns, but having an idea of when you’d like to achieve financial freedom should be your first step.

Do you want to retire before you turn 65? Do you want to travel the world with your spouse once you reach early retirement? Both goals will require a significant amount of cash stashed away, so it’s important to start saving ASAP to make those dreams come true. (See also: 15 Secrets of People Who Retire Early)

2. Not saving enough

It’s important to identify how much you’re currently saving, and how much you need to save in order to retire when you want to, or reach another major financial goal. Using a calculator like Networthify can help you play with various money-saving scenarios and make realistic projections about retirement.

Another way to make saving money easier is to automate it. Setting up an automatic weekly or monthly transfer from your checking account into your savings account will take the extra task off your already full plate. Even if it’s as little as $5 a week, it’s enough to start building that nest egg. (See also: 5 MicroSaving Tools to Help You Start Saving Now)

3. Not paying off consumer debt

If you’re carrying a credit card balance each month, financing cars, or just paying the minimum on your student loans, compound interest is working against you. Creating an aggressive plan to pay off debt quickly should be a number one priority for anyone who is serious about achieving financial independence. Otherwise, your money is working for your creditors, not you.

If you prefer to tackle credit card debt first, there are several debt management methods you can try, including the Debt Snowball Method and the Debt Avalanche Method. The Debt Snowball Method has you paying off the card with the smallest balance first, working your way up to the card with the largest balance. The Debt Avalanche Method is similar, but here you would pay more than the monthly minimum on the card with the highest interest rate first, working towards paying off the card with the lowest interest rate. Both are highly effective methods, and choosing one really just depends on your preference.

4. Giving into lifestyle creep

A high income does not automatically make you wealthy. As you move up in your career, the temptation to upgrade your lifestyle to match your income will be ever-present. After all, you work hard, so why not reward yourself with the latest gadgets and toys?

However, if you continue to spend and live modestly, you can put more money away for travel or retirement with every pay raise you earn. Financial freedom will be just around the corner if you resist that temptation to upgrade your home, car, and electronics to match your income bracket. (See also: 9 Ways to Reverse Lifestyle Creep)

5. Being driven by FOMO

Fear Of Missing Out, aka FOMO, is the modern version of keeping up with the Joneses. Except now you have access to the Joneses’ social media platforms, and they go on all kinds of fun adventures. Social media is a great tool for keeping in touch, but it can also make you want to spend all your money on lavish vacations, clothes, spa treatments, and other extravagent things. Resist that urge. And block the Joneses on social media if needed. (See also: Are You Letting FOMO Ruin Your Finances?)

Like this article? Pin it!

How would you define financial independence? If freedom from debt is what you're seeking, here are five areas that could be holding you back. | #budgeting #debt #savingmoney

This article is from Toni Husbands of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:
  • 5 Money Moves to Make Before You Turn 40
  • The 10 Commandments of Reaching Financial Freedom
  • 16 Small Steps You Can Take Now to Improve Your Finances
  • The Pros and Cons of Paying Off Your Debt Early
  • How a Credit Card Can Actually Help You Get Out of Debt


Source: feeds.killeraces.com

How to Build an Emergency Fund

  • Financial Advisor
  • Financial Freedom
  • Personal Finance
  • Savings Account
  • 6 min
  • 5 days ago

You never know what life will bring. You can unexpectedly lose your job. A medical emergency can present itself, or you may have unexpected home repairs. So, as financial advisors would say, having an emergency fund to cover these ’emergencies’ makes good financial sense. An emergency fund then is a stash a money you save …

Continue reading “How to Build an Emergency Fund”

The post How to Build an Emergency Fund appeared first on GrowthRapidly.

  • January 11, 2021
Tagged All, Buying, cit bank, Debt, Emergency Fund
Read More
Full view here

You never know what life will bring. You can unexpectedly lose your job. A medical emergency can present itself, or you may have unexpected home repairs. So, as financial advisors would say, having an emergency fund to cover these ’emergencies’ makes good financial sense.

An emergency fund then is a stash a money you save somewhere, usually in a savings account, to cover some of those unexpected surprises. These ’emergencies’ or unexpected events can be costly and they can threaten your financial well being when presented with them. It is therefore important to create one, know what a good emergency fund amount is, where you should keep your emergency savings, and how much you should save in your emergency fund.

Ready to get started? Start your emergency fund today with CIT Bank.

1. Where to put your emergency fund?

High yield savings accounts or money market accounts are a great choice to put your emergency fund for two main reasons. First, they are safe. The point of having an emergency fund is to have that money available to you when an emergency arises. In other words, you want to make sure that your money is there when you need it.

The worst thing you can do to your emergency fund is to expose it in the stock market. The stock market is so volatile that you can lose all of your money in a matter of minutes.

So money placed in high yield savings accounts are safe because they’re not exposed to the stock market and they are insured by up to $250,000, making them some of the best places to stash your emergency fund.

Second, they are accessible. They are liquid, and can easily get your cash within 24 hours, if not sooner.

Related: The Best 5 Places to Keep Your Savings

2. Emergency fund amount.

How much should you have in your emergency fund?

Your emergency fund amount depends largely on your unique circumstances. But financial experts recommend to have at least 3 to 6 months’ worth of living expenses. So if your monthly expenses is $2000, your emergency fund amount should be at least $6,000.

3. Your emergency savings choice.

CIT Bank 2.4% APY Savings Builder High Yield Savings Account is a great option for your emergency fund. It offers a very high APY 2.45%, multiple times better than what a typical traditional savings account is offering.

Learn more about CIT Bank here.

4. How to Start an emergency savings fund

Starting an emergency fund is easy. Open a savings account to use strictly for unexpected expenses and start stashing money away every week, every month, or every paycheck. Even if you think you don’t have enough money to save, save smaller amounts in the beginning and increase it whenever possible.

5. Reasons why you should have an emergency fund.

If you don’t have an emergency fund, you may find yourself in hot water when an emergency arises.

Apply for a loan. If you don’t have a safety net, you may be forced to apply for a personal loan. And a personal loan can put you into more debt. You will have to work hard to repay the principal, plus interest. And if you can’t pay your loan, a judgment can be entered against you.

Take out a 401k loan. You’re allowed to borrow against your retirement account such as a 401k plan. However, just as any other loan, you have to repay it back according to the rules set by your account, or else you will get hit with a penalty. Also, taking money out of your retirement account prevents potential growth of your account.

Selling stocks, rental properties. You may have to sell your stocks or real estate investments in case of emergency. However, that will cost you a lot of money like transaction cost, taxes, etc.

Learn more:

The 5 Best Places to Keep Your Savings

Top 5 Reasons Your’re Not Saving Money

Money Saving Tips: 6 Secrets to Saving Money

4 Reasons CIT Bank Can Maximize Your Savings

Working With The Right Financial Advisors.

You can talk to a financial advisor who can review your finances and help you reach your goals (whether it is paying off debt, investing, buying a house, planning for retirement, saving, etc). Find one who meets your needs with SmartAsset’s free financial advisor matching service. You answer a few questions and they match you with up to three financial advisors in your area. So, if you want help developing a plan to reach your financial goals, get started now.

The post How to Build an Emergency Fund appeared first on GrowthRapidly.

Source: growthrapidly.com

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