Question: Is it possible to retire on $500K (i.e. $500,000) in your 50’s and 60’s? Unfortunately, not all of us are great savers. Most financial articles will recommend that you’ll need at least $1 to $2 million dollars in savings before you can even consider retirement. But the reality for a large segment of the population is anything from that. To give you an idea, a study from the Government Accountability Office found that those savers between the ages of 55 to 64 have an average of just $104,000 in their retirement accounts. This is not surprising at all. With the responsibility of saving for retirement having shifted from company-sponsored pensions to individuals, the shocking truth for many people will soon be … [Read more...] about How to Retire on $500,000 In Your 50’s or 60’s
The foundation of any solid financial freedom plan is in knowing the best ways to budget your money and save effectively. It’s absolutely fundamental to preserving your wealth. Have you ever wondered why so many lottery winners end up going broke a short while after winning? Fortune reports that nearly a third declares bankruptcy within 5 years. You’d think that all those millions of dollars would solve their financial problems. But as it turns out: If you don’t know how to budget your money normally, than more money isn’t going to make a difference. But “budgeting” … Most people cringe at the word! And likely because they get the false idea that every dollar they spend is somehow bad (which is not true at … [Read more...] about The 10 Best Practical Ways to Budget Your Money and Save More
Saving your money into a 401(k) or IRA can have some very powerful wealth-building benefits. But clearly one of the biggest drawbacks is that you’re not allowed to access your money for years or even decades. If you try to take it out sooner, than you'll have to pay a penalty! So what happens if you need the money now? What if life becomes difficult and you need to pull the money out for some kind of emergency? Or what if you have done an excellent job of managing your finances and would like to retire early? How can you work around this problem and gain early access to your savings? Don't worry. The IRS knows that sometimes life can throw you curve-balls, and because of this they've made several exceptions … [Read more...] about When Can You Withdraw From Your 401(k), IRA, and Other Retirement Savings?
If you're curious to find out what's the difference between an IRA and 401(k) retirement plan, then this is the post that is going to explain everything you need to know! For most U.S. employees, when it comes to saving for retirement, they are offered two main tools to work with: A 401(k) and IRA. Though a lot of people will likely have the opportunity to contribute to both, sometimes the amount of money you plan to set aside for retirement each month can be limited by all the other financial demands going on in your life. That's when you might find yourself having to choose between one or the other. So then, what do you do? Which retirement plan do you choose to stash your savings in hopes that it will grow to its maximum … [Read more...] about What’s the Difference Between an IRA and 401(k)? Which is Better for My Retirement Savings?
Are you using the power of compound interest to your advantage? Have you ever wondered how compound interest works? Or better yet, why compound interest can make you so INCREDIBLY RICH over time? Albert Einstein has often been credited as famously stating "Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it." Great quote! But it just barely begins to describe shear potential behind this wonderful financial phenomenon. When used correctly, compounding interest is what can take your modest, periodic savings and turn it into thousands or even millions of dollars later on in your life. And the best part is: You don't have to be financial wizard to take advantage of … [Read more...] about The Power of Compound Interest and How It Can Make You Rich!
As if the decision in estate planning over whether to create a will or open a trust isn’t confusing enough, I’ve come to understand (on a personal level) that even this may not be sufficient for ensuring your lifelong savings get passed on to your loved ones. In short: With the way things work now with elder care, there may not be anything left to give! Here’s my story. Recently, my wife’s grandparents both developed a very bad case of Alzheimer’s, and somewhat rapidly. This has caused the family to make a quick decision to move them from their residence and into the care of a nursing home instead. Do you have any idea how much a nursing home costs these days? While interviewing a number of various ones, we … [Read more...] about Could an Irrevocable Trust be the Key to Leaving a Financial Legacy?
Question: What happens to your 401(k) when you quit your job or switch to a new one? Your retirement security used to be a BIG consideration when it came to changing employers. In the old days of pension plans, if someone were to quit their job early, they could be potentially giving up life-long future monthly checks worth thousands of dollars! But that was then, and this is now. According to the website The Balance, the average person changes jobs 10-15 times during their career. What changed? A lot. But in terms of the future of your retirement savings, a big influence was the shift away from the pension system towards the 401(k) plan. Though its often a heated debate, there are many aspects to a 401(k) plan … [Read more...] about What Happens to Your 401(k) When You Quit Your Job?
Do you know about flexible spending accounts (FSA’s)? You may have heard of them from your HR department and wondered: “How would this benefit me?” or “How does an FSA work exactly?” Believe me - These were the same types of questions my wife and I had when we were first getting started in our jobs years ago and looking for every angle we could to save a little bit of cash. At first glance, an FSA seems like just another thing taking money out of your paycheck. For most of us, that’s a deal-breaker. Between taxes, social security, and our retirement contributions, there’s already enough being subtracted from how much we really earn. Do you really need something else to reduce it even further? … Yes! And I’ll … [Read more...] about What Is a Flexible Spending Account? How Does an FSA Work?