Thinking About My Financial Future (8 Articles)

~ Thursday, January 12, 2023 Blog Post ~

Me (Sheena Ricarte, December 2022)

Similar to most people, I’m also concerned about my FINANCIAL FUTURE. Although I have chosen to be CHILD-FREE or CHILDLESS and without parental financial obligations or responsibilities, and I have savings and investments in place, I still worry about what lies ahead for me financially.

I must say I’m financially savvy and well-educated. I am quite well-informed about how proper saving and investing works. Moreover, I only engage with the appropriate and government-approved bank products, people, and information channels.

Nonetheless, events can be unexpected and inevitable. Think of the COVID-19 pandemic, skyrocketing inflation rates, international conflicts, economic meltdowns and recessions, changing government policies on retirement and pension schemes, and so forth all of which adversely impact if not destabilize and even jeopardize consumers’ finances.

I am well aware that people can select the type of lifestyles they want, especially if they are financially stable or secure. Additionally, I know that nobody is guaranteed tomorrow. However, I’m someone who’s interested to see the future, and I believe I’ll get to see it since I’m striving to maintain my excellent health today.

Furthermore, I have plenty of plans for myself. Hence, it goes without saying that for as long as a person is alive, he surely needs lots of money.

To mitigate my qualms about my FINANCIAL FUTURE, I’ll continue to be financially prepared for what lies ahead then while I’m still young at this point and capable. (1) Continuous working, (2) saving, (3) investing, (4) continuously getting proper financial education, and (5) being a frugal cost-cutter — these are my five antidotes to my misgivings about my FINANCIAL FUTURE.

Anyway, below are 7 related articles related to the keyword “FINANCIAL FUTURE”:

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Article #2 — Source: https://www.tradingacademy.com/culture/article/defining-your-own-definition-of-your-financial-future

DEFINING YOUR OWN DEFINITION OF YOUR FINANCIAL FUTURE

By LARRY JACOBSON, ED.D on AUGUST 20, 2020

The great Greek Philosopher, Aristotle, once wrote, “We are the all the sum total of our experience.” To learn from one’s experiences is paramount to truly navigating in life.

As we now find ourselves living in uncertain times due to the COVID pandemic, some find themselves unsure of what their financial future may look like. Are we heading toward another financial crisis similar or worse that 2008?! Or is this an opportunity to take inventory to re-evaluate how you could navigate your financial future especially in uncertain times.

As Ben Franklin said, “All mankind is divided into three classes: those that are immovable, those that are movable, and those that move.”

The reason why so many people fail to reach their desired financial goals is that they either lack the necessary information that provides the important ingredients and tools to use, or they simply succumb to their fears and negative beliefs (i.e. comfort zones) about their own financial future.

When creating your own financial future, you want to plan to not only include investing and savings, but your future growth and happiness.

So, to help you reflect on some things you can be doing now to take action during these uncertain times, here are eight quick tips to help you define your own definition for your financial future:

1. Spend Wisely — Spending wisely does not insinuate being cheap or being a cheapskate, but rather ask yourself, “IS this something I need RIGHT NOW, or can it wait until I can truly afford this purchase?” In the days of online commerce, there is no reason not to take the time to research and ensure you are getting the right purchase at the best price possible.

2. Accepting Responsibility — As President Harry S. Truman once said, “The Buck stops here.” When you make mistakes admit it, and work toward positive solutions. Remember, you got yourself into your financial situation and you will need to work hard to get out of that ‘hole’. Failure to accept financial responsibility usually costs you more money in the long run. There is no fast-pass to navigate your financial future.

3. Protecting Yourself (Buyer Beware) — More and more during uncertain times, there will be so-called gurus that will profess that they have all the answers and solutions to solve your financial problems: easy trading and investing money with 1000% returns, immediate repair of your credit report, wiping away past tax debt, etc. Don’t be afraid to challenge and ask questions or get second opinions (i.e. reputable online reviews) especially when you know what you want. The only dumb questions are the ones you don’t ask.

4. Live within your financial means — Create a savings and spending budget that will help you fix your own spending habits and financial planning. Keeping up with the Joneses is a fool’s game because it usually leads you to overextend yourself financially to impress others. Learning to make good strategic financial decisions and not poor emotional choices is a good first step.

5. Always Put Yourself First — If you currently do not have any savings or long-term investments for retirement, you need to learn how to invest In addition, set aside at least 10% of your net income toward a savings and/or an emergency fund so you do not need to continually pay ridiculously high interest rates to credit card or predatory loan companies. Invest in yourself first, your future self will thank you.

6. Set Financial Priorities — It is one thing to draft a financial plan, but without taking action, you are like a car driving around in circles; not only are you wasting time and money, but you are not going forward. Whenever you create financial goals, assign specific calls to action that required realistic deadlines and expectations.

7. Learn from your financial mistakes — There is an old saying, “Fool me once shame on you, fool me twice, shame on me.” Learn from your financial mistakes and course correct in order thrive. Do not continuously fall in the same hole over and over again; Remember nobody cares more about your money than you do (or should)!

8. Most importantly, have FUN creating and defining your own financial future and reward yourself for taking time to plan your future..

“We cannot teach people anything; we can only help them discover it within themselves.” ~ Galileo

This content is intended to provide educational information only. Trading is risky and you can lose money.

Article # 3 — Source: https://ivari.ca/learning-centre/good-to-know/10-ways-to-plan-for-your-financial-future

10 ways to plan for your financial future

Making sure your financial future is secure doesn’t need to be an overwhelming task. Simply follow these 10 tips and you’ll be well on your way to protecting yourself and your family.

1. Embrace the 3 P’s:

Talk to a Professional
Consulting a professional is obvious when it comes to your health or legal matters, but not when it comes to your finances and life insurance. A professional advisor will sort through the options and provide a plan to help you achieve your short-term, and long-term financial goals.

Be Prepared
It may sound impossible, but you can plan for the unexpected. A strong financial plan, that includes life insurance, will help you prepare for any emergency and give you peace of mind.

Stop Procrastinating
No matter your age or financial situation, the best time to start planning for your financial future is right now. The financial plan you put in place today will be the foundation for the financial security you, and your family, enjoy tomorrow.

2. Plan your route:

As the saying goes, if you don’t know where you are, how can you know where you’re going? The first step in planning for your financial future is to take an honest look at where all your finances are today.

3. Make a list…check it often:

Emergency situations can leave you scrambling for documents and information. To best prepare yourself for an emergency, prepare in advance when you are calm and thinking clearly. Consider creating an emergency financial plan and update it regularly. This plan should include:

• Three to six months’ total living expenses, set aside in a separate bank account that is readily accessible.
• A list containing contact information as well as personal medical information for each family member including blood type, allergies, current medications and your doctor’s contact details.
• A copy of your life insurance and any other insurance policies.
• For each child: school/daycare name, address and contact information. Include a list of adults, including phone numbers, authorized to pick up your child on your behalf.

If you don’t know where you are, how can you know where you’re going?

4. Insure your family’s future:

If something were to happen to you, would your family’s future be financially secure? One of the best ways to ensure this is to have the right type and amount of insurance protection. Over time your insurance protection needs will change. That’s why you should review your protection needs with an advisor every 10 years, or whenever a major life event occurs, such as the birth of a child. Using a tool like My Insurance View can help you understand your protection needs for today and tomorrow.

5. Take care of what WILL happen after you’re gone:

If you don’t have a valid will it’s time to stop procrastinating! If you die without a will, the laws of your residing province will determine the division of your property and assets without considering your wishes, or the wishes of your family members. There’s a lot to consider when creating a will, so it is strongly recommended that you seek professional advice.

Along with a will, consider using estate planning tools such as trusts, life insurance and long term care insurance to protect your assets. Estate planning is complicated, so it is highly recommended that you obtain professional legal and tax advice. Remember to update your estate plan whenever you have a major life change such as a marriage, divorce, birth or death in the family.

6. Debt today…gone tomorrow?

The fastest way to feel more financially secure is to reduce, or eliminate, your debt. Because this isn’t realistic for many Canadians, aim instead to manage it as best you can. For example, try switching from a credit card to a debit card for a few months. With a debit card, you can’t spend what you don’t have! A financial advisor can also provide advice and strategies to help manage your debt.

7. Pay yourself first:

Review your monthly budget to see how much money you can realistically save and start transferring that amount into a separate bank account. To avoid “cheating”, you can arrange with your bank to automatically transfer funds from one account into the other. Then, with the help of an advisor, use this money for long-term investing.

8. Allocate your assets:

Ever heard the saying, “Don’t put all of your eggs in one basket”? This is the thinking behind a strategy called asset allocation. This strategy involves investing in a combination of assets that will provide the highest expected rate of return possible at your desired level of risk. Your advisor can help you identify the asset mix that is most likely to achieve your financial goals.

9. Take it slow…win the race:

When it comes to investing, it’s often best to think long-term and avoid reacting to the latest headlines. In fact, investors who switch to the best-performing asset class of the previous year are often worse off than investors who maintain their investments in a balanced portfolio.

10. Get ready for retirement:

Step one of retirement planning is to determine the income you will need, monthly or annually, to maintain your desired retirement lifestyle. Your advisor can help figure out how to achieve this. There are three main sources for retirement income:

1) Employer-sponsored pension plans: either fully funded or a matched contributions program

2) Public pensions: Canada/Quebec Pension Plan (CPP/QPP), Old Age Security (OAS)

3) Personal retirement savings: RRSP and TFSA

Individually, each of these three sources may not provide enough to fund your retirement years, so it is important to start as early as possible and put away as much as possible.

A final word to the wise

Now that you know the ten proven strategies for achieving financial security, it’s time to recall the three P’s that will put your financial plan into action:

• Talk to a Professional
• Be Prepared
• Stop Procrastinating

Article # 4 — Source: https://www.apaservices.org/practice/business/finances/future

Planning for a Secure Financial Future: It’s Never Too Early to Start

by Corporate Relations and Business Strategy Staff

Whether you are on the verge of retirement, sailing along mid-career or just starting a practice, it is important to think ahead and plan for your future. For many reasons, including lengthy training, high student loan payments and the time commitment required to build and manage a practice, psychologists often get a late start on retirement planning.

Yet, a little preparation goes a long way. The following information will help you begin to plan for a financially secure future.

The Planning Process

Envision the Lifestyle You Want When You Retire

A good place to start is to determine if you would like to:

• Gradually wind down your practice
• Cut back to seeing clients part-time
• Only maintain the consultation or supervision part of your practice
• Start a second career or explore new business ventures
• Close your practice entirely
• Continue to work as long as you are able

You should also consider other plans such as travel, whether you will downsize your home and if you will relocate geographically.

Review Your Present Financial Situation

An evaluation of your current finances will help you plan for what you will need in the future.

• Calculate your net worth (your assets minus your liabilities)
• Organize your expenses in order to understand your spending patterns
• Examine your retirement and other investments

Although calculations can be done manually, the use of personal financial software such as Quicken or Money may facilitate the process.

Determine Your Retirement Needs

Based on your vision for retirement, work with a professional financial planner to decide how much money you will need to set aside and which investment vehicles are best for you. Consider factors such as:

• the percentage of your annual preretirement income you will need in retirement
• when you plan to retire
• the rate of return on your investments
• inflation
• taxes

Create a customized plan that you are comfortable with and that will help you maintain a lifestyle consistent with your retirement plans. Put concrete steps in place to reach your goals and stick with your plan over time.

Review Your Plan Periodically

It is not unusual for ideas about the future to change over time. Additionally, unanticipated life circumstances may require you to change your course. Review your retirement plan with your financial advisor every year or two and revise it as necessary to help you reach your goals.

Financial Considerations

Learn about Saving for Retirement

Read a book or two about retirement planning and explore a few financial websites such as CNN Money and MSN Money. You don’t have to be an expert (that’s what your financial advisor is for), but you should have a basic understanding of retirement planning and your various options. Having a general knowledge base will facilitate productive discussions with your financial advisor and increase your comfort level with the process.

Pick a Retirement Savings Vehicle That Is Right for You

There are a variety of choices, such as a 401(k), Keogh plan, IRA or SIMPLE plan. Each type of investment vehicle has different advantages and disadvantages with regard to eligibility, financial risk, return, access to funds and taxes. Some are better suited to certain legal models of practice. Consult with your financial advisor to determine which option is best for you.

Consider Other Sources of Income

When you retire, you may have other sources of income in addition to your retirement savings. Be sure to consider Social Security benefits, revenue from part-time practice and income from other investments when you create your retirement plan. You can request a Social Security Statement that estimates your future Social Security benefits.

Plan for Unanticipated Expenses

Life has a way of throwing us an occasional wrench and this remains the case during retirement. Build yourself a financial buffer that is quickly and easily accessible, so you are more readily able to meet needs such as unexpected home repairs or medical expenses if they arise.

Other Financial Issues

When it comes to your future, investing for retirement is not the only financial matter you should consider. Talk to your financial advisor about protecting your assets and those of your loved ones by preparing appropriate wills and trusts and purchasing health, disability and life insurance. You may also want to consider private long-term care insurance if you anticipate expenses that will not be adequately covered by government sources such as Medicare or any supplementary health insurance you carry.

Since malpractice charges can be filed even after treatment ends, it is also essential to make sure you will be covered in terms of professional liability. Before you retire, check your policy and consult with your liability insurance provider about appropriate and sufficient coverage.

Five Tips for Getting Started

Thinking about the financial aspects of retirement can be overwhelming, so many people put it off. David Ballard, PsyD, MBA, the APA Practice Directorate’s assistant executive director for corporate relations and business strategy suggests the following five tips to get started:

1. Get focused on the need to plan ahead.
2. Start saving now.
3. Consult with a financial advisor.
4. Create a retirement plan.
5. Protect yourself and your family with appropriate insurance.

Date created: 2004

Article #5 — Source: https://www.pewresearch.org/fact-tank/2022/08/11/large-shares-in-many-countries-are-pessimistic-about-the-next-generations-financial-future/

Large shares in many countries are pessimistic about the next generation’s financial future

BY LAURA CLANCY, ROSELINE GRAY AND BAO VU, August 11, 2022

(Jaap Arriens/NurPhoto via Getty Images)

When asked how children in their country will fare financially when they grow up, a median of 70% of adults across 19 countries say they will be worse off than their parents, according to a Pew Research Center survey conducted this spring.

How we did this

This Pew Research Center analysis focuses on the financial futures of the next generation in 19 countries, including the United States. For non-U.S. data, this post draws on nationally representative surveys of 20,944 adults from Feb. 14 to June 3, 2022. All surveys were conducted over the phone with adults in Canada, Belgium, France, Germany, Greece, Italy, the Netherlands, Spain, Sweden, the United Kingdom, Japan, Malaysia, Singapore and South Korea. Surveys were conducted face to face in Hungary, Poland and Israel and online in Australia.

In the U.S., we surveyed 3,581 adults from March 21 to 27, 2022. Everyone who took part in the U.S. survey is a member of the Center’s American Trends Panel (ATP), an online survey panel that is recruited through national, random sampling of residential addresses. This way nearly all adults have a chance of selection. The survey is weighted to be representative of the U.S. adult population by gender, race, ethnicity, partisan affiliation, education and other categories.

Here are the questions used for this analysis, along with responses. Visit our methodology database for more information about the survey methods outside the U.S. For respondents in the U.S., read more about the ATP’s methodology.

At least three-quarters of adults in Japan, France, Italy and Canada say children will be worse off financially than their parents, as do majorities in Spain, the United Kingdom, Australia, the United States, Belgium, Greece, the Netherlands and South Korea. Singapore is the lone country surveyed where a majority of adults (56%) believe the next generation will be better off financially.

In Israel, Hungary and Poland — where the surveys were conducted through face-to-face interviews — more than one-in-ten volunteered a response of “same,” meaning they believe children will have about the same financial situation as their parents. Still, Hungarians are more pessimistic than optimistic about the financial future of children in their country, while Israelis are more optimistic and Poles are almost evenly split.

In nine of the countries surveyed, the percentage of people who say children are going to be worse off than their parents has increased significantly since the question was last asked. For example, 42% of respondents in Poland say the youngest generation will be worse off financially — nearly double the 23% who said so in 2019.

The proportion of people with a pessimistic view of children’s financial future is up by 14 percentage points in Australia, 12 points in the Netherlands and 11 points in Hungary since the last time the question was asked in each country. Smaller but still significant increases in these views occurred in the UK, Canada, Singapore, Japan and the U.S.

In 11 of the countries surveyed this year, a record or near record high percentage of adults say children will be worse off financially than their parents. In South Korea, for example, there has been a steady increase since the question was first asked in 2013 in the share of adults who say children will be worse off than their parents.

In other countries, however, the share of adults who see a worse financial future for children is lower than in previous years. In France, for example, 90% of adults said in 2013 — during the eurozone public debt crisis which resulted in a French recession — that children would be financially worse off than their parents.

In all 19 countries surveyed, people with a negative view of their country’s current economic conditions are far more likely to believe that children in their country will be worse off in the future. In Poland, for example, 63% of those with a negative view of the country’s current economic situation believe children will be worse off in the future. Among Polish adults who see the country’s current economic situation as good, by contrast, only 19% share this view. Even in Japan, where the difference is the smallest of 19 countries, the gap stands at 17 points.

Even among those with a positive view of their country’s current economy, however, many are pessimistic about the financial prospects of the next generation. In 10 countries — the U.S., Italy, the UK, Spain, the Netherlands, Australia, Canada, France, Belgium and Japan — around half or more of adults with a positive view of the economy nevertheless expect children to be worse off than their parents.

Note: Here are the questions used for this analysis, along with responses. Visit our methodology database for more information about the survey methods outside the U.S. For respondents in the U.S., read more about the ATP’s methodology.

Article #6 — Source: https://www.nerdwallet.com/article/investing/what-is-a-financial-plan

What Is a Financial Plan, and How Can I Make One?

A financial plan is a roadmap that helps you achieve your goals. Financial planning can be done on your own or with a professional.

By Kevin Voigt and Alana Benson, December 6, 2022

A financial plan paints a comprehensive picture of your current finances, your financial goals and any strategies you’ve set to achieve those goals. Good financial planning should include details about your cash flow, savings, debt, investments, insurance and any other elements of your financial life.

What is financial planning?

Financial planning is an ongoing process that looks at your entire financial picture in order to create strategies for achieving your short- and long-term goals. It can reduce your stress about money, support your current needs and help you build a nest egg for your long-term goals, like retirement.

Creating a financial plan is important because it allows you to make the most of your assets and gives you the confidence to weather any bumps along the way.

You can make a financial plan yourself or get help from a financial planning professional. Online services like robo-advisors have also made getting assistance with financial planning more affordable and accessible than ever.

Financial planning in 7 steps

1. Set financial goals

A good financial plan is guided by your financial goals. If you approach your financial planning from the standpoint of what your money can do for you — whether that’s buying a house or helping you retire early — you’ll make saving feel more intentional.

Make your financial goals inspirational. Ask yourself: What do I want my life to look like in five years? What about in 10 and 20 years? Do I want to own a car, or a house? Do I want to be debt-free? Pay off my student loans? Are kids in the picture? How do I imagine my life in retirement?

Having concrete goals can make it easier to identify and complete the next steps, and provide a guiding light as you work to make those aims a reality.

2. Track your money

Get a sense of your monthly cash flow — what’s coming in and what’s going out. An accurate picture is key to creating a financial plan and can reveal ways to direct more to savings or debt pay-down. Seeing where your money goes can help you develop immediate, medium-term and long-term plans.

For example, developing a budget is a typical immediate plan. NerdWallet recommends the 50/30/20 budget principles: Put 50% of your take-home pay toward needs (housing, utilities, transportation and other recurring payments), 30% toward wants (dining out, clothing, entertainment) and 20% toward savings and debt repayment. Reducing credit card or other high-interest debt is a common medium-term plan, and planning for retirement is a typical long-term plan.

3. Get your employer match

If you visit a financial advisor, they will be sure to ask: Do you have an employer-sponsored retirement plan like a 401(k), and does your employer match any part of your contribution?

True, 401(k) contributions decrease your take-home pay now, but it’s worth it to put in enough to get the full matching amount because that match is free money. Here’s how much you should contribute to a 401(k).

4. Plan for emergencies

The bedrock of any financial plan is putting cash away for emergency expenses. You can start small — $500 is enough to cover small emergencies and repairs so that an unexpected bill doesn’t run up credit card debt. Your next goal could be $1,000, then one month’s basic living expenses, and so on.

Building credit is another way to shock-proof your budget. Good credit gives you options when you need them, like the ability to get a decent rate on a car loan. It can also boost your budget by getting you cheaper rates on insurance and letting you skip utility deposits.

5. Tackle high-interest debt

A crucial step in any financial plan: Pay down “toxic” high-interest debt, such as credit card balances, payday loans, title loans and rent-to-own payments. Interest rates on some of these may be so high that you end up repaying two or three times what you borrowed.

If you’re struggling with revolving debt, a debt consolidation loan or debt management plan may help you wrap several expenses into one monthly bill at a lower interest rate.

6. Invest to build your future goals

Investing sounds like something for rich people or for when you’re established in your career and family life. It’s not.

Investing can be as simple as putting money in a 401(k) and as frictionless as opening a brokerage account (many have no minimum to get started). Financial plans use a variety of tools to invest for retirement, a house or college:

• Employer-sponsored retirement plans. If you have a 401(k), 403(b) or similar plan, gradually expand your contributions toward the IRS limit of $20,500 per year in 2022. If you’re 50 or older, the limit is up to $27,000. In 2023, you can contribute up to $22,500, or $30,000 for those ages 50 or older.
• Traditional or Roth IRA. These tax-advantaged investment accounts can further build retirement savings by up to $6,000 a year in 2022 (or $7,000, if you are over 50). In 2023, the limits rise to $6,500 and $7,500 respectively. This NerdWallet IRA guide can help you choose the right type of IRA and show you how to open an account.
• 529 college savings plans. These state-sponsored plans provide tax-free investment growth and withdrawals for qualified education expenses.

7. Protect and grow your financial well-being

With each of these steps, you’re building a moat to protect yourself and your family from financial setbacks. As your career progresses, continue to improve your financial moat by:

• Increasing contributions to your retirement accounts.
• Padding your emergency fund until you have three to six months of essential living expenses.
• Using insurance to protect your financial stability, so a car crash or illness doesn’t derail you. Life insurance protects loved ones who depend on your income. Term life insurance, covering 10-year to 30-year periods, is a good fit for most people’s needs.
• Creating a will to ensure your assets are distributed according to your wishes. Other types of estate-planning documents can also provide your loved ones with clarity on how you would like to be cared for and who should manage your affairs.

Do you need financial planning help?

A financial plan isn’t a static document — it’s a tool to track your progress, and one you should adjust as your life evolves. It’s helpful to reevaluate your financial plan after major life milestones, like getting married, starting a new job, having a child or losing a loved one.

If you’re not the DIY type — or if you want professional help managing some tasks and not others — you don’t have to go it alone. Consider what kind of help you need:

A complete financial plan and investment advice: Online financial planning services offer virtual access to human advisors. A basic service would include automated investment management (like you’d get from a robo-advisor), plus the ability to consult with a team of financial advisors when you have other financial questions. More comprehensive providers basically mirror the level of service offered by traditional financial planners: You’re matched with a dedicated human financial advisor who will manage your investments, create a comprehensive financial plan for you, and do regular check-ins to see if you’re on track or need to adjust your financial plan.

Specialized guidance and/or want to meet with an advisor face-to-face: If you have a complicated financial situation or need a specialist in estate planning, tax planning or insurance, a traditional financial advisor in your area may fit the bill. To avoid conflicts of interest, we recommend fee-only financial advisors who are fiduciaries (meaning they’ve signed an oath to act in the client’s best interest). Note that some traditional financial advisors decline clients who don’t have enough to invest; the definition of “enough” varies, but many advisors require $250,000 or more. If you want to know more about how much seeing an advisor will cost, read our guide to financial advisor fees.

Portfolio management only: Robo-advisors offer simplified, low-cost online investment management. Computer algorithms build an investment portfolio based on goals you set and your answers to questions about your risk tolerance. After that, the service monitors and regularly rebalances your investment mix to ensure you stay on track. Because it’s all digital, it comes at a much lower cost than hiring a human portfolio manager.

Why is financial planning important?

Financial planning can help you feel more confident about navigating bumps in the road — like, say, a recession or historic inflation. According to Charles Schwab’s 2021 Modern Wealth Survey, Americans who have a written financial plan maintain healthier saving and investing habits, with a higher percentage of those with a plan having a three-month emergency fund compared with those without a plan.

Once your basic needs and short-term goals have been addressed, a financial plan can also help you tackle big-picture goals. Thoughtful investing, for example, can help build generational wealth, and careful estate planning can ensure that wealth gets passed down to your loved ones.

Article #7 — Source: https://www.iciciprulife.com/protection-saving-plans/importance-of-savings.html

Importance of Savings

Saving money is one of the essential aspects of building wealth and having a secure financial future. Saving money gives you a way out of the uncertainties of life and provides you with an opportunity to enjoy a quality life. Putting aside a sum of money in a systematic manner can help you steer out of many hurdles and obstacles in life. It can support you in your hour of need and ensure that your family has something to fall back on in case of an unfortunate event. There are many reasons to save and several ways to save with ease.

Here are some of the important aspects of savings that you should know.

Reasons why saving money is important

Savings is crucial for everyone, regardless of their earnings, spending and life stage. Here are some reasons why you need to start saving.

• It offers peace of mind: Knowing that you have a certain amount accumulated for times of your need, gives you peace of mind. You can lead a stress-free life with the knowledge that you will not have to struggle if things take an unexpected route.
• It gives you a better future: Your savings can be the answer to a number of your goals. You can buy a house, accumulate funds for your retirement, or purchase a vehicle. You can secure your future, indulge in the best of things that life has to offer and live a very fulfiling life.
• It provides for your children’s education: With a considerable amount of savings, you can fuel your children’s dreams and pay for the best schools and colleges across the world.
• You can plan your short-term goals: Savings are not just aimed at the long term. You can also benefit from savings in the short term. A lot of people save for a few months and then travel.
• It gives your family security in case of an unfortunate event: By saving in a disciplined manner, you can make sure that your family is well-provided for. In unfortunate times, your savings can act as a cushion for your loved ones and help them overcome any financial difficulty.

$T&Cs apply

Tips to enable savings

If you are new to savings or find it difficult to stick to your objective of saving, then you can try the following steps.

• Limit your credit card usage: Credit cards may provide a temporary sense of relief, but the high rates of interest can deplete your savings in no time. It helps to limit your debt and restrict credit card purchases to ensure that your savings are intact and growing.
• Keep a track of your expenses: If you find it difficult to save regularly, try to record and keep a track of your monthly expenditure. This will offer you a clear picture of where you spend. You can then identify the things that are not important and aim at saving more by avoiding those purchases.
• Create a budget for savings: It helps to devise a budget for each month. You can create a plan at the beginning of the month to target savings and set limits for spending. This lets you focus on what is important, reduces the chances of over-spending, and lets you save as planned.
• Invest in long-term financial tools: When you save, it is also important to see your savings grow with time. Investing your money in a long-term investment plan can have many additional benefits. These plans offer a lucrative rate of interest that lets your money retain its value and beat inflation. One such instrument is the savings or endowment plan. The ICICI Pru Assured Savings Insurance Plan is a new age endowment plan that is designed to address your life insurance needs.

Let’s find out more about this savings plan.

Why Choose ICICI Pru Assured Savings Insurance Plan?

ICICI Pru Assured Savings Insurance Plan is a new age endowment plan that comes with the following benefits:

• Lump sum payout to secure your future: At the end of the term of your policy you will receive a guaranteed$ lump sum payout as the maturity benefit which will help you secure your family’s financial future.
• Grow your wealth with guaranteed additions#: Every year 9% or 10% guaranteed additions# would be added to your policy depending on the term of your policy.
• Life cover^: The plan also provides a lump sum payout to your family in case of an unfortunate event. This amount ensures that even in your absence your family members are able to live the life you planned for them.
• Get tax benefits*: With this plan, you can enjoy tax benefits subject to the prevailing tax laws.

Savings is a vital component of your life. Most importantly you can also rely on savings for safeguarding your family’s needs and providing financial security in unfavourable times. But it is important to find an instrument that allows your savings to grow. Here is when a financial tool like ICICI Pru Assured Savings Insurance Plan comes into the picture and proves to be a perfect fit.

FAQs

1. Do savings plans offer a lump sum payout option?

Yes, a savings plan can offer you a lump sum payout option. Most plans let you choose whether to receive your money as a lump sum or as regular income. Under the lump sum option, you pay premiums for a pre-determined number of years and then receive a guaranteed$ lump sum payment at the end of the term. On the other hand, under the regular income option, you pay premiums for a fixed term and then receive either monthly or yearly regular income for the chosen term.

2. How much should I invest in my savings plans?

The amount to be invested in a plan depends on your goals, current income and several other factors like important milestones and various financial needs. Hence, there is no one figure that can suit everyone. In order to ascertain the minimum amount of investment required for your financial needs, you should take into consideration your future requirements and the time you have left to plan for them. Based on those requirements, you can decide on the amount you should invest in your savings plan. The importance of savings cannot be stressed enough.

3. As I grow older, do I need to save more or less in my savings plans?

Although it is always better to contribute more to your savings plans, the answer would depend on your current savings pool and needs. If you had started saving from an early age and have built a significant savings amount, you may not need to save more. On the other hand, if you started saving late, you may have to make up for the lost years by contributing more to your savings plan.

Article #8 — Source: https://www.annuity.org/financial-literacy/

Financial Literacy

By Alanna Ritchie

To be financially literate is to know how to manage your money. This means learning how to pay your bills, how to borrow and save money responsibly, and how and why to invest and plan for retirement.

Take the initiative to self-educate and grow your financial knowledge, by beginning with the basics of money management and maturing into a smart spender. Putting time into your financial development improves saving and investing decisions. By leveraging resources — like age, talent, money and the ability to establish good habits — you can build a long-lasting nest egg.

What Is Financial Literacy?

Managing your money is a personal skill that benefits you throughout your life — and not one that everybody learns. With money coming in and going out, with due dates and finance charges and fees attached to invoices and bills and with the overall responsibility of making the right decisions about major purchases and investments consistently — it’s daunting.

You would think that because the stakes are so high that this would be a skill that gets taught in high school (or even before), but that’s not the case. Managing your own money requires a fundamental understanding of personal credit and a willingness to embrace personal responsibility. That is, you pay your bills in a timely manner and you don’t drown yourself in debt. You accept the fact that sometimes you have to sacrifice immediate demands and desires for long-term gain.

You budget. You save. You protect your savings. When you spend, you spend wisely. When you make big purchases, you do so for things that are worthwhile.

You understand the difference between good debt and bad debt. And you constantly pay attention to your overall portfolio — earnings, savings and investments. You also understand what you don’t know, and you ask for help when you need it.

To be financially literate means having the ability to not let money — or the lack of it — get in the way of your happiness as you work hard and build an American dream complete with a long and fulfilling retirement.

How to Manage Your Money

Handling your finances the right way should be a priority, and it should drive your daily spending and saving decisions. Personal finance experts advise taking the time to learn the basics, from how to manage a checking or debit account to how to pay your bills on time and build from there.

Managing your money demands constant attention to your spending and to your accounts and not living beyond your financial means.

Money in the Bank

Developing financial acumen starts with opening a bank account. Once you have a paycheck, set up direct deposit. This keeps your money secure and saves you from paying interest to cash advance companies which charge a percentage of your check.

Having a bank account provides convenience, access to a choice of benefits and safety. Checks and debit cards offer proof of payment so you have a record of transactions showing where your money goes. The FDIC insures money in a savings account for up to $250,000.

There are a number of options for the type of primary account for saving your paychecks. Most people choose a checking, debit or savings account or combination of those. These enable you to set up automatic payments for monthly bills and offer the ease of not having to carry cash around. Each option comes with certain benefits and disadvantages. Evaluate the various overdraft, monthly, withdrawal and other maintenance fees accompanying account options.

Experts recommend you have a savings account which you can use for handling unexpected financial expenses and emergencies, such as a broken arm, flat tire or hike in school tuition.

Choosing to only open a checking or savings account can be a poor choice, as having the two types of accounts separate helps distinguish between money available for immediate spending and reserves, intended to be kept for the long-term. Keeping all your money in a checking account means your savings are easily accessible and available to spend. You will miss out on interest generated by a savings account.

With money in an account, you can start spending. This is where you need discretion. Learn to differentiate between necessities and luxuries. For example, you need to pay for your yearly dental cleaning, but you want to afford the salon appointment. Take advantage of mobile banking to get updates on how much you are spending and how much remains in your account.

The best way to leverage the cash you have in your bank account will be to start budgeting immediately.

Budgeting

One of the first building blocks of a successful personal finance plan is the ability to budget. Although it’s easy to understand, it’s also difficult to do because it requires a hard look in the mirror and a willingness to see what really stares back at you.

Budgeting requires that you analyze and, likely, change your spending habits. Instead of your money controlling you, you control your money. Develop habits to save, avoid financial crisis and maintain peace of mind.

A successful budget plan clearly defines:

• How to follow a monthly spending plan
• Ways for lowering your monthly bills
• How to handle accrued debt
• Debt pay-off options like the snowball and avalanche methods
• How to distinguish between short-term, medium and long-term goals
• A breakdown of family needs

Financial Literacy & Personal Finance Basics

How do you get started budgeting? Simple: you plunge right in. You need to see exactly how you’re spending your money and identify where your financial holes are.

Some steps:

1. Start tracking your monthly expenses.

In a notebook or a mobile app, write in every time you spend money. Be diligent about this, because it’s easy to forget. This is the foundation for your budget.

2. Identify fixed and variable expenses.

Fixed expenses are ones that you have every month: rent, mortgage, car payment, electric, bill, water bill, student loan payment. Variable expenses are costs that go up and down each month and ones that come and go — groceries, pet supplies, haircuts, concert tickets, etc.

3. Add up the totals.

After three months, calculate how much you are spending, on average, per month. And look at the categories.

4. Study your variable expenses.

This is where most people tend to overspend. Decide what gives you the most pleasure from these monthly expenses that you feel these costs are worthwhile? And which ones can you really do without? Be honest, and start cutting. This is the beginning of the hard decisions.

5. Factor in savings.

A key part of budgeting is that you should always pay yourself first. That is, you should take a portion of every paycheck and put it into savings. This one practice, if you can make it a habit, will pay dividends (literally in many cases) throughout your life.

6. Now set your budget.

Start making the necessary cuts in your fixed and variable expenses. Decide what you want to save every week or every two weeks. The leftover money is how much you have to live on.

Effective budgeting demands that you are honest with yourself and put together a plan that you can actually follow. The more time and effort you put into your budget today, the better you will be able to maintain a life-long savings habit.

Credit or Debit?

In addition to cash and a bank account, most people own some type of plastic, like a debit card, credit card or combination of the two. What you do with these tools has serious repercussions on your ability to establish credit history and to avoid developing a borrowing habit.

Conservative financial experts recommend either having only a debit card or having both with the credit card reserved for occasional major payments and then immediately paid off. This advice is often given to people who have accrued a large amount of debt.

Starting out with one of each card can help you develop responsible spending habits and provide convenience. Consider the rewards offered by both cards, especially if you travel or make large purchases often.

The main advantage of only using a debit card regularly is you spend money you already have. Debit cards can be tied to your checking account where paychecks are automatically deposited.

Debit cards have benefits like no limit on the amount of transactions and rewards based on frequent use. You have the ability to spend without carrying cash and the money is immediately withdrawn from your account.

Because using the card is so easy, it is vital that you don’t overspend and lose track of how often you’re spending with this account. If you’re not paying attention, overdraft fees can drain your account.

Some hotels, car rental companies and other businesses require that you use a credit card. Getting an account designed for occasional use can be a wise decision. You can establish your credit history and take advantage of the time buffer between making a purchase and paying your bill. Another advantage of using credit is the added protections offered by the issuer. For online shopping and larger purchases, a credit card can be a safer option than a debit card.

Relying on a credit card can lead to taking on serious debt. Should you choose to own a credit card, the best method of action is paying in full every month. It is likely you will already be paying interest on your purchases and the more time you carry over a balance from month to month, the more interest you will pay.

Saving

Saving is an essential component of good budgeting. Using a savings account allows you to prevent emergencies from draining the money you need for monthly bills and slowly build a reserve for making large future purchases. This reserve can be used for car repairs, apartment deposits, unplanned surgeries and other medical needs and even gathering funds for a home down payment.

Some facts about saving:

• The average amount of personal savings dropped 15% from $73,100 in 2021 to $62,086 in 2022.
• People ages 30 to 49 are the least likely to have emergency savings.
• 60% of Americans don’t have enough savings to cover a $500 or $1,000 unplanned expense.
• 1 person out of every 5 people near retirement age has zero money saved.

Make a financial commitment that you can keep, even if it means starting small, like $50 from every paycheck or cutting out your gym membership for an extra $100 a month. Remember, this account isn’t for splurging on the latest Apple product or a Michael Kors purse. Be intentional about only using your savings for needs. Whenever you take money out, do your best to quickly replenish the withdrawal.

Developing consistent savings habits allows you to leverage time, your age, your current resources, compounding interest, investments and tax-advantaged savings.

Saving tips:

• DO set up a portion of your paycheck to automatically go to savings.
• DON’T leave a savings account as your last financial priority.

Debt

The trend of personal debt in America over the past four decades shows a slow but steady climb.

An August 2022 Federal Reserve study revealed that American households have:

• $890 billion in credit card debt
• $1.59 trillion in student loan debt
• $11.39 trillion in mortgage debt

In September 2021, Experian reported that the annual national average VantageScore was 695, up from 688 in 2020. Still, it’s much lower than the 800 rating that qualifies to get the best interest rates when it comes time to buy a house or car.

The report also said the average consumer has a credit card balance of $5,897.

Total Debt for American Consumers = $11.74 trillion

Credit Scores

A credit score can be a strong indicator of your financial well-being. Equifax, Experian and TransUnion are the primary credit bureaus and assign scores ranging from 300 (high risk) to 850 (low risk). The bureaus determine scores based on a group of factors which reflect your spending habits.

Never underestimate the importance of credit scores. Once you are spending money with plastic and paying bills regularly, you begin your history. This record of how often you borrow, how quickly you repay and how much you owe can follow you throughout your life.

Credit Score Checklist

• Make sure you know where you stand and address the blemishes on your credit reports.
• You can obtain a copy of your credit report for free once every year from each of the credit bureaus.

Building a high credit score can help you get approval for low-interest loans, credit cards, mortgages, and car payments. When you are looking to move into an apartment or get a new job, your credit history may be a deciding factor.

On the other hand, making late payments on bills, missing payments, piling on debts and regularly maxing out your credit card can result in seriously lowering your credit score. Just as an excellent score can give you access to loans, jobs and more, a low credit score can prevent you from being able to borrow more, pay low interest rates and even get certain jobs.

Using Credit Responsibly

Using credit cards is a way of life for most Americans. For some, it’s a tool for building credit and borrowing money for major purchases. For other, it’s a constantly refilling debt relied on for nearly every purchase.

How many credit cards do you have? Experian’s annual State of Credit Report, issued in September 2021, shows consumers have an average of three credit cards.

Learning how to use these tools wisely has a major impact on your future, as potential employers may review your credit history and credit scores can be used to qualify you for better interest rates when it comes to loans, mortgages and applying for more credit.

Choosing the Right Card

Many credit cards require you meet a minimum credit score for approval. The higher your score, the more perks you will qualify for, like low interest rates and a high credit limit. If you are a student you may qualify for special rates. Decide before you apply for a card what your plan for using the card will be. Pay attention to introductory promotions which may expire after six months to one year of owning a card.

Making a Game Plan for Credit Use

Plan before you spend. You can become a responsible credit card owner by marking your calendar to avoid missing or being late for paying credit bills. Another precaution against getting in a borrowing hole is making sure you do not spend money you cannot repay and keeping your balance well below the limit for your account. Ask questions. Are there points you will earn for regular use? Is the APR affordable? What kind of limits will you have? Find out what the fine print means before racking up debt you won’t be able to repay.

Paying Off Credit Card Debt

Getting control of your credit card debt requires taking a good look at how much you owe. Take a deep breath and evaluate what you can afford. You likely will need to define a long-term strategy for chipping away at the total amount you owe while ensuring you don’t dig yourself deeper into debt. Talk to creditors to find if they can work with you to make a plan that works. Only look into consolidation and settlement as a last resort.

Student Loans

Student loan debt is almost as routine today as a car loan or credit-card debt. Few college graduates leave school without some sort of student loan to repay.

Most students don’t ask if they’ll go to college, but rather where they will go. And it may not be until a few decisions later that they consider how to afford tuition. Years later, when school ends and real-world living begins, the afterthought of student loans takes its toll and the bills start rolling in.

Student Loan Facts

• 43 million Americans have at least one outstanding student loan.
• Americans owe more than $1.7 trillion in student loans.
• The average borrower graduates from college owing $32,880.

Paying Attention to Loans While You’re Still in School

In addition to signing the promissory note for your loans, take the time to examine exactly when your first payment will be due and how much it will be. Put that future date and cost on paper and in the time between now and then, begin saving money to repay your loans. If you can work a few hours during the week, on the weekends or just holidays and summers, you can begin your post-college years with a surplus of money that can go directly toward loans.

Do’s & Don’ts

• DO find out when your grace period ends.
• DON’T miss your first payment because you forgot to mark your calendar.

Staying in Control When You Leave or Graduate

When the time to start paying comes, you have options for repayment. The Federal government offers longer term payment plans as well as graduated repayment options which allow you to bulk up your income and get some job experience under your belt before making larger monthly payments.

From there, your next step will be making payments on time and reducing the principal if possible by paying more than the minimum that is due. For public service careers, you may qualify for loan forgiveness.

Do’s & Don’ts

• DO make more than the minimum payment to reduce your principle.
• DON’T skip payments or accrue late fees.

When Repayment Isn’t an Option

During certain seasons of life, your income may be severely limited and affording student loan payments just isn’t possible. Fortunately, loan servicers are aware that situations like this occur and have precautions in place to help students get through these difficult times. Qualifying circumstances, like unemployment or health problems, can make you eligible for deferment or forbearance, which allow you to temporarily postpone or reduce payments. Contact your loan servicers to find out your options. If you just ignore loan bills, your account may receive delinquency or default status.

Do’s & Don’ts

• DO communicate with lenders if you are unable to make payments.
• DON’T ignore student loans when you’re struggling financially.

Real Estate

Owning property is a normal goal for a sound financial plan. Home ownership not only develops a sense of achievement and pride but also builds equity. It is also a major financial undertaking and a long-term investment.

For many people, buying a home is the biggest purchase they will ever make. Unfortunately, more and more people find themselves forced to put off this purchase. Student loan debt, underemployment, rising home prices and stringent mortgage standards prevent people from buying their own homes until later in life.

Before signing a mortgage, make sure to calculate all costs and leave some savings untouched for after you buy. Home ownership often comes with a slew of added expenses like taxes, insurance costs, emergencies and necessary repairs. You want to have more than enough to barely make it by. Often getting approval for a decent mortgage rate requires waiting a few more years to save up for a larger down payment.

The planning stage before buying a house is lengthy. Prospective buyers work hard to get to a place where they can find their permanent home. The process is long and involved, demanding most people to build up their credit scores, save up for a down payment, commit to a stable job location, earn an income that qualifies for a large enough mortgage, choose a good realtor, find a suitable place to live, find a home inspector than have an offer accepted.

Home Ownership in the United States

• The average home buyer searches 10 weeks and views 10 homes.
• The median price of a single-family home in 2022 was $440,300.
• In 2022, home ownership for all ages was 65.8%.

Foreclosures and Short Sales

A foreclosure occurs when borrower cannot make mortgage payments and the lender is legally given the right to take possession of collateral property. A short sale occurs when profits from selling a home are less the than debt remaining on a mortgage. In this case, the lien holder often agrees to release the debtor of the remainder of the loan.

On the other side of this coin is an opportunity for buyers looking to purchase a home at a discounted rate. While it might take more paperwork and some hoops working with a bank to get the sale approved, these homes can be discounted as much as $60,000 (RealtyTrac, a real estate information company). Have a home inspected before proceeding with the purchase as these may require extensive repairs, remodeling and insurance.

Business Finance

Startups are sweeping the nation. With the burgeoning tech industry and the DIY convenience of using the web as your storefront, entrepreneurial ventures have become commonplace. A University of Phoenix survey found 63% of adults in their 20s want to run their own businesses.

Small Business Facts

• Around 400,000 new businesses open every year.
• The SBA defines small businesses as those with less than 500 employees.

Top fastest growing sectors in 2014

• Electronic shopping and mail-order houses
• Software publishers
• Computer systems design and related services

Startups & Small Business

Business owners use their own savings, loans, stocks and other sources for startup capital. It’s vital to research your industry and make a plan that describes exactly how you can maintain profitability. Some people rush into growing a business without properly vetting out a strategy for long-term success. Pursuing an exciting business idea and not considering all the costs involved can make your dreams short-lived.

Startup Facts

• There are more than 28 million small businesses in the United States.
• One third of new businesses close within 2 years, and half close within 5 years.
• The Small Business Administration reports that around 10% to 12% of small businesses with employees close every year.

After starting a business, the work has only begun. Staying competitive in your industry requires keeping an eye on trends and adapting to changing consumer demands. From evolving your marketing strategy to expanding your client reach the work of maintaining a business requires constant dedication.

Venture Capital

One way entrepreneurs overcome their financial hurdles when starting out is by gathering venture capital, which refers to money from investors hoping to profit from partial ownership and the long-term, high-potential growth of new companies.

This capital can be an essential tool for handling startup costs, as a new business’ size, assets and development phase can prevent it from quickly growing.

While banks may be unwilling to extend credit to companies without a significant track record or collateral, angel investors and venture capital firms are often willing to take a chance on a new product or service. If there is a convincing pro forma, a detailed plan for operating the business, then investors are more likely to take on the risk.

Retirement

The sooner you start saving for retirement, the more opportunities you will have to grow the resources available to you. The average lifespan has been steadily increasing. In the United States, the average life expectancy is 78.74 years (World Bank). People are working later in life and living longer, both of which impact how much you will be able to save and how much you need to last your entire lifespan.

Your personal savings account, bank, investment portfolio and employer can all be resources that help you prepare for the future.

Retirement Facts

• The average age of retirement is 62.
• The average length of retirement is 20 years.
• According to the Center for Retirement Research, nearly a third of all households nearing retirement have no retirement savings.

Annuities and Retirement

People interested in adding security to their retirement portfolio often turn to annuities, which they can purchase with one premium or with series of premiums. Insurance companies issuing annuities guarantee their payouts, hence the security appeal.

The other retirement advantage that annuities have: their principal investment grows over time, and taxes get deferred until the investment starts paying out. The IRS taxes recipients on the annual distribution rather than the value of the entire account.

A secondary annuity market exists as well for people who want to shed their annuity or structured settlement immediately instead of waiting on it to pay off years from now. This market allows annuity owners to cash out their contracts for money. The cash value for such a sale is less than it would be if an owner held on to the investment, but even those who once wanted a retirement investment find themselves needing money now and not later.

For instance, some people need to pay off unexpected medical bills or family emergency costs. Others want to pay off student loans — or are getting divorced and must make their long-term asset a liquid one. A seller can opt to sell some or all of their payments, using some money now and saving the rest for later income.

Why an annuity for retirement?

• Anyone can buy an annuity, and you can shop among a variety of them. You can get a contract that sets up distributions to be paid out immediately, in several months or years or in many years in the future.
• Options include a fixed annuity, which provides a stable payout, or variable investment, which fluctuates based on market changes. Owners can also buy riders, such as the ability to make early withdrawals or the guarantee that payments last throughout the owner’s entire lifespan.

Getting Started

Begin by looking at how much you think you will need and planning a retirement budget. Fidelity financial corporation urges pre-retirees to have 8 times their annual salary saved by retirement. This general guideline can give you a rough idea of what you’ll need, but to get a clearer understanding take a look at each part of the picture.

Questions to ask

• What age do you expect to stop working?
• Do you plan to work part-time during retirement?
• What kind of pre-existing health concerns will you need to cover during retirement?
• What kind of retirement benefits does your company offer?
• Will your company provide you with a pension?

These are just a few examples of the questions you want to answer as your put together a retirement strategy. Use resources like the AARP website to find calculators for estimating expenses. You can learn about topics like how inflation will impact the value of your money and how you can expect your health cost to increase with age.

Do’s & Don’ts

• DO consider down-sizing and keeping the money you save to supplement retirement income.
• DON’T forget about 401(k) savings when you move to a new job.
• DO decrease risks as you age, like moving from stocks to bonds.
• DON’T put retirement savings as a low-level priority just because it seems to be in the distant future.

Current Assets

Next look at the resources you already have. It’s never too early to start a saving account. Even though your bank may offer accounts with low interest rates, you can use the decades between now and retirement to slowly build your savings. One way to guarantee you are dedicating a portion of your income to retirement is to set up automatic transfers straight from your paycheck into your savings.

Get an estimate of your stock portfolio and how assets will mature by retirement age. Use tax-advantaged accounts such as IRAs and 401(k)s. If your employer offers a match plan, try to budget so that you can put in maximum contributions to get the most from this account. The value of 401(k)s has been increasing in recent years, in part due to the stock market.

Looking into the Future

Evaluate other sources of retirement income. The Social Security Administration provides an estimator for determining how much your monthly Social Security payments will be. You will notice that the longer you wait for Social Security payments (prior to full-retirement age), the more your monthly payments will be.

If you’re a veteran, teacher or other government worker, you may have pension payments you can count on. Your retirement benefits can greatly vary depending on your occupation and employer. Make sure you are aware of and participating in any employer-offered retirement plans.

As you age, periodically gauge the value of your portfolio. You may need to adjust your funds, accounting for market lows or stagnant investments. The older you are, the more you will want to put money toward risk-averse investments like bonds, rather than fluctuating stocks. Additionally, if you fall behind in your retirement account deposits, you may qualify for larger catch-up contributions which would typically be more than the yearly maximum.

This guide can help you measure your savings progress.

Timeline for Retirement

At age 50

• Begin making catch-up contributions, an extra amount that those over 50 can add, to 401(k) and other retirement accounts.

At 59½

• No more tax penalties on withdrawals from retirement accounts, but leaving money in means more time for it to grow.

At 62

• The minimum age to receive Social Security benefits, but delaying means a bigger monthly benefit.

At 65

• Eligible for Medicare

At 66

• Eligible for full Social Security benefits if born between 1943 and 1954.

At 72

• Start taking minimum withdrawals from most retirement accounts by this age; otherwise, you may be charged heavy tax penalties in the future.

Please seek the advice of a qualified professional before making financial decisions.