Retirement Savings by Age – Are You on Track?

retirement savings by age - actual

Nearly a third of all workers admit to having less than $1,000 saved for retirement. Fifty-seven percent replied that they have less than $25,000 saved. Without knowing the exact retirement savings by age to reach a comfortable retirement, it’s still pretty obvious that the average American is woefully behind.

Below are the stats for the median retirement savings by age in 2013. Based on the recent news of people continually ignoring their retirement savings, I assume today’s numbers aren’t much different. So, here’s the big question, “Is it good enough to be average?”

The average Social Security payout in June 2016 was $1,234.98. Add to that an average spousal benefit of $699.77, and that provides the average couple with an income of $1,934.75.

According to U.S. News, the average cost of retirement per month is $3,411.50. This means that the average retiree needs to come up with $1,476.75 on . . . → Read More: Retirement Savings by Age – Are You on Track?

How to Become an Automatic Millionaire

become an automatic millionaire

“What if I told you that in just an hour or two I could share with you a system that would slowly and surely transform you into a millionaire?”

Sounded like a bad sales pitch to me…like I was going to have to dish out $200 to a pyramid scheme before I could receive my millions. In fact, I almost took the CD out of our car stereo right then and there. Thankfully, I pressed on and let the man talk.

Liz and I were on our way back from Tennessee. It was a fantastically relaxing trip, filled with reading, hiking, and many daytime naps. We desperately needed it and were so happy we made the trip. On the way back, I decided to turn my brain on again to learn a little something about our personal finances. I popped in the book on CD, “The Automatic Millionaire” by . . . → Read More: How to Become an Automatic Millionaire

10 Signs You’re Not Saving Enough for Retirement

not saving enough for retirement

The average 65 year old has $149,000 saved up for retirement…which is absolutely pitiful. Even if they receive $2,000 a month from Social Security (and I wouldn’t depend on that in the future), their monthly income with a 4% draw from their retirement account is still under $2,500 each month! At this point, I sure hope most of these 65 year-olds don’t have a house payment, otherwise they’re sunk. Based on this simple scenario of the average person, it’s important to recognize the signs you’re not saving enough for retirement.

10 Signs You’re Not Saving Enough For Retirement

You work hard. You earn lots of money. Wouldn’t you like to have some of it when you’re older? Heck, wouldn’t you like to have LOTS of it when you’re older? I think we all do. But, you have to be willing to sacrifice some things today if you want to . . . → Read More: 10 Signs You’re Not Saving Enough for Retirement

Should I Pursue an Executive Career or Financial Independence?

employee or entrepreneur

At the age of 27, I proclaimed that I would retire by 34. A pretty crazy proclamation I know, but I had a plan: I would live frugally, invest, and also build up my website to be one of the top blogs in the nation, making it worth $1,000,000 or so. I would then sell the site, live off that million bucks for the next 30 years, and at that point start drawing from my retirement account.

This idea sounded pretty rock solid at the time (blogs actually do sell for millions of dollars by the way), but as many of you know, life rarely goes as planned. Since then, I went through an unexpected divorce, ended up owing thousands of dollars from the settlement, and my blog was penalized by Google soon after. Not exactly the golden road to early retirement…

At this point, my site is worth around . . . → Read More: Should I Pursue an Executive Career or Financial Independence?

How to Tackle Multiple Savings Goals

retiring extremely early HSA

When there’s only so much money to go around, there are often multiple savings goals competing for your money. Think of the young professional who’d like to get a more reliable car, buy a house, and save for retirement. Or consider the young family that’s saving for college, retirement, and a bigger house. No matter the stage of life, when you’re trying to make the most of your money, you probably have multiple places to send the cash.

Consider How Much and How Long

When you’re saving for multiple goals, there are several things to consider. For one, you need to know how much money you need. You also need to consider how long you have to save and invest for your goal. This is called the time horizon.

Time Horizon and Investing

The sooner you need the money, the less risky you can afford to be . . . → Read More: How to Tackle Multiple Savings Goals

How to Become Stay at Home PARENTS (Yeah, that’s plural)

getting rid of debt while you're young

Many couples struggle with the thought of just one of them staying at home with their children, but I say, “Why not both?” In this day and age, it’s becoming unheard of for a spouse to forgo their income to stay at home with their child, but in my opinion, becoming a dual-stay-at-home couple is becoming easier than ever !

My fiance and I have tossed around the idea of one of us staying home with our future children, raising them how we see fit. And can you guess the response that our friends give us? “If one of you stay at home instead of working, you won’t have any money and you won’t be able to do anything.” Some of you might share the same view – and I’d say that you’re incredibly narrow minded. Seriously, get your head out of that box you were brought up in and . . . → Read More: How to Become Stay at Home PARENTS (Yeah, that’s plural)

Is It Enough to Save 15% of Your Income for Retirement?

income for your retirement

When it comes to saving for retirement, how much is enough? As a starting point, many experts recommend that you save at least 15% of your income for retirement. One of the loudest personal finance voices out there, Dave Ramsey, recommends saving 15% of your income for retirement as part of Step 4 in his seven baby steps to financial peace.

But what if you got a late start in your financial journey? The later you start to save, the less time your money has to compound and work for you to build wealth. And if retirement is close, it’s probably wise to move your money into less risky, lower performing investments. You’ll earn a lower return, but you’ll preserve more of your capital so your money is there when you need it.

Is saving 15% of your income for retirement always enough to live a comfortable lifestyle in your . . . → Read More: Is It Enough to Save 15% of Your Income for Retirement?

Becoming Wealthy or Being Cheap? Or Both?

becoming wealthy

Are you taking actions toward becoming wealthy or are you actually just being cheap, likely never to get truly wealthy? And what’s the real difference? As Ramit Sethi often talks about on his blog, I Will Teach You To Be Rich, cutting out a few expenses is not going to dramatically change your financial future. In fact, if you ordered a tall latte every day before work for a year, it would cost you about $1,000. That sounds like a lot of money, but what if, during that same year, you started a side business that generated an additional $10,000 in profits?

As my nifty graph shows above, the difference maker was not those negative lattes, it was the positive business income. Becoming wealthy is often done by massively increasing your earnings, not by scrimping and saving your way into a poverty-stricken lifestyle.

Becoming Wealthy – When . . . → Read More: Becoming Wealthy or Being Cheap? Or Both?

What If I Spent My Money Like 90% of Americans?

what if I spent my money

Did you know that the median American savings is $0.00 each year? Since pensions are now nearly extinct and Social Security is teetering on the brink of failure, you’d think that Americans would be saving much more now than in the past. In reality, however, many are saving far less.

Take a look at the chart below. The bottom 90% of earners in America typically save less than 5% of their income each year. And, as of the year 2000, they are saving even less than that (even into the negatives at times)! Some people reason that the low savings rate is natural because the bottom 90% are earning less to begin with. I agree with this to an extent, but is a 3% savings rate really the best a family can do that’s earning more than $50,000 per year? After all, that would mean that they’re only saving about . . . → Read More: What If I Spent My Money Like 90% of Americans?

Extremely Early Retirement – It’s Just Not Working

extremely early retirement

There is a new craze going around these days, and it’s called Extremely Early Retirement. While the majority of this world struggles to live paycheck-to-paycheck, a handful of individuals are enjoying an extremely early retirement at the age of 40, 35, or possibly even as young as 30 years old. How in the world is this possible? Well, sites like MrMoneyMustache and EarlyRetirementExtreme lay out the calculations pretty clearly. All you have to do is live on less than 25% of your income (and invest the remaining 75%) for about 7 years and you can officially quit your job and live off of your investments!

The chart above might appear intimidating at first, but it is actually a fantastic tool to figure out how many working years you’ll have to endure at various savings rates and investment returns. As with anything, it’s probably best to explain the . . . → Read More: Extremely Early Retirement – It’s Just Not Working