Posts Tagged ‘savings’

Boost Your Savings Once The Kids Leave The Nest

Thursday, December 13th, 2018

FMI - Boosting Savings After the Kids Leave the Nest

For many couples, retirement planning takes on fresh importance once their children leave the nest, especially if  they have put off savings during the child-rearing years. If this is your situation, think about directing a greater share of your income toward your retirement. It may be helpful to devise a strategy several months before you face an empty nest, figuring out how far behind you are in building your nest egg. Having a written budget is critical, as is auto-depositing your contributions. That way you’re not tempted to spend your increased income once the kids are launched.

Accelerated Retirement Is Possible If You Follow The Right Roadmap

Friday, December 7th, 2018

FMI - Retirement Planning

Everybody imagines retiring early, but few people manage to do it. A recent Willis Towers Watson survey reported that far more working Americans are planning to retire after age 65 (46%) than before it (30%).1 Here are five steps you can take to jumpstart the process.

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2017: A Good Year For Participants

Tuesday, December 4th, 2018

FMI 2017: A Good Year for Participants

Auto Features Contributing to Participation, Average Balance Increases

It was a good year for individual account plans, including 401(k)s and 457s. In fact, 2017 may go in the record books as the first year the number of plans with an average auto-enrollment deferral rate of 6% exceeded the number of plans with a default deferral rate of 3%, as it has commonly been.

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Planning Finances As A Single Parent

Tuesday, November 27th, 2018
FMI planning finances as a single parent

 

[Written by Carla Seely]

Organizing and planning for your family’s financial well-being can be challenging at the best of times. However, there are many challenges involved in managing and maintaining a household as a single parent. Being a single parent means you have less money to spare, and there is a pressing need to have a solid long-term financial plan because in most cases there are no alternative sources of income. (more…)

Grow up financially while you’re still young.

Monday, June 23rd, 2014

imagesThe old adage of ‘the earlier you start to save for retirement, the better’ holds true today especially today. Here are a few questions you should ask yourself when starting to think about your options:

How much should I save?

Try to start out at around 15 percent, and that’s a minimum figure — 15 percent of your salary. It should be as easy putting that much away and more into a 401(k) plan. If you have a 401(k) with a match, up to half can of your savings can come from your employer.

Where should I invest my savings?

Index funds are a great way to get started since they allow you a wide range of investments including funds that invest in domestic stocks and bonds, and international stocks. A solid investment portfolio mixes equal parts of all three. The key aspect of an index fund is that it is generally cheaper.

What if I have a low paying job that doesn’t allow me to save much? (more…)

Hey, your 401(k) is not a piggy bank.

Saturday, June 7th, 2014

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With a piggy bank, you put money in and take it out. It’s a fairly simple tool, and it’s great for what it’s used for. A 401(k), on the other hand, is a great tool to save for retirement. But increasingly, they are being used as something they aren’t: piggy banks.

Recent studies show that Americans are increasingly pilfering from their 401(k) accounts. With the economy being the way it has been since the financial crisis, that’s understandable on one level, but the choice can put your retirement plans on a slippery slope.

According to the IRS, a whopping $57 billion was withdrawn prematurely from 401(k) accounts in 2011, up 37 percent in inflation-adjusted dollars from 2003. You could argue that if a person needed the money to survive, then an early withdrawal from a 401(k), even with the tax penalty, is better than most other options – to a point.

Unfortunately, younger individuals are withdrawing the most. According to a recent study, nearly 40 percent of workers between 20 and 39 cash out their plans when they change jobs.

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Being financially savvy with your 401(k) can earn you more.

Tuesday, May 27th, 2014

If ever you needed an incentive to learn more about money, this might be it. A new study shows that the more financially savvy you are, the more you’ll earn on your 401(k) plan. And not just a little bit more, a whole lot more–up to 1.3 percentage points more per year on your retirement plan investments than your less sophisticated counterparts.

In fact, being financially literate could help you build over the course of a 30-year working career a retirement fund some 25% larger than that of less-knowledgeable peers, according to the study, “Financial Knowledge and 401(k) Investment Performance,” which was recently published as a working paper on the National Bureau of Economic Research website.

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Your 401(k) can start to blossom this spring with these handy tips

Monday, May 5th, 2014

Unless you scour the voluminous info about your plan (which you should, but probably don’t) you might miss some important tips that can make a real difference in your planning down the road.  Here are seven things to bear in mind when reviewing your porfolio.

1. You can rollover.  When you leave your employer, you can transfer your 401(k) plan to an individual retirement account – and it is not a taxable event. This type of transfer is called a rollover. Many 401(k) participants think that any type of distribution from their 401(k) plan is taxable and subject to penalties. That isn’t true.

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Happy retirement: Stop worrying about paying taxes.

Monday, April 28th, 2014

When you contribute to a Roth IRA you typically don’t have to worry about paying taxes on that money or its investment gains ever again. And employers are increasingly adding a Roth option to their 401(k) plans. Aon surveyed 400 employers covering 10 million employees in 2013 and found that half now offer a Roth 401(k) plan. Here are some of the benefits
of saving for retirement in a Roth account:

Having a tax-free account in addition to your pre-tax savings gives you more options to reduce taxes in retirement.
Tax complications don’t end when you leave the workforce. In fact, your taxes in retirement can actually be more complicated than in the years when you were working. For the most part, you’ll want to withdraw money you have in taxable and Roth accounts first and delay paying taxes on your savings in traditional retirement accounts as long as possible. But it’s also possible that you could pay significantly higher taxes if you delay too long and your traditional retirement account gets big enough for required minimum distributions to force you into a higher tax bracket. With money in different pots, you’ll have a chance to run different scenarios and maximize your after-tax retirement income.

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Key questions (and answers) for Plan Sponsors

Monday, April 7th, 2014

Q: Is there a relationship between automatic enrollment and employer decisions about matching contributions and total compensation?

A: Recent research by the Center for Retirement Research at Boston College (CRR) found that auto-enrollment is related to relatively low employer match rates and default rates, but not overall compensation. The How Does 401(k) Auto-Enrollment Relate to the Employer Match and Total Compensation? report indicates that auto-enrollment plans had a matching rate of about 0.4 percentage points less than plans without auto-enrollment, even taking into account other factors.

The researchers also investigated whether low-default contribution rates adopted by employers who have auto-enrollment in their plans. It appears that employers who have this feature may be using a relatively low default rate, with resulting lower matching, to offset the higher costs that occur from higher participation rates found in auto-enrollment plans. 
The study concluded that auto-enrollment increases saving for workers who would not have participated in the plan without that provision. However, employees who would have participated in the absence of auto-enrollment may, over time, save less because of relatively low employer match rates.

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