Summer is the perfect time for barbeques, but it’s also good opportunity to take the pulse of your saving and spending plan with a midyear financial checkup.
With the first part of the year in the rearview mirror, a quick look at your monthly budget can yield valuable insight into whether you’re on track to meet your 2021 savings goals. It can also help identify areas of waste and provide motivation to set new goals.
Check your retirement contributions. Savers should, at minimum, contribute enough to collect any employer match to which they are entitled, he said. Not doing so leaves free money on the table. Ideally, you should aim to max out your tax-favored retirement plans, such as a 401(k) or IRA, which not only helps to build your future nest egg, but also potentially yields a valuable current-year tax deduction. The annual contribution limit for 401(k) plans is $19,500. The total annual contribution limit for Traditional and Roth IRAs this year is $6,000. (That limit is $26,000 and $7,000 for participants age 50 and older.)
Tackle debt. Next, review your debt. If your debt level going up, you need to understand what’s happening with your financial situation and correct your spending pattern. Some debt, including student loans and home mortgages, are common and necessary, but credit card balances with double digit interest rates can cripple your budget.
How’s your emergency fund? The mid-year check-up is also an opportune time to be sure your rainy day fund is up to snuff. Most financial professionals recommend having three to six month’s worth of living expenses set aside in a liquid account, such as a money market fund or savings account.
Monitor your spending. If your debt level has been stagnant since January or you’re finding it tough to meet your savings goals, put the next lazy day to good use and get your budget under control. The National Foundation for Credit Counseling suggests consumers, track their spending for at least 30 days to get a better sense of where their money is going. Look for opportunities to liberate cash flow by halting memberships in clubs you don’t use, slashing your cable bill, and swapping one trip per year for a staycation. Most financial professionals recommend saving 10 to 15 percent of your annual salary for retirement. That’s easiest done by “paying yourself first” through automated deferrals at work.
Tackle your taxes. Most of us only pay attention to taxes in December, when it’s too late to implement many of the most effective tax-saving strategies. If you meet with your tax professional now, however, you can potentially still maximize deductions. Specifically, financial experts and tax professionals routinely suggest taxpayers check their withholding to be sure they’re on track to pay what they owe and nothing more. Look too, for opportunities to maximize charitable deductions,
The year is still young for those who are serious about getting their financial house in order. By examining your finances or working closely with a financial professional, you can potentially use the remaining months of the year to maximize your tax deductions, eliminate debt, and develop a saving and spending plan that will help you meet your financial goals.
https://www.clearyinsurance.com/wp-content/uploads/Cleary_Logo.jpg00Carol LaCombehttps://www.clearyinsurance.com/wp-content/uploads/Cleary_Logo.jpgCarol LaCombe2021-07-19 09:47:582021-07-19 11:31:355 Steps to a Midyear Financial Review
Will I have enough money to retire? It’s a common question and one that has increased in magnitude lately — especially for people in their 40s and 50s.
Indeed a MassMutual study in 2018 found that the greatest worry for those on the edge of retirement was not having enough money to enjoy themselves.
This can generate a feeling of frustration. You’ve been working hard for over 20 years. You’ve been saving as much as you can. Then, the market crashes, and your savings disappear. It’s not too late to bounce back. Even if you’re 55 years old and decide that today is the day to begin saving in earnest, you still have time to build up income for retirement.
On your mark, set your priorities, go
Determine what you want out of your retirement…what are your priorities? Sit down with a pen and paper and start a list. Empower yourself to make the important decisions today that will set tomorrow in motion:
When do you want to retire?
Where do you want to live?
What kind of lifestyle do you want to lead?
Consider your current lifestyle. Can you cut back to save more for retirement?
These are just some of the questions you should be asking — and answering — yourself. So take the first step and start making some decisions.
Save more, spend less
The most obvious advice still applies: save more, spend less. But there’s more to it than that.
Create a budget to help you stay on track — and actually stick to it. Decide where you can trim your expenses. What can you live without now so you can have more later?
If your budget isn’t working, you may want to consider downsizing to a smaller home or a less expensive location to help maintain your standard of living. This may be a difficult exercise, but remember you’re trying to catch up.
Speaking of catching up, if you will be age 50 or older at the end of the calendar year, you can take advantage of catch-up contribution options to accelerate the growth of your retirement accounts. The bottom line: make the maximum contributions possible to your employer’s retirement plan, including any available catch-up options.
Think outside the box
There are certain financial products and savings instruments that you may not be familiar with, but that may help you get more out of your money. Many people opt to consult a financial professional to help become aware of options and lay out a plan.
Delay retirement (The beach will wait for you)
People are working longer than ever before. Delaying your retirement by three years from age 62 to 65 can boost your assets significantly — thanks to the combination of making extra contributions to your employer-sponsored retirement plan, not taking withdrawals and allowing your funds more time to grow.
In addition, if you anticipate receiving Social Security retirement benefits, it’s important to understand that monthly benefits differ substantially based on when you start receiving them and the filing option you choose. For every year you postpone collecting benefits beyond your full retirement age (typically 66 or 67), you can earn an annual delayed retirement credit of up to 8 percent.
On the flip side, filing for benefits before your full retirement age can permanently reduce your monthly income. Benefits will decrease based on how early you retire..
The bottom line is that there are real steps and strategies you can take today to help secure your future. It’s never too early or too late to evaluate your current retirement savings plan — or create a new one.
https://www.clearyinsurance.com/wp-content/uploads/Cleary_Logo.jpg00Carol LaCombehttps://www.clearyinsurance.com/wp-content/uploads/Cleary_Logo.jpgCarol LaCombe2021-04-13 15:29:112021-04-13 15:36:07Saving for Retirement: Are you Ready?
Staring at the same four walls for the past year may have triggered you to start thinking about making some changes. Many of us have taken the opportunity to tackle home projects this past year. In 2020, Farmers Insurance surveyed homeowners and found that 62% of those polled are planning renovation or maintenance on their homes. Of those planning renovations, only 28% said they understand their homeowner’s policy. If you have already completed or are thinking about making changes, here are a few insurance considerations.
Your home insurance provides coverage for the home as it stands today. Increasing square footage, adding a garage or pool increase the value of your home beyond your coverage limits.
The most common, and costly, improvements are made when updating bathrooms or kitchens. Upgraded finishes such as countertops, cabinets and fixtures may leave a gap in coverage. This is especially important for condo unit-owners. As a unit-owner you may be responsible for any improvements made after the purchase.
Your policy most likely wont supply coverage for faulty work. For instance, if you update your electrical system and down the road it leads to a fire, there may be coverage for damage caused by the fire, but the cost to correct and replace the electrical components would be out of pocket.
When choosing a contractor, always request to see their certificate of insurance. Contractors should have coverage for liability, property, and workers compensation. In the event they do not have adequate insurance, you may want to consider a different contractor. If a contractor causes damage to your home, their insurance should be the primary option for recovery.
In summary, its important to ensure you have adequate coverage in place and are clear on the risks that come with home improvement. If you are planning or recently completed a renovation, please contact us to ensure your new investment is adequately protected!
https://www.clearyinsurance.com/wp-content/uploads/Cleary_Logo.jpg00Carol LaCombehttps://www.clearyinsurance.com/wp-content/uploads/Cleary_Logo.jpgCarol LaCombe2021-04-13 15:28:352021-04-14 08:27:44This Old House, Needs Some Updates