One of my favorite things about being a personal finance blogger is getting to discover and read some great books. This week I want to share some wonderful stories and experiences I read from Clark Howard’s new book, Living Large for the Long Haul.
In it he shares the stories of over 50 different people from all socio-economic backgrounds who have improved their finances even through The Great Recession. Included among the numerous stories are couples, young and old, who are working together to get out of debt, build their wealth, and invest in their futures.
Mike Pollard and his wife are working hard at saving for retirement. Mike is 50 and had just $30,000 in his portfolio, much lower than what he needs to have if he wants to retire at 65. Most people would be so discouraged that they don’t even bother to fix the problem while others would simply be in denial and just hope that their Social Security income will be enough when they retire. That’s not the Pollards style.
Mike has bumped up his retirement savings to 14% of his income and his wife is setting aside of her income. In addition to their savings, they are also taking advantage of their employer’s match program, giving them a dollar for dollar match for the first 4% they put into their accounts.
Working as a Couple for Retirement
What if you’re in the same boat as Mike and his wife? While not an ideal situation to be in, you two can still ramp up your contributions between now and when you retire.
Check your employer’s plans. Employer sponsored plans like 401(k) can be a fantastic tool for building your retirement plans. One benefit of saving in a 401(k) is that your contributions are tax deferred. That means that you lower your taxable income now while investments grow for retirement later. Some employer’s also offer a match for your contributions, making a good deal even better.
Max out contributions if possible. Right now if you’re 50 or older, you can contribute up to $23,000 each year (per person) in a 401(k), 403(b) or Thrift savings Plan and $6,500 for an IRA (though there are income eligibility requirements with IRAs). even if you can’t max out your accounts, putting away something is much better than nothing.
Automate your contributions. The easiest way to stay on target for your investment goals is to go ahead and automate your IRA contributions. It has certainly helped me avoid skipping deposits.
Increase your contributions every six months. Twice a year look at your budget and see if you can tweak your budget to boost your contributions. A little goes a long way.
I definitely like Vanguard and Betterment as places to invest your IRA contributions. They are both some great no hassle, low cost options that make it simple to invest in your future.
Thoughts on Jump-starting Your Retirement Investing
I’d like to hear your take on investing and where to begin. How have you started with your investing? What was the most difficult step in setting it up? Was it easier or harder than you expected?
Not sure if it’s an ego thing (I’m sure why wife would say “yes”), but I like to have the best of the best. I don’t want a good steak, I want the “best” steak when I go out to eat. When I go the movies, I don’t want to see a good movie. Screw that! I want to see the “best’ movie.
When you’re buying life insurance, you need to have that same ego-driven mentality to make sure you’re choosing the best life insurance company.
Having life insurance is important for every person out there, regardless of what you are going to be leaving behind. You want to make sure that you are not forcing your loved ones to go into debt and that everything is covered after your death. When you pass, this will provide money to the people who need it. This money will be used to cover your funeral costs and will help them to manage any other needed expenses. No matter what happened or where you are in life, this will do what you need it to do.
Choosing the company for your life insurance is just as important as having it. You need to put a lot of effort into this if you want to make sure that it pays out for you or at least find somebody to help out. After your passing, everyone should have the peace of mind of knowing that this is going to be there for them. Without it, they will be stuck with massive funeral costs and other expenses.
This can put people into debt, and has in the past. Unfortunately, I’ve witnessed this firsthand. To make sure that this does not happen to your loved ones, you have to make sure that you choose best policy for you.
Are They Good or REALLY Good?
Your main concern should be how good the company is. Do your research and begin to understand more of the facts. If you want the best insurance company available to you, you are going to need to look for them. Think about how often they pay out and how reliable they are as a whole. Look into reviews and the history for each company to develop a greater understanding.
This will help you to find something that you can depend on for your money. Do not forget to consider other facts, either, like what they charge and how strict they are for acceptance and payouts. One easy to find out this out is to check the the life insurance company’s rankings. Companies like Moody’s, S&P, and AM Best will rate each company on how solvent they are. Look for one with at least an “A” rating.
Once you find a few companies that you know work, it is time to look for ones that offer the best policies. Different policies are for different people (think term, whole life, universal life, etc), and not all will fit your life. You do not want to choose something unsuitable because a lot of risks come along with that.
You might overpay, you might not have enough for everything, and you might not have the coverage that you need. Think about what your family and loved ones are going to need after your passing and then calculate how much life insurance you can afford. This will help you to find the cheapest policy that is just right for where you are in life.
Seek Assistance if Needed
Some insurance companies are not going to offer the quality that you need. While this does not mean that they are all bad, it does mean that you have to put some effort into the search. To make things easier for you, find a reputable independent life insurance agent who can help you navigate through the insurance maze.
Choosing the best company means choosing something that is reliable and that matches your life. You want to make sure that this is going to give you the coverage that you need and that your family is in good financial order.