Here’s how much the average family in their 50s has saved for retirement

By age 50, your golden years are just around the corner.

To be financially ready to retire by 67, retirement-plan provider Fidelity Investments says you should aim to have eight times your salary saved by age 60.

Are Americans on track?

According to a report from the Economic Policy Institute (EPI), many Americans have some catching up to do. The mean retirement savings of a family between 50 and 55 years old is $124,831. For families with members between 56 and 61, the mean retirement savings is $163,577.

But those numbers aren’t representative of the state of American retirement. Since so many families have zero savings and since super-savers can pull up the average, the median savings, or those at the 50th percentile, may be a better gauge than the mean.

The median for families between 50 and 55 is only $8,000. For families between 56 and 61, it’s $17,000.

Source:  CNBC

How Well Do Stocks Hold Up In Geopolitical Crises?

Headlines like the growing conflict with North Korea, a renewed Cold War with Russia and the chance that France will elect a right-wing nationalist as president have many investors on edge.

In such times, it’s worth asking: do I need to take sizable steps to protect my portfolio in the event that things truly get out of hand?

But unless your personal fear index is skyrocketing, the likely answer, based on history, is no.

When it comes to major events like war, terrorism and even presidential assassinations, stock markets have proven to be remarkably resilient, assuming of course that these events don’t led to a massive hit to the economy.

In fact, stocks have held up well even when the U.S. and many other countries were arguably in bigger trouble than they are now.

In a piece written for Bloomberg View, financial writer Ben Carlson writes that from the start of World War I in 1914 until it ended in late 1918, the Dow Jones Industrial Average was up more than 43% in total, or around 8.7 percent annually.

The Dow rose almost 10% in the first day of trading after Germany invaded Poland on Sept. 1, 1939, writes Carlson, the director of institutional research with Ritholtz Asset Management. “When the attack on the U.S. naval base at Pearl Harbor occurred in early December 1941, stocks opened up the following Monday down 2.9%, but it only took a month to regain those losses,” adds Carlson.” From the start of World War II in 1939 until it ended in late 1945, the Dow was up a total of 50%, more than 7% per year.”

He also points out that stocks gained value during the Korean War and the Vietnam War.

Most of us remember […]

An Antidote to Market Worry?

I read an interesting comment Coach Frank Martin made to his University of South Carolina basketball team after losing a couple games towards the end of the regular season. He told them, “adversity is part of the deal”. Indeed, that is so in every aspect of life. If the stock market goes down a few days in a row, that’s part of the deal. It should be expected, anticipated, and embraced. Coach Martin’s team used adversity as fuel for the most exciting postseason run in the history of Gamecock basketball. The very same lessons can be translated into your approach towards investing.
If you pay any attention to the financial media noise on a day-to-day basis, you are left with the impression that markets should only go in one direction and that it is “news” when they don’t.
Of course, that is objectively untrue and even the expectation of markets only moving higher can easily become a problem. Investors worry about the markets; they worry about their futures and the markets.
What if there was an antidote to this needless worry about the markets? In medicine, an antidote is administered to stop the harmful effects of a poison. 
Within the context of financial planning and investing, worry can lead you to react to something you heard or read in the media. Assuming that your purpose for investing is something years into the future, why should you care if the market goes down today? Plainly put, the financial media is in the business of filling space/time and sensationalizing even mundane market events. Their best interest may not be your best interest. The media can easily poison your plans and your perspective.
The antidote to worry is doing, taking action.
That is, taking […]

What to do with your 401(k) when you switch jobs

Changing jobs is exciting, but there are some practical things you’ll have to deal with … like what to do with your old 401(k) plan.

1. You can leave the money in your old 401(k) plan

There may be a minimum balance required to leave your money with your old company, but most companies will let you do it.

That said, there are a few downsides of keeping your 401(k) where it is: One, you can no longer contribute to it, and two, you’ll have multiple 401(k) plans floating around.

Plus, if your old company gets bought or switches 401(k) providers, now you don’t know your login information or your account number and it can be a pain to figure out.

Leaving your funds with your previous employer is definitely an option, but typically, the downsides mean it’s not the best option.

2. You can roll over your 401(k) to your new employer’s plan

If your new employer accepts rollovers, this is a good option if you like the investment choices and the fees aren’t too high. This way, your money will all be in one account and it’ll be easier to manage.

If you aren’t happy with the investment options offered by the new plan, or the fees are too high, you have a third option.

3. You can roll over your 401(k) to an individual retirement account (IRA)

Your third option is to move your 401(k) into an IRA or Roth IRA, which is a great option because IRAs typically have lower fees and more investment choices.

They’re both retirement accounts — you just get to pick when you pay the taxes. With a traditional IRA, you contribute pre-tax dollars and let that money grow tax-deferred over time. You’ll pay taxes on your contributions (and investment gains) only when […]

Freelancers and independent contractors must plan ahead

There are more than 53 million freelancers in the United States, according to a 2014 study commissioned by the Freelancers Union. That accounts for about a third of the economy.

Whether you freelance full time or have a side gig in your off hours, it takes some financial know-how to make it work. Here are four important financial matters to plan for:

Cash flow

Freelancers sometimes struggle with uneven cash flow. Checks may not arrive when you expect. For people accustomed to having a full-time job where cash is seamlessly deposited into their bank account like clockwork, it can take some getting used to—and some savings to tide you over.

Be sure to pay yourself a salarys. You may also want to consider keeping your business and personal checking separate. That’s because you will need to keep records to help substantiate business expense deductions such as office supplies. Even if your business is something with extremely low overhead—you may find yourself paying a little extra for mundane things.

As a self-employed person, you may be able to deduct the cost, or part of the cost, of some of your business expenses—so it may make sense to track them apart from personal expenses. For more information, visit IRS.gov.

Because freelancers don’t have the luxury of knowing that another paycheck is automatically coming in two weeks, it’s vital to establish an emergency fund and keep paying into it regularly. Retirement savings have to be a high priority as well. It’s easy to let savings slip, but you should treat retirement savings like money you save to cover taxes—it’s something you can’t afford to ignore.

Consider saving at least 15% of your pretax income for retirement. That amount would include any retirement savings contribution […]

When markets get choppy…

No investor likes to hear that the market has experienced a big drop. But volatility is part and parcel of investing.

Dramatic moves in the market may cause you to question your strategy and worry about your money. A natural reaction to that fear might be to reduce or eliminate any exposure to stocks, thinking it will stem further losses and calm your fears, but that may not make sense in the long run.

So instead of being worried by volatility, be prepared. A well-defined investment plan tailored to your goals and financial situation can help you be ready for the normal ups and downs of the market, and take advantage of opportunities as they arise.

Market volatility should be a reminder for you to review your investments regularly and make sure you consider an investment strategy with exposure to different areas of the markets—U.S. small and large caps, international stocks, investment-grade bonds—to help match the overall risk in your portfolio to your personality and goals.

Keep perspective–downturns are normal and normally short lived.

Market downturns may be upsetting, but history shows that the U.S. stock market has been able to recover from declines and can still provide investors with positive long-term returns. In fact, over the past 35 years, the market has experienced an average drop of 14% from high to low during each year but still had a positive annual return more than 80% of the time.

Be comfortable with your investments.

If you are nervous when the market goes down, you may not be in the right investments. Your time horizon, goals, and tolerance for risk are key factors in helping to ensure that you have an investment strategy that works for you.

Even if your time horizon is […]

A good spring cleaning

Warmer temperatures make it a good time to thaw out and soak up some much- needed vitamin D. Why not use the subsequent energy boost to tidy up your personal finances?

Performing some financial spring cleaning can help you avoid making a mess of your fiscal affairs down the road. Here’s where to get started.

Revamp your budget

Living within your means is an integral part of a healthy financial lifestyle. But we’re all human, and those new kicks you spotted at the mall or that popular restaurant down the street can make it difficult to stay faithful to your budget.

“Everything in your financial life flows from your ability to effectively manage and allocate your income,” says Carrie Houchins-Witt, a financial adviser in Coralville, Iowa.

She recommends that you review your 2016 spending transgressions. Then recalibrate your budget for this year. That may mean zeroing in on and consequently reducing purchases in a given spending category, such as going out to eat.

Tweak your investments

As important as it is to track current spending habits, make sure also to review the investment allocations in your retirement account and other long-term savings. This spring, adjust the mix if what you hold no longer gels with your overarching financial goals.

“We are all so busy and — especially for the index-fund investor who relies on the simplicity of this kind of strategy — it’s easy to forget that we need to perform periodic maintenance to ensure our investment allocations have not grown out of whack over the last year,” Houchins-Witt says.

Financial adviser Mathew Dahlberg recommends rebalancing your portfolio.

“Regularly rebalancing a portfolio can add a few percentage points to long-term returns,” says Dahlberg, of Kansas City, Mo. He recommends using rebalancing tools offered by […]

4 Money Lessons you can Learn from Anthony Bourdain

Anthony Bourdain is now reportedly worth millions of dollars and is one of the richest chefs in the world — but the chef-turned-TV-personality had a number of financial roadblocks on his way to success. From blowing his money on drugs to racking up thousands in debt, as he told WealthSimple, an online investment management service, n a recent interview, has learned the hard way how to be more financially savvy. Here are some of the lessons we can take away from the top chef’s experiences.

1. Start saving when you’re young

Until he was 44 years old, Bourdain, 60, didn’t have a savings account. He called his delay in saving “a sad fact” and said, “I’d always owed money. I’d always been selfish and completely irresponsible.”

He’s not alone, however: nearly 70% of Americans have less than $1,000 in savings and 28% have no money saved at all. Erin Lowry, author of “Broke Millennial: Stop Scraping By and Get Your Financial Life Together,” said even people on a tight budget can make room for savings from each paycheck. “It’s important to start the habit as early as possible,” she said. “Even if the amount you’re saving feels minuscule, it’s really about building that foundational habit so when you do start to make more, you do not have to make a lifestyle shift.”

No matter where you are in your career, start putting away at least $5 a month to get in the healthy habit of saving.

2. Don’t owe anybody money

Bourdain learned the hard way that owing money can take a toll on personal finances — and mental well-being. The chef talked about the stress of constantly owing money when he struggled with substance abuse. “I didn’t put anything aside, ever. Money came in, money went out. I was […]

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