Get Your Savings on Track

Get started and set goals.  Fidelity Investments recently put together an age-based savings guideline.

Here are the guideposts:

• At age 35, you should have saved an amount equal to your annual salary.
• At age 45, you should have saved three times your annual salary.
• At 55, you should have five times your salary.
• When you retire at age 67, you should have eight times your annual pay.

Sounds easier said than done, right?  Fidelity provides some shorter term goals to meet along the way which is helpful because having short-term goals can make a daunting task more achievable.  One example is to begin saving in a workplace retirement plan, such as a 401(k), at age 25. Save continuously and without interruption until age 67.  Fidelity recommends starting out by saving 6% of your salary and increasing by 1% per year until reaching 12%.

Unfortunately, almost no one is saving money in their early twenties, and if they are, it’s not 6% of their pay! These guideposts above could help you to reach retirement security, however it is imperative to get started as early as possible.  Regardless of your age, are your savings on track for retirement?

Are you “Unbanked”?

According to a recent article on CNN Money, nearly 10 million households across the country are living without a bank account.  Areas where the largest percentage of residents do not have bank accounts also have been found to have the largest percentage of low-income poverty stricken regions.

Odysseas Papadimitriou, CEO of CardHub.com says this is not a coincidence: “Wherever you see high poverty and low-income populations, you will see higher populations of unbanked.”

Most low-income families are not able to keep a high balance in their checking accounts or pay monthly fees, so they prefer to not have that type of an account.  Their alternatives can be costly and fee-ridden as well though.

Check-cashers, payday loans, tax refund anticipation loans or money orders all have fees associated with them.  Prepaid cards are also becoming more and more popular, like the GreenDot card.  However, even these cards have fees which can range on a “per transaction” basis of $.50 to monthly fees of $9.95.

In the last two years, the percentage on “unbanked” has increased from 7.7% to 8.2%.  Perhaps checking accounts could be offered that have absolute basic features at lower fees or even free.  It wasn’t that long ago that a standard checking account was offered for free at most retail finance institutions.

What is the Fiscal Cliff?

Basically, the Fiscal Cliff refers to the expiration of several tax cuts at the end of 2012 enacted under President George W. Bush, as well as mandatory spending cuts resulting from the debt ceiling fight last summer.

Spruce up that Cover Letter

I think it’s safe to say that the difficult economic environment has not left anyone untouched.  Folks feel it at the grocery store, with prices in goods increasing, and they certainly feel it at the gas pump every week.  Most recently I have noticed amongst my circle of friends an increase of those searching for jobs.  I know this is not new for many; however I found this article that was helpful in giving tips on how to make a cover letter really stand out by not committing these outdated pieces of advice.

Spring is in the Air

Jean Chatzky is one of my favorite people to turn to for practical financial advice.  Her philosophy about money is simple and matter-of-fact.  She encourages you to spend less than you earn (which can be difficult), to save, then invest and to protect what you have worked hard for.

Helpful Investment Advice for Young Investors

Recently, CNN Money ran an article with great advice for young investors. I think it is timely given that the last few years have caused such havoc on portfolios of investors of all ages. Hearing about those who were just about to get ready to retire, lose so much was heartbreaking and unnerving to say the least. The article was encouraging in that it provided sound advice for young investors, still wary about whether or not to invest. 

What’s the deal with the mortgage deal?

The all too familiar story of homeowners in over their heads owing more on their home than it is worth may have a twist! A $26 billion foreclosure settlement mortgage deal with the nation’s largest banks, will provide some relief to homeowners under pressure.

Consumer debt decreased in 2011

Great news, credit card debt decreased by 11% last year!

According to a recent article from CNN Money, the average credit card balance in 2010 was $7,404 and in 2011 this dropped to an average of $6,576.

Never too early to plan for Retirement

The economy as of late has really opened my eyes. It causes me concern to think of those in their retirement that have been severely impacted by the rapid shrinking of their retirement portfolios. What if that was me? What am I doing about my retirement? I currently have a small percentage of my paycheck automatically invested before taxes into a 401-K. Is that enough? What else can I be doing?

Can we stand another financial meltdown?

The Federal Reserve is having America’s largest banks go through a new round of Stress Testing to see if they would be able to endure financial meltdown like what we experienced in 2008. Stress Testing helps determine the stability of a given entity, in this case, financial institution.