3 Things 1-6-25

Thing One

You and Your 401k

The beginning of a new year is a great time to take a look at your retirement plans and make the appropriate adjustments to help you reach your goals. Catherine Brock of Yahoo Finance has some guidance you should take into consideration. See below:

“…You may also be interested in setting milestones for your 401(k) balance so you know your savings are on track. The process of setting milestones is an inexact science, however. One approach is to set a saving goal to reach by retirement and then work backward to identify milestones for ages 30, 40, 50, and so on. But knowing how much wealth you need to retire is hard to predict.

Pam Krueger, founder and CEO of wealth manager Wealthramp, recommends targeting a retirement balance equal to six to 10 times your gross salary. If that is the end goal, your 401(k) milestones might be:

· 401(k) target balance in your 20s. One to two times your gross salary. If you make $60,000, for example, the target would be $60,000 to $120,000.

· 401(k) target balance in your 40s. Three times your gross salary, or $180,000 if you earn $60,000 annually.

· 401(k) target balance in your 50s. Six times your gross salary, or $360,000 on a $60,000 salary.

· 401(k) target balance at retirement. Ten times your gross salary, or $600,000 on $60,000 in annual earnings.

·

This advice comes with two caveats. One, the target balances will increase if you expand your lifestyle as your salary grows. Expanding your lifestyle in your working years ultimately increases the cost of your retirement.

Two, these are guidelines only. There are many factors to consider when defining your target retirement balance.

As Thomas Buckingham, chief growth officer at Nassau Financial Group, explains, "There is no one dollar amount of assets or ratio to salary that will work for everyone…"

As for how to get to the balances over time, she offered up the following tips:

“…Use auto-escalation. Some 401(k) plans have an auto-escalation feature that increases your contribution rate automatically. You set the terms, which include the amount of the increase and the cadence. It makes sense to plan the increase to happen around the time you expect an annual raise.

Hold lifestyle spending steady. You can use pay increases to raise your 401(k) contributions instead of expanding your lifestyle, according to Saïd Israilov, CFP, financial planner and wealth manager at Israilov Financial. Resisting the urge to upgrade your home or car after a big raise can help you secure a more comfortable retirement.

Trim spending. Vanessa Welch, vice president for financial insights at wealth manager Empower, recommends reviewing your spending to find places to cut back. "By reducing unnecessary expenses, you'll have more to invest and will make real progress over time," Welch said….”

Please pass this advice on to anyone you think might benefit from it.

Thing Two

Two Potentially Money Saving Moves For You

The writers at financebuzz.com have compiled a long list of money-saving tips. Two of those tips, cancelling unwanted/unused subscriptions and systematically shopping your car insurance - especially now with the dramatic increase in car insurance rates – are on the list what we call must-do-no-brainers for 2025. See the relevant details below:

“…Get the one budgeting app that truly does it all

Ever look at your bank account and wonder where your paycheck went? *Poof,* it's gone … and you have NO idea how you spent it all so quickly.

A budgeting app like Rocket Money could end this problem for you.

Now, some insider info: They *do* have a free version of the app ... but the real money-saving power is found in their premium subscription.

Select a premium subscription when you sign up, and you’ll unlock features that actually save you the most money possible. Like their “Cancellation Concierge,” which helps to cancel subscriptions for you. (It’s pay-what-you-want for premium, too — as little as $4 a month!)

With your premium subscription, you’ll also be able to create unlimited budgets, see your full credit report, and get automatic “smart savings” that help you grow your savings on autopilot.

Download Rocket Money

Georgia Driver? Cancel your car insurance

We’ve got bad news. You could be wasting $600 every year on overpriced, second-rate car insurance. And you should probably cancel your existing insurance right now, because there’s something much better.

Our tool can tell you if you’re overpaying for your car insurance in just a few clicks. We match drivers with companies that report saving drivers up to $600 or more per year when they switch! Each driver’s savings will vary by driving history and how many discounts you’re eligible for. And once you try it out, you’ll never have to look for affordable insurance again because we find you the lowest rates that other companies can’t match.

Oh, and it’s also free. And come on — you can’t tell us you don’t want to save up to $600. To find out if you're losing up to $600 or more a year, just answer a few questions, and then make sure to enter your zip, dob, and email, to see if you qualify for a lower rate. It takes less than 2 minutes.

See if you’re overpaying…”

Thing Three

Just A Thought

"It is not that we have a short time to live, but that we waste a lot of it." - Lucius Annaeus Seneca