How to Conduct Midyear Financial Checkup

CENTRESTAGEFILMS — Thu, 24 Aug 2023 23:11:45 +0000

How to Conduct Midyear Financial Checkup

While summer is more readily associated with baseball, barbecues and beach parties, the season also provides the ideal opportunity to take stock of your saving and spending with a midyear financial checkup. As of July 1, the first half of the year is the rearview mirror, so reviewing the current state of your finances will enable you to determine whether you are on track to meet your annual goals.

It also can prove invaluable come tax time, as the checkup can reveal whether you are earmarking enough money each month for state and federal taxes. Confirming this now – and making any needed adjustments – lessens the likelihood you’ll encounter any unwelcome tax season surprises. Here are a few steps you can take to help you accurately assess your midyear financial health.

Is That 401(k) OK?: Retirement will be here before you know it, so double check to ensure you’re doing all you can to make it a happy and prosperous one. Make sure you’re contributing enough to your 401(k) to collect any employer match to which you are entitled; after all, who wants to leave free money on the table? Your goal is to max out your tax-favored retirement plan – 401(k), 403(b), IRA – to build that nest egg and access any potential current-year tax deductions.

Cut the Debt: There is no escaping some debt, of course; think student loans and home mortgages. Credit cards, however, regularly come with double-digit interest rates that can wreak havoc on your budget and overall quality of life, particularly with the Fed prepared to raise rates at least one or two more times this year. The most effective debt-reduction strategy is to tackle the card with the highest rate first, while continuing to make minimum monthly payments on the others to avoid late fees. Once that first debt is eliminated, move on to the next highest rate card until you are debt-free. In the interim, make sure you don’t pay for any new purchases with plastic.

Saving for A Rainy Day: Mid-year is also an opportune moment to ensure your emergency fund is up to snuff. Financial professionals recommend having three to six months’ worth of living expenses set aside in a liquid, interest bearing account, such as a money market fund or savings account, for life’s little emergencies. If you don’t have an emergency fund, there’s no time like the present to start one.

Where Does the Money Go?: The National Foundation for Credit Counseling suggests consumers, regardless of their financial position, track their spending for at least 30 days annually to get a better sense of where their money is going and to establish better spending and saving habits. Write down every cent and put your spending into categories. Look for opportunities to liberate cash flow by cancelling memberships in clubs you don’t use, slashing your cable bill and swapping one trip per year for a staycation.

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At Harmony Communities, we feel strongly that each resident has a sense of home. That they come home from work and feel pride in their environment and in their place in the greater community. That families are comfortable raising children in our neighborhoods, and that couples and singles know that they belong to something bigger than their four walls. In other words, we seek to create harmony within each community, making our communities not just passable, but peaceful, safe, functional, and beautiful.

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How Do I Know if I Have Enough Money to Retire?

CENTRESTAGEFILMS — Wed, 08 Jun 2022 21:27:39 +0000

There are a wide range of factors to consider before you make the decision to retire. What, for example, is your current level of job satisfaction? How far do you live from supportive family members, particularly those grandchildren? What is the status of your and your spouse’s health? And then there’s the matter of those post-retirement goals – just how do you want to spend your golden years?

That said, there’s no denying one factor trumps the rest – can you afford to retire? It’s not always so easy to figure out. The internet is loaded with websites and podcasts offering advice on how best to build and sustain your nest egg but comparatively light on describing when you have enough in those accounts to retire comfortably. Here are some indicators to look for.

You Can Forget Social Security: Recent generations know firsthand what history teachers never taught you about the New Deal – that Social Security benefits in and of themselves are not enough to retire on. Those contemplating retirement must not expect the federal program to be their primary source of income but rather a supplement to begin drawing at 67 or 70; icing on the cake, not meat and potatoes.

The 10 Times Rule: It’s clearly best to draw your retirement income from a range of sources – pension, 401(k), stocks and bonds, you name it. But how best to determine if their collective value is enough to retire on? Financial planners point to the 10 Times Rule, meaning you can access 10 times your annual net take-home pay. Simply multiply the latter figure by 10 and compare it with the value of your holdings to determine if you have enough salted away to retire.

And the 4% Rule: Financial planners also look to the 4% Rule to ballpark how much cash you will need in retirement. The 4% in question represents the portion of assets you will withdraw from your portfolio each year in retirement. If that number plus your anticipated Social Security benefits at least matches your current monthly budget, you’re likely good to go for retirement. You can also reverse the process –
multiplying your desired annual income by 25 can give you the amount you’d need in order to withdraw 4% from each year to live comfortably.

Prepared for Healthcare: Human mortality being what it is, the ever-escalating cost of healthcare must remain in the foreground of your retirement planning. Americans can access Medicare at 65 but every potential retiree must consider how best to finance their own regimen of treatments, checkups and prescription drugs. If you know how much you could potentially need to spend on healthcare and feel confident the resources are available – a big “if,” to be sure – then you have removed a major roadblock toward retirement.

Debt Free’s the Way to Be: A bit of a no-brainer, sure, but being debt free is a clear indicator you are financially ready for retirement. Paying off the mortgage is the obvious first step with auto loans following closely behind. Retiring these debts frees up more money each month to, well, retire on.

The post How Do I Know if I Have Enough Money to Retire? appeared first on Other CMS.

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How to Conduct Midyear Financial Checkup

How Do I Know if I Have Enough Money to Retire?