Mother and little daughter reviewing the family’s financial plan together with a laptop at home
Welcome to the New Year, a good time to talk about putting to a financial plan for the year! Let’s explore ways to make 2022 the year you reach financial independence.
But first, we need to examine some statistics that may explain why achieving financial independence can seem out of reach for many people. A recent savings survey found that 75% of Americans manage their own finances, with no help from a financial advisor. It’s tough to stay on top of a complex, fast-changing investment environment and shunning investments altogether is a recipe for losing savings to inflation.
In addition, increasing numbers of workers aren’t staying in jobs long enough to earn a pension, even if one is available for people who put in many years with a single company. That means employees must take more responsibility for their own retirement savings, most commonly through such plans as 401 (k) workplace savings accounts or Individual Retirement Accounts (IRAs).
The Bureau of Labor Statistics found people born between 1957 and 1964 held an average of 12.3 jobs between ages 18 and 52. So a Baby Boomer who opened a 401 (k) at each workplace could have as many as 12 such accounts over a working lifetime. That’s a lot of retirement accounts to keep up with, and it’s easy to lose track of them if you don’t roll them over into your next employer’s retirement savings program.
So let’s look at some ways to help you stay on top of your financial goals:
- Make it easy on yourself by having savings automatically deducted from your paycheck every month; you can designate the deductions for your Roth IRA, your emergency fund or even a vacation fund, and the amounts will build without your having to take action every time.
- Do the same thing with credit card or other recurring debts–put them on automatic payment plans. If you can afford to make more than the monthly amount, you will pay the debt off faster and save on interest charges.
- Start the year off with an honest conversation with yourself (and your partner, if you have one). What are your top 1-3 goals and what can you do to meet them?
- Review your portfolio. Is it performing to your expectations? Would you like to save more this year? Looking to change jobs? It’s time to make a meeting with a financial advisor and pronto. The good news is that you can easily make a virtual complimentary consultation. We are …….