Recent news reports have been full of dour news about the state of retirement savings in the United States. Many of these reports have focused on the news that many people have neglected saving for retirement at all, focusing their finances on immediate needs instead of planning for the future. Fortunately, there has recently been some good news about Americans and their retirement savings. A new analysis from Fidelity Investments is showing that more people are saving for retirement than ever before.
The analysis from Fidelity found that over a million people have increased the amount of money they were saving in their retirement accounts administered by the firm in the first quarter of 2015. Nearly a quarter of these account holders were saving more money in the accounts in 2015 than they were saving in the accounts during the same time period of 2014. The balance of the retirement accounts held by Fidelity have hit new highs due to the increased contributions.
If you have not yet begun saving for retirement, there is no better time to start than now. There are many different methods for saving for retirement available and each method has benefits and restrictions that must be taken into account before you decide on which method to use. Using these retirement saving accounts correctly can help you save hundreds of thousands of dollars for retirement over the course of a couple of decades. Here are some of the best methods for saving for retirement.
401(k) plans are employer sponsored retirement plans that allow account holders to divert a portion of their pre-tax income into an interest bearing investment account. The investments available for these plans are limited, but often have lower fees than the investments that you could find with a broker. One of the best things about 401(k) plans is that many employers offer matching funds for them, giving you free money just for saving for retirement.
Individual Retirement Accounts
Individual retirement accounts (IRAs) are another good method for saving for retirement. These accounts are funded with after tax dollars and grow tax free until the money is withdrawn during the account holder’s retirement years. IRAs have lower maximum annual contributions than 401(k) plans, but they are a great alternative if you do not have access to a 401(k) account at your employer.
The myRA plan is a retirement plan offered by the federal government for workers that do not have access to a retirement plan through their employer. The plan helps workers save for retirement by investing in special US Treasury bonds and the principal and earnings can be withdrawn at any time without incurring taxes or penalties. Although the plans have just recently been launched, they are expected to eventually help up to fifty million people start saving for their retirement.
Are you overextended financially? Many people are, yet are blissfully unaware of how precarious their financial situation really is. Financial overextension is very easy to get into and can be very hard to extract yourself from. Months or years of financial overextension damages your financial security, leaving you vulnerable to financial devastation at any turn of events. Before you can begin to correct the problem, you must be able to recognize the problem. Here are some of the signals that indicate you are facing financial overextension.
You Carry A Lot Of High Interest Debt
If you have a lot of debt spread out over different credit cards and you are paying close to the minimum amount each month on the debt, it is a signal of financial overextension. Roughly a third of American adults carry credit card debt from month to month with over 35 million of them rolling over $2,500 or more on their credit cards from month to month. Carrying high interest debt results in a considerable portion of your income going towards interest payments on the debt. Pay down your debt as much as you can or consider consolidating your debts into a single loan with a lower interest rate to retake control of your finances.
You Are Having Difficulty Paying Bills On Time
Having difficulty paying bills is another red flag that signals financial overextension. According to a recently conducted survey, nearly a quarter of Americans are constantly late with their bills. If you’re frequently paying bills late, getting hit with late fees or getting burned by your bank’s overdraft fees, that’s generally a sign that it is time to revamp your budget and reduce your spending. Getting a handle on the problem will take time, but it will be well worth it when you have more breathing room with your finances.
You Are Not Saving For Retirement
Neglecting to save for retirement because all of your money is going towards your current expenses is another signal of financial overextension. If your company has a retirement plan and you aren’t putting money in, especially if the company provides matching funds, you’re creating a future problem for yourself. Find a way to begin saving at least 5 percent of your current income for retirement by reducing your expenses in other areas. Once you have managed to save this amount on a regular basis, you can put a portion of any future raises or bonuses towards your retirement savings to increase the balance faster.
For many American adults, taking out loans is part of their financial life. Loans are taken out to purchase homes, purchase cars, pay for necessary repairs, fund education for their children, and help them handle significant unexpected expenses. If loans are handled the right way, they can be a beneficial financial product that can assist individuals with difficult financial situations. However, if mistakes are made when taking out loans, it can put the borrower in a worse financial position than they originally found themselves in. Here are some mistakes to avoid when taking out loans.
Failing To Read All Of The Details Of The Loan
One of the biggest mistakes a borrower can make when taking out loans is failing to read all of the details of the loan before signing for it. The details of the loan includes a lot of important information, including the interest rate for the loan, the fees that will be charged for the loan, and whether penalties will be assessed for paying the loan off early. People that fail to review this information carefully are often unpleasantly surprised later on down the road when the terms that they were unaware of begin to cause financial problems for them. Before signing on the dotted line, double check the details of the loan to ensure that you know exactly what you are getting into.
Failing To Consider The Long-term Implications Of The Loans
Many people make the mistake of focusing on the short-term gains of taking out loans rather than the long-term financial implications of the loans. It is important to understand that you will be paying on the loan for a considerable period of time and that the payments for the loan will affect your disposal income during that term. If the payments for the loan would cause a hardship for your finances in the future, you must carefully consider whether the benefits of obtaining the loan outweigh the risks to your finances in the future.
Taking Out Loans For Others
Another mistake that is often made when taking out loans is that people take them out in their name and then give the money to another person to use. While this may initially seem like a good idea to solve a tricky financial problem, issues often arise when it comes time to repay the loan. If the other person is unable to pay or refuses to pay, the original borrower is on the hook for the entire amount of the loan with little legal remedy for recouping the lost funds. Unless you are prepared to pay for the entire loan out of your pocket, avoid taking out loans for other people.
Finding full-time work has been difficult for many Americans, especially if they have already been out of work for an extended period of time. Because of the scarcity of good paying full-time jobs, many people have resorted to taking part-time jobs to make ends meet. While most part-time jobs do not offer the pay and benefits accorded to full-time workers, there are some part-time jobs that pay fairly well. These jobs are good options for getting back on your feet after a job loss. Here are some great part-time jobs that pay well and offer flexible hours.
Part-time office professionals can make up to $30 per hour depending on their area of expertise. Finance, Administration, and Human Resources departments at small and mid-sized companies often use part-time office staff when there is not enough work available to justify hiring a full-time worker for 40 hours a week. One advantage of these types of part-time jobs is they can quickly result in a full-time position if the company expands and more work becomes available. During expansions, companies would often rather offer additional work to the employees already established at the company rather than hiring and training new employees.
Driver For A Rideshare Service
Did you know that you could make between $15 and $30 per hour as a driver for a rideshare service? If you have your own car that is in good shape, have a smartphone, and can pass a background check, you stand a good chance of being hired as a driver for a rideshare service as a part-time job. Those who are located in larger cities have a greater chance of obtaining a significant number of riders throughout the week, but they will also face greater competition for those riders than drivers located in less populated areas. Rideshare services are not available in all areas, so do your research and find out if you would qualify before banking on this plan.
The childcare industry is quickly growing as more families have both parents working outside the home and trying to spend time alone together when they get the chance. A professional babysitter that has been screened by an agency can command between $13 and $18 per hour as a part-time job. For many of these agencies, when work becomes available in a particular area, the job is offered to registered babysitters in the general location if the customer has not designated a preference. To become a professional babysitter, you should be certified in CPR and first aid, be able to pass a background and drug screening, and have reliable transportation.