The right way to retire
Getting everything in order now to retire will help you get the most out of your career, investments, and savings.
Your Entire Financial Life in One Deceptively Simple Chart
Time for fun with charts! A famous chart in the early retirement community is The Crossover Point from the book Your Money or Your Life, which shows that you've reached financial independence when your investment income equals your monthly expenses: Fellow blogger Adrian of 7million7years also shared a related chart from Chris Han of Quora, where wealth is the shaded area between your income and e ... ...
Calculating Our Personal Savings Rate
Do you know what your households savings rate is? Most of us probably have a rough guess, but I wanted to use some more reliable data. Heres the definition again for my purposes: Current Spending There are plenty of ways of tracking your expenditures, as anyone who has tried to follow a monthly budget has found out: Handwritten expense lists Excel or other spreadsheets Online budgeting tools PDA/S ... ...
The Perils of Pursuing Financial Freedom
The following is a guest post from Kent Thune, who is a Certified Financial Planner(R) and the author of The Financial Philosopher, where he urges readers to place *meaning before money and purpose before planning*. ...
National Personal Savings Rate Definitions: NIPA vs. FoFA
In looking up some stats for personal savings rates, I found that the Bureau of Economic Analysis (BEA) provides a chart of two separate calculations that track the personal savings rates of US taxpayers: The National Income and Product Accounts (NIPAs) method, and The Flow of Funds Accounts (FFAs) method You may find either of these quoted in mainstream media articles whenever there is a big shif ... ...
Savings Calculator: Does 1% More Make A Difference?
If youre like me, your 401k plan comes with a little newsletter each month. A common theme in the world of personal finance advice is to nudge up your savings by one more percentage point a year. For the average person, this is probably not a bad idea. ...
Beyond Net Worth: Tracking Financial Progress Better
For a while now, Ive been thinking about a better way to publicly track my progress towards financial freedom and also allow easier comparisons between readers. Im sure some people would miss the net worth updates, but I have reached the point where our net worth fluctuates mainly with stock market valuations and not due to actual improvements to income or savings rates. ...
Don't Let 401(k) Auto-Enrollment Decide Your Contribution Rate For You
The Wall Street Journal has a rather surprising article 401(k) Law Suppresses Saving for Retirement regarding a recent law that allowed employers to automatically enroll their employees into their 401(k) retirement plans. ...
Comfortable Retirement = Saving 11 Times Working Income?
Via the NY Times, benefits consultant Aon Hewitt released their 2012 Real Deal study about workers at large companies and their readiness for retirement. The study assumes that an employee will work at least 30 years with some large company, not necessarily the same one, and then retire around age 65 with Social Security kicking in. ...
How Many Years Until You Can Reach Early Retirement?
One of the recurring themes of personal finance is that while the concepts are often simple, execution can be quite difficult. A couple of excellent posts from Mr. ...
Retirement Rule of Thumb #537: Age-Based Targets at 35, 45, and 55
Heres yet another retirement rule-of-thumb, this time by Fidelity Investments. [...] the average worker may replace 85 percent of his pre-retirement income by saving at least 8 times his ending salary. In order to reach the 8X level by age 67, Fidelity suggests workers have saved about 1 times their salary at age 35, 3 times at age 45, and 5 times at age 55. ...
Pay Your Kids To Fund Their Own Roth IRA?
Youre probably aware of the wonders of the Roth IRA and how it allows your money to grow completely free from taxes, even upon withdrawal. An added wrinkle is the lack of age restriction, so that even kids with earned income (wages, salaries, tips) can contribute to a Roth IRA up the lesser of their taxable income or $5,000. ...
House Value Update Q2 2011: Mortage Loan Payoff Calculations
As part of tracking our financial status, I regularly check in to see how long it will take to pay off our home mortgage. Buying versus renting is a very personal decision, but we ended up buying our house three and a half years ago and still plan on staying in it for the foreseeable future. ...
Minimizing Your Personal Inflation Rate
Inflation. Deflation. Hyperinflation. Its all people seem to talk about these days. Im always reading that you should always consider your investment returns after inflation. ...
Do I Have An Obsession With Early Retirement?
After my post counting down my years until early retirement earlier this week, I received a very thoughtful e-mail from reader Tim: Ive been reading and enjoying your blog for a long time, and think its one of the best out there for your mix of personality, short-term and long-term financial tips and advice. ...
Debt, Debt, and More Debt
After seeing this household debt bubble chart, Ive been especially sensitive to news about consumer debt. Here are some recent stats from across the spectrum: Mortgages According to real estate data firm CoreLogic, 22.7% of US homes with a mortgage had negative equity in the first quarter of 2011, meaning the outstanding mortgage amount was greater than the value of the property. ...
Morningstar Lifetime Allocation Indexes
Morningstar recently started publishing their Morningstar Lifetime Allocation Indexes, which are designed as benchmarks for mutual funds that shift their asset allocation as a target retirement date nears. An example is the Vanguard Target Retirement 2045 fund (VTIVX), a buy-and-hold fund designed for those retiring around the year 2045. ...
Should I Dip Into Savings To Max Out Roth IRA?
Its getting very close to April 15th, which in addition to tax returns is also the funding deadline for IRAs in the 2009 tax year. A reader wrote in asking whether they should dip into their savings in order to fully fund their Roth IRA contribution for the year. I would imagine this is a common scenario this time of year. ...
Making an Early IRA Withdrawal From Vanguard
What if, for some reason, you really do need to make a withdrawal from your IRA before you are 59.5 years old? One example is withdrawing a Roth IRA contribution without penalty, which you can do at any time. Some folks were wondering how hard it would be to do so, so I just tried to withdraw $100 from my Roth IRA held at Vanguard. Would they put up a fight? Require forms signed by a notary public ... ...
Portfolio Check: Do You Need Investment Management Help?
I received a thought-provoking comment last week on my Fidelity Portfolio Advisory Service review. Since this post is a couple months old by now, I doubt most readers saw it. After reading it, my first guess was that somehow the visitor was interested about Fidelity PAS and also read up about my own investing activities. ...
Are You Protecting Your Most Valuable Asset?
We are all leading busy lives, and its all to easy to miss the woods for the trees. ...
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About the author:
I love to help people improve their lives. I always try to find the right techniques to make life easier, the right products to make tasks faster so that I can be more productive, and spend more time with my 8 month old daughter and my husband. Hopefully some of the things that I have found can help you in your life and home as well. ~ Brianna Lane