One of my coworkers very recently moved to this state from across the country. In doing so, he had to pick up his family, sell his house and buy a new one all while working remotely, traveling back and forth and transitioning to a new area (and climate). We got to talking about real estate […]
I saw this proverb a few years ago through StumbleUpon and I re-discovered it recently. As part of the PF blogosphere, a lot of our attention is focused squarely on attainment of financial independence and eventual retirement. For your reading pleasure, a different take on the rat race: (source) Author Unknown An American tourist was […]
We here at DQYDJ are constantly scouring the internet for gems which will help you with the financial aspect of your life. This post is no different and we even extend the courtesy to your family as well…
A very interesting study out of Texas Tech University asks the question: How is Financial Literacy Affected By Age? The results are very interesting. Even though the paper reports that households with ages over 60 years possess more than half of the wealth in the United States, a decidedly younger crowd, the 45-49 year olds, possess the most financial knowledge. The implications: while we know that there is a decline in physical and cognitive capabilities which comes with aging, we should also note that with those cognitive changes may come curious financial decisions as well.
When it comes to guaranteed returns, there is a list of investments perhaps as numerous as your fingers. The most famous example is the 401(k) with an employer match. In order to charm you into investing some of your money in the company’s 401(k) account, most employers tend to put up a bit of their own money as an incentive. The return is immediate, guaranteed, and something that should be captured. The bottom line is – in almost all instances you should make sacrifices elsewhere in order to receive the full employer match.
Tying to an article earlier that my colleague PKamp3 wrote, personal finance seems to have taken a dive in popularity in more recent years. As a writer for a confessedly self-aware personal finance crowd, this assertion may seem irrelevant, surprising, or, at worst, alarming. As a young college graduate, many of my fellow coworkers (as well as I) have student loans as one of their more significant financial obligations on top of car loans and (soon) mortgages. Some plan on paying down their student loans as fast as possible to deleverage themselves and then start saving for a home. I am of a different and not necessarily correct opinion: to hold onto the student loans for as long as possible due to their incredibly low interest rate and tax-deductibility for incomes up to $60,000 (partial deductions up to $75,000).
It’s a topic we’ve covered here at DQYDJ before, and we’ll definitely do it again in the future. Every once and a while everyone needs a reminder: if you qualify, open a Roth IRA. If you have one and you aren’t funding it: do it. Here’s a rehashing of why!
In 2006, Former President George Bush signed a well intentioned law which allowed companies to automatically enroll employees in the company retirement program – and to automatically choose the investment in which they were enrolled. The Pension Protection Act of 2006 authorized companies to automatically enroll new participants and enroll them in three types of funds – lifecycle funds, balanced funds, and managed accounts – while absolving the companies of any financial liability for losses in the funds. As expected, the law has effectively increased the rate of participation in company 401(k) accounts.
Maybe it’s better if you haven’t checked it since like, say, 2007… but if you habitually check your 401(k) balance you may notice something – it has come charging back since the doldrums of the last few years. According to this article on CNNMoney, it’s not only your account which is happily recovering – 401(k) balances are at a record high… and the average 401(k) balance now stands at $71,500. Last years average? A mere $64,200, so contributions and returns have raised the average balance 11.5%!
Reality check or tempered expectations? The number of 401(k) investors who believe they can retire early has, as expected, decreased over the last few years of market turmoil. Since 2007, the number of investors who think their 401(k) or IRA accounts will be the largest source of income in retirement has fallen 7 percentage points – from 52% to 45%.