For many Americans, retirement is a stressful topic. Surveys repeatedly show a large percentage of US households are nowhere close to accumulating enough assets to enjoy a comfortable retirement. Instead, they live with a series of nagging thoughts about the tenuous nature of their long-term financial future, wondering…“Will I ever have enough money to retire?”
Beyond the financial considerations involved in deciding to accept a 0% balance transfer, there is a critical psychological component: You must have the discipline to use the offer to your advantage in accelerating debt reduction. It is easy for spendthrift consumers to see no interest charges and lower payments as a way to increase their spending (which is precisely what the credit card company intends). Instead of accelerating payoffs, they end up with even more debt – often at higher rates. Credit card companies make 0% balance transfers an easy do-it-yourself project. But because of the details involved, many consumers would benefit from a second opinion from a financial professional familiar with their unique circumstances.
Spurred by a proliferation of free on-line programs and the ability to integrate data from multiple financial institutions, a trending “new idea” from financial behaviorists to encourage saving is…are you ready?...ESTABLISHING AND MAINTAINING A PERSONAL BUDGET. Do you need a budget?
Under recently proposed guidelines for prohibiting further contributions, the threshold for retirement account balances would be approximately $3 million. Using current assumptions, the White House estimated this limit would impact only 1% of U.S. retirement account holders. However, an analysis by the Employee Benefits Research Institute released April 15, 2013, challenged that assumption, stating up to 5% of workers under age 35 could eventually find their contributions capped before retirement. This disagreement about the potential impact prompts the question: How hard is it to accumulate $3 million in a qualified retirement account?
For all the window-dressing the financial service industry can add to the process, it is possible to distill the essential issues in retirement planning to two, expressed as a ratio of working years to retirement years. This ratio does not produce an exact number for retirement, but it gives you a sense of the task at hand, and how long you have to complete it. This ratio can also be quite instructive, particularly when placed in a historical context, because the numbers used to create it reflect significant demographic and economic trends that impact individuals. What is your ratio?
A generation ago, a typical retirement discussion usually included a reference to or illustration of the “Three-Legged Stool.” This was an analogy to describe the three most common sources of retirement income - pensions, personal savings and Social Security.
While many from the previous generation enjoyed a stable retirement from the three-legged stool model, changing circumstances are rocking each of these retirement sources.