healthcare costs. Conduct a thorough review of your financial assets and liabilities in order to make informed decisions about when to retire and how to plan for post-retirement. If you’re age 50 or older, you’re eligible for an additional $7,500 in catch-up contributions, raising your employee contribution limit to $30,500. If possible, maximize contributions to 401(k)s and IRAs in order to accelerate savings, and make up for any
gaps in savings in order to increase financial security in your later years.
As we recognize Financial Literacy Month, remember that any time is a great time for people of all ages to improve their financial knowledge and habits. By staying informed and proactive, you can navigate the landscape of money and finance with confidence and ease.
Personal finance basics: create a budget and plan ahead
BY ARAM ANTHONY
Build an emergency fund Emergencies can occur with little or no warning. Experts recommend having at least three months of living expenses available in a reserve fund. Consider opening a separate account for your emergency fund to keep you from dipping into it unnecessarily. 3
Save for your golden years Open an IRA account,
Regardless of where you are in your financial life, there’s no time like the present to make a plan and follow it. Here are seven steps to take on your journey toward financial freedom.
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which lets you set money aside for retirement and offers significant tax advantages. A standard IRA is funded with pre-tax income (you’ll pay income tax when you withdraw it), while a Roth IRA is funded with post-tax income (withdrawals in retirement will be tax-free).
Create a baseline budget Draw up a monthly
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budget that compares the money you bring in with what you spend. Ideally, you’re creating a sustainable monthly routine that allows you to meet your current needs while saving for the future.
Pay off high-interest debt Credit cards interest
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Invest in stocks and bonds How much you invest in
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rates can be more than 25%. If you have high-interest credit card debt, prioritize paying it down. Just imagine how good it will feel to see those account balances hit zero.
each depends on your investment horizon (how long you’re willing to wait before converting an investment to cash), and your tolerance for risk. Generally, the younger you are, the higher your potential for risk. That’s because you have more time to recover any losses.
Set your long- and short-term goals When it comes to
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Make the most of your employer’s match Most employers offer
money, try thinking of it in two ways: 1) What you need to pay for your everyday needs and 2) what you’ll need to save for your retirement. Your budget should give you a good idea of what your resources are and how to split them between these goals.
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contribution-matching retirement programs, usually in the form of a 401(k) plan. Check with your HR department to see how much you have to contribute to earn your employer’s maximum match.
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IN YOUR CORNER ISSUE 16 | 2024
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