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Due to our busy lives and schedules, it's easy to lose sight of our financial objectives. Working with an advisor is like having a personal trainer at the gym who helps you refocus, get organized, and encourage you to achieve your goals.
How much we should be saving is a bit subjective. However, as a rule of thumb, 10% of gross household income is a great starting point for many. This, however, may not be enough depending on your age and if you have any previous savings toward retirement. In many cases, those who defer saving until their 30s and older will find they have to increase their savings percentage. If you have delayed saving, please consult with your financial advisor to work on identifying how much you should start saving today.
1. Know your monthly base take-home pay and spend within the confines of that amount.
2. Have retirement savings automatically drafted each month or from each paycheck.
3. Treat overtime like a bonus that is used for savings or paying down debt.
4. Live within your means today in order to expand your means tomorrow.
Perhaps. But it is more likely you'll grow accustomed to a lifestyle supported by your pay when working full-time and making overtime. Maintaining a similar lifestyle will require income streams from your pension as well as investments which have grown over years of diligent saving and prudent investing.
Employer-sponsored retirement plans such as a 457b, 401k, 403b, IRA, etc.. are simply tools which control the application of income taxes. We must select the proper tool relative to our goal(s) and the timing we anticipate achieving or reaching each goal. That being said, if your employer is providing a match toward your contribution(s), then you will want to participate at a minimum to achieve their "free" money. Discussing these decisions with your financial advisor before committing your hard-earned dollars is always a good idea.
Many times, we look at this from a mathematical perspective. If the interest rate of the loan is lower than the average return you can receive from investing your money, then it may not make sense to pay off the mortgage. An advantage of a mortgage is that we can often write off the loan interest on our taxes if we are itemizing our tax returns. This is sometimes referred to as "good debt" since it reduces our annual income-tax liability. This is a very personal question though and does require an in-depth conversation, as there could be other factors to consider before making a final decision.