Make Ends Meet: Keep retirement savings robust during turbulent economy
LOUISVILLE, Ky. (WAVE) - From inflation to a volatile market, staying in charge of emotions and finances can be hard.
During most turbulent times in life, it often feels like there is no control, but there is always something we can do. Even if it is just understanding the situation.
When you are in the whirlwind of financial uncertainty, understanding as much as you can about your financial situation can truly make a difference.
Laurie Rowley, CEO and Co-Founder at Icon Retirement Savings Plan shares a few practical steps to take to help ease fears.
“When we don’t have a lot of control over what’s going on in the stock market we have to just hang on,” proclaimed Rowley.
With US inflation at a 40-year high and market volatility in the picture, some investors are bound to be a bit anxious and tense.
“Just take a quick peek at your personal finances and look at your budget and look at things you’re paying for that maybe you don’t need,” shared Rowley.
Once you’ve got a handle on your household budget, set financial goals and cut those unnecessary expenses. Rowley explained even if people save and invest $100 today in a tax-advantaged account, in 20 years that $100 could be $700.
“Pay off anything that’s a high-interest rate cause when you’re paying those high-interest rates you’re never going to get out of paying for those” stressed Rowley.
There is no firm definition of what qualifies as a high interest rate, but Rowley says anything over 7% is high. The higher the interest rate, the more money you’re charged in borrowing fees. Pay it off.
”If you can spend some time trying to figure out what the fees are on the investments in your retirement plan that’ll go a long way” exclaimed Rowley. “All retirement plans have fees”
These fees add up and in the present volatile market conditions can drain even more hard-earned retirement finances right out of a 401k. Take time to look at all the fees, charges, and transfers that happen in your account. Rowley stressed the importance of “your” account.
“Everybody needs to have their own retirement account,” explained Rowley. “So if you’re single, if you’re married, it doesn’t matter how old you are. Everybody needs to have their own personal nest egg.”
Rowley believed sitting on your own nest egg leads to a sense of financial health and well-being which is often overlooked but may be the most important thing of all. Physical and mental health is your first wealth.
“Your health is your biggest asset,” proclaimed Rowley. “It’s the thing that really enables you to earn a living, to thrive, and do all these things, and we really underestimate our health as an asset.“
You don’t have to save a lot of money. Just save as much as you can when you can. Even if you can only save a little it adds up over time with compound interest, it’s the easiest way to build your future wealth.
Also, pay attention to subscriptions that are paid monthly and automatically. Sometimes you don’t even use them, but you are still paying for them.
Rowley shared that a recent study showed that Americans spend over $200 a month on subscriptions - $2,400 annually.
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