Are You Saving Enough for Retirement?

Will your savings be enough to see you through retirement? This is a key question in planning, but many people still don’t know how to determine the appropriate amount they need to accumulate for a retirement-worthy nest egg.

Financial planners often recommend that you save between 10% and 15% of your income for retirement, beginning when you are in your 20s. But what if you are older? How do you know how much you will need then?

Saving between 10% and 15% is just a general guideline. When talking about your specific retirement, it pays to consider more personalized numbers. Another guideline, promoted by J.P. Morgan Asset Management, involves looking at your age and income together.

For example, if you are age 55, and your annual income is $50,000, J.P. Morgan recommends you have 4.7 times your income saved ($235,000); if your annual income is $100,000, have 6.9 times your income saved ($690,000); and if your annual income is $150,000, have 8.1 times your income saved ($1,215,000).

The main concept is to factor age and income into your retirement planning because they are the significant factors that will determine how much you need to live comfortably at your current lifestyle when you retire. In other words, when you start saving and how much you make are just as important (if not more so) than tucking away a flat percentage each month.

Of course, how you will achieve and grow your savings is another topic. Depending on your situation, we might recommend diversification or other strategies.

And remember, these are just broad guidelines. We can help you decide if your current savings numbers are on point based on your circumstances and goals.

Three Costly Insurance Mistakes to Avoid

When you are looking to save money on insurance, you may be tempted to reduce your coverage; but focusing on the numbers instead of your goals could leave you dangerously underinsured. This could lead to much bigger bills in the event of a disaster.

Here are three mistakes to avoid when it comes to insurance coverage.

Insuring a home for its value instead of the cost of rebuilding

Real estate prices fluctuate, and when they do, some people think they can reduce the amount of homeowners’ insurance they maintain. But that ignores a fundamental principle of homeowners’ insurance: it is designed to cover the cost of rebuilding your home, not the sale price of your home. As a result, your homeowners’ policy should be robust enough to ensure you can completely rebuild your home and replace your belongings. If you need to save money on your homeowners’ policy, consider raising your deductible instead.

Purchasing only the legally required amount of automotive liability insurance

Different states require different amounts of automotive liability insurance coverage. But the requirements are minimums. Buying only the minimum could mean you pay more out of pocket later, especially if you are sued, in which case the costs could be significant enough to jeopardize your financial well-being. Consumer groups generally recommend at least $100,000 in bodily injury protection per person and $300,000 per accident.

If you need to save money on your automotive policy, consider dropping collision and/or comprehensive coverage on older cars.

Choosing an insurance company by price alone

We all want to choose an insurance policy with competitive prices. But we also want to be paid in an efficient manner when a claim is filed. So we recommend you make sure that the carrier you choose is on stable financial footing and provides good customer service.