Roughly 30% of American adults have no emergency savings. On top of that, the average American couple has only saved $5,000 for their retirement. It’s pretty difficult to think about retirement and personal finance when many Americans are living paycheck to paycheck, especially after being hit by the Great Recession.
Still, when it comes to everyday living and retiring comfortably, it’s important to have a personal finance management system in place. Financial decisions that will impact personal finance include budgeting, investments, mortgage planning, savings, and retirement planning.
That said, everyone’s personal finance is different and will depend on earnings, living expenses, and short and long-term goals. Some of the most important factors impacting long-term personal finance include savings and investment.
That’s because today, the average retired worker in the U.S. receives approximately $16,092 annually, or $1,341 per month. That isn’t a lot to live on, especially when you consider the average life expectancy is around 80 years of age and climbing. Those who retire at 60 need to have enough savings for at least 20 years.
It’s critically important for Americans to take control of their personal finance and not only rely on Social Security but also have additional income vehicles to take advantage of. When it comes to personal finance and investing, in the past, it was pretty simple: invest 60% in stocks and 40% in bonds and rebalance annually. It’s not that easy anymore.
Because of the artificially low interest rate environment, Treasury bonds now yield less than 1.5%. That adds up to just $150.00 annually on a $10,000 investment. Before the Great Recession, yields were around five percent. In the 1990s, the yield on a 10-year Treasury bond was close to seven percent.
While the 60/40 rule of stocks to bonds was always just a rule of thumb, today, personal finance allocation for stocks across all age groups and risk tolerances may need to be considerably higher than traditional bonds.
Even then, the definition of “bonds” might need to be broadened to include popular income streams, such as solid, high dividend-yielding stocks, which can be above five percent a year. After all, personal finance is a marathon, not a sprint, and includes a diversified portfolio that couples long-term investing strategies and growth opportunities with risk tolerance.
Young Leading Surge in Retirement Saving One of the lagged indicators for an improving economy is that people find more disposable income on their hands to think about life’s other priorities after food, shelter, and health. And saving for retirement.
Knowledge of Their Retirement Goals Can Cut Stress New York, NY — You should feel lucky if you’re part of that minority group in the U.S. whose members don’t lose sleep over concerns and negative emotions about their retirement. A.
3.6% of Institutions Held 75% of All Endowment Assets New York, NY — Inequality in income and wealth in the U.S. has been the topic of many studies, but did you know that there are huge differences in college endowments.
Most Children Believe Parents Should Fund Their Education New York, NY — More American parents are saving money to fund their kids’ education than for their own retirement, according to T. Rowe Price’s “2016 Parents, Kids & Money” survey. About.
1-in-5 Students Did Not Apply for Financial Aid New York, NY — College is not cheap, but there is still a sizable portion of students who decide not to get financial aid. On Tuesday, the National Center for Educational Statistics.
Millennials Not Making Enough to Start Saving New York, NY — Nearly two-thirds of working millennials say they will never accumulate $1.0 dollars in savings over their lifetime, according to the Wells Fargo Millennial Study. Six in 10 millennials (59%).
Patience Makes You Richer New York, NY — More patient people grow richer and healthier than their more impetuous peers, according to a new study that compares elderly Americans’ willingness to delay financial gratification with their personal characteristics and lifetime.
Dividend Growth Fund Swells to $30 billion New York, NY — The Vanguard Group said on Thursday it is closing its $30.0-billion dividend growth fund to new investors as a protective measure. “Vanguard is proactively taking steps to slow strong.
A housing shortage has sent rents soaring across the country, leaving some Americans struggling to catch up. According to the Joint Center for Housing Studies of Harvard University’s latest State of the Nation’s Housing report, the cost burden for renters.
Everyone knows that rent has been increasing, but it might surprise you just how much faster rent has increased compared to income. According to a new study from Apartment List, using Census data from 1960 to 2014, inflation-adjusted rents have.