New answers tagged

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A quick answer to give you some ideas about your assumptions: your pension will be a fraction of what you will earn later in life. So you might want to start your own saving so you will have extra "private" income You should have some extra savings. What is usually called "emergency money cushion" also apply to Europe. You might want some extra, faster ...


1

Adding my own answer as I've thought about it more and adding a piece that probably should have been included in the question. First off, I think it is correct (in agreement with the other nice answers) that the actual dollar amount in the nest egg must be related to your actual expenses in the year of retirement. So you must use inflation adjusted spending ...


3

You are correct. Better explanations of the 4% rule don't say "current expenses," rather they say expenses needed in retirement, expenses right before retirement, or some other wording to help address the issue you just highlighted. Simply applying the inflation rate for the number of years until retirement is probably a pretty good approach to keeping ...


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Spreadsheets are really handy for this!! I calculated my hypothetical initial retirement budget based on my current budget adjusted for: what my father currently pays for Medicare Advantage (we're in the US), what expenses I think might disappear, what new expenses I think might appear, how taxes are calculated, years until retirement, and estimated ...


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Trying to succeed at something that you are unfamiliar with is a daunting proposition and AFAIC, investing based on the advice of anonymous strangers on the web isn't the best approach. My generic advice would be to start the process of becoming financially literate. To do so, start by reading beginner level introductory material. There are a lot of "XYZ ...


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In my country (the United States) they advise to bank on a community bank, because they treat you as family, rather than big banks that see you only as a number ($). A checking account is for convenience - you can pay by using debit card or by check. I stopped using credit cards; we follow what the bible said: "a borrower is a slave to the lender". For ...


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Yes, most bank plans have a required minimum amount to avoid monthly fees. It's about $3000 (minimum balance in a month) to avoid about $10 in monthly fees, or ($5000 for $25, $1500 for $5 etc.. depending on your account). This works out to $120 / $3000 or 4% annual interest, ie. more than your savings account. So always keep at least the minimum balance ...


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Depends on the saving account. A good account yieds 2% and makes a savings account worth having. In this situation your strategy makes since. Earn some dollers before paying off the credit card each month. As long as your credit card charges don't exceed your long term saving goals. I use checking to avoid Reg D's 6 monthly transactions and rarely when ...


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In the USA, are there popular rent / spending / saving ratio recommendations? I would say "No", there is not a popular ratios governing personal finance categories. Really it is very dependent upon your goals and stage in life. For example, people who embrace "FIRE", or financial independence, suggest saving between 50-75% of their income. When people ...


1

The landlord has their own guidelines about what ratio of rent to income they will approve. This ratio in combination with the renters credit report gives the landlord an idea on how likely they are to struggle to pay the rent each month. What they can't see is the rest of the renters spending habits. They have no idea if they will spend all their money each ...


12

You said, Whenever I see things like this, they are always tied to moving money from your checking to your savings account. The reason why that's the mechanism they're suggesting is because most people treat their checking account as their primary transaction account - they leave their paycheck there, and spend out of it for daily purchases, bills, and ...


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If it looks like a scam and smells like a scam; yes it’s a scam.


2

Gold provides diversification in a portfolio and is often correlated with the stock market during risk-on periods, while it decouples and becomes inversely correlated during periods of stress. This is unique amongst most hedges in the marketplace. We provide the correlation between gold and many major market indices across various assets classes ...


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Is it a good idea for someone in the middle class to invest in physical gold as a safe guard against economic crisis? No. This is not investing. This is preparing for the worst. Or actually, trying to prepare for the worst. Investing, by definition, requires a fundamental yield mechanism. Forest grows. That's yield. Bonds pay interest. That's yield. ...


4

Precious metals might be valuable in extreme situations, as well as a basement filled with dried goods, guns, bullets, and water purification systems. But these preparations probably shouldn't be viewed as high return investments. In fact, they require storage and security, which are not free, and theft or loss are always possible. Keep in mind that if ...


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TLDR: That TD Ameritrade product isn't more aggressive, just razzle-dazzle. Invest like endowments. And invest very early, because time means compounding. Aggressiveness is the right strategy. But it's simple. Endowment manager here. Go all-in on retirement, and do it early. Time is money, friend. Endowments are forever-funds which are designed to ...


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I'd like to add a spin to this issue, based on tax brackets. It appears that you don't itemize, and take only the standard deduction, $12,200. Meaning that at tax time, $8,000 or so will be taxed at the higher 22%, vs 10/12% of the lower brackets. I'd suggest you consider a mix of traditional and Roth in your company account. At some point, you might ...


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The biggest benefit of using a Roth 401(k) vs a non-tax-advantaged investment account is that the growth is tax free (not just deferred like a traditional 401(k)). With the managed account, you'll pay taxes on all distributions and realized gains as you get them, which adds friction to long-term growth. The downside is obviously that you can't touch the ...


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You are still young in your career and will likely have a number of large ticket expenses that you'll want to save for (like the house you mention). Having short-to-medium term investments to accomplish this goal is a totally normal thing to do. I recommend getting in touch with a CFP that can help you assess your risk tolerance and provide specific advice ...


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Criteria would be the ability for him to ... see the remaining balance. For just the two of you, a shared Google spreadsheet is far and away the simplest path to satisfying this criterion, while dwizum's answer handles the other two. EDIT: presuming you aren't charging him interest, here's an example spreadsheet.


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One option is to talk to a local bank or credit union, and see if your plans would integrate well into their online banking tools. You may be able to kill two birds with one stone - get him on a plan to pay you back, and also get him some exposure to "real" banking tools. For instance, my credit union has a tool in our online banking platform that lets you ...


1

0.5% is less bad than 0.0%. You're only losing 0.75% instead of 1.25% to inflation (which is 60% loss instead of 100% loss). As for where to put money for two to three years... savings or term deposit accounts are exactly where I'd put them.


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Budget large items as a fixed amount each month I budget everything as a monthly expense and pay my savings account until the bill is due. This is pretty similar to the "rollover" method that Nosjack mentioned, but something about the negative numbers isn't intuitive to me. Actually transferring the money makes it work in my brain when I see the budget ...


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How do I manage the deferred expenses/savings on my budget sheet? Am I overcomplicating it? I feel like I'm double counting it if I add it as income. Expenses are money that you spend some time during the month, right? You spend the Food line item on, obviously, food, and you spend the Mortgage line item on the mortgage company. Similarly, you "spend"...


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I feel like I'm double counting it if I add it as income. I think you're misinterpreting deferred expenses. Let's take a simple example. Say you earn $1,000 this month and next month. Your only expense will be next month for $2,000. So this month you have $1,000 in (pure) income and $1,000 in deferred expenses and everything balances (you should have $1,...


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I do not use a spreadsheet for our budget, I use Mint (I am not affiliated with Mint, but I would recommend it). But, this advice might still be applicable. Have a "rollover" balance from month to month In Mint, I check a box for a budget category and it will automatically rollover used/unused amounts to the next month. So, if I budget $100 for gas then ...


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