ACHIEVING FINANCIAL GOALS. Rep Name, Designation

Transcription

1 ACHIEVING FINANCIAL GOALS Rep Name, Designation

2 [Advisor Disclaimer Here]

3 FINANCIAL GOALS

4 70 % 80 % The recommended amount of your salary you should plan to live on.

5 ACHIEVING FINANCIAL GOALS

6 DEFINING A FINANCIAL GOAL What you are saving for? When do you want to buy it? How much will it cost at that time?

7 ACHIEVING A FINANCIAL GOAL How much to save? What account to use? Investment strategy

8 WHICH ACCOUNTS TO USE For retirement and college savings, you can receive a tax benefit if you make those savings to certain qualified accounts.

9 RETIREMENT

10 RETIREMENT SAVINGS: HOW MUCH? PLEASE CHOOSE THIS OR THE NEXT SLIDE TO KEEP If you are: Aim to have: TRY TO SAVE AT LEAST 15% 30 half of your salary saved today 35 1x your salary saved today 40 2x your salary saved today 45 4x your salary saved today 50 6x your salary saved today At minimum GET THE FULL MATCH Increase contributions by 2% annually to build toward 15% target 55 8x your salary saved today 60 10x your salary saved today 65 12x your salary saved today

11 RETIREMENT SAVINGS: HOW MUCH? If you are: Aim to have: TRY TO SAVE AT LEAST 15% 30 half of your salary saved today 35 1x your salary saved today 40 2x your salary saved today 45 4x your salary saved today 50 6x your salary saved today At minimum SAVE AT LEAST 6% Increase contributions by 2% annually to build toward 15% target 55 8x your salary saved today 60 10x your salary saved today 65 12x your salary saved today

12 STOCKS, BONDS, AND SHORT-TERM TECHNICAL TERM: Asset allocation GOAL: Provide an appropriate balance between short-term market volatility risk and inflation risk for a particular time horizon Stocks Money Market/ Stable Value Bonds All investments involve risk, including possible loss of principal. Asset Allocation does not ensure a profit or protect against a loss.

13 RETIREMENT SAVINGS GLIDEPATH YEARS BEFORE YOU REACH YOUR GOAL YEARS AFTER YOU REACH YOUR GOAL GOAL % 20% 80% 10% 30% 60% 20% 40% 40% 30% 50% 20% STOCKS 55% Large-Cap Stock 15% Mid-/Small Cap Stock 30% International Stock BONDS 70% Investment-Grade Bond 20% International Bond 10% High Yield Bond SHORT TERM 100% Money Market Securities, Certificates of Deposit, Bank Accounts, and/or Short-Term Bonds *In the investing for retirement time line, the GOAL shows an investor at age 65. Use this as a reference to find your age (10 to the left of zero shows you at age 55, and 10 to the right of zero shows you at age 75). The allocations above are based on age or time horizon and do not take risk tolerance into account.

14 IMPLEMENTATION ALL-IN-ONE PORTFOLIO BUILD YOUR OWN PORTFOLIO

15 EMERGENCY RESERVES

16 EMERGENCY RESERVES Adequate savings can prevent the need to use credit cards or raid retirement accounts Set aside 3to6 MONTHS OF EXPENSES Build over time 20% OF YOUR INCOME

17 EMERGENCY RESERVES Adequate savings can prevent the need to use credit cards or raid retirement accounts Set aside Build over time 1to2 YEARS

18 COLLEGE SAVINGS

19 COLLEGE SAVINGS Continue saving toward retirement Consider reducing contributions ONLY if you have a well funded retirement account Save for a down payment

20 COLLEGE SAVINGS % of Total Costs Covered 15 < 1% < 1% 5% 11% 16% 21% 27% 32% 38% 43% 48% Child s Age 14 < < < < $100 $150 $200 $250 $300 $350 $400 $450 $500 $550 $600 Monthly Savings Amount Costs more than covered Down payment or about ½ of savings needed to cover the total cost This study is for illustrative purposes only and does not represent the return earned by an any single investment option. It assumes an investment return of 6% annually, net of fees. But investment returns will vary and could be higher or lower than in this example. The future cost of college was calculated based on the 2012 total cost for one year of an average four-year, in-state public university education ($19,093) for a family in the third income quartile (annual household income of $65,000 to $108,000 in 2012) after the average amount of grants and scholarships for this group was subtracted. The cost was then inflated by 5.5% annually for 18 years. Sources: T. Rowe Price; for the average college cost, U.S. Department of Education, National Center for Education Statistics, and National Postsecondary Student Aid Study; and for the college cost inflation rate, the College Board.

21 COLLEGE SAVINGS GLIDE PATH YEARS BEFORE YOU REACH YOUR GOAL YEARS AFTER YOU REACH YOUR GOAL GOAL % 10% 30% 20% 30% 40% 100% 80% 60% 50% 40% 20% STOCKS BONDS SHORT TERM This chart is age-based only and does not take into account personal risk tolerance.

22 SPECIFIC PURCHASE

23 SPECIFIC PURCHASE GLIDE PATH YEARS BEFORE YOU REACH YOUR GOAL YEARS AFTER YOU REACH YOUR GOAL GOAL % 10% 30% 30% 100% 80% 60% 50% 100% 20% STOCKS BONDS SHORT TERM This chart is age-based only and does not take into account personal risk tolerance.

24 ELIMINATE DEBT

25 ELIMINATE DEBT If debt payments are prohibiting ability to save for retirement Target debt Target high interest debt (credit cards) and accelerate payments Set a time table Continue payments

26 ELIMINATE DEBT If debt payments are prohibiting ability to save for retirement Target debt Target high interest debt (credit cards) and accelerate payments Set a time table Set a time table. For example: 1 to 3 years Continue payments

27 ELIMINATE DEBT BEHAVIORAL APPROACH Tackle lowest balances first and accelerate payments ECONOMIC APPROACH Target highest interest cards first and accelerate payments $2500 $1000 $500 $200 29% 16% 14% 11% When each card is paid off, reallocate payment to next card you plan to tackle

28 ELIMINATE DEBT If debt payments are prohibiting ability to save for retirement Target debt Target high interest debt (credit cards) and accelerate payments Set a time table Set a time table. For example: 1 to 3 years Continue payments Continue making regular payments on other kinds of debt, like student loans and mortgages Once debt is eliminated, increase retirement contributions toward 15%

29 COMPETING PRIORITIES

30 COMPETING PRIORITIES Retirement vs. Emergency Reserve Don t stop saving for retirement consider cutting back to the minimum and fund your emergency reserve over a 1 to 2 year period. Then increase your retirement savings aiming for a 15% savings rate. Retirement vs. Debt Don t stop saving for retirement consider cutting back to the minimum and pay down credit card debt within 3 years. Then increase your retirement savings aiming for a 15% savings rate. Emergency Reserve vs. Debt Don t stop saving for retirement consider cutting back to the minimum and fund your emergency reserve over a 1 to 2 year period. Then pay down credit card debt within 3 years. Then increase your retirement savings aiming for a 15% savings rate. Retirement vs. College Savings Don t stop saving for retirement if you are close to the recommended retirement savings benchmark amounts, consider reducing your retirement contribution to fund college savings.

31 IT S YOUR FUTURE.

32 SAVE ENOUGH FOR RETIREMENT.

33 WE RE HERE TO HELP.

34 CDLHL280W 2016-AX phone number /website