A common question Financial Advisors hear from clients is, “How can I save more than I’m saving now?” Fortunately, there are several ways you can accomplish that goal with a bit of professional help.
Last month we discussed monitoring your expenses and reducing credit card expenses. We conclude today with boosting contributions.
If you participate in a workplace retirement plan, consider increasing your contribution by an additional 1% or 2% of income. Even if you think that may be too much, try it out for a few months. The extra effort could make a big difference down the road: Contributing even $20 extra each week could provide you with an additional $87,493 after 30 years (before taxes), assuming 6% annual investment returns.2
Use windfalls wisely. While it may be tempting to spend a windfall--such as an inheritance or workplace bonus--on something fun, it’s probably a better idea to use the money to enhance your long-term financial standing. For example, assuming you invest a $2,000 windfall in an account earning a 6% annual rate of return, it could grow to $2,698 after 5 years, $6,620 after 20 years or $12,045 after 30 years (before taxes).1
At Morgan Stanley, we can help you implement effective strategies for reducing expenses and set up customized savings and investment plans to help pursue your goals. Call me so we can talk about the best way to get started.
1These examples are hypothetical and for illustrative purposes only. Your results will vary. Indicated returns cannot be guaranteed. They do not reflect the performance of any actual investment and do not allow for the fees and expenses incurred with investing. Calculations use monthly compounding at an annual rate of 6%, however actual investment returns may vary from year to year, which could impact projected values.
If you’d like to learn more, please contact Julia A. Peloso-Barnes, CFP®, CPM®, ADPA®, CPRC®
Article by Wealth Management Systems, Inc. and provided courtesy of Julia A. Peloso-Barnes.
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