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What Does Financial Freedom Mean to You?

Most of us dream of being “rich” or “wealthy” or experiencing “financial freedom”. But what do those words actually mean to most of us? What is our exact definition of “wealthy”? It probably wouldn’t surprise you to learn that to some degree, these terms are relative to one’s background and current circumstances. What is middle class to one person might feel “rich” to another, and what feels like freedom to someone else might feel too constrained to yet another person. But, to get an idea of what “wealthy” means to most Americans, GoBankingRates conducted a survey*. The answers might surprise
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Retiring Without a Mortgage

Retirement presents a challenge for most people, both with regard to their changing lifestyle and their changing budget. In particular, shifting to a lower income and smaller budget can feel quite uncomfortable. While sound financial planning throughout your working years can help you to build as much retirement income as possible, preparing for your future budget is another significant part of retirement planning. One of the best steps you can take is to pay down debts during your pre-retirement years, so that your living expenses better fit within your budget. Most retirees report that housing is their number one expense.
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Is a 401K Loan a Bad Idea?

In the event of a financial emergency, how would you come up with the necessary cash for living expenses, medical bills, or a home repair? Asking yourself this question ahead of time, before a crisis ever emerges, is always a good idea. When we’re under pressure, it can be much easier to make big mistakes with money. Often, those facing a large, unexpected expense are tempted to take a loan from their 401k account. It looks like a good idea on the surface; you’re borrowing from yourself, rather than a bank, and the interest rate is often comparatively reasonable (usually
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Plan Ahead to Spot Valuable Opportunities

It happens more often than you might think; sudden windfalls are quite common, and even occur to the people you’d least suspect! An unexpected influx of cash can come from an inheritance, a large work bonus, a lawsuit settlement, a tax refund, or even something as exciting as a good weekend in Vegas. Unfortunately, the result that we often see from these situations is an impulse purchase, followed by regret. That’s because those who don’t plan for large sums of cash, often have no idea what to do when it happens to them! It’s always good to have a plan
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Continue to Plan Even After You Retire

Are you approaching your expected retirement date? Or, have you just recently celebrated this milestone? Congratulations! Your years of careful planning have paid off, and we hope you will live (or are already living) the retirement of your dreams. However, we do want to remind you that financial planning never really ends. It just changes as your needs and priorities change. Since prevention is almost always easier than any “cure”, we urge you to take the following steps to keep your funds safer, and to help you enjoy your retirement even more. Secure your income. “Playing the market” is exciting
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Guard Against These Risk Factors Before You Retire

We always recommend early, regular, and consistent financial planning for retirement. Solid preparation is certainly the key to (mostly) avoiding many unpleasant surprises in life. Having said that, what type of events should be anticipate in retirement, and how do you prepare for them? The following are some of the more common retirement risks. Market fluctuations. We all know that nothing is guaranteed, when it comes to the stock market. But, generally speaking, we know that some investments tend to be more risky than others. When you’re young and ambitious, you might feel comfortable taking some risks, but not so
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Income During Retirement Might Affect Social Security Benefits

Through hard work and careful planning, some lucky people are able to retire earlier than planned. You might expect to claim your Social Security benefits, take distributions from your retirement account, and feel quite content with the streams of income that you have established for yourself. You might even expect to work part time at a fun or interesting job, to add a bit to your monthly income. Occasionally, though, early retirees receive an unpleasant surprise when they go this route. They knew that claiming their Social Security benefits earlier than planned will result in a permanent reduction in those
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What Will You Do About This Retirement Dilemma?

We frequently remind our readers to budge carefully and save for retirement, because planning for the future is indeed important. But today, let’s talk about a different decision you will need to make once you’ve reached retirement: How do you plan for distributions from your retirement account(s), in a way that best benefits you? At that point your focus shifts from saving money, to withdrawing and using it. You might already know that retirement accounts typically allow you to begin distributions at age 59 ½. However, most people are still working at that age, and in most cases should leave
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Managing Your Income to Prepare for the Future

Ask yourself this question: “What type of people are able to create long-term wealth?” The answer might seem obvious to you, and it does indeed appear to be a matter of common sense. Most people will answer something along the lines of the following statement: “People who earn higher incomes are more able to save and prepare for the future”. That’s half true. “Able”, yes. But do higher earners actually accomplish that goal? Consider this fact: Seventy-eight percent of NFL players file for bankruptcy or experience serious financial crises at some point, and they are certainly not the only high
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Tweaking Your Tax Strategy Can Save You Money

For many of us, income taxes eat up a significant portion of our budgets and the more money you make, the higher your taxes in most cases. This can present a dilemma when you’re planning for retirement, and need to save as much of your income as possible. That’s why tax planning should be fully integrated into your overall financial plan. Luckily, there are ways to hedge against income taxes and lower your overall burden to some degree. Make sure you’re evaluating all of your potential opportunities for savings. We’ve included some of the more common ones below. Identify your
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