A new study reveals that Generation X is least likely (relative to their age) to be prepared for retirement, thanks largely to the recession.
Generation X is comprised of Americans who, in the year 2013, are between the ages of 38 to 47.
The study, commissioned by the Pew Charitable Trusts, found that Generation X is poised to only replace approximately 50 percent of their current income during their retirement years. Most financial experts recommend that you should be prepared to replace 70 to 90 percent of your income during retirement.
Why is Generation X so ill-prepared? They were hit hardest by the recession, the study shows. Members of Generation X had accumulated assets -- in the form of a house and some retirement savings -- and saw those values get slashed in half when the recession hit. Many people in Generation Y, in contrast, hadn't purchased a home yet (and are now taking advantage of low housing prices) and didn't have much of a retirement portfolio built up yet. And many people in the Baby Boomers generation had re-allocated their assets into safer vehicles like bonds, which shielded them from stock losses.
Read more: What is Asset Allocation?
Shari Olefson is a lawyer, but she's not thinking about standing in a courtroom right now. Instead, her mind is preoccupied with a deeper question: Is it advisable -- and is it possible -- for people to own their homes "free and clear," meaning without a mortgage?
To address the latter half of that question -- yes, it's possible. Almost 30 percent of Americans are mortgage-free homeowners. But Olefson has found that three factors predict a person's likelihood of paying down their mortgage: their age, their home value, and their credit score.
Read more about her thoughts on whether or not you should own your home free and clear.
I started saving for retirement at age 22, when I opened my first 401k account. I think I started too late. If I had begun saving at age 18, I'd be light-years ahead of where I am now.
"But lots of 18-year-olds are in college," you might object. "You can't save for retirement in college!" I'd argue that anyone, even college students, can find $50 per month to put away. And $50 per month makes a HUGE difference when it compounds, tax-deferred, for 45 years.
If you can earn an extra $50 each week by babysitting or mowing lawns, you'll hit your retirement savings target much faster. You can retire younger, with more money in the bank.
But fair enough. If you're in college, I don't really expect you to be saving for retirement. Just covering your costs as a student, without having to resort to student loans, is a tough enough job. But once you're working full-time, you should definitely save something for retirement -- even if you have competing financial goals like paying off student loans or saving for a down payment on a home.
How much? At least 15 percent of your income. Optimally 20 percent, if you can. And the younger you are when you start, the better.
Here are some articles that can guide you through these topics:
There's a saying on Wall Street: "sell in May and go away." That old cliche implies that the stock market tends to rise from January through May, but acts sluggish during the summer, so you might as well sell your gains in May and relax throughout the hottest months of the year.
Is there any credence to that? Probably not. Don't try to "game" the market. Take a principle-centered approach to investing: diversify among stocks and bonds, re-balance once a year, and don't try to time the market.
If you want to "sell in May and go away," though, then simply designate May as the month that you do your once-annual re-balancing.Read more:
Interested in venturing into rental property investing?
Owning a rental can be a good source of passive income, but you need to make sure you're buying the right house. Here are two formulas for beginner rental property owners. Enjoy the article and leave a comment with your rental property story!
Are you thinking about becoming a one-income household ... but you're not sure exactly how to prepare for the huge change? Here are 5 tips for couples who are transitioning into a single-income household. Read the article, and leave comments below to share your tips for moving from two incomes to one!
Maybe you've seen commercials or advertisements for life insurance, but you're not sure exactly what it is -- or why you'd need it.
What is life insurance, anyway? What types of insurance plans are out there? Who needs it, and who doesn't? Find out in this latest article.
When Mary Hunt started raising her two sons, Jeremy and Josh, she did exactly what many new moms do: she spoiled them.
She bought them clothes, toys, gifts -- anything they wanted. They wore the best clothes. Their Little League teams had the best snacks. They brought the most expensive toys to other childrens' birthday parties, impressing their friends (and their friends' parents).
Unfortunately, she discovered that her kids were becoming "acquisitive ingrates," as she termed it. They developed an insatiable desire for more, more, more.
Furthermore, they were learning bad skills about handling money. They were learning to be spendy, flashy and materialistic.
So Mary and her husband decided to embark upon an ambitious plan to teach their kids to budget and save. Click that link to find out how they did it.
Want to download some FREE apps on your smartphone or tablet that can help you save money, manage your budget and even check your credit score?
Check out this list of six popular free apps that ultimately help your bottom line. Then leave a comment sharing your favorite money-saving apps!