Thoughts About Retirement

Retirement Statistics Data

Average retirement age 62

Average length of retirement 18 years

Average savings of a 50 year old $43,797Total cost for a couple over 65 to pay for medical treatment over a 20 year span

$215,000

Percentage of people ages 30-54 who believe they will not have enough money put away for retirement

80%

Percentage of Americans over 65 who rely completely on Social Security

35%

Percentage of Americans who don’t save anything for retirement

36%

Total Number of Americans who turn 65 per day

6,000

Percentage of population that is 65 years of age or older

13%

Out of 100 people who starts working at the age of 25, by the age 65:

Will be considered wealthy 1%Have adequate capital stowed away for retirement 4%

Will still be working 3%Are dependant on Social Security, friends, relatives or charity 63%

Are dead 29%

Americans older than 50 account for:

Percent of all financial assets 77%Percent of total consumer demand 54%Prescription drug purchases 77%All over-the-counter drugs 61%Auto Sales 47%All luxury travel purchases 80%

Saving is the key to wealth

The only way to attain the wealth you desire is to spend less than you earn and to save the difference. The rich are not rich because they earn a lot of money; the rich are rich because they saved a lot of money.

You may be skeptical. I was once skeptical too. But many books I have read on the subject of wealth-building have convinced me — books like Stanley and Danko’s The Millionaire Next Door make it abundantly clear that it is not a high income that leads to wealth — though, obviously, a high income does not hurt – but saving.

THE POWER OF COMPOUNDING

The best way to ensure your future financial success is to start saving today, even if all you have seems like a paltry sum. “The amount of capital you start with is not nearly as important as getting started early,” writes Burton Malkiel in The Random Walk Guide to Investing. “Procrastination is the natural assassin of opportunity. Every year you put off investing makes your ultimate retirement goals more difficult to achieve.”

The miracle of compound interest is the secret to getting rich slowly. Even modest returns can generate real wealth given enough time and dedication … mainly time.

The Rule of 72 Do you know the Rule of 72? It's an easy way to

calculate just how long it's going to take for your money to double.

Just take the number 72 and divide it by the interest rate you hope to earn. That number gives you the approximate number of years it will take for your investment to double.

As you can see, a one-time contribution of $10,000 doubles six more times at a 12 percent return than at 3 percent.Years 3% 6% 12%

0 $10,000 $10,000 $10,0006 $20,00012 $20,000 $40,00018 $80,00024 $20,000 $40,000 $160,00030 $320,00036 $80,000 $640,00042 $1,280,00048 $40,000 $160,000 $2,560,000

Inherit $5,000 at age 20

At 6% Return

How just $50 a month adds up

The power of compounding interest cannot be understated. The more time you allow your investment to grow without making a withdrawal, the more this effect can be seen.

If you stashed $50 a month under your mattress for 30 years, you would end up with $18,000, but if you invested it and earned just 5 percent, you would end up with almost $40,000 – at 8 percent, that figure becomes $68,000.

When do you need life Insurance? Will you need it your whole life? How much do you need?

More Insurance

Getting Older

Lifetime Need for Insurance

Need For Life Insurance

Savings

Age 64

Do we need insurance on our

children?

Auto Insurance

Tips to Save Money On Teen Car InsuranceBoth teen drivers and their parents can find ways to to get cheaper teen car insurance.Teen Drivers•Get good grades.

• Many auto insurance companies offer good student discounts, which are discounts for teen drivers who make a certain grade point average (usually a B average).

•Enroll in driver's education.• Your state may or may not require Driver’s Ed. However, many

providers offer discounts for successfully completing a driver's education course, so you may wish to seriously consider it, even if it’s not a state requirement.

•Take an additional driver training course.• Depending on your insurance company, an additional driver

training course could knock even more dollars off your premium. The extra training brings instant and future benefits as far as safe driving is concerned.

•Avoid pushing for a fancy ride.• Newer models and flashy cars are more expensive to insure than

older models or practical rides.•Pay a higher deductible.

• If your parents agree to increase their deductible, it will help lower insurance rates overall.

ParentsIf your teen is just getting her license, you can employ the following strategies to save money when you add her to your policy:•Ask about multiple-vehicle auto insurance discounts.

• Adding another vehicle to a policy that already has at least one vehicle could earn you a discount.

•Buy (or encourage your teen to purchase) a sensible vehicle.• “Sensible” means it has a high safety rating (bonus points for

added safety features) and is not a luxury vehicle, which is much more expensive to insure.

•Consider increasing your deductible.• Doubling your deductible usually lowers your rates automatically.

•Think twice about collision and comprehensive coverage.• If your teen drives an older model car that isn’t financed, it might

make more financial sense to skip these optional coverage types.•Find out if you can include your teen driver on your policy as an “occasional” or “pleasure-use only” driver.

• Listing her as a primary driver will cost more.

State Adult alone With teen Increase

Alabama $1,217 $3,521 184%

Alaska $1,188 $3,384 181%

Arizona $1,009 $2,984 192%

California $1,461 $4,903 227%

Colorado $1,095 $2,664 142%

Connecticut $1,597 $4,917 217%

Oklahoma $1,405 $3,006 114%

Tennessee $1,256 $2,881 134%

Texas $1,416 $3,534 145%

Utah $935 $2,165 131%

Vermont $900 $2,288 146%

National average $1,215 $3,059 152%

Rates are based on full coverage for a single, 40-year-old male who commutes 12 miles to work each day, with policy limits of 100/300/50 ($100,000 for injury liability for one person, $300,000 for all injuries and $50,000 for property damage in an accident) and a $500 deductible on collision and comprehensive coverage. The hypothetical driver has a clean record and good credit. The rate includes uninsured motorist coverage.

How much does it cost to add a teen driver?

Ways to Save Money on Car Insurance for Teen Drivers

“Good student” discounts. Your insurer may offer discounts for good report cards, typically A’s and B’s or a GPA above 3.5. Quite simply, studious drivers are seen as more responsible and lower-risk drivers than those with poor grades. Keep your teen driver on the family policy. This will offer your teen lower rates than if they buy their own auto insurance policy. Remove them as a driver from certain vehicles. If your teen will be limited to driving the family minivan, have them removed from driving the family’s other vehicles. This will cause them to be uninsured in the event they get behind the wheel of another family car, so keep in mind which car they’re allowed to take out on Saturday night. Driving safety courses. Many insurers offer discounts to teen drivers who complete a driver safety course. Ask your insurer what options are available. Dashboard cameras and tracking devices. Many insurers offer discounts to families who install “black box” recording devices, GPS trackers, and dash-mounted cameras in their teen’s cars. Choose your teen’s car carefully. Certain car models offer varying safety ratings, have higher or lower cost of repairs, and subsequently cost more or less to insure, even among similar models from different manufacturers. Research rate quotes for various different models before settling on a car for your teen driver.

Credit Score/Credit Card

Credit Score (FICO)

When you apply for credit, the lender will want to know what type of risk you are and will pull your credit history or FICO (Fair Isaac Corporation— credit scoring model) score. There are three major credit bureaus: Experian http://www.experian.com, TransUnion http://www.transunion.com ) and Equifax http://www.equifax.com/home/en_us that monitor your credit history. Adjustments are made to your credit score by these bureaus as your buying and paying habits change. Your FICO score helps a lender decide what kind of risk you are likely to be. The higher the credit score and the lower the risk, the more likely a lender will extend you credit at a low rate.

When it comes to credit scores, higher is better.

The most commonly used consumer credit scores range from 300 to 850.

There is no one score that is universally accepted by lenders as being excellent or poor, but a score of about 750 and above is considered “excellent” with the best interest rates being offered. A score of about 580 or below is viewed as “poor” or “subprime” and a higher interest rate and down payment may apply or the loan may be denied altogether.

Once you know your credit score estimate, you will have a better understanding of what interest rate is available to you as well as the maximum amount of the purchase for which you can qualify.

A credit card company set limits on how much you can charge on your card. This limit is based on your ability to handle debt.

Paying the minimum monthly payment is a bad idea. After you subtract the minimum payment from your balance, finance charges will be added to your remaining balance. These charges add up month after month. You can dig yourself into a hole real fast.

Know this too: the minimum payment is the LEAST amount you can pay to keep the card active. If you pay less, your card will be deactivated (turned off).

If you pay your bill in full during the grace period, you won’t have to pay a finance charge on purchases for that bill. A grace period is usually about 25 days.

If you don’t pay your bill by the due date (the date your grace period expires), you will be charged a late fee. These can be as high as $35! Get yourself organized to pay on time. Paying late is costly.

Remember: when you use your credit card, you’re borrowing money. So you will be charged interest whenever you don’t pay your bill in full. With a credit card, you are paying for convenience. Credit card rates can be 18% or as high as 24% depending on your credit history.

“Secured” credit cards

Some banks offer secured credit cards to people with a poor credit history or no credit history at all. Secured cards can be the best option for your first credit card. The card is “secured” with a cash balance, a savings account, for example. You cannot touch this balance, or the card will be deactivated (turned off). If you charge over your limit, the bank can take the balance from your account. Your account acts like collateral for a loan. These cards may charge higher interest rates, but they offer the convenience of using a credit card while you build a good credit history.

You must notify your credit-card company as soon as you know your card has been stolen or used without your permission. If you do, you will be responsible for only the first $50 of unauthorized charges. These days, thieves can steal your credit card number — they don’t need the actual card. Always know where your card is, and keep all your receipts.

Debit cards do not offer the same protection as credit cards. (Some credit card companies offer debit cards with some protection.) Most debit cards work like writing a check — the money is immediately taken out of your account. If you do not report a false charge or charges within 60 days of receiving your bank statement, you could be held responsible for the false charges. Be sure you understand the details when you sign up for a debit card.

U.S. household consumer debt profile:

Average credit card debt: $15,706

Average mortgage debt: $156,333

Average student loan debt: $32,953