Bitcoin in Race for Adoption Before Central Banks Launch Digital Currencies:

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Benzinga

Here’s What it Took to Help My Millennial Colleague Plan Her Million-Dollar Nest Egg

I’m a nosy person, so I elbowed my millennial colleague, Jessa, in the next cube over, and asked her, “Pssst… How much do you save for retirement per year?”Instead of ignoring me, she furtively Slacked me all of her financial details (it was like a giant ice cream sundae for a finance nerd): * Jessa, at 28, still owes $15,000 in student loans, and her husband, who is 30, still owes $20,000. * They owe $12,000 on their car loans. * Jessa and her husband have a $200,000 mortgage. * She currently saves $0 toward her retirement plan. (Sorry, but that’s not enough, friend.) * She and her husband need help from Facet Wealth — a virtual full-service financial planning service with dedicated certified financial planners.According to a survey by Bank of America, a surprising 16% of millennials between the ages of 24 and 38 now have at least $100,000 saved for retirement.Whooo hooo! That’s cause for celebration. But what about Jessa? What does she need to do to get out of debt and save enough for retirement?Why Millennials Struggle to Save for Retirement Why do millennials like Jessa struggle to save for retirement? 1. Housing costs: The No. 1 response (37%) for millennials is the cost of housing, according to the Retirement Pulse Survey. 2. Supporting family members financially: Millennials often support extended family members with their income. This doesn’t even involve the amount you need to save to put kids through college — remember, financial aid doesn’t cover everything. 3. Not enough income: The State of Our Money shares that more than half of millennials (55%) don’t have a retirement savings account, such as a 401(k) or IRA. About 46% said unemployment was to blame. 4. Student loan debt: As of September 2017, the average graduate from the class of 2016 owed more than $37,000 in student loan debt, according to Student Loan Hero. “Yep, yep and yep,” she said, when I showed her these numbers. “We hit three of these four categories. I just can’t afford to put money in my retirement account right now.”What My Millennial Colleague Needs to Do — and Here’s What You Can Do, Too! Feel like the percentages stack against you? Here’s what to do next.Tip 1: Analyze interest rates. As soon as I said the words “interest rate,” Jessa flopped over in her desk chair and pretended to fall asleep.I knew Jessa and her husband refinanced their home this past fall, and I asked her about their interest rates. She was paying only 3% on their home and student loans. I suggested asking Facet Wealth if they should invest in retirement more aggressively than pay down debt on their loans. (It’s what I would vote for!) On the flip side, if you have high interest rates on your own student loans, I’d suggest asking Facet Wealth about paying off debt if your loans carry a higher rate than your investments earn before taxes. Tip 2: Consolidate those student loans — but there’s a catch. Consider consolidating student loan payments only if you can lower your payment without stretching out your loan term. In Jessa’s case, she could use the extra money to start compounding her retirement savings.Tip 3: Get cracking on that retirement plan. Jessa must save at least 10% of her income. It’s the rule of thumb cited by most financial advisors and other money experts. If Jessa doesn’t want to struggle to keep her head above water after retirement, she needs to invest 10% of her income each year. And none of this “invest just enough to get the employer match” crap. In most cases, that’s not enough retirement savings for most people and it won’t scratch the surface toward creating a hefty nest egg. Tip 4: To get really rich, invest at least 15%. If Jessa wants to get really rich as a passive investor, she’ll invest at least 15% of her income. She won’t get Warren Buffett rich, of course, but if she wants at least $1 million in liquid assets beyond her…



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