Latest news with #CatherineValega
Business Insider
4 days ago
- Business
- Business Insider
4 ways to shrink your debt payments when your wallet feels stretched
Carrying debt can feel like a massive weight. When you owe money to lenders, it can be difficult to save and invest — both of which are important steps to reaching financial milestones like retirement. And yet many Americans are in this position: Total household debt hit $18.04 trillion in the fourth quarter of 2024, according to data from the Federal Reserve Bank of New York. A recent report from Lending Tree found that on average, Americans put $1,597 a month toward paying off debt. When you're paying for housing, utilities, groceries, and more, allocating a chunk of your budget to paying back lenders isn't easy. Debt can be an important part of a healthy financial life, especially when it's used to fund things that will grow in value or increase your earning potential, such as a house or an education. But holding debt — especially high-interest debt like credit card debt — can be extremely stressful. While the long-term goal is usually to be debt-free, there are steps you can take now to shrink your debt payments and give your budget a little room to breathe. 1. Negotiate with your creditors The terms of your loans may seem set in stone, but they could actually be negotiable. "If you have private loans and are having trouble paying, the loan servicing company is often happy to work with you," says Catherine Valega, financial advisor and founder of Green Bee Advisory. "Start by calling them and discussing your options." Valega says to say you're calling to ask for more lenient loan servicing terms, then explain to them what is impeding you from being able to make payments — such as losing your job or having medical bills. Tell them you've created a budget of your basic needs, not wants. Using that budget, identity and tell them how much you have left each month to pay toward your loans. 2. Consider refinancing Refinancing a personal loan allows you to pay off your existing loan with a new one, essentially replacing that existing loan with one that ideally has better terms. "Refinancing can be a good option for lowering your payments and lowering your interest rate," says Kassi Fetters, financial planner and founder of Artica Financial Services. She recommends checking the options at your local credit union when refinancing your loans or credit card debt. Keep in mind that if you refinance to a loan with better rates but a longer repayment period, you may increase the total amount of interest you'll pay over time. 3. Consolidate your debt Debt consolidation loans replace multiple debt payments with a single one, and you may be able to snag a lower rate and monthly payment this way. "While it can definitely make paying back loans easier, be sure to fully understand the new interest rate and payment, and compare it to the sum total of the other payments," Valega says. If you're dealing primarily with credit card debt, you may want to consider transferring your balance to a 0% APR credit card. The catch here is that companies only give you a certain amount of time with the 0% APR, often between a year and 18 months. After that time period is up, the rate will increase, so you want to be sure you can pay off the debt before that happens. 4. Seek professional help For borrowers who are really struggling, debt relief companies (also referred to as debt settlement companies) can negotiate with lenders on your behalf to reduce the total amount you owe. When debt gets overwhelming, debt settlement could be a lifeline that stands in the way of declaring bankruptcy. Debt settlement companies step in to negotiate with your creditors, asking them to settle for less than you originally owed. This option enables you to enroll multiple debts, make a single monthly program deposit, and get a concrete timeline (usually 24-48 months) for when all your enrolled debt will be resolved. Note that most debt settlement companies require unsecured debts of at least $7,500 to be eligible for the program. That's not to say debt settlement companies are a perfect solution: You'll pay a fee for their services, your credit score can suffer, and there's no guarantee that the company will actually be able to get you a lower balance — ultimately, it's up to your creditors. If you want to tackle the debt yourself, you can also seek out credit counseling agencies or other nonprofit resources that offer debt consultations with no fee. If you decide to go with a debt relief company, check that it's verified with the Association for Consumer Debt Relief, the International Association of Professional Debt Arbitrators, or the Consumer Debt Relief Initiative. By law, debt relief companies can't charge upfront fees. If a company tries to charge you before negotiating with your creditor and getting your approval on the settlement, choose another company instead.
Yahoo
15-05-2025
- Business
- Yahoo
Here's how much money you should have saved for retirement based on your age
Retirement is the dream of every worker, but it can also be a source of dread and anxiety because the money needed to do so in comfort is out of reach for many Americans. According to a recent study by Northwestern Mutual, Americans felt they would need $1.26 million saved up in order to retire comfortably. But most people have nowhere near that, even as they approach retirement. The median net worth (meaning all of the assets and minus liabilities) of Americans between 65-74 years old is $410,000, according to the Federal Reserve Board's 2022 Survey of Consumer Finances, which is its most recently available data. And that's including everything they own — a home, savings accounts, and their retirement funds. For Americans under 35, the median net worth is just $39,040. More than half of Americans surveyed (51 percent) told Northwestern Mutual that they think they are somewhat or very likely to outlive their savings. 75 and older $334,700 65-74 $410,000 55-64 $364,270 45-54 $246,700 35-44 $135,300 Less than 35 $39,040 Which is unsurprising considering the median average annual salary in the US is just $59,384, according to the Social Security Administration. So how are you supposed to save for retirement without winning the lottery or hoping for an unexpected inheritance? According the advice of numerous financial institutions, it's by setting savings goals early, sticking to them, and making sure your money makes money through compound interest and investments, even if you're watching Donald Trump's tariffs send the markets plummeting. 'I think whats important now — what happens every time we have a volatile market dip — is that people read the headlines and they get scared. The younger generation might see that and decide not to invest, and that's what I fear,' Catherine Valega, a Certified Financial Planner, told The Independent. 'Look at this as an opportunity to buy stocks. Increase your contribution to your 401k or a Roth IRA. Don't let the markets scare you off, because I'll tell you what — the billionaires are all buying while everyone else is selling.' According to Fidelity Investments' retirement planning tips, a good rule of thumb for Americans looking to retire comfortably is to save 10 times your income if you're hoping to retire by age 67. That includes money in any retirement accounts or investments, CNBC reports. Breaking that down further by decade, Fidelity recommends that by age 30, Americans should have the equivalent of your annual salary saved up. If you're making $55,000, aim to have $55,000 saved. By the time a worker hits 40, they should, according to the investment company, have three times their income saved. By 50, that number should be six times their income, and by 60 it should be approximately eight times their income. That breakdown tends to be the standard shared by many financial experts with some minor disparities. Ally Bank's breakdown for retirement saving is similar to what's presented by Fidelity; at 30, have the equivalent of your annual income in the bank, by 40 have three times your income saved, at 50 aim for five times your income, and at 60 you're recommended to have seven times your income saved up for retirement. 'We want to save as much as we can, as soon as we can, and [be investing] as aggressively as we can,' Valega told The Independent. 'It's never too early or too late to start investing, quite honestly. If you missed the boat, lets get on it now.' Both Fidelity and Ally advise that it's important to keep in mind that those benchmarks are guidelines, and that an individual's retirement goals and personal circumstances must be factored in. And if you're not on track, remember that most others aren't either — 17 percent of Americans, regardless of age, have less than their annual income saved for retirement, according to Northwestern Mutual. how much Fidelity recommends you have saved if you want to retire at 67 Lifestyle is another important consideration. If a worker wants to spend their retirement traveling the world, eating good food, lavishing their loved ones with substantial inheritances, those goals need to be accounted for in advance. Where a person retires can be just as important. Some areas of the country are more expensive to live in than others. Some are more prone to disasters. Florida has long held a reputation for being the locale of choice for retirees, but repairing home and property damage caused by flooding and hurricanes can quickly eat into one's retirement savings if they don't plan for those potential costs. 'I'm in New England, and we used to advise people to retire with $2 million to have a comfortable retirement,' Valega said, who works with fairly wealthy clients. 'Now I want my clients to have $3 and $4 million saved in their retirement accounts to maintain the type of life they're accustomed to. So it depends a lot on where you live, and where you want to live.' White $284,310 Hispanic $62,120 Black $44,100 Other $132,200 Climate, activities, and proximity to loved ones all factor into those decisions, and thus must factor in to how one plans for their retirement. If a person has loved ones in several cities, they may want to plan to save up enough money to cover transportation for visits, or enough to afford a home or an apartment with a guest room. In order to actually manage to save up all the money needed to retire in relative comfort, financial experts suggested using a 50/30/20 budget frame work. According to the 50/30/20 framework, people should, after taxes, take 20 percent of their income and put it toward savings and debt repayment, and 50 percent should go to needs, while 30 percent should go to wants. The money set aside for savings ideally should be placed into high yield savings accounts, retirement accounts and investments into the stock market. Taking advantage of compound interest — that is, interest that builds on interest earned — is a top recommendation from virtually all of the major retirement planning experts. amount Americans believe they need to retire comfortably 'Given that we have more uncertainty than ever, I think it's so important to get money working for you in stocks and assets like real estate. You do want to be smart — if it comes down to someone enjoying a luxury like a trip or investing a few hundred bucks, I'd probably tell you to go with the investment,' Valega said. A good place to start, according to Fidelity, is investing in a standard index fund that tracks the S&P 500, as its more diversified than buying individual stocks like a day trader might. Most major brokers have S&P 500 fund or ETF like Vanguard. Perhaps the most important tip that financial experts have recommended has less to do with the technical side of budgeting and investing and more to do with perspective. All of this advice — saving more than a million dollars, hitting decade benchmarks, navigating the stock market — can seem daunting, but setting short term goals can help alleviate some of that stress, since the worst thing you can do is nothing at all.
Yahoo
10-05-2025
- Business
- Yahoo
Interested In The New 'Super-Funding' 401k Opportunity? Here's How To Know If You Qualify
401(k) funding changes for 2025 now allow investors of a certain age to contribute $11,250 in catch-up funds This super-funding opportunity is available to investors ages 60-63 The changes are good news for Gen X'ers in particular, as only 54% believe they are financially prepared for retirement The IRS has introduced some 401(k) funding changes for 2025 that allow older investors to contribute additional funds to their plans. According to a survey by Northwestern Mutual, Americans need $1.26 million to retire comfortably. Among Gen X'ers, who are approaching their retirement years, only 54% believe that they will be financially prepared for retirement when the time comes. Don't Miss: Inspired by Uber and Airbnb – Deloitte's fastest-growing software company is transforming 7 billion smartphones into income-generating assets – Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — Tommy Lucas, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo, told CNBC these new changes are a "super-funding" opportunity for older investors, offering them an opportunity to catch up. What exactly the changes are, and who qualifies for them, hasn't been entirely clear. Catherine Valega, a CFP and founder of Green Bee Advisory, told CNBC, that it will take time for people to become aware of the new opportunities, and that at this point "no one knows about the extra increase." So here's a more precise breakdown of the "super-funding" opportunities and who qualifies for them. In 2025, the IRS has set 401(k) contribution limits to $23,500 for investors of all ages, up $500 from 2024. Older contributors, ages 50 and up, can contribute an additional $7,500 in "catch-up contributions" to their 401(k). This totals out to $31,000 for the year, a cap that remains unchanged since 2024. Trending: Many are using retirement income calculators to check if they're on pace — But for contributors who are 61, 62, or 63, a change under the Secure 2.0 Act of 2022 has increased the catch-up contributions from $7,500 to $11,250. This means that the total cap for investors in their early 60s sits at $34,750 for 2025. It's important to note that the age eligibility is determined by how old you'll be by Dec. 31. So if you're 59 at the start of 2025 and will turn 60 before year-end, you're eligible for the increased catch-up contributions. However, if you're currently 63, turning 64 by the end of December, you are not eligible. Dan Galli, a CFP and owner of Daniel J. Galli & Associates, told CNBC that the higher 401(k) catch-up rates are "a great tool in the toolbox." However, they're not ones that many people are using. According to data from Vanguard's "How America Saves" report, only 15% of eligible employees utilized these catch-up options in 2023. Fidelity told the outlet that 3% of retirement plans haven't added the feature for 2025, meaning catch-up contributions will stop at $7,500. So it's important that you speak to a financial advisor if you plan to take advantage of the change to ensure you're able to make the most of it. Read Next:Donald Trump just announced a $500 billion AI infrastructure deal — . Image: Shutterstock Up Next: Transform your trading with Benzinga Edge's one-of-a-kind market trade ideas and tools. Click now to access unique insights that can set you ahead in today's competitive market. Get the latest stock analysis from Benzinga? APPLE (AAPL): Free Stock Analysis Report TESLA (TSLA): Free Stock Analysis Report This article Interested In The New 'Super-Funding' 401k Opportunity? Here's How To Know If You Qualify originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Sign in to access your portfolio
The Independent
05-05-2025
- Business
- The Independent
Here's how much money you should have saved for retirement based on your age
Retirement is the dream of every worker, but it can also be a source of dread and anxiety because the money needed to do so in comfort is out of reach for many Americans. According to a recent study by Northwestern Mutual, Americans felt they would need $1.26 million saved up in order to retire comfortably. But most people have nowhere near that, even as they approach retirement. The median net worth (meaning all of the assets and minus liabilities) of Americans between 65-74 years old is $410,000, according to the Federal Reserve Board's 2022 Survey of Consumer Finances, which is its most recently available data. And that's including everything they own — a home, savings accounts, and their retirement funds. For Americans under 35, the median net worth is just $39,040. More than half of Americans surveyed (51 percent) told Northwestern Mutual that they think they are somewhat or very likely to outlive their savings. Which is unsurprising considering the median average annual salary in the US is just $59,384, according to the Social Security Administration. So how are you supposed to save for retirement without winning the lottery or hoping for an unexpected inheritance? According the advice of numerous financial institutions, it's by setting savings goals early, sticking to them, and making sure your money makes money through compound interest and investments, even if you're watching Donald Trump's tariffs send the markets plummeting. 'I think whats important now — what happens every time we have a volatile market dip — is that people read the headlines and they get scared. The younger generation might see that and decide not to invest, and that's what I fear,' Catherine Valega, a Certified Financial Planner, told The Independent. 'Look at this as an opportunity to buy stocks. Increase your contribution to your 401k or a Roth IRA. Don't let the markets scare you off, because I'll tell you what — the billionaires are all buying while everyone else is selling.' According to Fidelity Investments' retirement planning tips, a good rule of thumb for Americans looking to retire comfortably is to save 10 times your income if you're hoping to retire by age 67. That includes money in any retirement accounts or investments, CNBC reports. Breaking that down further by decade, Fidelity recommends that by age 30, Americans should have the equivalent of your annual salary saved up. If you're making $55,000, aim to have $55,000 saved. By the time a worker hits 40, they should, according to the investment company, have three times their income saved. By 50, that number should be six times their income, and by 60 it should be approximately eight times their income. That breakdown tends to be the standard shared by many financial experts with some minor disparities. Ally Bank's breakdown for retirement saving is similar to what's presented by Fidelity; at 30, have the equivalent of your annual income in the bank, by 40 have three times your income saved, at 50 aim for five times your income, and at 60 you're recommended to have seven times your income saved up for retirement. 'We want to save as much as we can, as soon as we can, and [be investing] as aggressively as we can,' Valega told The Independent. 'It's never too early or too late to start investing, quite honestly. If you missed the boat, lets get on it now.' Both Fidelity and Ally advise that it's important to keep in mind that those benchmarks are guidelines, and that an individual's retirement goals and personal circumstances must be factored in. And if you're not on track, remember that most others aren't either — 17 percent of Americans, regardless of age, have less than their annual income saved for retirement, according to Northwestern Mutual. 10 times your income Lifestyle is another important consideration. If a worker wants to spend their retirement traveling the world, eating good food, lavishing their loved ones with substantial inheritances, those goals need to be accounted for in advance. Where a person retires can be just as important. Some areas of the country are more expensive to live in than others. Some are more prone to disasters. Florida has long held a reputation for being the locale of choice for retirees, but repairing home and property damage caused by flooding and hurricanes can quickly eat into one's retirement savings if they don't plan for those potential costs. 'I'm in New England, and we used to advise people to retire with $2 million to have a comfortable retirement,' Valega said, who works with fairly wealthy clients. 'Now I want my clients to have $3 and $4 million saved in their retirement accounts to maintain the type of life they're accustomed to. So it depends a lot on where you live, and where you want to live.' Climate, activities, and proximity to loved ones all factor into those decisions, and thus must factor in to how one plans for their retirement. If a person has loved ones in several cities, they may want to plan to save up enough money to cover transportation for visits, or enough to afford a home or an apartment with a guest room. In order to actually manage to save up all the money needed to retire in relative comfort, financial experts suggested using a 50/30/20 budget frame work. According to the 50/30/20 framework, people should, after taxes, take 20 percent of their income and put it toward savings and debt repayment, and 50 percent should go to needs, while 30 percent should go to wants. The money set aside for savings ideally should be placed into high yield savings accounts, retirement accounts and investments into the stock market. Taking advantage of compound interest — that is, interest that builds on interest earned — is a top recommendation from virtually all of the major retirement planning experts. 'Given that we have more uncertainty than ever, I think it's so important to get money working for you in stocks and assets like real estate. You do want to be smart — if it comes down to someone enjoying a luxury like a trip or investing a few hundred bucks, I'd probably tell you to go with the investment,' Valega said. A good place to start, according to Fidelity, is investing in a standard index fund that tracks the S&P 500, as its more diversified than buying individual stocks like a day trader might. Most major brokers have S&P 500 fund or ETF like Vanguard. Perhaps the most important tip that financial experts have recommended has less to do with the technical side of budgeting and investing and more to do with perspective. All of this advice — saving more than a million dollars, hitting decade benchmarks, navigating the stock market — can seem daunting, but setting short term goals can help alleviate some of that stress, since the worst thing you can do is nothing at all.
