Saving for retirement isn’t easy as it is, what with debt payments and skyrocketing living expenses. However, what’s harder is that the language of personal finances isn’t easy or user-friendly, and is considered a taboo, not-too-happy topic to talk about.
Read on the following suggestions to combat the language of retirement planning and personal finances and make the process of getting ready for retirement as painless as possible.
Talk to people
Money and finances are uncomfortable, yes, but that doesn’t mean that they’re taboo that you be putting off. Talking to one’s parents, siblings and a financial role model will help improve your knowledge and bring you one step closer to accepting that you need to plan for retirement.
Know your retirement needs
In order for you to get a handle on your finances, you need to know exactly how much you’ll be needing for retirement. According to financial experts, one will need minimum 70% of their pre-retirement income (90% for the lower range earners) in order to maintain the same standard of living, if not more, when they stop working.
Make proactive changes
One doesn’t need to make huge sacrifices and changes in the way they live to pan for retirement, but should just focus on the following: identifying and categorizing expenses to see where you can cut down. Budgeting and reviewing your investments don’t require more than two or three hours per week to be updated. Expensive cable TV packages, unused gym memberships, unnecessary shopping expenses, etc. can be cut down easily. Reallocating sudden windfalls to savings and retirement accounts rather than spending it is also a great idea. One small tip: Every year, simply add 1% more to your savings and watch your nest egg grow by leaps and bounds!
Retirement plan and tax breaks
Learn about your employer’s pension and retirement plans such as a 401k, and begin contributing to them early on. Remembering to take into account employer contributions to 401k and delaying/prepaying income taxes using the traditional IRA/401k or the Roth IRA/Roth 401k plans will be a boon to lower and moderate income savers, especially. If one is planning to switch jobs, then one should either leave their savings invested in their current retirement plan, or roll them over to their new employer’s plan or an IRA.
Also, one should watch out for early withdrawal penalties if they withdraw from the retirement accounts before the turn 59½ years of age. If you end up withdraw your retirement savings earlier, you will also be losing out on the principal and interest amounts, as well as tax benefits.
There are companies that work on collecting and maintaining credit information of consumers. These are known as credit reporting agencies (CRAs). There are three such major CRAs in the country, namely Equifax, Experian, and TransUnion. Apart from these, there are other smaller-scale agencies too that specialize at the job. If you’re worried about “where to get my credit score?,” the larger CRAs are the most reliable bets.
These major CRAs obtain information from companies that you hold business and transactions with. People or companies that lend you money regularly report to these CRAs on your repaying status. There is also detailed information on the amount you are indebted and whether you have ever defaulted on your payments. Aside from the reports obtained from lenders, these companies also tally your general records based on certain other aspects. Some of these aspects are your public records from the local and state judiciary. These include your tax records and bankruptcy information. This information makes up an important chunk of your credit score and its report.
Equifax
Present in 24 countries, Equifax is an agency that offers consumers protection against identity theft and credit fraudulence. They also sell credit reports and credit monitoring assistance to businesses.
Experian
Experian started off in London and is now a trusted agency in 39 different countries. It provides you with a credit score, credit report, and even credit tracker on subscription. The agency uses FICO 8 system of credit score calculation. Experian was a part of Forbes’ “World’s Most Innovative Companies” in 2018.
TransUnion
Based across 30 countries with a database of over 1 billion consumers, TransUnion is another CRA giant. The agency, like the other ones, will provide you with your credit score and your credit reports. In case you decide to freeze your TransUnion credit report, it will also go the extra mile to notify Equifax and Experian, which frankly is a big help especially in case of identity theft and credit fraud.
So, the next time you are sat wondering “where to get my credit score?,” think of these three giants that provide you with an annual credit score and credit report for free once each year. However, if you are looking for more frequent updates, you can subscribe to their services and receive your monthly updates.
Did you know that you have more than a single credit score? Agencies calculate your credit score based on the data in your credit reports. If you are wondering, “where to get my credit score?,” there are three main credit reporting agencies. These can have different credit scores for you if your information on each of their credit reports is different. Also, these agencies charge a fee to reveal your credit score.
Recently, it has become easier to track and get hold of your credit score without paying any fees. You can get it from your credit card company, your loan provider, and even from a non-profit counselor. Here are a few tips you can use to check your score.