Archives for April 14, 2018

America’s collective readiness for retirement is improving, according to Fidelity’s latest Retirement Savings Assessment study. The study distills America’s retirement readiness into a single score representing the percentage of estimated retirement income that the average saver will require.

According to the current study, America’s combined retirement score is 80 – meaning that the average American saver is on track to have 80% of the income required to cover all retirement costs. While 80 falls at the upper end of the fair range in Fidelity’s guide, it’s a great improvement over the original survey score of 62 in 2005.

Unfortunately, assuming that 80% of retirement income covers necessary expenses, the results indicate that half of survey respondents are at risk of not having enough income to cover these expenses in retirement – and the data indicates movement toward the extremes. While 32% of households scored above 95, 28% of households scored less than 65. Both values increased from the 2016 survey, at the expense of the fair category (65-80) and the good category (81-95).

The average score for baby boomers (those born in 1946-1964) was 86, the highest of all generations in the survey – as it should be, since most boomers are nearing retirement or already retired. They are socking away just under 10% of their salaries for retirement, above the average savings rate of 8.8% but well below Fidelity’s recommended savings rate of 15%. At this point, the most impactful step for Boomers is to work longer and delay Social Security benefits, but taking advantage of catch-up contributions to 401(k)/IRA accounts can help.

On the other end of the generational scale, millennials have the second-best average retirement score at 78. Millennials (born 1982-2000) save only 7.5% of their salaries on average, but a soaring stock market has helped them overtake generation X (born 1965-1981) in readiness – even with relatively conservative investing habits. They could improve by adopting more aggressive investing habits while they have more time to recover from the inevitable corrections.

Generation X averages 77 in retirement readiness, as they did in the 2016 survey. With an 8.6% savings rate, generation X-ers will need to increase savings rates or consider working longer to compensate, since they don’t have the luxury of time that millennials have.

Are you in the half of Americans that aren’t on track to meet essential expenses in retirement? Fidelity suggests three steps to improve and projects how much of an impact these changes will have on an average retirement readiness score.

1.Review Investments

Investments that are either too conservative or risky for your age can reduce your likely retirement income. Fidelity estimates that an age-appropriate asset allocation would increase the average readiness score from 80 to 82.

2.Increase Savings

At Fidelity’s recommended savings rate of 15% with employer contributions included, the average retirement score increases from 80 to 90 – but every little bit of savings will help.

3.Delaying Retirement

The median retirement age of respondents was 65, below the full retirement age (FRA) of 66-67 depending on birth year. By simply delaying retirement from age 65 until FRA, average readiness increases from 80 to 91 – and by working beyond FRA, you can increase your monthly Social Security benefits by up to 30%.

These are obvious points – if you save more and work longer, you should have more income at retirement and should need less income when you do retire. However, obvious is not the same as simple. Fidelity is noting our progress in retirement readiness and reminding us of the necessary steps to close the gap. It’s up to us to actually take those steps.

Regardless of where you plan to retire, the number one factor in ensuring that you can retire on your terms is your 401(k). Make sure that your 401(k) is maximizing its potential with this free analysis that checks your fees, fund mix, and other factors to help you hit your retirement goals.

As spring begins to bloom, and Americans break out of winter hibernation, improving wellness and working on a healthier lifestyle enters the forefront of their minds. Without spending a dime, you can benefit from the warmer temperatures of spring. Crack open your windows to air out your home, take more outdoor walks or bring your fitness routine outside.

You might be interested in taking your health and wellness a step further. Self-care became a major focus in 2017, and as a result, there are more ways than ever to keep yourself healthy, both physically and mentally. Before spending more money than you should to take advantage of one of these recent trends, consider the following advice to improve your health without overspending.

Essential oils. The world of essential oils is vast, and might be overwhelming if you don’t know where to start. If you’re hoping to diffuse, apply or even ingest essential oils to reap their benefits, make sure you do your due diligence. One universal piece of advice: Don’t buy “cheap” or knockoff essential oils to save money. The reason certain essential oils are marketed as less expensive might be because they are diluted or even include ingredients that are lower quality and might not be safe.

Rather than cut costs on the oils you use, you can save money on accessories. Bargain hunt for a diffuser rather than buying one that is high-tech or fancy. Something simple and straightforward can be found for $20 at most retail box stores. You can use a carrying case or shelf that you already own, as long as you read the recommended storage environment to keep them in good condition for as long as possible.

Lastly, consider how you want to start trying essential oils. If you have a certain ailment that you are looking to address, such as allergies or stress, research the best oils to start with and start by purchasing only one or two. If you are looking for general help with wellness, a starter kit might be the best bet financially, as they are often offered at a discount from individually priced oils. There are also wholesale and bulk options once you decide what essential oils you like and want to invest in, so that you can get an overall discount in the long-term.

Better sleep. The amount and the quality of sleep you get each night can affect every aspect of your life. Better sleep is trending in the wellness world, and everything from pricey mattresses with smart technology to sleep science studies are touted as solutions for more sleep. But you don’t necessarily have to reach into your wallet to sleep better and feel better:

• Set an alarm: You probably set an alarm to wake up each day, right? Do the same thing in the evening to help you get to bed early. As a bonus, going to sleep and waking up at the same times each day and night will help your body adjust to a schedule.
• Try yoga at night: Instead of taking a yoga class you need to pay for, try a 10- or 15-minute routine created
  specifically for better sleep. There are many yoga experts who provide free routines on YouTube to get you ready to fall asleep and stay asleep.
• Cut back on caffeine: This is probably easier said than done for many people who live for their afternoon cup of coffee (or two), but the earlier you cut out caffeine during the day, the better chance you have at getting tired in the evening.

Unplug. Lastly, the influx of technology seeping into every part of our lives has many people craving time away from screens – so much so, in fact, that there are now camps and retreats that advertise an expensive “digital detox” experience. If you want to step away from your devices to quiet your mind, the best part is you don’t need to spend a dime. It can be a challenge at first, but aim for an hour each day away from any screens. On the weekends, try for two hours a day. Pick up a book, go for a walk or a jog or get together with a friend. You may find you are able to focus more, increase your productivity, and even improve your posture, as you won’t be looking down at a laptop or smartphone. Once in awhile, try unplugging for an entire day or period of time – such as a vacation – and see how you feel.

Instagram has more than 800 million users, but not all of them have figured out how to make money from their feeds.

However, Viktoria Altman, the blogger behind TravelTipster, is a social media maven who has cracked the code. Since she started using her Instagram for business purposes in late 2016, Altman has built a following of over 33,000 fans by sharing breathtaking images from around the globe.

Altman learned how she turned her love for travel and photography into a source of income (which, by the way, brings in over $1,000 per month).

Here’s how Altman earns money from her travel photos, along with her advice for aspiring Instagram influencers looking to follow in her well-traveled footsteps.

1. Capture your passion with quality photos and equipment

These days, Altman works full time on her blog and Instagram feed. She also deals with other platforms, including Pinterest and Facebook.

But Altman didn’t start out as a blogger. She began as a full-time traveler.

“The more places I visited, the more inspired I felt to try and create something that would help me preserve memories and help others to create their own experiences,” said Altman.

She initially took pictures with her cellphone. But in November 2016 she decided to take her photography up a notch to produce exceptional images for Instagram.

“Start with buying a good DSLR [digital single-lens reflex camera] and a starter lens,” she advised.

Now Altman uses her website and Instagram to inspire others and help travelers build their own adventures.

“I provide lots of travel tips, talk about places to visit in a location, how to save money, and how to get the most out of the experience,” said Altman.

Focusing on practical tips also helped her stand out in the travel blogging and Instagram world.

“Having a unique voice [on] Instagram and [in the] blogosphere is very important to grow your following,” she said.

By choosing a field you’re passionate about — whether it’s travel, fitness, food, or whatever else — you’ll be more likely to add value and a unique perspective.

2. Boost your photography skills with free online courses

Of course, Instagram isn’t just about the information you can provide. It’s primarily about the quality of your images. That’s why Altman made it a priority to improve her skills as a photographer.

Once you’ve secured the right equipment, take advantage of free online tutorials to sharpen your skills.

“There are a million free videos on YouTube, and the best way to learn, I find, is to watch the videos about photography and then practice on your own,” she said. “Same works for Photoshop and Lightroom. There is a learning curve, but it’s very doable without any expensive classes.”

Altman has also improved her photography skills by taking advantage of the “social” part of social media.

“I have been able to make friends with great photographers through Instagram and Vero,” she said. “I often ask them for advice.”

Without standout photography skills, you’ll be hard-pressed to succeed as an Instagram influencer.

“It’s a very competitive world,” said Altman. “Making a living as an Instagram influencer means you need to constantly work hard on yourself and your skills.”

3. Find your tribe and engage with them

Along with mastering the art of photography, you must also grow your following and boost engagement.

“Instagram has always been about community, and by finding a group of like-minded people whose work you admire you can help yourself grow,” said Altman. “I am networking with many big landscape photographers who also follow me and comment on my pictures. This means the Instagram algorithm favors me and helps me grow faster.”

Along with growing your following, you should also focus on building engagement. This could mean following other Instagram users or responding to any comments left on your photos.

“You would start to create your Instagram family by following bloggers whose work you admire, commenting on their pictures, and building a relationship,” said Altman. “Building a genuine community is the No. 1 step to becoming a professional Instagram influencer.”

4. Collaborate with companies offering products you’d use

You don’t need thousands of likes per picture to monetize your Instagram feed, Altman said. She said clients will start to approach you once you steadily have about 700 to 1,000 likes per picture.

Of course, you can also reach out to them when you’re ready.

“Every brand has a PR team,” said Altman. “Send them an email, tell them you love their product, [but] only approach companies you would genuinely use.”

Some clients will give you products in exchange for a post, while others will pay you for a campaign.

“On average, an Instagrammer with 30,000 followers and a strong blog can expect to make $500 to $3,500 a month depending on the month,” said Altman. “An average campaign probably brings in about $1,000 for an Instagrammer of my size.”

5. ‘Under promise and over deliver’ for your clients

Once you start getting clients, Altman said it’s important to “under promise and over deliver.”

“If a client asks for three Instagram posts, I try to deliver four,” she said. “If a client asks for just one article, I try to add one more as a guest post on a different blog.”

The world of Instagram influencers is a competitive one. By exceeding clients’ expectations, Altman ensures they keep coming back. And a happy client can turn into a source of referral.

“Make the work great, put your heart and soul into it — and they’ll be back and refer others,” said Altman.

She also said you can’t expect to score lots of clients right away. Building a customer base takes time, so be patient. If you keep at it, you can make money doing what you love.

6. Don’t be afraid to experiment with new platforms

Rather than sticking solely to Instagram, Altman said it helps to also create blog posts, Pinterest images, and YouTube videos. Building up several sources of influence will help you bring in the most income from your online business.

Additionally, Instagram influencers should also be on the lookout for the next great platform.

“Everyone knows that Instagram is huge,” she said. “But consumers can change their habits. Remember Myspace?”

For her part, Altman has been experimenting with the social network Vero. Since it’s still fairly small, she feels she can score big clients by getting in on the ground floor.

“Be open to new media,” Altman advised. “Instagram users who got on Instagram at the very beginning had a huge advantage. I am always looking for new networks and trying new things.”

So while there are tried-and-true ways to get big on Instagram — great photography and engaging with your community being two of them — you also can’t be afraid to experiment.

By trying new things, you can carve your own niche in the Instagram influencer space. What’s more, you can turn your passion into a lucrative job that brings in hundreds, if not thousands, of dollars per month.

For even more inspiration, learn how this blogger makes $9,000 per month writing about cruises or how this stay-at-home mom makes seven figures after turning her blog into a business.

If you’re working hard but are in disbelief about the state of your bank account, you’re not alone. A recent national survey revealed that 44 percent of Americans could not afford a $400 emergency expense without borrowing or selling off assets. Americans also currently average a savings rate of significantly less than 5 percent.

Luckily, you can put more money in savings while still living comfortably with one surprisingly simple fix: It’s time to revisit household budgeting. Americans are earning, saving and spending enough, just in the wrong order.

As a certified financial planner, I recommend breaking down your finances into three categories: spend, save and donate. However, that hierarchy often lends itself to a 100/0/0 allocation, which I find totally backwards.

The quick fix is to reverse the order and attempt a 10/10/80 allocation of cash flow: Save 10 percent, donate 10 percent and then spend 80 percent.

Once this strategy is adopted, most folks will realize they’re living the same lifestyle they did before. Only now they’ll watch their savings and investment accounts steadily grow and begin compounding.

The donation portion is optional, but it’s hard to deny the incredible satisfaction of giving. In fact, this principle of generosity goes back at least as far as biblical times, when the apostle Paul taught the Corinthians that charity is the greatest of all virtues.

Americans are still generous today. “Giving by individuals totaled an estimated $281.86 billion, rising 3.9 percent (2.6 percent adjusted for inflation) in 2016,” reports Giving USA.

And even with a budget, you’ll still be able to spend 80 percent of your income! You can also embrace the momentum and start shifting your funds further in the right direction, perhaps creating a 15/15/70 program.

Compounding money is exciting but compounding knowledge is never-ending. To take this concept a step further, I challenge parents to put three jars in their kids’ rooms and label them save, donate and spend.

Instruct them to divvy up their birthday gifts, Christmas gifts, summer job money, etc., according to the same budget you’ve implemented. At the end of the year, they can use what’s in the spend jar on a game they’ve been wanting, for example, and give what’s in the donate jar to a charity that piques their interest.

It’s a lesson that will stick with you both, as these small habits can lead to big success.