Revising Budgets
March 17, 2016Planner: Michael via 1 on 1 Consultation
Problem: She had just gone through a divorce & was only contributing 2% to her 401k. She thought she was going to have to work forever & never be able to retire.
Suggested Action Steps: We discussed increasing her 401k contributions to 6% after finding areas in her budget that could be downsized. We also talked about using the Rate Escalator feature with a 2% annual increase (had been getting 4% annual increases, so 2% was a way to get to maximum contribution in less than a decade)
Results: After the increase in contributions, her retirement projections had her on track. The added savings allowed her to buy a home within 3-5 years at a mortgage cost lower than her current rent.
Testimonial: “I was nervous that I would never be able to save enough for retirement or afford the contributions. The planner showed me how to do this without lowering my monthly take home pay too low. I am currently saving to buy a home.” – 1 on 1 Consultation Attendee