Give Yourself A "Wealth Check-Up"
By Jane White, President of the Retirement Solutions LLC and a former financial journalist. She can be reached via email at Jane@retirement-solutions.us. The Retirement Solutions Foundation is a non-partisan organization dedicated to educating the public about saving for retirement.
Remember when the only time people moved was because of a job transfer - not to "trade up" to a bigger and better house? As recently as 20 years ago, the word "McMansion" didn't exist-and the only people who could afford to live in regular mansions were rich people. Contrary to popular opinion, investing for retirement doesn't take special skill and knowledge, for the most part it means not wasting money on items that will become obsolete, not getting into debt and hanging onto one of your biggest assets: the roof over your head. Take this quiz to see if you're on track.
a) As soon as they offer a new feature or free Anytime Minutes
2. How old is your TV?
a) Less than a year
3. When was the last time you remodeled your kitchen
a) When they invented Sub-Zero refrigerators
4. How old is the oldest car in your household?
a) One year or less
5. How much do you spend on a typical vacation?
a) More than $1,000
6. Have you recently refinanced your mortgage or are you tempted to do so? If so, what did you (or would you) do with the money?
a) Went on vacation
7. How much do you owe in credit card debt?
a) More than $5,000
8. You are 45 years old and you just found out that the value of your five-year-old home has doubled. What do you do?
a) Sell it and trade up to a bigger house
9. Do you own a Hummer or would you consider buying one?
a) Are you crazy? Ugly, gas-guzzling AND constantly in the repair shop?
10. You're 45 and you've got $50,000 in your 401k account. You've just been laid off from your job. You have a choice of "cashing out" your 401k balance or rolling it over to an IRA. Should you tap into your account?
a) Yes because it's less embarrassing than borrowing from my parents.
11. How much money is in your 401k account?
a) Less than $10,000
12. Do you have retirement savings outside of your 401k plan such as in a Roth IRA or separate investment account (not including a company pension or a rollover IRA)?
13. How much money do people need to save compared to their salary right before retirement?
a) At least twice their salary
14. What is the likelihood that an American family will file for bankruptcy compared to filing for divorce?
a) Less likely
15. How does today's bankruptcy rates compare with that of the Great Depression?
a) The same
16. In 2003, household borrowing in America was almost $8.7 trillion, 108% of disposable income. How does the $8.7 trillion figure compare to the assets in all 401k plans in 2003?
a) Half the amount
Questions 1 through 11 except 9: Give yourself one point for every a) answer, three for every b) answer and five points for every c) answer.
Question 9: Give yourself one point if you checked a), subtract 3 if you checked b) and subtract 5 if you checked c).
Questions 11 to 16: Give yourself 3 points if you checked 12 b) and 13-16 c), otherwise none.
Judging your score:
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