Money Matters: Save before you spend to get out of debt and prepare for retirement
YNN continues its reports featuring top experts offering their top resolutions for a number of your money goals, like retirement. Shazia Khan filed the following report.
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Some leading experts shared their tips about how to plan for retirement and get out of debt.
"We survey retirees every year and consistently find the two biggest regrets year after year are that they didn't start saving early enough and they simply didn't save enough money," Greg Daugherty from Consumer Reports says.
This year, resolve to beef up your 401(k) or similar plans, especially since contribution limits went up by $500.
"This year you can put in up to $17,500 if you are under 50 or a total of $23,000 if you're over 50," Daugherty says. "So we would make that the centerpiece of all your retirement planning.if you have more money, you can put it in other places too."
IRAs are another good place to store your money. Contributions limits also went up for IRAs this year, from $5,000 to $5,500 for people under 50. If you're over 50, the limit is now $6,500.
From savings we turn to spending, but For many Americans, 2013 may be the year to fold them.
"Households with credit card debt on average are carrying about $15,000 on their balances," says Farnoosh Torabi, a personal finance expert and host of Yahoo's Financially Fit. "So this year if you want to get out of credit card debt, you really need to stick to cash."
If you're expecting to spend someone else's money this year, such as that from an inheritance, you may want to think twice.
"About one in five Americans actually receives an inheritance," certified financial planner Anthony Canale says. "The median is around $60,000. About 50 percent of an inheritance is either lost in some sort of business venture or investment opportunity, spent on current consumption or actually given away."
So make the dearly departed proud and resolve not to make a big impulse purchase .
"Since the average person who receives an inheritance is not seeing a huge change in their wealth, what you want to do is wanting to build wealth," Canale says. "Do I have an emergency fund? If i don't, then an inheritance is a good place to start."
As is putting it towards debt, retirement and your children's education.