Want to get your finances on track in 2012? The guidelines below won't be right for everyone. But they should give you a starting point as you look to build a better financial life.
1. If you're in the work force, aim to save 10% to 15% of your gross income every year.
2. If you're retired, consider limiting annual withdrawals to 4% to 5% of your portfolio's beginning-of-year value, including any dividends and interest you receive.
3. Fund an Individual Retirement Account every year and put at least enough in your employer's retirement plan to take full advantage of any matching employer contribution.
4. Before you invest, think about why you're investing and how far off your goals lie. That'll heavily influence your mix of stocks and more conservative investments. Once a year, check that you still have the right overall investment mix.
5. Don't put more than 5% of your stock-market money in any one stock - especially if it's your employer's stock.
6. Organize your estate. Get a will. Check you have the right beneficiaries named on your retirement accounts and life insurance. Tell your executor where key papers are located.
7. Cut your borrowing costs. Look into refinancing your mortgage. Favor secured loans, where you borrow against assets such as your home and your investments. Try to avoid carrying a credit-card balance.
8. If you have a mortgage, keep all monthly debt payments below 36% of gross income. If you don't have a mortgage, keep all monthly debt payments below 10% of gross income.
9. If you have family members who are financially dependent on you, make sure you have enough life and disability insurance.
10. Prepare for bad times by building an emergency fund and setting up lines of credit.
INVESTMENT AND INSURANCE PRODUCTS: NOT FDIC INSURED • NOT A BANK DEPOSIT • NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY • NO BANK GUARANTEE • MAY LOSE VALUE
The information provided is solely for informational purposes. It is not an offer to buy or sell any of the securities, insurance products, investments, or other products named.
Citigroup Inc. and its affiliates do not provide tax or legal advice.
Diversification does not protect against loss or guarantee a profit. There is no guarantee that these strategies will succeed. This information is intended to illustrate available products and services The strategies do not necessarily represent the experience of other clients, nor do they indicate future performance. Investment results may vary. The investment strategies presented are not appropriate for every investor. Individual clients should review with their Financial Advisors the terms and conditions and risks involved with specific products or services. Past performance is no guarantee of future results.
Investments are subject to market fluctuation, investment risk, and possible loss of principal. Investing in foreign markets entails greater risks than those normally associated with domestic markets, such as political, currency, economic and market risks.
Borrowing against securities may not be suitable for everyone. If the value of the securities should decline below a minimum level, you may be subject to a collateral call without specific advance notice, requiring you to deposit additional cash or securities. If you cannot do so, all or a portion of your collateral could be liquidated, and a potentially taxable event could result.
A Home Equity Line of Credit is a form of revolving credit in which your home serves as collateral. Home equity plans typically involve variable interest rates rather than fixed rates. Before entering into a plan, consider how you will pay back any money you might borrow. Some plans set minimum payments that cover a portion of the principal (the amount you borrow) plus accrued interest. But, unlike the typical installment loan, the portion that goes toward principal may not be enough to repay the debt by the end of the term. Costs to obtain a home equity line. Many of the costs in setting up a home equity line are similar to those you pay when buying a home. For example: a fee for a property appraisal, which estimates the value of your home; an application fee, which may not be refundable if you are turned down for credit; up-front charges, such as one or more points (one point equals one percent of the credit limit); other closing costs, which include fees for attorneys, title search, mortgage preparation and filing, property and title insurance as well as taxes; certain fees during the plan; for example, some plans impose yearly membership or maintenance fees; you also may be charged a transaction fee every time you draw on the credit line.
Since life insurance is medically underwritten, you should not cancel your current policy until your new policy is in force. A change to your current policy may incur charges, fees and costs. A new policy will require a medical exam. Surrender charges may be imposed and the period of time for which the surrender charges apply may increase with a new policy. You should consult with your own tax advisors regarding your potential tax liability on surrenders.
© 2012 Citigroup Inc. Citi Personal Wealth Management is a business of Citigroup Inc., which offers investment products through Citigroup Global Markets Inc. ("CGMI"), member SIPC. Insurance products offered through Citigroup Life Agency LLC ("CLA"). In California, CLA does business as Citigroup Life Insurance Agency, LLC (license number 0G56746). Citibank, N.A., CGMI and CLA are affiliated companies under the common control of Citigroup Inc. Citi and Citi with Arc Design are registered service marks of Citigroup Inc. or its affiliates.
its all about reminding each other what we ought to try to do