Freeman's Blog


February 18, 2015
February 18th, 2015 by

Ask most people what their net worth is and they probably don’t know. In many ways, viewing your net worth is like watching your weight: it’s healthy to set reasonable goals that make sense for you and your current situation. Comparing yourself to others only helps if you’re getting started and struggling to get a feel for where you stand.

How to calculate your net worth

In essence, net worth is calculated by taking everything you own (stuff, cars, houses,portfolios, etc.) and subtracting out everything you owe (college loans, mortgages, credit card debt, etc.). For the purposes of this article, we won’t be including pension plans, the cash value of life insurance policies, or the value of household furniture or jewelry in our calculations.

Take a minute and think about everything you own and owe. The things you own are called assets and go on one side of the sheet. The things you owe are called liabilities and go on the other. If you’re confused about the car you’ve borrowed for or your house that has a mortgage, put the fair value of those things in the “Assets” category, and the amount you still owe in the “Liabilities” category.

Where do you stand?

Back in 2011, the U.S. Census Bureau published a report breaking down the median household net worth by age and in quintiles. The plain English explanation is this: the 30th percentile means that if you have exactly this net worth, it is greater than 30% of households your age. The same is true for the 50th and 70th percentiles.

What is your net worth?

Sources: USAToday | January 31, 2015 | Typical net worth by age: Where do you stand?

Freeman Owen, Jr - Host of "Safe Money Talk" on CBS Radio The Big Talker 1580AM I do things the way my mother always taught me. I look a couple eye-ball-to-eye-ball and give you easy, attainable ways to protect your nest egg for your golden years. Should you wish to meet me for a FREE retirement strategy consultation, contact my office at 1-833-313-7233 | MD, VA & DC. 
February 17, 2015
February 17th, 2015 by

American employers are increasingly dropping pension plans, and that means workers are increasingly counting on 401(k) retirement accounts to provide financial security in their golden years. To get the most out of your account, be sure to avoid these 401(k) mistakes that could derail your retirement account.

1. Withdrawing Your Money:

One of the worst things you can do with your 401(k) account is to cash it out when you change jobs. Many people do just that. Recent data from Fidelity Investments, which administers many companies’ 401(k) plans, shows that 35% of those plans’ participants cashed out their accounts last year when leaving their jobs.

You should put a percentage of your overall salary into a retirement savings account, rather than accumulating money temporarily in a separate account. Considering that fewer and fewer Americans have the luxury of guaranteed pensions for retirement, and the average Social Security benefit is about $1,328 per month as of January 2015 (that’s only about $15,900 annually), most of us need to be stocking away lots of money on our own for retirement.

Fidelity also noted that among its plan participants in their 20s through 40s, the average cashed-out account balance was $14,300. Sure, after cashing out, you might start contributing to a new 401(k) account. However, you will have lost a significant sum, thereby affecting your overall retirement plan.

2. Paying High-Cost Fees:

Another huge 401(k) mistake you can make is paying more than you have to in fees.

Over time, the difference between 0.50% and 0.05% in annual fees is massive. Think thousands of dollars of potentially lost money over the course of your career. So, you need to pay close attention to funding choices in your 401(k). Sometimes a better deal is right under your nose.

3. Not Taking Full Advantage of Employer Contributions:

One of the biggest 401(k) mistakes is not making full use of money that your employer is willing to contribute to your account. Many employers make contributions in two different ways. Based on your percentage of your overall salary, they add profit-sharing contributions to employee accounts. Also, they match any contributions that you make up to a certain amount. Both of these types of contributions amount to free money from your employer, and it’s worth the minimal effort to claim it.

Most of the time, you don’t need to do anything to receive profit-sharing contributions. But with employer matching, it’s critical to save at least enough to maximize the amount of your employer’s contribution. Typical 401(k) plans will include provisions that match half of your contributions up to a maximum of 6% of your total salary. However, some contributions are much more generous. You could receive matching contributions (dollar-for-dollar) or matching contributions on higher percentages of your total pay. Even though employer matching and profit-sharing are sometimes subject to vesting requirements, your contributions are always yours to keep. Therefore, there’s no risk for your saving potential.

Source: USAToday: Feb 1, 2015 -3 critical 401(k) mistakes to avoid

I want to help you with your 401(k) plan and outline a plan for a retirement income you cannot outlive. So, let’s get started today! Contact my office at 1-833-313-7233 | MD, VA & DC. Freeman Owen, Jr - Host of SAFE MONEY TALK on CBS The Big Talker 1580AM