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  1. Knowing your numbers helps you stay healthy, wise and wealthy. 806 3.5% $857k 21 Key Stats for Tracking Your Financial Health 66.7 11x $1.6M 8 7 4% 60/40 15% 3.5% $15,000 $120k

  2. Why It's Important to Know Your Numbers Living well means knowing your numbers. Your doctor, for example, tracks your blood pressure to make sure you'll keep on living. Your mechanic checks your tire pressure to make sure you'll keep on driving. Knowing your numbers helps you make better day-to-day decisions that can have a positive influence on your health and well-being. Should you order fries with lunch… or salad? Drive another 100 miles… or pull over? Your financial health depends on numbers, too. Tracking a few key stats can help you determine whether you're saving enough for retirement, using credit wisely, or investing appropriately for your long-term goals. Here are 21 key financial stats that are good to know…

  3. Net Worth • What it is: Net worth is a crucial measure of your overall financial health at a point in time. It's what you have left if you sell all your financial assets and pay off all your debts. • Why you need it: If your assets are greater than your liabilities, you have a positive net worth. A negative net worth means you owe more than you own. Net worth generally fluctuates from year to year, so it's important to monitor the overall trend. • Assets defined: Assets are anything you own that has some monetary value. That includes all property such as cars, real estate, investments, savings, retirement, checking, and valuable collectibles such as art, jewelry, or antiques. • Liabilities defined: Liabilities are all your debts that must be repaid and represent a drain on your assets. Liabilities include any mortgages, credit card debt, student loans, car loans, medical bills, back taxes, etc. Find your number: Total Assets - Total Liabilities Source: U.S. Census Bureau, 2015

  4. What it is: There is a reason for the old maxim: "Cash is king." Cash in the bank means you're prepared for surprise expenses as well as developing opportunities Why you need it: Your net worth could be positive, yet you still may not have enough cash on hand to meet expenses. For example, you might enjoy a rising net worth due to your real estate investments, yet not have enough cash to pay a tuition bill. Significance: A rising cash flow generally indicates positive growth and a growing net worth. Cash and cash flows can be more important than your net worth to banks and other creditors. Your ability to get loans depends on whether your cash flows are positive or negative. Emergency savings: Building up cash balances is important for establishing an emergency fund for surprise expenses, a job loss, or other income disruptions. Experts recommend having cash reserves that could fund a minimum of three to six months of living expenses. Cash Balance Find your number: Checking account + Savings accounts + Liquid assets Source: GOBankingRates, 2017

  5. What it is: Investable assets are financial assets that could be easily liquidated into cash. Basically they are the sum of your cash and investments, but not any personal properties, mortgages, or assets tied up in your business. Why you need it: Investable assets tell you how much money you have available without having to sell any personal property. Your investable asset number is usually lower than your net worth since it doesn't include illiquid assets like real estate holdings or pensions. Price breaks: Your level of Investable assets could give you some clout with banks and brokerage houses. If you meet certain account minimums, you may be eligible for price breaks and additional services. Retirement gauge: It can also help you determine when to retire. Many retirees desire to live off their portfolio's earnings in retirement leaving as much principal as possible for their heirs. Investable assets helps you decide how much to invest to create cash flows and otherwise fund retirement. Investable Assets Find your number: Savings + Investments – Consumer Debt Source: Federal Reserve Survey of Consumer Finances, 2016

  6. What it is: Adjusted gross income (AGI) is a tax term for your total gross income after qualified adjustments, but before personal exemptions and deductions. Qualified adjustments include health insurance premiums, interest on student loans, retirement account contributions, half of self-employment tax, alimony payments, qualifying tuition, and more. Why you need it: Your AGI will determine your tax bracket, your ability to contribute to certain retirement accounts, and your eligibility to take various tax deductions and credits, among other things. Higher AGIs that "hurdle" specific thresholds can also trigger additional taxes. For example, if you make more than $170,000 married or $85,000 single, Medicare premiums start to rise. Make over $250,000 in taxable income married or $200,000 single, and you might trigger the 3.8% net investment income tax. Changes annually: Your AGI will change each year depending on your income. You can estimate your AGI yourself or consult with a tax professional. Adjusted Gross Income (AGI) Find your number: Total income – Qualified Adjustments (or see last year's Form 1040) Source: 2018 Key Financial Data

  7. What it is: Your tax bracket indicates how much money you can make before that last dollar of income pushes you into the next higher bracket. Why you need it: Knowing your tax bracket can help you decide whether or not to sell an asset, make a gift to charity, or contribute to a retirement account. For example, if you are in the 35% tax bracket, you could save $350 for every $1,000 spent on a tax-deductible expense like mortgage interest or charity. Changes annually: Congress sets the tax brackets each year, indexed to inflation. Note: Your tax bracket is not the same as your effective tax rate. Your tax bracket indicates the highest rate you pay, but that rate is not applied to all of your taxable income. A portion of your income will be taxed at 10%, another portion at 15%, etc., until the bracket threshold is reached. Generally your effective tax rate is lower than your tax bracket. Tax Bracket Find your number: Use the 2018 Tax Brackets Table or visit IRS website Source: Tax Foundation, 2018

  8. What it is: When you die, your assets can be taxed at both the state and federal level. How much tax your estate will pay depends on the dollar value of your assets at death. Federal taxes: Assets must reach $11.18 million in 2018 before the estate tax of 40% kicks in. State taxes: States, too, can impose an estate or inheritance tax. Only 15 states do and their exemptions may or may not follow the federal estate tax exemption. Why you need it: If you don't see your state on the chart, only the federal estate tax applies. If you live in one of the states that does impose an estate tax, you will need to decide how to dispose of your assets tax-effectively so you don't burden your heirs with a big tax bill. The lower your state's exempted amount, the more estate planning you'll need to do. Your State’s Estate Tax Find your number: Review Estate Tax Rates & Exemptions Chart Source: Tax Foundation Facts & Figures, 2018

  9. What it is: Most investment portfolios are based on three categories of investments: stocks (or equities), bonds and cash. Equity investments are vital to your portfolio since they've historically provided superior long-term returns compared to bonds or cash. At the same time, they are also riskier than bonds or cash since they are subject to the business cycle as well as market volatility. Why you need it: How much to invest in stocks is a critical decision in attaining your financial goals. Experts have been debating for years the "correct" allocation to stocks, but it is a decision that depends on your age, goals, risk tolerance and portfolio. At retirement, you may want fewer equities in the portfolio so to decrease your risk exposure. At a younger age, you may feel comfortable taking on more risk in order to earn higher returns. At any age, it's important to know what your equity allocation is. Even in retirement, you may need some kind of allocation to stocks to protect against inflation and outliving your portfolio. While too much equity can be painful in market corrections, too little equity could mean you won't achieve your retirement goals. Your Equity Allocation Find your number: Stocks/Total Portfolio Source: JP Morgan Guide to the Markets, 2016

  10. What it is: Inflation is defined as a sustained increase in the general price level of goods and services. It is measured by either the Consumer Price Index (CPI) or Producer Price Index (PPI). Both indexes are published by the Bureau of Labor Statistics (BLS). Why you need it: Inflation affects your purchasing power. A dollar received today may not be worth a dollar of goods in the future, depending on inflation. Inflation affects interest rates, cost-of-living increases for Social Security, and various tax items that are adjusted for inflation each year. Historical average: Planning for retirement or major purchases like college tuition sometime in the future means you need to take into account the effects of inflation today. Historically, inflation has averaged around 4% from 1918-2018, reaching an all-time high of 23.7% in June 1920. Inflation is an economic fact of life. Sometimes it works in our favor and sometimes it doesn't. Either way, it could impact your investments and affect your ability to achieve your long-term goals. Inflation Rate Find your number: CPI and PPI are announced monthly by the Bureau of Labor Statistics Source: JP Morgan Guide to the Markets, 2018

  11. What it is: The replacement ratio helps you determine how much of your work salary you'll need in retirement. Example: If your pre-retirement income was $100,000 a year and you will receive $60,000 a year in Social Security and pension benefits, your replacement ratio is 60%. Why you need it: Experts recommend replacing 70-90% of your final salary to enjoy a lifestyle similar to the one you had when you were employed. However, critics suggest that retirees need less income than is generally believed. One reason you probably won't need 100% of your working income is that expenses generally decrease in retirement. Work-related costs fade away as does the need to save for retirement. Your replacement ratio can help you estimate how much income you will need in retirement and how much income you will need to save to close the gap between your expenses and your sources of income. Replacement Ratio Find your number: Post-retirement Income/Pre-retirement Income Source: Center for Retirement Research, Morningstar 2014

  12. What it is: How much to save for retirement depends on how much you want to spend, how much income you'll have, and your age at retirement. Multiple formulas: One rule of thumb states you'll need $15-$20 for every $1 gap between your retirement income and expenses. Other experts say you should save around 15% of your annual salary starting at age 25 if you want to retire at age 62. Of course, the later you wait to start saving, the higher your rate needs to be. While everyone's savings rate is highly individual to their needs and lifestyle, Merrill Lynch has done a number of studies on retirement planning and finds that savers should reach certain milestones as they age. Why you need it: The important thing is to get into the habit of saving something each year. That includes taking advantage of company matches with your 401(k) and other savings incentives. Retirement Savings Rate Find your number: Around 15% of your annual salary depending on your circumstances Source: Bank of America Merrill Lynch, 2017

  13. What it is: Your withdrawal rate is how much you take out from your investment portfolio on an annual basis to meet expenses in retirement. Ideally, you want a "sustainable" withdrawal rate that you can use throughout retirement that won't deplete your savings. To calculate: Determine how much you'll spend in your first year of retirement. Next add up income sources like pensions, military pay, and Social Security. Gap analysis: Subtract your expenses from your income to determine if there is an "gap" that needs to be filled. If so, what percentage of the portfolio will you withdraw to fill the gap? That is your withdrawal rate and may need to be adjusted for inflation in future years. Opinions vary: Manyfinancial advisors recommend a 3-4% withdrawal rate while others say those percentages are too low. Determining your withdrawal rate depends on a number of factors like longevity, inflation, the return you're getting on your current portfolio, your health and how you want to live in retirement. Withdrawal Rate Find your number: Around 3-4% Source: Blackrock,

  14. What it is: Your reliance rate measures how much you depend on your investment portfolio to fill your expense gap. Example: Say you’ll need $100,000 a year in retirement income. If $70,000 comes from your portfolio and $30,000 comes from other sources, your reliance rate is 70%. Why you need it: A high reliance rate indicates a high dependence on your portfolio to meet expenses. You will be much more sensitive to market volatility since more of your income will fluctuate along with the market. A low reliance rate signals a lower exposure to the market and you can expect smaller and maybe fewer fluctuations in your retirement income. The bottom line is that the higher your reliance rate, the more market declines will affect your retirement income. Or to say it another way, the higher your reliance rate, the more flexible you need to be with your spending during retirement in order to compensate for market fluctuations. Reliance Rate Find your number: (Expected Spending – Non Portfolio Sources of Income)/ Investment Portfolio Source: Wall Street Journal, 2015

  15. What it is: How much you spend each month can be broken down into three categories: fixed, variable, and periodic expenses. Fixed expenses represent your monthly "nut" or how much you spend on basic living arrangements. Fixed expenses don't vary much from month to month. Why you need it: Knowing how much money you need to meet your bills each month helps you in planning, investing and building your savings whether for retirement or a major purchase. Spending is a variable you can control (for the most part) and therefore need to track in order to achieve your long-term goals. The lower you can get your monthly expenses, the more money you'll have for saving, investing or paying off debt. Your fixed monthly expenses also become very important in retirement and determine how much money you will need to save. Fixed Monthly Expenses Find your number: Add up mortgage payments, utilities, loan payments, housing, food, transportation, insurance premiums, and clothing Source:, Bureau of Labor Statistics 2016

  16. What it is: Health care costs can vary widely from year to year, especially if you're budgeting for a family. Some health care costs are fixed such as your annual premiums and your routine care. Other health care expenses arise suddenly – someone becomes ill or is in an accident. Insurance may cover the bulk of the costs, but you still may be liable for a large deductible or co-pay. National average: According to the Milliman Medical Index, the average family of four spent just under $27,000 on health care in 2017. Of course, these are national averages. Your costs may vary a great deal from the average depending on your unique situation. Why you need it: Health care gets more expensive as you age. Fidelity finds that married couples will spend about $250,000 on health in retirement. Over 30 years, that is around $8,000 a year with the bulk of the expenditure taking place in the later years. Health care is a big enough expense that it should be a line item on your financial or retirement plan. Yearly Health Care Costs Find your number: Add up fixed premium payments and routine out-of-pocket costs for the past year Source: Milliman Medical Index, 2017

  17. What it is: The market value of your home can be quite a bit different from the replacement cost of your home. Replacement cost is the cost necessary to replace or repair the home and does not include land value. Insurance options: There are generally three types of homeowner's coverage: Guaranteed replacement coverage insures 100% of your home without limits, but it can be very expensive. Replacement cost coverage insures about 80% of your home. A cash-value policy will cover the cost of replacing your residence minus depreciation and wear and tear. Your coverage may be significantly less than the cost to rebuild your home. Why you need it: Knowing your rebuild costs can help you determine how much insurance you need. Insurance coverage should be reviewed annually, especially in years you upgrade or improve your home. Your policy may need to be adjusted to reflect any increased rebuilding costs. Cost to Rebuild Your Home Find your number: Contact your insurance agent, a contractor, or hire an independent appraiser Source: Insurance Information Institute, 2018

  18. What it is: The value of the equity you have in your home can be a very significant number to know. While you may not have thought of your home initially as an investment, when it comes time to sell, the proceeds could be a significant source of retirement income. Home equity measures how much of your home you own based on its current value. The less you owe, the more equity you have. The price of your home or its market value doesn't come into play in this equation. Hopefully, you bought low and can sell high (more equity!), but a negative equity position is also possible depending on property values at the time of the sale. Why you need it: Knowing how much equity you have can help you make some important financial decisions. Suppose you want to remodel the house, consolidate debt or pay for college. You could take out a line of credit against the equity in your home or do a cash-out refinance. In retirement, you may want to take out a reverse mortgage. For many people, their home is the largest financial asset they own so it's good to know how much equity you've built up in it. Home Equity Find your number: Current market value of home minus your mortgage balance Source: Census Bureau, Motley Fool, 2015

  19. What it is: Of all the numbers to know, how long you will live is one of the most important. It affects all of your financial decisions like retirement spending, Social Security claims, insurance, and more. Longevity risk: The probability that you may live longer than expected is known as your "longevity risk," and it changes each year as you grow older. The average life expectancy for 2016 was 78.6 years in the U.S., according to the CDC. Why you need it: Studies have shown that people tend to underestimate how long they will live. This can be a critical error in retirement planning. You will spend your savings a lot differently depending on whether you live to 75 or 100. But remember, those are still just averages. About 25% of today's 65-year olds will live past age 90 and 10% will live past age 95, says the Social Security Administration. Life Expectancy Find your number: Visit or Source: Center for Disease Control, 2016

  20. What it is: Most Americans carry some kind of debt in the form of mortgages, car loans, college loans, and credit cards. One way to determine whether your debt load is manageable is to calculate your debt-to-income ratio. This measures the amount of income used to cover your monthly bills. Why you need it: Lenders use the debt-to-income ratio to determine what kind of credit risk you pose. A low ratio indicates you have a good balance between your debts and your income. A high balance signals you are carrying too much debt for the amount of money you make. Debt guidelines: According to FHA guidelines, housing-related expenses (i.e., monthly mortgage payments, property taxes, etc.) should not exceed 31% of gross income. And total debt load (housing-related expenses plus credit cards, car payments, etc.,) should not rise above 43% of gross income. Debt-to-Income Ratio Find your number: Recurring Monthly Debt/Gross Monthly Income Source: Pew Trusts, 2015

  21. What it is: Credit card debt is some of the easiest and most expensive debt to incur. A majority of Americans carry at least one credit card. However, credit card debt can be expensive with interest rates averaging around 16.5% as of November 2017, according to Credit types: Lenders generally divide credit card users into two groups: transactors and revolvers. Transactors pay their balance off every month and generally avoid interest charges. Revolvers carry a balance from month to month, incurring interest expense. Why you need it: Of course, the best way to keep interest expense low is use credit cards sparingly and pay the bill within 30 days. Not paying on time or paying only the minimum payment can result in higher interest rates and lower credit scores, limiting your ability to borrow money in the future. Credit Card Balance & Interest Rate Find your number: Review APR and outstanding credit card balance on each account Average Credit Card Debt Source: Credit Hub, 2018

  22. What it is: Your full retirement age (FRA) is a magic number at the Social Security Administration. What age you are when you retire can affect the amount of your Social Security benefit, and in some cases, your spouse's benefit, too. History: For many years, the FRA was 65. However, in 1983, Congress began raising the age limit due to increases in average life expectancy. Currently, the FRA is around 66 depending upon the year you were born, rising to age 67 for everyone born after 1960. Why you need it: While your FRA might be 66 or 67, you can begin claiming Social Security as early as 62. However, there is a penalty for early claiming that reduces your benefit by as much as 70% depending on your age. On the flip side, if you delay claiming until age 70, the benefit will be 32% higher, according to the Social Security Administration. Full Retirement Age (FRA) Find your number: Visit the Social Security Administration website Source: Social Security Administration, 2015

  23. What it is: Banks and other lenders will look at your FICO score to determine whether you are a good credit risk or not. FICO scores range from 300-850 points and are compiled by the three major credit bureaus: Experian, Equifax, and Trans Union. How it's calculated: Your FICO score is based on a formula using five weighted credit factors: your payment history (35%), amount owed (30%), length of credit history (15%), new credit (10%) and the mix of credit accounts you already have (10%). Your score is a snapshot of your credit at a particular point in time and will change as you add more credit or pay off your bills. Why you need it: While FICO scores may be most important when you're buying a home or other major purchase, some employers, insurers, and landlords may also review your scores to determine whether you’re a good credit risk or not. Check your score every year or two to make sure your report accurately reflects your credit history. FICO Credit Score Find your number: Visit Source: FICO Blog, 2018

  24. Net Worth ____________ Cash Balance ____________ Investable Assets ____________ Adjusted Gross Income ____________ Tax Bracket ____________ Your State’s Estate Tax ____________ Your Equity Allocation ____________ Inflation Rate ____________ Replacement Ratio ____________ Retirement Savings Rate ____________ Withdrawal Rate ____________ Your Key Stats • Reliance Rate ____________ • Fixed Monthly Expenses ____________ • Yearly Health Care Costs ____________ • Cost to Rebuild Your Home ____________ • Home Equity ____________ • Life Expectancy ____________ • Debt-to-Income Ratio ____________ • Credit Card Balance & Interest Rate ____________ • Full Retirement Age ____________ • FICO Credit Score ____________

  25. If you would like to improve your key financial numbers…. Who we work with: How we help: Who we are: Disclosures One More Number Need help with your numbers? Call us at Name & Title