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  • Jun Wang
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Be Financially Fit at 30

2016-03-04 12:30:04

A retirement plan is the center of the person’s financial well-being. To ensure a stable financial core, work on your retirement plan the moment you take your first job. For 30-somethings, here are four financial tips which you can do to secure your future and finances.


Assess investments for unnecessary charges. Active managers can either bolster or dent returns depending on their investment decisions and market timing. In case the manager is not doing his job, the additional fees they levy on you are rendered useless, not to mention it would affect on performance. To avoid paying unnecessary fees, track your portfolio and find ways to cut the costs.


Do not keep excess money in retirement account. Believe it or not, holding too much cash does not make you financially fit. Cash cushion is required in any investment but retirement savings. Stocks are volatile in nature. However, the difference between the returns of a balanced portfolio and cash-dominated portfolio can be huge. Again, extra is good but not in long-term retirement accounts. Put that money somewhere else; perhaps in an emergency fund or another investment.


Maximize 401(k) contributions. You may opt to put the cash stash here. As much as possible, contribute to your 401(k) plan. Let’s look at this example. Pau is a 35-year-old branch manager with an annual average salary of $63,993. She $50,000 in her 401(k) plan (with an annual rate of return of 5%), pays a contribution of $6,399.30, and plans to retire at 65. Pau will receive around $783,668 from her 401(k) after 30 years.


Map out a long-term career plan. Nothing beats extending your working life and bolstering your salary. If you can, work longer. Here’s why: you can compound your savings for a longer time and reduce the years you will spend using that savings account. Expect a better retirement if you choose to stay longer at work.


How to become financially fit at 30? Evaluate investments for hidden or unnecessary charges. Never keep extra cash in retirement account. Max out contributions. Plan for a long-term career.