Page 15 - Means Wealth 2020/2021 Perspectives
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Resources department. Increasingly, plans provide automatic enrollment
        at a default contribution rate and investment alternative called a Qualified
        Default Investment Alternative or QDIA.

        How is my money invested?
        401(k) plans typically offer variety of mutual funds to invest in. These funds
        will each have different investment parameters and levels of risk. It is up to you
        to direct the investments within your account. Most plans offer target-date
        and/or risk-based model portfolios that provide diversification based on
        age and/or risk tolerance. If a plan has a QDIA as mentioned above your
        contributions will typically be automatically invested into one of these options,
        but you can change this if you so choose. The QDIA is designed to be
        effective for those that don’t wish to become more involved and can be
        suitable for most investors. If you are new to investing, you may wish to further
        educate yourself or enlist our help.

        How much should I contribute?
        Make sure you are contributing at least
        enough to receive all of the employer
        match, if any. Consider this free money
        that you don’t want to miss out on. Beyond
        that, you want to contribute as much as
        you can while still making sure the rest of
        your financial house is in order.
           •  Establish an emergency savings
             account equal to at least three months’ income (six months is better).

           •  Pay off any high interest debt. If you use a rewards credit card, make
             sure you pay off the balance each month.
        Once you have taken these steps your goal should be to contribute as much
        as you can up to the contribution limit of $19,500 ($26,000 if age 50 or
        older) for 2020 and 2021.

        How much will I need to retire?
        A quick internet search will yield a variety of answers to this question. Each
        individual’s circumstances will vary. Fidelity Investments has published
        guidance that says you should save 1x your salary by age 30, 3x by 40,
        6x by 50, 8x by 60 and 10x by age 67. If you are a little or a lot behind
        remember:  it’s never too late to start and some is always better than none.
        We recommend that you work with your Financial Advisor to develop a plan
        to get on track and stay on track to a successful retirement! n

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