Cash strategies
Save for retirement or fund today's needs? We say "yes."
You want to save for retirement and other long-term goals, but need to pay for today's realities. And the ever-changing economy isn't making it any easier for you to find ways to balance doing both.
You may be wondering:
- What can I do to save more for tomorrow?
- How can I find safe ways to save so I'm not worried about losing money?
- How can I save enough to feel prepared for the unexpected?
Here are some simple steps you can take right now to:
Set aside more for the future
Save more by spending less
Taking a fresh look at your spending habits can be one way to find more money to save or invest. You can work with an Ameriprise financial advisor to identify inefficiencies in your day-to-day budget. An advisor can also help you find more cash to save or invest by showing you ways to reduce or eliminate high-interest debt. One possibility is to pay down or eliminate credit cards with high interest rates. You should also consider transferring balances with high interest rates to a card with lower interest rates.
Ask an Ameriprise financial advisor about credit cards that offer low rates, no annual fee, no pre-set spending limit and rich rewards.
Your home could help you generate investable cash
There are two ways you can do this:
- Refinance at a lower rate and invest the monthly savings. With interest rates at historic lows, now may be a good time to secure a low interest, fixed-rate loan and reduce your monthly mortgage expense. The monthly savings realized through refinancing can be invested for tomorrow.
- Take out a home equity line of credit to lower debt payments. A home equity line of credit (HELOC) can help you consolidate debt at a lower interest rate. Similar to refinancing, the savings realized by consolidating with a HELOC may help you get the cash you need to invest more in your future.
You should talk with a financial advisor about how these opportunities could fit into your overall saving and investing plan.
Save more securely
How can you find ways to save more securely? First, take a fresh look at your risk tolerance. Carefully consider the amount of risk you're comfortable assuming as you save for today and invest toward your future goals. Many investors find that their risk tolerance changes in volatile markets, like the one we are experiencing. So now may be a good time to meet with a financial advisor who can help you reconsider your risk profile, and guide you toward investments that are appropriate for your situation.
If you're feeling risk-averse these days, you may want to discuss these "lower risk" investment options:
- FDIC-insured savings accounts, money market accounts and certificates of deposit (CDs). Savings and money market accounts offer you immediate access to your money, while CDs may offer higher interest rates. With FDIC insurance, all these investments offer unsurpassed safety.
- Fixed annuities can provide a guaranteed fixed rate of return on your investment and comfort knowing your original investment is protected, no matter what's happening in the market. Fixed annuities guarantee a minimum interest rate based on which annuity you purchase.
- Solutions with advice from experienced professionals built into the product could be another good option. You can select a product that is managed in alignment with your current feelings about lowering risk. A financial advisor can help guide you to product solutions that are right for your situation.
Feel more prepared for the unexpected
Layoffs, disability, health care needs — these unexpected events can be a greater threat to retirement savings than market or economic changes. Many people turn to their retirement savings to cover themselves through the unexpected, and they never recover from the drain to their retirement savings. Take a more proactive approach by building an emergency fund. A financial advisor can help you determine how to structure your emergency fund so it is right for your situation.
Tip: To calculate the size of your emergency fund, consider how long it may realistically take you to find a job. Today's high unemployment rates are causing most job searches to take longer than usual.
Contact an Ameriprise financial advisor to schedule a New Perspective review. This complimentary review will provide you with an overview of your complete financial situation and clear steps you can take right now toward saving for your long-term goals.
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Your New Perspective meeting will include a review of your existing financial situation and potential opportunities, gaps, or general strategies. You will not receive a comprehensive review or financial planning services for which fees are charged.
Financial planning services and investments offered through Ameriprise Financial Services, Inc., Member FINRA and SIPC.
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There are risks associated with fixed income investments, including credit risk, interest rate risk, and prepayment and extension risk. In general, bond prices rise when interest rates fall and vice versa. This effect is usually more pronounced for longer-term securities.
Ameriprise Bank, FSB an equal Housing Lender, is a subsidiary of Ameriprise Financial, Inc. Mortgages and home equity loans and lines of credit are provided by Ameriprise Bank, FSB. Home equity loans and lines of credit are not available in Texas. Financial advisors who are employed by a federal savings bank are eligible to offer mortgages, home equity loans and home equity lines of credit to clients.
Financial advisors may not arrange for, promote, suggest or permit a client to use mortgage or home equity loan proceeds to purchase securities or other investment products offered by financial advisor.
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Bank CDs are FDIC insured to at least $100,000 per depositor. On October 3, 2008, FDIC deposit insurance temporarily increased from $100,000 to $250,000 per depositor. The $250,000 limit is permanent for certain retirement accounts (includes IRAs) and is temporary for all other deposit accounts through December 31, 2013. Funds held in an identified FDIC insurable capacity will be FDIC insured up to a maximum of $250,000 at a single bank, and any amount deposited above $250,000 will not be covered by FDIC deposit insurance.
CDs are generally FDIC insured up to the applicable limits. However, it is not certain that in the case of Structured CDs that the return component of the value of the Structured CDs will be covered by FDIC insurance.