Millennials:
Ditch Debt and Start Saving
Hi. We’re Fidelity.
Our resume
• Family-owned company, 70 years experience
• Products and solutions for every stage in life
Today’s Topics
CREATING A BUDGET
PRIORITIZING DEBT
AND SAVING
Creating a budget
Where are you now?
FIGURE OUT YOUR INCOME
SUBTRACT YOUR
LIVING EXPENSES
SUBTRACT MONTHLY LOANS
AND DEBT PAYMENTS
Creating a budget
Where are you now?
FIGURE OUT YOUR INCOME
SUBTRACT YOUR
LIVING EXPENSES
SUBTRACT MONTHLY LOANS
AND DEBT PAYMENTS
What’s left over?
PAY OFF DEBT
SAVE FOR SHORT- AND
LONG-TERM GOALS
Prioritizing debt and saving
Planning for what’s leftover
BUILD AN EMERGENCY FUND
CONTRIBUTE TO YOUR PLAN
PAY OFF HIGH-INTEREST CREDIT CARDS
PAY OFF PRIVATE STUDENT LOANS
CONTRIBUTE EVEN
MORE TO YOUR PLAN
TACKLE LOWER INTEREST
LOANS LAST
STEP ONE
STEP THREE
STEP FIVE
STEP TWO
STEP FOUR
STEP SIX
• Chatting about budgeting at the Salon
STEP ONE
Build An Emergency Fund
What is it?
Money you put away just for emergencies
How much do you need to save?
• 3-6 months of living expenses
• Keep it in a separate account
• Consider automatic transfers
STEP TWO
CONTRIBUTE TO
YOUR PLAN
Contribute to your Plan
What is it?
A tax-advantaged retirement account typically offered through work
How much do you need to save?
Start with at least 1% of your salary
• Take advantage of automatic payroll deductions
• Take advantage of starting early
About your retirement plan
Duke University and Duke University Health System
You can enroll in the plan at any time. The
IRS Contribution limit for 2015 is $18,000.
You can select and change your investments
at any time. If no investment options are
selected, contributions start off in a Fidelity
Freedom K
®Fund, based on your date of
birth, at the direction of your employer.
Generally Faculty and Staff paid monthly are
eligible for Duke’s contribution after completing 1
year of service and reaching age 21.
• 8.9% on your first $59,000 of salary.
• 13.2% on your salary in excess of $59,000, up
to $265,000.
Immediate vesting in your own voluntary
contributions to the plan
Vested after three years in Duke contributions
Web: www.netbenefits.com/duke
Service Center: 1-800-343-0860
Free onsite one-on-one guidance is available
with Fidelity. Schedule at
www.fidelity.com/reserve.
ELIGIBILITY
EMPLOYER
CONTRIBUTIONS
CONTACT
INVESTMENTS
VESTING
GUIDANCE
• Retirement planning in the hot tub
The Power of Compounding
STEP TWO
Initial monthly cost
of 1% savings boost
Potential income boost
over 25-year retirement
The Power of Compounding
STEP TWO
$1.5M
$1M
$.5M
Age: 25
Age: 35
Age: 70
This hypothetical example assumes the following (1) $5,500 annual IRA contributions on January 1 of each year for the the age ranges shown, (2) an annual rate of return of 7% and (3) no taxes on any earnings within the IRA. The ending values do not reflect taxes, fees or inflation. If they did, amounts would be lower. Earnings and pre-tax (deductible) contributions from Traditional IRAs are subject to taxes when withdrawn. Earnings distributed from Roth IRAs are income tax free provided certain requirements are met. IRA distributions before age 59 1/2 may also be subject to a 10% penalty. Systematic investing does not ensure a profit and does not protect against loss in a declining market. This example is for illustrative purposes only and does not represent the performance of any security. Consider your current and anticipated investment horizon when making an investment decision, as the illustration may not reflect this. The assumed rate of return used in this example is not guaranteed. Investments that have potential for a 7% annual rate of return also come with risk of loss.
$796,687
$796,687
The Power of Compounding
STEP TWO
$796,687
$1.5M
$1M
$.5M
Age: 25
Age: 35
Age: 70
This hypothetical example assumes the following (1) $5,500 annual IRA contributions on January 1 of each year for the the age ranges shown, (2) an annual rate of return of 7% and (3) no taxes on any earnings within the IRA. The ending values do not reflect taxes, fees or inflation. If they did, amounts would be lower. Earnings and pre-tax (deductible) contributions from Traditional IRAs are subject to taxes when withdrawn. Earnings distributed from Roth IRAs are income tax free provided certain requirements are met. IRA distributions before age 59 1/2 may also be subject to a 10% penalty. Systematic investing does not ensure a profit and does not protect against loss in a declining market. This example is for illustrative purposes only and does not represent the performance of any security. Consider your current and anticipated investment horizon when making an investment decision, as the illustration may not reflect this. The assumed rate of return used in this example is not guaranteed. Investments that have potential for a 7% annual rate of return also come with risk of loss.
