Susie Skog knows Lake Norman Real Estate Inside Out

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Retiring early is a great idea if you can afford it.

Unfortunately, few people plan for retirement as well as they should. A common rule of thumb is to save 10 times your final salary to retire by age 67. For someone with an annual salary of $50,000, that would mean having $500,000 saved in retirement funds.

If you want to retire early, you probably already know you need to have a good chunk of money saved. But there are some other things you can do too:

Check Federal Benefits
The Social Security Administration has rules for when benefits can start to be collected. The longer you put them off, the more money you can get. To receive the full amount of benefits, you must reach full retirement age. Check out the agencys to determine your full retirement age.

If your full retirement age is 67 and you choose to collect Social Security benefits at age 67, youll get 100 percent of your benefit amount.

If you start your retirement benefits at age 62"the earliest age to receive them"your benefit is reduced by about 30 percent. At age 63 it drops about 25 percent and at age 66 it drops 6.7 percent.

Starting Retirement Benefits
Retirement plans also have restrictions on when they can be used. Money can be withdrawn from a 401(k) retirement plan without paying a 10 percent penalty at age 59-1/2.

However, theres a provision for taking out 401(k) funds as early as age 55 without a penalty if you retire early. Your employment must have ended in the year you turn 55, and the money in the plan must stay in the 401(k) plan to access it without having to pay a penalty.

How Much Income Will You Need?
Determining how much income youll need in retirement isnt easy. There are many expenses to consider, so your annual income in retirement is a moving number.

One rule of thumb for calculating how much income youll need in retirement is to have 70 – 90 percent of your annual pre-retirement income. This can come from retirement accounts, Social Security and other savings you might have. You could also supplement it with part-time work.

Withdrawing 4 percent from your retirement account is a good starting point. You may also have IRAs, investment accounts, rental property and dividend-paying stocks to rely on.

List Expenses
Your expenses in retirement should change. Youll probably no longer need to use your car as much to drive to work, you can find a more affordable place to live and you may not have a mortgage any longer. But other expenses may increase. These can include healthcare, travel, retirement hobbies and a home remodeling project. You should also plan for emergencies, such as paying for emergency medical care, a major home or car repair and long-term care.

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Here are a few reasons why a turnkey residence is more likely to appeal to luxury buyers.

Convenience

Many of todays top buyers are willing to pay more for a property that already meets their expectations without having to put more work into it.

Easier to Envision Themselves

Homes that look brand new are much easier for buyers to envision themselves in over a more personalized, lived in space.

Costs Are Upfront

If a home is already equipped with everything a buyer is looking for, then it can be very appealing to know they wont have to invest any more money in upgrades.

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Having bad credit can be worse than having no credit at all. A lousy credit score can lead to a steeper credit hole to climb out of, and can take years to fix.

All is not lost. Borrowers with bad credit scores can still get approved for a new credit card, though they’ll have to jump through a few more financial hoops than other people.

If you’re trying to qualify for an unsecured card because you have bad credit, here are some things you’ll need to provide:

Proof of Income
The Credit Card Act of 2009 requires that borrowers be checked that they have an “ability to pay” to have credit extended to them. That can include proof of your annual income, as well as your partner’s.

The credit card issuer may have minimum income requirements of $10,000 or $12,000 per year. If you earn less than that, or you already have too much debt, you may be denied.

Bank Account
A checking or savings account may be needed to determine your financial stability. If you can’t find a bank that will let you open an account because you have a poor banking history, look for a bank or credit union that offers “second chance” accounts.

These accounts often don’t have overdraft protection, but can have low or no monthly fees and no minimum balance requirements, so you can rebuild your banking history.

NoCredit History Red Flags
Most credit cards run credit checks to look for signs that your financial life is getting worse. Bankruptcy, liens, lawsuits and debt, among other things, could hurt your chance of getting approved.

Before applying for a credit card, clean up your existing accounts by getting caught up on payments and paying your bills on time.

A bankruptcy can be one of the biggest roadblocks, so you may want to try getting a credit card from your local bank or credit union, which might have less strict requirements for their credit cards.

No Bad Blood
Lastly, having a clean history with the credit card company that you’re trying to get a new credit card from can help your application. If you’ve defaulted on payments with a certain company, you may be better off not seeking a credit card from them for a while and focusing on a company that you’ll have a clean slate with.

Bear in mind banks are always looking for business, so finding a credit card somewhere while you try to rebuild your credit shouldn’t be impossible.

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If you’ve been making on-time payments on an auto loan for a year or more, it may be a good time to consider refinancing the loan so that you can lower your monthly payments.

Refinancing shouldn’t cost you anything as auto loans don’t typically have a prepayment penalty and applying for a refinance has no application fee.

Even if you’re happy with your car loan, it can make sense to refinance. Here are some situations when refinancing is worthwhile:

Interest Rates Dropped
If interest rates are lower now than when you first got your car loan, refinancing could lower your interest rate. This will allow you to save money in interest, which you can pocket, or free up some money that you can put toward paying off more of the principal, which will enable you to pay off your auto loan quicker.

Improved Credit
Most people improve their credit scores over time. If your credit score wasn’t good when you first got your car loan, or you didn’t know what it was at the time, check it now to see if it has improved. You might be surprised to learn that it’s good enough to help you qualify for better loan terms. This can be as simple as going to your current lender and asking them to check your credit score so that you can qualify for a lower loan rate.

If your current lender won’t do it, there are plenty of other lenders who will not only do this for you but will also be glad to have your loan. Refinancing will pay the balance of the existing loan and create a new loan, which you’ll send money to on a monthly basis through a new lender.

Your Loan is From a Car Dealer
If your existing loan is from your car dealer, you may have been charged a higher interest rate than you would have been charged somewhere else. Maybe you didn’t shop around for loans or didn’t know you had options. Whatever the reason, if you’ve made timely payments for a year or more, chances are you can now get a better rate elsewhere.

Check your credit score and check online or in person with banks, credit unions and online lenders for a better interest rate.

Falling Behind on Payments
If you bought a car that turned out to be more than you can afford and are struggling to make the loan payments, or are having other financial difficulties, refinancing an auto loan can lower your payments. You can also extend the loan to give you more time to pay it, though that will lead to paying more interest over the life of the loan.

This article is intended for informational purposes only and should not be construed as professional or legal advice.

Published with permission from RISMedia.