Foolproof Module 6 Test Answers (2024)

FAQs

How much money will you need for retirement foolproof? ›

Estimate your total savings needs

The first is the rule of 25: You should have 25 times your planned annual spending saved before you retire.

They almost always cost more than going to a bank, a credit union or a store. Some people have problems with debt after using these ways to borrow. The charges can be very high. It is hard to pay the money back and get out of debt.

When you pay with a debit card or ATM card, you are not borrowing money. You are spending your own money. When you pay with a credit card, you are always borrowing money.

A grace period consists of the days between the end of your credit card's billing cycle and the payment due date, by which you can pay off the balance without any interest or late fees. This is typically between 21 and 25 days.

If you can live on a tight budget with the right circ*mstances, $2,000 a month from a pension and Social Security, combined with the right strategy with $500,000 in your Roth IRA may be enough to sustain you throughout your retirement.

“With a nest egg of $100,000, that would only cover two years of expenses without considering any additional income sources like Social Security,” Ross explained. “So, while it's not impossible, it would likely require a very frugal lifestyle and additional income streams to be comfortable.”

It costs $30 to $50 in fees to transfer a $1,000 balance to a credit card, in most cases, as balance transfer fees on credit cards usually equal 3% to 5% of the amount transferred.

And if your payment is late, even by a single day, your card issuer could cancel the 0% offer and reset your card's interest rate to the ongoing APR. On top of costing you interest and late fees, missing payments could also end up hurting your credit scores.

It streamlines your financial situation, enabling you to concentrate on a cost-effective repayment strategy. You can easily convert your credit card debt into a personal loan.

You never know when unexpected fees or expenses will hit your checking account. And you can at times forget to write down a payment you make with your checking account or debit/ATM card. so, you're less likely to overdraw your account if you always keep a hundred dollar balance.

Which is safer, a debit card or a credit card? ›

The Bottom Line. Credit cards are far more likely than debit cards to offer true zero liability protection in the case of fraud, which generally makes them a safer choice.

If you don't pay your balance off in full each month, you'll accrue interest.

Try the snowball method

With the snowball method, you pay off the card with the smallest balance first. Once you've repaid the balance in full, you take the money you were paying for that debt and use it to help pay down the next smallest balance.

Rule #1: Pay in Full, on Time

There's one rule that's true for all credit card users, no matter the circ*mstance: Pay your bill on time and in full every month. Contrary to an enduring myth, carrying credit card debt past the end of the billing period isn't good for your credit score—in fact, it's usually the opposite.

Paying off your monthly statement balances in full each month is the path to avoiding credit card debt. As long as you pay off your statement balance in full before the due date, you can continue making purchases on your credit card without paying interest until the next statement due date.

Fidelity's guideline: Aim to save at least 1x your salary by 30, 3x by 40, 6x by 50, 8x by 60, and 10x by 67. Factors that will impact your personal savings goal include the age you plan to retire and the lifestyle you hope to have in retirement. If you're behind, don't fret.

He found that withdrawing 4% of one's retirement portfolio annually, adjusted for inflation, had a high probability of lasting through a 30-year retirement. The rule was then simplified to suggest that retirees should save 25 times their annual expenses to achieve financial independence, based on this withdrawal rate.

It's the million-dollar question — quite literally: How much should I save for retirement? There is a general rule of thumb: When saving for retirement, most financial experts recommend an annual retirement savings goal of 10% to 15% of your pre-tax income.

$700k can last you for at least 35 years in retirement if your annual spending remains around $20,000, following the 4% rule.