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Do your investments match your personal financial goals?

Align your savings and investments with your goals so that you can make the most of the funds you're investing.

Tags: Goals, Investing, Planning, Retirement
Published: March 27, 2019

You have an idea of what you want out of your financial life: A new home, college for your kids, regular travel and a sound retirement. Does your investment strategy align with those goals?

Focusing on what you want to achieve can help you make the most of the funds you're investing. Here are examples of goals-based investing in action, using some of the same strategies financial professionals use.

Select a goal

Select new goal

For most people, a home is a big purchase. Knowing how much, and how long, you’ll need to save can help alleviate potential stress.

College costs are rising. If you have kids, saving for college is an investment goal that requires some planning.

Approach your next vacation with the same financial savviness you bring to any other goal by planning ahead.

Investing prudently — and starting early — is key to retiring comfortably.

Use the slider to guess the median down payment on a home for buyers under age 37. The median down payment on a home for buyers under age 37:

$300,000+

The median cost of
a home in 2018.2

Certificates of deposit (CDs)

CDs are a low-risk choice to help you save for a medium-term financial goal. Also, since you might have more time to save, liquidity is less important.

Average cost of four years at a public university for residents:

$56,8403

Average cost of four years at a private college:

$104,0003

15-20 years

Ideally, families kick off college saving when a child is born. This means a college fund is a fairly long-term investment.

529 plan

With a 529 Education Savings Plan you make contributions with after-tax income, and contributions are not taxed when withdrawn for any reason. Any growth in the account is tax deferred, and any gains earned are not taxed when withdrawn and used for qualified education expenses.

How much do you spend on your vacation? Find out how it compares with the average cost of a vacation for a family of four.

2,400You
Average cost of vacation for a family of four$4,5804
1K
10K

How many months should you save for your vacation?

How many months should you save for your vacation?

12 months

Save for your vacation throughout the year — not just the month prior.

Savings account

A travel fund is a short-term goal, but you should still keep your savings separate from your checking account. Consider using a basic savings account. If you travel frequently, a credit card with travel-based rewards can help you maximize your budget.

Drag the arrow to compare your income to the average annual budget of households over age 65.

10K
100K+
Households over age 65
$45,7565
You
Households over age 65
$45,7565
10K
100K+

40 years

Retirement is the ultimate long-term savings and investment goal. Experts recommend starting as early as possible, then continuing to prioritize retirement as you age.

401(k) and Roth IRA

Start with an employer-sponsored retirement account, like a 401(k), if you have access. Take full advantage of any employer match that may be offered as well as the advantage of contributing before tax dollars. If you’re already maxing out your employer-sponsored account, consider opening a Roth IRA, which may provide you with additional investment choices.

New
home
College
fund
Travel
fund
Retirement
fund

1https://www.washingtonpost.com/news/where-we-live/wp/2018/07/12/why-its-more-realistic-to-opt-for-a-low-down-payment-and-private-mortgage-insurance-rather-than-saving-20-percent/?utm_term=.6522410bfc37

2https://www.census.gov/construction/nrs/pdf/uspricemon.pdf

3https://money.cnn.com/2017/05/01/pf/college/how-much-does-college-cost/index.html

4https://www.creditdonkey.com/average-cost-vacation.html

5https://www.nerdwallet.com/article/lets-get-real-what-an-average-retirement-costs

Do your investments meet your financial goals?
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[SECTION 1] Goal: New home

For most people, a home is a big purchase. Knowing how much, and how long, you’ll need to save can help alleviate potential stress.

 

[GRAPHIC] 7%

The median down payment on a home for buyers under age 37.[1]

 

[GRAPHIC] $300,000+

The median cost of a home in 2018.[2]

 

[GRAPHIC] Certificates of deposit (CDs)

CDs are a low-risk choice to help you save for a medium-term financial goal. Also, since you might have more time to save, liquidity is less important.

             

[SECTION 2] Goal: College fund

College costs are rising. If you have kids, saving for college is an investment goal that requires some planning.

 

[GRAPHIC] $56,840

Average cost of four years at a public university. For private colleges, the number is $104,000.[3]

 

[GRAPHIC] 15-20 years

Ideally, families kick off college saving when a child is born. This means a college fund is a fairly long-term investment.

 

[GRAPHIC] 529 plan

With a 529 Education Savings Plan you make contributions with after-tax income, and contributions are not taxed when withdrawn for any reason. Any growth in the account is tax deferred, and any gains earned are not taxed when withdrawn and used for qualified education expenses.  

 

[SECTION 3] Goal: Travel fund

Approach your next vacation with the same financial savviness you bring to any other goal by planning ahead.

 

[GRAPHIC] $4,580

The average cost of a vacation for a family of four.[4]

 

[GRAPHIC] 12 months

Save for your vacation throughout the year—not just the month prior.

 

[GRAPHIC] Savings account

A travel fund is a short-term goal, but you should still keep your savings separate from your checking account. Consider using a basic savings account. If you travel frequently, a credit card with travel-based rewards can help you maximize your budget.

 

[SECTION 4] Goal: Retirement

Investing prudently — and starting early — is key to retiring comfortably.

 

[GRAPHIC] $45,756

Average annual budget of households over age 65.[5]

 

[GRAPHIC] 40 years

Retirement is the ultimate long-term savings and investment goal. Experts recommend starting as early as possible, then continuing to prioritize retirement as you age.

 

[GRAPHIC] 401(k) and Roth IRA

Start with an employer sponsored retirement account, like a 401(k), if you have access. Take full advantage of any employer match that may be offered as well as the tax advantage of contributing pre-tax dollars. If you’re already maxing out your employer-sponsored account, consider opening a Roth IRA, which may provide you with additional investment choices.

 

 

[1] https://www.washingtonpost.com/news/where-we-live/wp/2018/07/12/why-its-more-realistic-to-opt-for-a-low-down-payment-and-private-mortgage-insurance-rather-than-saving-20-percent/?utm_term=.6522410bfc37

[2] https://www.census.gov/construction/nrs/pdf/uspricemon.pdf

[3] https://money.cnn.com/2017/05/01/pf/college/how-much-does-college-cost/index.html

[4] https://www.creditdonkey.com/average-cost-vacation.html

[5] https://www.nerdwallet.com/article/lets-get-real-what-an-average-retirement-costs

 

 

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