The investment information provided on this page is for educational purposes only. NerdWallet does not provide advisory or brokerage services, and does not recommend or advise investors to buy or sell particular stocks, securities or other investments. Welcome to NerdWallet’s Smart Money Podcast, where we answer your real money questions. This week’s episode begins with an introduction to what to do if your data is hacked. Next, we move on to this week’s money question from Melanie, who sent this message: “Hi, Sean. My name is Melanie. I’m a millennial and haven’t contributed to my IRA or 401(k) in quite a while. So I read a blog post recently about how much I’m supposed to have saved now, and sure enough, I’m not even halfway there and I know there’s a lot of people in my shoes who do even worse. So I was wondering if you know of any tricks or hacks, things to get around this limit so I can start contributing a lot more. I’ve heard there is one, but I don’t know the specifics about it, that if you have a business license like an LLC you can potentially contribute unlimited to a 401(k) or a IRA. Can you tell me a bit more about it or if you know any details about it or maybe it is a myth? I do not know. Very well. I can’t wait to know more. Thank you for your help.” Check out this episode on one of these platforms:Apple podcastSpotifyOur take on data breaches When data breaches make national news, as they did in early 2023 with Experian, Sequoia, and even the LastPass password management system, they remind us to secure our own accounts. . Prevention really is the best strategy, and one of the best tools is a credit freeze. When a freeze is in place, new accounts that require a credit check cannot be opened in your name unless you lift the freeze. A Fraud alert is another defensive measure that encourages lenders to contact you whenever someone tries to open an account with your social security number. Other best practices include regularly monitoring your credit reports, creating strong passwords, and enabling two-factor authentication. It takes time to have all of these protections in place, but it’s time well spent if it protects against identity theft that can hurt your finances. Our take on catching up with retirement savingsPerhaps nothing is more personal about personal finance than how much you need to save for your retirement. However, as a general rule, many experts recommend saving enough to replace 80% of your pre-retirement income. If you find yourself behind on saving for retirement, there are ways to get back on track. Many financial advisors recommend people take advantage of any 401(k) matching their employer may offer and maximize their IRAs. For 2023, the maximum contribution limit for a 401(k) is $22,500 and $6,500 for an IRA. For people aged 50 and over, the contribution limits increase to allow future retirees to cover the ground more quickly. Called catch-up contributions, they save you an additional $7,500 in a 401(k) and an additional $1,000 in an IRA. Social Security payments is another way to boost your nest egg. Each year, you defer your claim past your full retirement age, currently between 66 and 67, and you can add 8% to your check until age 70, when your benefit reaches its maximum. Our adviceRemember that you are not a number. Saving for retirement can be stressful, but don’t let your retirement account balance define you. And remember, contribution limits are increasing for 2023. Beware of social media advice: Apps like TikTok and Instagram are full of fake news — personal finance and more. Turn to reliable sources of information (like NerdWallet) for help. Do you have a question of money? Text or call us at 901-730-6373. Or you can email us at [email protected]. To listen to previous episodes, go to podcast homepage.
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Jae Bratton writes for NerdWallet. Email: [email protected] Weston, CFP® writes for NerdWallet. Email: [email protected]. Twitter: @lizweston.Sean Pyles writes for NerdWallet. Email: [email protected]. Twitter: @SeanPyles.
The article Smart Money: Data Breaches, and Catching Up On Retirement Savings originally appeared on NerdWallet.