Broker Check

December Newsletter


November 27, 2019                                                                                

Are You a Super Saver?

You can take retirement saving to the next level by putting away at least 20 percent of your income and striving to be a super saver.  A new TD Ameritrade online survey of 1,503 individuals conducted in September and October of 2019 found that 20 percent of investors qualify as super savers.  According to Dara Luber, senior manager of retirement services at TD Ameritrade, “Most are choosing this path because they are looking for financial security and peace of mind.”   The survey found that 57 percent of super savers hope to retire earlier than their parents, versus 43 percent of non-savers.  These over achievers are putting away twenty, even up to thirty percent of their income, compared to ‘non-super savers’, who are investing just six to ten percent of their money.  Many super savers start investing by age thirty and almost a third of them start by age twenty-five!

Saving is ingrained in everything these super savers do:

  • They develop a budget to live by and do not spend what they save.
  • They put saving on autopilot, increase it annually and keep it out of sight.
  • They live in modest homes and buy used cars.
  • They do not buy on impulse and are not influenced by peer pressure.

Super savers are actively involved in investing and are more likely to own low-cost funds.  When it comes to retirement accounts: 401(k) plans, individual retirement accounts and health savings accounts, super savers usually own all of these.  The one account that most distinguishes them from other investors is the post-tax Roth IRA. Let’s take a closer look at the differences between the Roth IRA and the Traditional IRA: 

So, does this twenty percent savings rule, better known as the 50/20/30 rule really work?  Simply put it says that fifty percent of your income should be for nondiscretionary expenses like housing, food, and utilities. Another thirty percent should go toward discretionary spending which leaves twenty percent that can be contributed to a savings account,  an emergency fund or a retirement account. Twenty percent may not be your magic number. It could be higher or lower.  This is a good financial rule of thumb, but it doesn’t work for everyone.  If saving this amount is out of reach right now, then start with a lesser amount and make twenty or even thirty percent your goal. The most important thing is that you start and save a set amount of money that works for you. 

The bottom line; if you can consistently contribute 20% of your income to savings over the long-term (think: decades), you’ll have a better shot of retiring comfortably and perhaps earlier than your folks.

In 2019, Intelligent Investment Management, LLP offered our time and resources to the “Outsmart Cancer Program” co-organized by TD Ameritrade Institutional and Family Reach Foundation, a non-profit organization that works to eliminate financial barriers that come with a cancer diagnosis.  Steve and I guided one such cancer survivor and helped to organize services such as Social Security Disability, Medicare support and general financial planning.  That experience was successful and rewarding and we look forward to helping another individual when the time is right. 

You may have heard in the news, Charles Schwab and TD Ameritrade have reached an agreement for Schwab to acquire TD Ameritrade. The combined company will retain the Schwab name and will reflect the best each legacy firm has to offer. For now, the transaction is subject to customary closing conditions and is expected to close in the second half of 2020. During that time, there should be no impact to how you work with us or TD Ameritrade Institutional. We are monitoring this situation and will report developments as they occur.  Be assured that we will continue to act as a fiduciary for our clients and make decisions in your best interest.

All of us at Intelligent Investment Management wish you a peaceful Thanksgiving and Christmas complete with laughter, friends and family! 

Sincerely, 

Intelligent Investment Management, LLP

Laura Vaughan, FPQP™