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Retirement is supposed to be the golden age of relaxation. Whether it be reading the garden, lazy days spent fishing, or early mornings on the golf course, when you retire, there are no bosses or daily meetings to preoccupy you. But what is the best way to get there?

Saving for retirement can seem daunting, especially when you consider housing expenses, student loan debt, and other day-to-day living expenses.

The average American retirement savings leave much to be desired. Most Americans nearing retirement age in the U.S. have only 12% of the recommended $1 million saved.

Actively preparing for retirement is one of the best ways to ensure you can spend your later years relaxing and enjoying your well-earned time off. There are a wide variety of accounts that allow you to save for retirement, from Traditional and Roth IRAs to a 401k, 403b, or other investment accounts. One of the most popular retirement vehicles is the 401k.

If you’re getting ahead on saving for retirement you may be wondering “how much should I have in my 401k?” While the answer to that varies depending on your financial situation, age, and more, there are a few retirement guidelines that can help you better prepare for the future.

What Is a 401k?

A 401k is an employer-sponsored retirement plan that allows both you and your employer to make contributions to the account. If your employer offers a 401k plan, you are most likely able to select a percentage or specific monetary amount to contribute to your 401k from each paycheck.

One of the major benefits of a 401k is that your employer can also make contributions. If your employer offers matching contributions, it makes sense to participate in the 401k plan, at least up until the matching maximum. Matched contributions are determined at your employer’s discretion, so check your company policy to see what is offered at your workplace.

There are two kinds of 401ks. When you contribute money to a traditional 401k, the money is tax deductible, but will be taxed when you withdraw it in retirement, at the income bracket you are in at that time. When you contribute to a Roth 401k, the money is taxed at the time of contribution, at the tax rate you are currently in. But it’s not taxed when you withdraw the money.

For both Roth and Traditional 401ks, the contribution limit for 2018 is $18,500. If you are over the age of 50, you are allowed to contribute an additional $6,000, known as a catch-up contribution. When you contribute money to a 401k, it is intended to be used in retirement .

Because of this, there is a penalty if you withdraw money before the age of 59 ½. On the other side of the age spectrum, if you do not begin withdrawals by the age of 70 ½, you will be faced with fines and penalties.

Average 401k Balance by Age

Your readiness for retirement will depend on a few factors; including your age, income, and expected retirement age. While everyone’s situation is different, it’s never too early—or too late—to start preparing for retirement.

To see if you’re on track with your retirement goals, take advantage of free online resources, like a retirement calculator that will help you estimate your financial readiness for retirement.

The earlier you start saving for retirement, the better. But if you’ve gotten a late start, there are ways to boost your retirement savings. As you age, your strategies for saving for retirement will shift. Here’s what to expect in your 20s and beyond.

In Your 20s

You’re just starting out in the work force and chances are you’re still paying off your student loan debt. While paying off your student loans and spending money on happy hour may seem more important than saving for retirement, the earlier you begin saving, the more time you will have to benefit from compound interest.

Compound interest is interest calculated on the initial principal and on the interest accumulated over the previous deposit period. This means saving for retirement in your 20s has significant advantages when you are finally ready to retire. Some experts think by the time you turn 30 , you should have saved one year’s salary toward your retirement. The average 401k savings for someone in their 20s in 2017 was $9,900.

In Your 30s

Your 30s are when you want to kick your retirement savings into high gear. It’s a good rule of thumb to up your retirement savings contributions to 15% of your monthly income . You may have other expenses like kids or a mortgage, but you’re also likely making a bit more money than you were in your 20s—so take advantage and invest some of that money in your future.

No one else will be looking out for your financial health in retirement. The average 401k savings for someone in their 30s in 2017 was $38,400.

In Your 40s

By the time you have reached your 40s, you should have a considerable chunk of change socked away for retirement. Common financial advice is that you have at least three times your annual salary saved at 40 if you intend to retire at 67. Often times, your 40s are also when you’re faced with financing your children’s education.

And when push comes to shove, many parents will put their child’s education ahead of their retirement savings. You’re now considerably closer to retirement than you were at 22, so consider opening an independents retirement savings account like an IRA, in addition to contributing to your company’s 401k plan.

Diversifying your investments may help reduce some investment risk. The average 401k savings for someone in their 40s in 2017 was $91,000.

In Your 50s

When you turn 50, you can begin making catch-up contributions to your 401k and IRA. You can contribute an additional $6,000 a year to a 401k and an additional $1,000 a year to your IRA. Take advantage of these catch-up contributions and continue to save.

Consider adding any bonuses or extra income into your 401k to boost your savings. The average 401k savings for someone in their 50s in 2017 was $152,700.

In Your 60s

As you get into your 60s, you can see retirement at the next exit. Now would be a good time to adjust your investments into less risky options. As retirement becomes more real, take the time to prepare for the unexpected and safeguard some of your investments. The average 401k savings for someone in their 60s in 2017 was $167,700.

But the average couple in their mid-60s will have to cover approximately $280,000 in health care costs. Make sure your retirement plan accounts for health care costs.

About 70% of Americans surveyed in 2016 said they plan to work as long as possible. Extending your working years could lead to financial gains down the road. Depending on when you were born, you qualify for Social Security benefits at different ages. If you were born after 1960, you won’t be able to collect Social Security until you are 67.

Invest with SoFi Invest®

If you are looking for opportunities to expand your retirement savings and complement your employer-sponsored 401k plan, consider investing with SoFi. If you have an old 401K, we can help you find out how much you are paying in management fees. Then, we can help you determine the impact of rolling over your 401K into an IRA with SoFi. Schedule an appointment here.

Additionally, at SoFi, we offer a competitive wealth management account with no SoFi management fees and members get complimentary access to financial advisors.

We’ll work with you to establish your financial goals and determine the risk profile you are most comfortable with. SoFi will work to diversify your investments and automatically rebalance your profile as needed. You can start investing with as little as $100.

SoFi can’t guarantee future financial performance.
This information isn’t financial advice. Investment decisions should be based on specific financial needs, goals and risk appetite.
Diversification can help reduce some investment risk. It cannot guarantee profit or fully protect loss in a down market.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Advisory services offered through SoFi Wealth, LLC, a registered investment advisor.
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Starting your own business is one of the most challenging—and rewarding—leaps you can take with your career. Turning your idea into a successful, thriving firm takes ingenuity, determination, and grit. It also takes a decent chunk of capital. You have to spend money to make money, right?

According to the U.S. Small Business Association, 57% of start-up businesses rely on personal savings to get their firms going. But if you’re just starting out or are planning an expansion to take your business to the next level, you might need more than you feel comfortable taking out of your savings.

Luckily, there are other sources of financing available that can help offset your costs. In fact, a recent National Small Business Association report found that available financing for small firms is on the rise, with 73% of businesses being able to access the financing they need.

Whether you need to get your business off the ground, expand your reach, or have cash on hand, it can take some creativity to find the right financing to help you thrive. Here are the basics of debt financing to help you find the right solution for your business.

What is Debt Financing?

Debt financing is the technical term for borrowing money from a lender to help run your business (as opposed to raising equity to cover your costs). Examples of debt financing include small business loans and lines of credit. Small businesses use debt financing to cover a range of expenses including start-up costs, operations, equipment, and repairs.

How Does Debt Financing Work?

Essentially, debt financing means borrowing money from a lender that you agree to pay back, typically with interest. If you’ve ever taken out a loan, you’ve financed a debt. The terms of the financing are agreed upon in advance, and you are mostly free to use the money however you wish.

Getting debt financing with favorable terms can be dependent on your credit score and financial profile. However, it is a relatively quick way to secure funds.

What’s the Difference Between Debt Financing and Equity Financing?

Equity financing refers to selling shares of a business in exchange for capital. Basically, this means finding investors who, in exchange for a portion of the business, help fund it. Equity financing can include everything from raising funds from friends and family to securing multiple rounds of financing from angel investors and venture capital firms.

A benefit of equity financing is that it’s money that is given rather than lent, meaning that you won’t have to pay interest. Another benefit is the investors themselves: Having good relationships with them can lead to important connections, mentorship, and resources to help your business grow.

Of course, a potential downside to equity financing is losing some control over the business and its operations (for example, many investors may want a seat on your board in exchange for funding . It can also take a long time—and a lot of effort—to attract and secure investors.

What’s the Difference Between Short and Long-Term Debt Financing?

Debt financing can be divided up into categories of short-term and long-term. Short-term debt financing refers to loans that are repaid over a period of a year or less. This includes everything from using a credit card, to opening a line of credit that you repay as you use it. Short-term financing can be useful for everyday expenses, small emergency repairs, and to cover cash flow.

Businesses use long-term debt financing to cover larger purchases such as expensive equipment, renovations, or real estate purchases. This can include mortgages or business loans which have multiple-year repayment plans. Often lenders require these types of loans to be secured by the assets that they are helping you purchase. For instance, a property mortgage would be secured by the property itself.

What Debt Financing Options are Available?

If you’re looking for an immediate solution, short-term debt financing may be a good place to start. For covering smaller day-to-day expenses that you plan to pay back quickly, a credit card might be the easiest and most familiar option.

Opening a line of credit can also be a handy way to manage cash flow or finance an expansion over a period of time. A line of credit works a bit like a credit card, but with more flexibility.

Lines of credit tend to be larger than credit card limits, and they usually have more competitive interest rates. Just like a credit card, you can borrow what you need as you need it, and then make monthly repayments.

About SoFi

SoFi is a new kind of finance company that offers personal loans, student loan refinancing, mortgage refinancing, and more. Learn more today to see how SoFi can help you reach your financial goals.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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Getting married soon? Congratulations! Just be warned—there comes a moment in many weddings when half the guests suddenly slip away to watch a big game (just follow the cheers to find your wedding party).

Football especially is a pretty good analogy for a wedding – after all, in both football and marriage, you’re either tackling things together or you’re being tackled by them. Money is a common example of this (in marriage, not football), as the growing number of couples dealing with student loan debt can attest.

Whether the loans belong to you, your spouse or all of the above, once you get married it doesn’t really matter anymore. Paying off debt is now something you can tackle together. It may be tough, but with open communication and planning you can work as a team to get that student loan linebacker off your, er, back.

So what’s the best strategy for taking down student loans without letting them clobber your marriage? Here are five tips for proactively – and collaboratively – running a play that could help lead to the big pay-off: a debt-free happily ever after.

Tip #1: Create Your Big Financial Picture

Preparing to take on a big financial goal usually requires some conversation and preparation upfront. Before making any decisions, sit down and talk about your short- and long-term financial objectives, and make sure you’re both on the same page (or as close to it as possible). This can be an overwhelming topic, so see if you can break it down into chunks.

Have you established a household budget? How do student loans (and paying them off) fit into your long-term and short-term goals? Should you start aggressively paying off debt, or might it be better for you to ramp up over time? What other factors (e.g., buying a home, changing careers, having children, etc.) could affect your decisions?

Not only can this exercise help give you more clarity to create an action plan, it can also actually be kind of fun – after all, planning a life together is part of the reason you got married in the first place. The key is to listen to each other and remember that you’re both on the same team.

Tip #2: Take Advantage of Technology

Once you’re clear on the big picture, it’s time to get into the weeds. Many people have more than one student loan, often with multiple lenders, so a good place to start can be to gather all of your loan info in one place. You can use an online student loan management tool to collect this information, compare student loan repayment options, and even analyze prepayment strategies.

After crunching the numbers, your debt payoff strategy may include putting extra money toward your loans each month, which means creating and sticking to a budget that supports that goal. Platforms like Mint and Learnvest can help you aggregate household accounts and track spending.

Note: tracking your spending so precisely may feel like ripping off a bandage at first, but over time, this kind of discipline can help you better see where your money goes and help you make conscious choices about your spending. And once you have your budget in place, these apps can be set up to alert you both when spending is getting off track.

Tip #3: Define The Who, What, When

Whether your finances are separate or combined, you’ll probably want to come to an agreement on how to collectively pay all of your financial obligations. Many couples address this based on each person’s share of the total household income.

For example, if one person makes 40% and the other makes 60%, the former might pay 40% of the shared bills and the latter might pay 60%. Others find it simpler and more cohesive to have one household checking account and pay all bills from there.

However you decide to split things up, it could make things much easier to agree upon a plan that accounts for everything, because missed payments can potentially impact your credit (and/or your spouse’s), making your future financial objectives that much tougher to achieve.

Tip #4: Look For Opportunities to Optimize

Okay, so now you’ve established a plan and a budget, and you know who’s on point for each bill. You’re on the path to getting student loan debt off your plate. Is there anything else you can do to speed up the process?

Short of winning the lottery, the most common ways to accelerate student loan payoff are prepayment (meaning, paying more than the minimum) or lowering the interest rate, the latter of which is most commonly accomplished through refinancing.

If you qualify to refinance your student loans, you have a few possibilities: you can lower your monthly payments (by choosing a longer term) or lower your interest rate (which could also lower your monthly payments) – or you could shorten the payment term, and that means you could save money on interest over the life of the loan – money that could come in handy for those other financial goals you’ve both agreed to pursue.

Tip #5: Be on the Same Team

Living with debt is stressful for any couple, but being part of a relationship has its advantages, too. There’s a reason that weight loss experts often recommend finding a “buddy” to help cheer you on and keep you honest in your diet and exercise journey – and the same applies for achieving a big goal like paying off student loan debt.

Keep it positive and keep the lines of communication open, and you may even find that the journey to being debt-free makes your marriage even stronger – so you can take the hits that come your way as easily as your favorite team does.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.

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You love your car, whether it’s a bare-bones hatchback or a souped-up Escalade. After all, it gets you places and keeps you from having to wait outside in the cold for the bus.

But maybe you’re struggling to make the payments on your auto loan, or you’re worried your interest rate is higher than it should be. No one likes to overpay, and there are a lot of reasons why you might be paying more than you need to on your auto loan. So how do you lower your monthly car payment?

The easiest fix is to refinance your auto loan. Refinancing a car will allow you to potentially qualify for a lower interest rate on your loan. This could potentially save you money, lower your monthly payment, or both. Or, you can also look into extending your repayment over a longer period of time.

But before you get on the phone with your car dealer to ask about your auto loan, you might want to consider the different ways you can refinance. Many people assume that the only way to refinance an auto loan is to replace it with another auto loan—but that’s not actually the case. In fact, you might find that using a personal loan to refinance your auto loan is actually a better idea.

When it’s Smart to Refinance a Car

There are a lot of reasons refinancing a car could be a great idea. One common reason is that you have improved your credit score since originally taking out your auto loan, so you’re likely to qualify for a more favorable rate now.

That’s partly because if you take out an auto loan and make your payments on time, often your credit will naturally improve as long as you’re diligent when it comes to credit in other areas of your life as well.

But there are other reasons you might suddenly qualify for a better interest rate. Maybe interest rates have gone down since you originally took out your loan, or maybe a slick car salesman convinced you to get an auto loan directly from the dealership–and charged you a premium for it. You might have gotten your ride more quickly, but you’ve since realized that you’re throwing money away on your auto loan.

One final factor that could be important when considering when to refinance a car is whether you need a lower monthly payment. Life changes fast—and sometimes you don’t have as much expendable income as you once did. Refinancing allows you to lower your interest rate, but it also lets you extend the term of your auto loan so that you end up paying less monthly.

Auto Loans vs Personal Loans

When it comes to refinancing your car loan, you can either get another car loan, or you can think outside the box and get a personal loan to pay off your car. An auto loan is a secured loan in which your car is used as collateral.

That means that if you don’t make your payments, your car can potentially get repossessed. In contrast, a personal loan is an unsecured loan that you can take out for [personal, family or household purposes. There is no collateral involved. Personal loans often have broader terms, options, and rates—and they can cost you less over the course of your loan.

One important thing to note is that since auto loans are amortized loans, you pay more interest at the beginning of your loan. So the sooner you’re able to refinance your auto loan for a lower rate, the more you’ll save.

To start the refinancing process, you first need to consider how much you’re currently paying on your auto loan. Look at both your monthly payment and your interest rate. Then you need to figure out what your refinanced interest rate and monthly payment would be if you used an auto loan versus a personal loan.

If you didn’t have great credit when you took out your auto loan, you could be paying from 7% to 15% interest on your car loan. By refinancing, you might be able to qualify for a new auto loan or a personal loan, with interest rates starting around 4% or 5%.

Deciding Between the Two

Personal loans are beneficial because you can take them out for personal, family or household purposes, and you have a wide range of what the loan can cover. Also, if you have good credit and a steady income, the interest rates that you’ll qualify for on a personal loan can be very competitive.

You’ll likely be able to get better terms on your personal loan—like the option to extend your payment schedule—and there might be fewer hidden fees. SoFi, for example, offers personal loans with zero fees or hidden costs.

When it comes to refinancing your auto loan with a brand-new auto loan, one key benefit is that you could be more likely to qualify if you don’t have good credit. And you could still get a lower interest rate, because it’s a secured loan.

However, the terms on your refinanced auto loan aren’t likely to be as good. For example, if your car is too old, you might not qualify for refinancing at all. Furthermore, an auto loan is usually tied to things like the age, make, and model of the car.

If you are able to refinance, you might not qualify for a desirable term length because the depreciation on your car might not make it worthwhile as collateral. In addition, you could struggle to refinance your auto loan if you currently owe more on your car than your car is worth—either because you paid too much for your car or because your car depreciated quickly.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website . on credit.

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You probably already know that you should have an emergency fund—a bit of extra cash on hand in case of an unforeseen event, like getting laid off or needing to move.

But many of us don’t know more than that. How much should you have? How, exactly, do you save that cash? And should you focus on building this fund or paying off debt first?

SoFi advisor and Certified Financial Planner Alison Norris recently talked about all of this and more at a recent #WealthWednesday discussion on the SoFi Member Facebook page. (Yep, SoFi members have daily access to complimentary advisors on social media and via phone—check out more about the SoFi Member Benefits.)

And today, we’re bringing that discussion, as well as other common questions about emergency funds and her expert answers, to you.

How much should I have in an emergency fund?

Your emergency fund should be three to 12 times the amount you spend monthly. The exact amount should reflect your risk aversion to unexpected unemployment. If you have reason to believe you could quickly land another job—say, you’re a software engineer in San Francisco—then you might be comfortable with three months’.

If, on the other hand, you’d expect a longer job search—for example, you’re in a specialized line of work, or a finding a new job would likely entail moving to a new city—your emergency fund should reflect that

Also, consider this: Would you be willing to amend your lifestyle if income slows or something costly crops up? If you’re OK living on a friend’s couch eating ramen, then you might survive with a smaller rainy day fund. If you wish to keep living the life you’re accustomed to, then you may want more of a backup.

Where should I keep my emergency fund—my checking account, a savings account, or elsewhere?

You want to keep your emergency fund money “liquid,” or available to access as soon as you need it. It’s also smart to separate cash on hand from your emergency fund. Cash on hand can be left in your checking account, earmarked for paying upcoming bills. Your emergency fund works well in a FDIC-insured savings account.

With that said, many savings accounts only pay you 0.01% interest on cash balances. This doesn’t keep pace with inflation, so you’re essentially losing money. Instead, you might consider a high-yield savings account that earns 1.0% interest or more. Bankrate is a good place to compare your options.

What do you suggest if you have roughly $5K built up so far for an emergency fund and also about $3K in credit card debt?

Should I wipe out the debt and then build the fund back up, or chip away at the debt and maintain the fund?

I might suggest knocking out that credit card debt in full. Here’s the order of operations that works best for most:

•   1. Keep enough cash on hand to pay recurring bills and avoid living paycheck to paycheck. (This isn’t your emergency fund, just cash that’s good to have on hand.)

•   2. If your employer matches contributions to a retirement plan, max out that match.

•   3. Pay off consumer debt, including high-interest credit cards.

•   4. Build your emergency fund.

Also keep in mind that the comfort of having a cash cushion and not living on the financial edge may outweigh other purely financial benefits of wiping out high-interest debt. Sleeping soundly at night is another benefit to building up an emergency fund.

Could a credit line be considered a pseudo emergency fund?

While I don’t have credit card debt, I do have a ton of student loans I want to pay off more aggressively. My credit cards would allow me to live for a good three months or so if I needed to.

I commend your desire to pay off your student loans aggressively, but I wouldn’t do so if it means you would instead have revolving credit card debt.

Say, for example, you have a 6% rate on your student loans and a 20% rate on your credit card loans, and $1,000 in outstanding debt with both. You’ll end up paying $140 less toward your student loan each year (maybe even less because there are tax deductions for student loan interest). I might suggest prioritizing the emergency fund while making minimum payments on your student loans.

What’s the best way to save up for my emergency fund, quickly?

The basic equation for wealth building is: Money In – Money Out = Money Saved.

But you don’t need us to tell you how math works. The key is to figure out which levers to pull to increase your odds of success.

Start by tracking your expenses, either in a spreadsheet or using a free service like Mint.com. You’ll quickly get a handle on your monthly cash flows, which will enable you to target an emergency savings goal tailored to your needs.

The next step is key: Pay yourself first. Schedule recurring auto-deposits into your savings account to coincide with your paychecks. You’ll find this cash flow will quickly become painless and invisible. More importantly, it ensures that when you overspend in a given month, it’s discretionary items—like eating out one more time—that get cut, rather than your savings.

I’m almost at my savings goal for my emergency fund. Where should I put my money next?

The earlier you save for retirement, the better, so you can let the power of compounding interest work for you. And even better than compounding is free money. For both reasons, the first place to invest for retirement should be in your employer-sponsored retirement plan, if you have access to one.

Many employers will match part of your contribution, which is essentially free money. Once that match is met, aim to keep contributing to tax-advantaged accounts. You can invest in the employer retirement beyond your match, contribute to an IRA, or (our preferred strategy) both. To understand which IRA account you can contribute to, use this IRA calculator.

From there, document your assets and liabilities. Know your good debt from bad. A mortgage or student loan? Good. A high-interest credit card? Not so good. Also write down your long- and short-term goals—for example, paying for wedding, saving for a house down payment, or even taking a summer vacation.

Once you’re saving for retirement, you can plan a savings or investment strategy for these goals, based on their time horizon.

SoFi can’t guarantee future financial performance. This information isn’t financial advice. Investment decisions should be based on specific financial needs, goals and risk appetite. Advisory services offered through SoFi Wealth, LLC, a registered investment advisor.
SoFi doesn’t provide tax or legal advice. Individual circumstances are unique. Consult with a qualified tax advisor or attorney.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
SoFi can’t guarantee future financial performance.
This information isn’t financial advice. Investment decisions should be based on specific financial needs, goals and risk appetite.
Neither SoFi nor its affiliates is a bank.
SoFi Checking and Savings^TM is offered through SoFi Securities, LLC, member FINRA / SIPC . Advisory services offered through SoFi Wealth, LLC, a registered investment advisor.

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