Amy: Tonight, it is July 1st. We've got a look back on the first half of the year and a look forward. What should you be doing? What is your mid-year financial checkup? Look like you're listening to "Simply Money," presented by Allworth Financial. I'm Amy Wagner, along with Steve Hruby. Gosh, it's hard to believe it is already July 1st. This year has flown by. One of the things I think that is so interesting too, is, you know, when you get to the end of a year, there's all these predictions of what's going to happen. So we had all these predictions, you know, last December and in January, of where we would be maybe by now. And now we've got kind of the reality of it.

Steve: Yeah. So, you know, today we're going to give a look back on what's happened in the first half of the year. And, you know, so far, the S&P 500 index climbed 14.5%. That's huge. Obviously, this is on the back of some big stocks, and we've had entire segments talking about The Magnificent Seven, you know, the big three, the top one, Nvidia. You know, it's riding pretty high because of a handful of stocks, but the S&P 500 up 14.5%. For some reason, it almost doesn't feel like it.

Amy: I know. I think it's just because there's been kind of a mixed bag so far this year. I mean, we're still working on bringing inflation down. We're still paying so much more than we did a year ago. And I think in the midst of all of that, I don't know, if you're not paying close attention, there's been a lot of market volatility. I haven't looked at this research recently, but I would say a month, a month and a half ago, we looked at the fact that the market was up because of eight or nine days this year, you know. So it's not like every day we're riding all these highs. We've seen some volatility this year. Overall though, up close to 15%. Not a bad first half of a year to kind of have in history books at this point.

Steve: Yes. Especially when we use the S&P 500 as a gauge so often. You know, three straight quarters up, 32.6% from its 52 week low back in October. That's big. The tech heavy NASDAQ, you know, led the way in the first half. It climbed 18.1%. Obviously, AI craze, kind of capturing the attention of a lot of investors that are happening on to the queues, as you would call them. That's the investment for the NASDAQ. Blue Chip Dow lagged up about 3.1%.

Amy: Yeah. You know what I think is really interesting about the Dow is, so much of the financial articles and headlines revolve around the Dow. I mean, you know, it's only 30 stocks. It's a very, very small index, yet it's talked about so often, the Dow this, the Dow plunge, the Dow way up. The Dow, if that is something that you invest solely in, because that's what everyone's talking about, well, we just said the S&P 500, the 500 biggest companies that make up the American economy up north of, you know, almost 15%, then you've got the Dow 3% to 4% up this year. And I think that speaks really clearly to why you have to be so diversified, where you can't just be following one index and say, okay, I'm diversified. Because you look at the Dow this year and it's way behind everyone else.

Steve: Yeah, you want to have a mix of large cap, small cap, mid cap, international, domestic. There's different types of stocks that you need to have exposures to, just the same way that you need to have exposure to a lot of different indexes. Now, when we look at all of them overall, we recently had a segment on the VIX, which is the volatility index or Wall Street's Fear Index. And it has stayed under 20 for quite some time now. Under 20 signifies calm waters. And that, I don't know, things are pretty good right now as far as the markets are concerned.

Amy: Yeah. In fact, speaking of calm, we haven't seen any swings above or below 2.15% in a day for over a year.

Steve: On the VIX.

Steve: Yes, on the VIX. And I think it's important to understand that, because it just means that investors are feeling pretty good. I mean, no, it's not just the VIX. I think it's just like in the index, right? No more days above or below, you know, that kind of a swing. So we talk about volatility, but really, we haven't had any major down days. We haven't had major up days. The problem with that, that I see too often, is investors start to feel like, oh, I can do no wrong.

Steve: Invincible?

Amy: Yes. There is a weird sense of invincibility. And I think it goes into the sort of recency bias. You know, you forget, gosh, we have seen periods of terrible, terrible volatility, or you feel like you need to take a Dramamine. You're so nauseous from , you know, the losses in your 401(k). But then you enter into a period like we have been now over a year of not a ton of volatility. And it feels like, you know, oh, I'm 85 years old. Put me more in on the stock market. Nope, not the best idea. You got to stick with your plan. But I also think it's a great plan during times like this, when there is not a huge storm raging in your 401(k) or in the economy, to look around and to do a bit of a checklist. We're going to get to that in a few minutes. But for now, yeah, I think investors are feeling pretty good. And as we said, there's probably a reason for them to be feeling pretty good.

Steve: Build your ship when the waters are calm. You know, that's something else we had an entire segment about. And now is the time to revisit making sure that you have the proper asset allocation based on your financial situation, needs, and goals. It's not the time to say, well, the markets are doing great. I think I need to put everything into stock. You need to ask yourself, if you're thinking about that, what's that based off of? It's greed. Greed is what's driving that decision. So build your ship when the waters are calm. Now, we're going to pivot and talk about inflation for a little bit. At the start of the year, the amount of money we were paying for everything was about 3.1% more than in the prior year, January of 2023. Today, headline inflation stands at 3.3%. Fed is trying to get that down to 2%.

Amy: We knew it was going to be difficult. The Fed actually said that. They projected that. They said, the closer we get to 2%, the harder it's going to be. But there's different measures of inflation in what the Fed really cares about, right? The Fed cannot control the price that you're paying for eggs, the price that you're paying at the gas pump. There are so many other external factors. The weather, what's happening, you know, in the Middle East, all different kinds of things that are there. So the Fed can only control the federal funds rate. And so they kind of pull those really volatile pieces out of gas and food and say, okay, how are we doing? And that data shows we're moving in the right direction. Now, interestingly, we talked about some of the predictions, right? In January, you had a lot of sort of Wall Street experts saying, "Oh, I think we're going to see, you know, maybe six, seven rates decreases this year from the Federal Reserve." We haven't seen a one yet, because this inflation has remained stickier than we thought. You know, so I think one thing to think about there is, you can't make any changes to your portfolio or the way that you're invested based on what anyone is predicting, because we just know those predictions, some of them absolutely land. Many of them fall far off. And you just never know how that's going to go. Housing market remains stubborn. You know, people just aren't moving right now. When you're paying double in interest rates what you were just a few years ago, you know, about 7%, house price is incredibly high right now. It's like really weird time, because your 401(k) is probably doing okay, yet the rest of your life, you're paying more for things. The opportunity to move isn't so great. It's kind of a mixed bag right now.

Steve: That's why it doesn't feel like the economy is doing as well it is, why the stock market is doing as well it is. Because your 401(k), if you're invested, is going up. Your IRA, it's going up. As long as you have some stock exposure in those accounts, this is really great for all of us. But yes, when you're filling up your gas tank, when you're buying groceries, you know, if you're shopping around for a home, woof. Yeah, home prices have doubled since the end of 20... Mortgage rates, that is, have doubled since the end of 2021. So it is extremely expensive to get a mortgage on a house right now. So there are challenges that we're all experiencing and certainly noticing. But yes, the markets are up.

Amy: You're listening to "Simply Money," presented by Allworth Financial. I'm Amy Wagner, along with Steve Hruby. It is July 1st. We are looking back on the past six months, where we've landed with inflation, where your 401(k) has likely landed, where the economy is right now. The interesting thing, though, is those are all things that you cannot control. Good to know where they are, really good to be informed. But now I want to get into the nitty gritty of the financial checkup here. What could you be doing? What should you be doing? Good to know where things stand, but here's what you can do.

Steve: Yeah. So if you aren't retired, if you're in the accumulation phase of retirement planning, you're still saving, you're actively employed. You have your 401(k), 403(b), whatever you might be saving in. Have you upped your contributions? That's something that we should be looking at just about annually to make sure that we don't have too much lifestyle creep. Meaning, as we get... Even if it's a small raise, 2%, 3%, put 1% into your 401(k). Find a way to make that happen so that our money has the chance to turn into more money, and that money has the chance to turn into more money. It's compounding interest. It's one of our best friends when we have time on our side.

Amy: Fidelity recommends that you're putting away about 15% of your take home pay. For as long as I have been here at Allworth, at "Simply Money," we've always said 20%. That feels like a huge stretch for a lot of people. Why do we say it? Well, I like stretch goals. I mean, I like to have something to be working toward. But also, those who can pull that off, right? It's not an easy thing to do. I'm not talking about people who have major six figure incomes. I'm talking about people who...average salaries, but they work, they find a way, they live beneath their means. The reason why we say 20% is those people are always fine when they get to retirement.

Steve: Oh, yeah.

Amy: I mean, you know, they have done well, they have saved well. There is no difference in what their lifestyle needs to be in retirement. In fact, they can often spend more.

Steve: Yeah. What you're doing is you're paying your future self for financial freedom, is really what that is. Because plenty of folks that we work with, they don't come from extreme incomes. They come from making good financial decisions with the income that they have, and saving what they can to make sure that they have a plan that creates a situation where their money lasts longer than they do. And you can do that by putting aside 20% of your income. Just like you said, oftentimes finding ways to spend more when you transition into retirement. But in order to do this, it also goes back to the emergency fund. You got to have that solid financial cushion, that foundation that in case life throws us a curve ball, we're able to weather that storm and not take on additional debt, not tap into our 401(k)s or other investments. So have that three to six month emergency fund if you're in the accumulation phase of retirement planning, three months for a double income household, six months for a single. If you are retired, it's not the worst thing to have more. I'm talking maybe one or two years, because in that situation, you're buying time against volatility, for when the markets do go down, you don't have to sell at a loss. You can tap into your liquid cash via the emergency fund.

Amy: And also, were you someone who, at the beginning of the year, when you were making your financial New Year's resolution, said, I'm going to pay down debt this year. I have a little bit of credit card debt that has creeped up, maybe student loan debt that's out of control. I'm going to pay down debt. Okay, have you? And what we have seen over the years is that the more specific you are, I'm going to pay down this debt by this amount, by this day. And here's what I'm going to do in order to make that happen. You have to be very specific to reach financial goals like this. If you have made progress on debt, today is the day to celebrate. If you haven't, today is the day to double down on the fact that while interest rates are so high, that credit card debt, gosh, it is squeezing the life out of you because you're probably paying 20%, 25%, you know, interest on that money. Pay that down.

Steve: Yeah. Maybe even higher. Yes, pay it down. And it's never a bad time to review the tax situation. If you're of age and you need to do required minimum distributions, have you done them? Have you explored maybe a qualified charitable distribution, where you give your RMD directly to a charity. If you have an accountant, sit down and ask them, am I doing everything that I can be doing to minimize the taxes that I'm losing each year that I could be saving for myself?

Amy: Here's the Allworth advice. This is the midway point of the year. And it is a great time to review your overall financial situation and then tweak things wherever you see you might be a little off. Coming up next, are you rich? Do you consider yourself rich? We're going to look at that definition. And does it have any impact on your long term financial success? You're listening to "Simply Money," presented by Allworth Financial, here on 55KRC THE Talk Station.

You're listening to "Simply Money," presented by Allworth Financial. I'm Amy Wagner, along with Steve Hruby. If you can't listen to our show every night, you do not have to miss a thing. We have a daily podcast for you. Search "Simply Money." You'll find it right there on the iHeart app, or wherever you get your podcast. And straight ahead, at 6:43, the road map you need to follow if you're looking to retire early. We'll tell you how you can be much more likely to get there. I think there's this thought that, you know, the more money you have, the better off you are, the happier you are, the easier your life is. There's so much research to the contrary of that. But there is a new survey from the Federal Reserve Bank of Philadelphia that shows that people who are making really good salaries, right, six figure salaries, between $100,000 and $150,000, are still concerned about their ability to make ends meet in the next six months.

Steve: Man, that is not a good figure, is it? Geez. And interestingly, the more affluent Americans are actually as worried about their finances than many individuals who are earning less money. About 3 in 10 individuals making between $40,000 and $70,000 said they're concerned. So even less. So, I guess that would stand by the old saying, Mo Money, Mo Problems. Is that what it is?

Amy: Maybe. I've actually been reading this book talking about also, you know, what is the point where there's more happiness? And, you know, it is, you get to a certain amount of income, you're no happier. And I think that there are... I mean, you've got the same problems regardless. One of the problems that all of us are seeing right now and experiencing is inflation. The typical U.S. household right now is paying about $230 a month more to buy the same things, goods and services, that we were buying one year ago. And that's $780 more than the same time two years ago. I mean, that is a tough pill to swallow. I was just with a teacher from Indiana over the weekend, and this is not like a brand new teacher. She's been teaching for eight years in a sort of high poverty school system there. She, I mean, just makes a huge difference. In the summer, she lives with her parents. She Airbnbs her house.

Steve: This is a teacher. A fulltime employed and teaching.

Amy: This is a teacher. In her 30s, right? This is what she is doing to make ends meet. And she's also a server in a restaurant during the summer. And she said the reason why, with inflation being the way that it is, there are many weeks when over the past year or two, she would have to choose between the gas to get to work, she works a pretty good distance from where she lives, or buying groceries that week.

Steve: I take major issue with that.

Amy; Me too.

Steve: These are the people that educate our children, our grandchildren. You know, they educate society.

Amy: They should not be struggling.

Steve: Yeah. They need to make more money. Because to take it a step further, three years ago, we're spending about $1,000 more per month. So that is reflected in the fact that you personally know of a teacher in Indiana who has to work part time and find little hustles just to keep the lights on and keep gas in her car. That's awful.

Amy: Yes. And I think there might be others listening tonight, maybe don't feel it to that extent, but you certainly feel it. And you can understand how someone could see a difference to that extent. And so, you know, yeah, I think this research is interesting. You know, if only I can make more money, maybe I would feel a little better about things. We see that that really isn't the case. And I think along these lines, it's not just how much you make, right, but it is how much you have. And there's a calculation. And whenever I'm sitting down and working with a client, with an investor for the very first time, one of the first things we do is to calculate their net worth. And this is simply what is... Everything that you have, the money that you have in your checking and savings accounts, and your 401(k)s, in any accounts like that, how much equity you have in your home, add all of that together versus how much debt, how much more do you owe on cars and your home? Is there student loan debt? Is there credit card debt? Hopefully, that number is a positive. But what I try to say is, hopefully whatever number we come up with the very first time you meet with me is the lowest number you're ever going to see.

Steve: Yeah, that's a big part of financial planning is protecting the net worth and growing it year over year. And talking about strategies to achieve that.

Amy: Absolutely.

Steve: So Schwab did a recent modern wealth survey, that is, and found that Americans think that you need about $2.2 million to qualify as being rich. That's the threshold currently that many people think. If you want to compare yourself to what a one percenter is in this day and age, that's the top 1% net worth, $12 million.

Amy: I mean, yeah, sign me up for that, I guess.

Steve: I know. It sounds kind of nice.

Amy: I know. Top 2% have a net worth of about $3 million. Top 5% just north of $1 million. If you're in the top 10%, you've got just under a million dollars. In the top 50%, you've got just under $600,000. I don't know, I guess it's good to know where you fall within these things. This is Schwab's research. I think we recently, earlier this summer, had some research that shows many Americans' definition of rich is $1.5 million. So I think the research varies. You can look at these numbers again. You can figure out where you fall, where you stack up. I don't know if that's helpful or not. I would say, first of all, calculate your net worth, just to see where you are right now. But secondly, your number should be an individual number. And you should figure out what your goal is, not just for how much equity you have in your home, because that's not liquid. I don't know that that's any indicator of how well you're doing when you get to retirement. I think you've got to figure out how much you've saved, how much you've invested, and what the gap is between where you are now and where you need to be to continue with the same lifestyle that you have when you're working, in retirement.

Steve: Yeah, I think comparison here is the thief of joy. There's no need to compare ourselves to others, because financial planning is about you, your situation, your needs, your goals, that of your family's needs and goals, and making sure that you have the means that you need to support the lifestyle that you've grown used to and the lifestyle that you want in the future. So making these comparisons is kind of a moot point, because there is such thing as living below your means.

Amy: I almost can get whiplash sometimes in one day, in the difference between the people who come into my office. There are some who come in and they live so frugally that they have money left over from their Social Security, you know. Which is only supposed to replace 40% of your income. So anything that they've saved in the course of retirement, they're hardly ever going to touch that money. Then I see those, right, who are spending money left and right. They're not saving nearly enough. And they're telling me, "When I retire, I want to go to Europe. I want to do this. I want to do that." You look at their income and you think, they should be doing great. Actually, there's a huge gap. And it worries me about how they can get there. So I think people can get really hung up on one number in the research. You really have to figure out, know yourself and how much you're going to need. And that's where you start. Here's the Allworth advice, the definition of rich, it's really much more than a dollar amount. It's a very individual number. Coming up next, we're going to take a deep dive into those travel credit cards. Which ones might make the most sense for you. You're listening to "Simply Money," presented by Allworth Financial, here on 55KRC THE Talk Station.

You're listening to "Simply Money," presented by Allworth Financial. I'm Amy Wagner, along with. Steve Hruby. It is that time of the year, peak summer travel season. But as we know, everything is more expensive. It's not cheap to fly, to stay in hotels, to do anything along those lines. So how do you use your credit cards to maximize those travel rewards, to get yourself maybe a pretty nice vacation without the pretty nice price tag. Well, joining us tonight is our credit expert, Britt Scearce. Britt, it seems like there are offers everywhere. How do we even begin to make sense of it all?

Britt: Well, certainly they are hitting you hot and heavy right now. I know I personally was on a flight in the last couple of weeks, where they spend a good amount of time going over their credit card application and the bonus points that they would offer if you signed up today, earn up to 60,000 travel miles. Apply today, only an $89 annual fee.

Amy: But you can't go anywhere. It's like captive audience. We're going to shove this credit card down their throats. And I think there's a lot of people who are sitting there like, I don't know, nothing else to think about or do. Does this make sense? Does it make sense?

Britt: Yeah. I mean, if you travel enough and provided... Keep in mind, these cards that are being offered, Amy, the ATRs on these cards are anywhere between 21.9% and 29.99%.

Steve: So it is as high as it gets.

Britt: So it worth their time to push these on you, because if you utilize them and take time revolving balances, they make a ton of money.

Steve: They do make a ton of money. That's huge, 29%, almost 30%. If you are revolving that debt and you are not paying it off every month, then you're not actually coming out on top at all. Speaking of which, you know, there's different types of travel credit cards. Can you break that down a little bit for us?

Britt: Yeah. I mean, you have credit cards that you can redeem points for hotels, for airlines. You know, you can use some of these to basically...for your rental cars. And most of the time, you're not getting enough points to completely pay. It depends on where you're going, of course. But in many cases, it's enough to maybe help you upgrade a flight to maybe a little bit...maybe to business class, or maybe to first class. It depends on how much you actually utilize this. The average person that's not, say, a business traveler, that literally travels thousands and thousands of miles a year. For the average, you know, person that goes on vacation once or twice every other year or something, I don't know that these benefit people all that much. I think it's more of a gimmick and a way to get you into a balance that you can revolve and pay them a lot of interest.

Steve: I think that last thing you said is extremely important, gimmick. You're sitting on a flight. You're stuck listening to it. You don't realize the added costs that you could add into your life for a minor benefit that you may or may not even use. So speaking of which, when it comes time to redeem your points or miles, how do we go about that? Is there any flexibility in this day and age?

Britt: Well, different cards have, you know, different procedures. And a lot of times, it's not too terribly difficult. I mean, you're getting about... When you get points, it's about a penny a point, you know. So it takes quite a few miles or points to add up to miles and actual money that you can utilize. And in many cases, it's something that's just a little nice little perk, like I said, a little upgrade to where you're sitting. Or maybe it does help you with a part of your hotel and that sort of thing. And if you're the kind of person that travels for business, and you use, you know, one of these cards for everything. I mean, you could potentially rack up, you know, some points and get maybe a mostly paid for airfare, or maybe a free hotel room, or something of that nature. But it takes quite a few for them to add up too much.

Amy: I think, Britt, the only way that these make a lot of sense is, and this is kind of what we have done, is you put everything that you need to pay for, like all of your bills, attached to that credit card, and then you have to pay it off in full every month. And then, you know that all is earning points. But, you know, my husband and I actually were having this conversation with some friends recently, about the fact that you used to be able to fund, you know, a couple of trips a year, and you could... You know, at least free hotel and maybe free airfare. And now, I don't know if it's because of inflation or because they're sort of minimizing how many points you get, but it's harder and harder to save these points for a trip that makes any kind of a difference.

Britt: It's true. I mean, and they do give you sign up, you know, bonuses and things of that nature. And I have seen a few people say, hey, with the sign up on this, it paid for my trip that was only a few hundred bucks or something to somewhere here in the States or something. But the other issue that you have with these cards too is, most of them come with some sort of an annual fee as well. And you got to make sure that you're utilizing it enough to where the annual fees, with all the little...you know, the higher interest rate, all the detrimental things, you got to make sure that it's actually going to come out to your advantage and not just end up costing you more money. And I know that, you know, legislation wise, Congress is trying to find ways to cut the interchange fees that credit cards are able to charge whenever a purchase is made. You know, a merchant has to pay a fee to the credit card companies for people to use credit cards as a form of payment. And if they get their way, and they are able to cut a lot of those types of fees, you're going to see a lot of these types of reward things go away. Because obviously, if they can't charge as much on that kind of thing, they can't afford to do these types of programs.

Amy: Another warning, and I've seen this, I don't know if you have, Britt, a lot of these credit cards will say, sign up, you get 30,000 points or miles, or whatever, if you spend X amount of dollars in the first few months, right? And so it's like, you're either spending more than you need to, or you're not spending enough, and you're not getting the points anyway. And now you've got another credit card.

Britt: Exactly. To your point, the one airline that I was on here recently said, earn up to 60,000 travel miles, $89 annual fee, if you apply now. Earn 40,000 miles if you spend at least $500 in the first 90 days. And then the other one said, an additional 20,000 travel miles if you spend at least $2,000 in the first six months. So, let's see if we can get you revolving right away at that 29% interest so that we can give you a $200 plane ticket.

Steve: So, remember that these credit card perks exist because someone is paying for them. If you want to be the person that actually capitalizes on these benefits, then you cannot carry revolving debt. When you do that, and you're paying almost 30% interest rates, you're the one that's buying somebody else's airline ticket, or upgrading them to business class, or upgrading their vehicle when they're renting. You know, these costs can be extravagant. So, you know, I'm curious to hear from your perspective, Britt, how do we choose the right travel card if we are going to use one?

Britt: Yeah. Understand your own behavior, you know. Depending on your situation, if you're someone who does travel a lot for work, I mean, I've seen people that swear by certain cards, because it gets them into certain lounges when they're traveling all around the country, you know, every month, and maybe around the world, every every other month, or whatever. And, you know, some of these cards offer certain perks to get you in some of the airline lounges. Some of them will... You know, if it's hotels you want more of a discount on. You just have to research them and see which ones offer, based on your behaviors, you know, which one's going to give you the biggest bang for your buck. But the bottom line is, you know, most of these come with very large annual fees. The $89 one was one of the small ones. I've seen some that are as much as like $650 a year as an annual fee. And, yeah, they have a lot of nice little perks, and they help you get the TSA clear and all the other other types of things. But again, if you're going to have to put a bunch of money on the card, and you're not able to pay it off every month, these don't really benefit you much at all. I mean, honestly...

Amy: Buyer beware, right? You know, you can get big eyes about all of these benefits and then get yourself into some trouble. Britt Scearce, our credit expert, thank you for the real story behind all the travel perks. Just keep this in mind. You're listening to "Simply Money," presented by Allworth Financial, here on 55KRC THE Talk Station.

You're listening to "Simply Money," presented by Allworth Financial. I'm Amy Wagner, along with Steve Hruby. If you have a financial question, you and your spouse fighting about or it's keeping you up at night, you can't figure it out. We can help you figure it out. There's the red button you can click on while you're listening to our show. It's right there on the iHeart app. Record your question. It's coming straight to us. We will weigh in. And straight ahead, are you planning a family trip to Disney? How much are you actually meaning to plan on shelling out? And we've got some good news maybe that can make that trip a little less stressful. Okay, it's Monday, and are you thinking, how many more Mondays do I have to drag myself out of bed and go into this terrible place? I hate my boss. I hate my commute. I hate my coworkers. I hope that's not you, but I think that there's probably a lot of people out there who are thinking, yep, yep, yep, like, I want to be done. And maybe you're nowhere close to 65. And the question that you're trying to figure out right now is, could I possibly retire early?

Steve: We could clip that, get you in a lot of trouble, Amy.

Amy: I know. I'm not saying, I think that. I'm just saying there might be people out there who feel that way. I certainly have not in this job, but in the past.

Steve: Yeah, yeah, for sure. But this is where we are now, and we're happy. But Pew Research just came out, about half of workers are actually highly satisfied with their job. That means that half are not highly satisfied with their jobs. And that's unfortunate, because a job is a big part of our lives. It shapes our days. Oftentimes, it shapes our evenings, our weekends, depending on how much we're working, how much time we have.

Amy: How much stress we take with us from work.

Steve: Yeah. How much stress you take home. So that's an unfortunate reality I think that a lot of Americans are experiencing right now.

Amy: And when you dig deeper into why are we not happy with our jobs, you know, there's a lot of people who say, I don't feel like there's opportunities for training for me to grow in my job. I'm not happy with how much I'm paid, or my opportunities for promotion. Eight in 10 workers say it's extremely or very important to them that a job offers a 401(k) or a 403(b), some way for them to save. And I think ultimately, everyone across the board says, like, can I just get to the point where I've got financial freedom and then work becomes an option, not an obligation. And if you're not there, but you want to get there, what do you do?

Steve: Well, set a higher savings rate. That's a big one. Not only are you accumulating more money, but you're also learning to live off of a little bit less. So when you need to calculate the number that you will need to support yourself in retirement, that number will be a little bit lower, inherently, because you have saved. So in a situation where you want to close gaps, that's the easiest way to do it, because getting more money means more compounding interest, and that can really help you retire earlier.

Amy: You know, I think there's a behavioral finance component to this, of like, my current self versus my future self, right? And I want all of these things now, but if I get them now, will I be able to retire? One of our really good friends was saying his very first day of his very first job out of college, he realized, I hate this. I hate working. There's not a job that you can give me that I'm going to love. And so what did he do with that? He started maxing out his 401(k), his health savings account, his IRAs. And said, okay, what is it going to take for me to have to do this for the shortest amount of time that I possibly can? He will likely retire before the age of 50. And he'll probably be okay into his 90s.

Steve: Is he grumpy every day, though?

Amy: He's not grumpy every day, because you know what, he knows that he's doing what he needs to get what he needs to do.

Steve: That's a great point. I like that.

Amy: And there is a balance there. He's still enjoying life. You know, but maybe they do mini vacations rather than huge trips to Europe or whatever. It doesn't bother him, because his eyes are on the future, with that goal to retire early, and he knows he's on track to do it.

Steve: Yeah, that's a great point. So if you have a financial plan, then that can give you that sigh of relief, that breath of fresh air...

Amy: Yeah, it's working. Yeah.

Steve: ...to know that the time and effort that you're putting in to aggressively save means that you can leave your job that you are not satisfied with earlier. So on that note, how about maximizing your income? If we want to close gaps, you know, we kind of are in a day and age here where you used to be able to work at one place for your entire career, and they would take great care of you, and then you would have your three legged stool with your pension, your Social Security, maybe some other investment assets. And that would float you for the rest of your lives and give you that lifestyle that you had two, three, four Kids, and you took a vacation every year. That's not really the reality anymore, unfortunately, which has caused a lot of people to job search, to jump from job to job, which is a great way to bring up your income more quickly.

Amy: Yes. But it's also, at the same time, you can't rely on that boss to fund your retirement, so you've got to be serious about it yourself.

Steve: Your own savings. Yeah.

Amy: Yes, yes. Which is why you know living beneath your means for many people, is what it's required to be able to max out a lot of these accounts and also to invest wisely. I've seen people look at this gap between where they are and where they want to be, and think there's got to be some magic solution to this. And that's where things can go terribly awry. A couple who I know was very much on track to retire early, doubled down on dot-com, you know, all these great tech companies in the late 90s. What could possibly go wrong? They were making 30%, 40%, you know, year over year. And then 2000 hits, right, the bubble burst, and they ended up having to work an extra 10 years.

Steve: That's awful. That is so terrible. I mean, the tried and true tested way in this day and age of just passively investing in a lot of index funds and building that asset allocation of stock to bond ratio is a tried and true tested way to get you there. Don't let greed take over and put too much of your eggs in one basket to the point where you can lose your shirt and have to work longer.

Amy: And I think the plan is the foundation of all of this, the financial plan, right? What is it going to take for me to get there? I love to run plans with several different scenarios. Okay, does it work this way? What if we tweak this? What if we spend less? What if we put a little more way? What does that look like, right? And then it's like, okay, is it worth it to you to make those adjustments? Maybe it is, maybe it's not. And then I also think you've got to look at this from the standpoint of, does it make sense to retire emotionally, right? How much of your life and your sense of identity is wrapped up in that job? If you're ready to say, let's go, okay, then get your plan and work the plan. Here's the Allworth advice, many of you can achieve in early retirement. It does, though, require discipline, consistency, and a great deal of planning. It may not be for everyone, but there's many of you who likely can do it. Coming up next, some news for parents and grandparents out there who are ready to take the family to the happiest place on earth. You're listening to "Simply Money," presented by Allworth Financial, here on 55KRC THE Talk Station.

You're listening to "Simply Money," presented by Allworth Financial. I'm Amy Wagner, along with Steve Hruby. Okay, so for those of you who legitimately find Disney as the happiest place on earth, I know you, I see you. Some of you are my very dear friends. I am not a Disney person. I just think the cost is exorbitant. And one thing that Disney is trying to do is to sort of change things about the experience that you have there. I guess if you're gonna pay so much. I don't know.

Steve: Amy's not a fan.

Amy: I lean in. I lean in when Disney says we're going to make things better. Because I'm like, okay, this is interesting. How are you going to make it better? And then I hear how, and I'm like, meh, I don't know if that's gonna make much of a difference.

Steve: July 24th, guests will no longer have to wait for their park day to reserve experiences. So this is for those staying at Disney World's resort hotels, specifically, up to seven days in advance, all at once, for up to 14 days of their stay. They can make different reservations within the park for attraction, so they don't have to wait like everybody else.

Amy: Okay, wait for it, wait for it. Disney is saying, hey, we have this great thing that you can do now, and maybe you're not gonna have to wait in line. It's called Genie Plus, and it comes with a price tag. It's like we're making this easier for you, and we're gonna pay... People are gonna blow up my social media, and I'm so sorry. If you love Disney, I love that you love Disney. But as someone who feels deeply in my bones that... And truly, investing in experiences is what I strongly believe in up to a point. But the average family of four can plan...and this is Nerd Wallet research, can easily top $6,000 for a seven night trip. I think that is on the low, low, low end.

Steve: Well, they specify that that's for a frugal traveler. For a week long family trip, it can certainly exceed $15,000. That's for families that are doing character meals and the hotels close to the park that will, I guess, enable you to reserve specific ride times. Last year, I had planned for years. I had never been to Europe or Africa for that matter, and we went to France, Italy, and Morocco, my daughter, my wife, and I.

Amy: Trip of a lifetime.

Steve: Yeah, trip of a lifetime, for less than $6,000. And we were gone for two and a half weeks.

Amy: Wait, that's not Florida, where you're spending more than that for an amusement park. If you are looking to save money, there are Disney good neighbor hotels. There are family friendly resorts near Disney World that are generally more budget friendly. Look at points, look at miles. One thing that we've said many times in the show too, is you can buy Disney gift cards from Kroger when they're doing like, four times the fuel rewards, and then you're gonna save on your gas. So there are some ways that you can save a little money, but understand, this is a very expensive trip. Thanks for listening. We hope you're going to tune in tomorrow when we're talking about the financial mistakes that could keep you from retiring in the next five years. You're listening to "Simply Money," presented by Allworth Financial, here on 55KRC THE Talk Station.