You have mastered the basics. You’ve sorted through the many budgeting and spending tracking apps and found the one that works for you.
You’ve even used one of the myriads of online calculators to determine if your retirement savings are on track. If you have debt, surely you have quantified the most efficient debt payoff strategy.
Is your work done, or is there more to learn?
If your personal finance goals are a bit less vanilla, then the basic resources may not answer the questions you have. Evaluating the costs and benefits between competing paths can be complex.
More advanced personal finance resources can help you to understand or even challenge the assumptions that underpin financial planning conventional wisdom.
Advanced PF Resources
These 5 personal finance resources can help you make next level decisions:
If I FIRE, can I afford health insurance?
One of the aspirations of the Affordable Care Act was the potential to delink the ability to have good health insurance from having formal, full-time employment.
While the Health Insurance Marketplace® has made the process of buying health insurance on your own more transparent and standardized, high costs remain a barrier.
If you’re planning to leave the workforce early, or you plan to pursue entrepreneurship, the cost of purchasing health insurance must be a factor in your spending and savings calculations.
The Kaiser Family Foundation, a non-profit organization focused on health issues, offers an easy-to-use Health Insurance Marketplace Calculator to accurately estimate your anticipated health insurance cost.
The calculator allows you to compare premiums at varying levels of coverage and estimates your potential health insurance subsidy amount, all without divulging any personal information to an insurance company that they can use for marketing purposes.
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What are the tradeoffs between investing in an IRA or 401(k) account versus a “regular” taxable brokerage account?
For many, investing in both a retirement account and a non-retirement investment account is part of a well-thought-out strategy to diversify their portfolio, recognizing the need to access savings at different stages of life. But for some, the strategy is, shall we say, less considered.
If you’re investing in a taxable brokerage account to support your post-60-year-old life when you have not yet exhausted all options for tax-advantaged saving (particularly a Roth account), can you quantify the cost of that decision?
Indeed you can with this powerful calculator from AARP. This tool will allow you to compare the dollar-and-cents effect of investing in a taxable account, a traditional retirement account (tax-free growth but withdrawals are taxed), and a Roth account (both tax-free growth and withdrawals). And because a Health Savings Account (HSA) “acts” like an IRA in retirement, you’ll be able to model the benefit of this as well.
By adjusting for both your tax rate now and your expected tax rate in the future, you can make a fully informed decision about how to allocate your investments between the different types of tax-advantaged and taxable accounts.
Is paying off my mortgage early realistic?
No one needs to tell you that the rate of return of your typical S&P 500 mutual fund exceeds your mortgage interest rate. But the decision to put extra money towards a mortgage paydown rather than a market investment is often not based on metrics.
It may be an emotional decision, driven by the desire to live debt-free. It may also be the case that part of your FIRE plan is to reduce your expenses by not having a mortgage payment in retirement.
Do you know what it would take to actually execute this plan? Can your cash flow today support an increased monthly payment large enough to bring you to your mortgage-free goal on time?
This simple calculator allows you to model the effect of intermittent extra payments to mortgage principal or a bi-weekly mortgage payment schedule.
How do I know my stockbroker or investment advisor is honest?
Calculators will only take you so far. When the time comes to execute an investment decision, who can you trust? Most investment advisors and stockbrokers are legitimate. But not all. (“Wolf of Wall Street” anyone?)
FINRA is the financial industry’s self-regulatory body that, among other things, monitors compliance with securities law and brings actions against firms and individuals that breach ethical rules.
You can look up your broker or their firm using the FINRA BrokerCheck tool. BrokerCheck will tell you if an individual or a firm is licensed to sell investment products or give investment advice and alert you if there have been complaints or disciplinary actions against either the person or the company.
Yes, you can trust…but also verify.
I need to know…everything!
Then Dinkytown is for you. This might be the most comprehensive collection of free personal finance calculators available online.
The full range of topics are covered: investing, insurance, home and auto purchase, retirement, borrowing, taxes, etc. The number of possible financial decisions may be infinite; Dinkytown attempts to have a tool to quantify every one of them.
This is just a sample:
- I received stock options from my company. How do I know what they are worth?
- Using debt to fund an investment can magnify my returns. It can also escalate my downside risk. How do I model that?
- Are two incomes always better than one? Does it make more sense for my partner to stay at home?