Nine important numbers you should know for your financial health

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Knowing a few simple numbers about income, retirement and net worth can get you started on a track to financial success.

Your doctor needs to know certain numbers to judge your physical health, such as your weight, your blood pressure and your cholesterol levels.After-tax income and ‘must-have’ expenses Your after-tax income is your gross income minus the taxes you pay . If you get a steady paycheck, you can use your latest pay stub to calculate this figure. Otherwise, check your most recent tax return.

Your after-tax income also is the basis for the 50/30/20 budget, a spending plan that helps you balance current expenses, debt payments and savings. That budget suggests limiting your essential or must-have expenses — shelter, utilities, transportation, food, insurance, minimum loan payments and child care needed to work — to 50% of after-tax income. Wants, such as vacations and dining out, make up 30%. That leaves 20% for savings and extra debt payments.

Lifetime income and net worth You can access your Social Security statement, including your lifetime earnings history, by signing up at socialsecurity.gov/myaccount. Add up your annual earnings, plus any other income you’ve received such as gifts, inheritances, investment income, pensions, under-the-table earnings or government benefits.

Full retirement age and expected Social Security benefit Your full retirement age is the age at which you are entitled to 100% of the Social Security benefits you’ve earned. If you apply for benefits before that age, your checks will be permanently reduced. If you delay your application until after full retirement age, you can qualify for delayed retirement credits that boost your benefit by 8% each year until 70 years old, when benefits max out.

 

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