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6 ways to take control of your investments and financial future

Barbara Marquand | guest writer for GoTalkMoney

You may be powerless over the high unemployment rate or low interest rates on savings accounts, but even in a stubbornly tough economy there is a great deal you can control when it comes to your financial life.

Here are six ways to exert control in times like these:

1. Investments turned sour? Evaluate what went wrong.

If you're like many Americans and have suffered a loss in the last few years, take a step back and view the situation objectively to evaluate what happened, advises money expert Saly Glassman in her new book, "It's About More Than the Money: Investment Wisdom for Building a Better Life" (FT Press: 2010) Glassman, ranked the nation's No. 1 woman financial advisor by Barron's, says blaming everyone else leaves you powerless. Maybe it wasn't all your fault, but there may be some things you did that contributed to the loss. Perhaps you had unrealistic expectations, or were overextended. Once you have a good reading on the situation, you can plan how to avoid those same mistakes.

2. Figure out how much you need for retirement

A troubling number of people have no idea how much money they'll need in retirement. A survey conducted in May for Allianz Life Insurance Co. of North America, asked people whether they'd be more likely to guess how much they'd have or need in retirement or how many gum balls were in a jar at the local county fair. Only 53 percent felt more certain about their ability to estimate retirement needs.

Most experts say you need 70 percent to 90 percent of your pre-retirement income to maintain your standard of living. Contact the Social Security Administration and request a Personal Earnings and Benefit Estimate Statement to project how much Social Security income you'll get. Add in other sources of income, such as pensions. Then calculate how much of a nest egg you'll need to make up the difference between Social Security and pension income and the amount you'll need to live each year for the rest of your life.

3. Play catchup with retirement investments

Government tax provisions let you save an extra $5,500 in a 401(k), on top of the $16,500 you're already allowed to contribute if you're 50 or older. For a traditional IRA or Roth, you can pitch in another $1,000 on top of the $5,000 limit, and for a SIMPLE IRA, you can add in another $2,500 in addition to the $11,500 limit if you're at least 50.

4. Redo your budget to set aside more for savings accounts

It's a good idea to review your budget periodically. Perhaps your pay has been cut, or you'd like to beef up your emergency savings fund. If so, see where you can cut back and set up an automatic savings plan by having money diverted from a checking to a savings account every month.

5. Pay down credit card debt

New rules under the CARD Act, signed into law in May 2009, provide protection against interest rate hikes on existing balances and and other unfair practices by issuers. Still, credit card interest is wildly expensive, especially if you carry a big balance from month to month. Create a plan to pay off your cards and keep credit card debt from dragging you down.

6. Shop around for best interest rates

Yes, interest rates on CDs, money market accounts and savings accounts are abysmal when compared to rates offered during the years before the recession hit. So do what you can to get the best rates possible today. Shop online to compare rates in addition to checking with your local banks.

These aren't the only ways to take control of your financial life. Look for others to improve your bottom line, both now and for the future.

Disclaimer:This content is not provided or commissioned by American Express. Opinions expressed here are author's alone, not those of American Express, and have not been reviewed, approved or otherwise endorsed by American Express. This site may be compensated through American Express Affiliate Program.

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