2
Apr
Written by admin on April 2nd, 2012
So you want to retire early. Sounds like a great idea to me. Here is a plan to get you started.
First, decide how much money you will need to retire comfortably. Make sure that your nest egg will cover your normal expenses, the cost of health insurance, and money for travel, hobbies, dues, charitable donations, and even continued savings. A good safe withdrawal rate from your funds is five percent, but of course, a lower withdrawal rate would be better because you would be less likely to outlive your funds.
Second, maximize your income. Choose a great career and work all you can. Earn an excellent reputation in your company as the “go to guy” (or “go to girl”). Be indispensable at work. Being self employed would probably pay a lot more than working for someone else if your venture is successful. Pal around with people who keep you positive and motivated. A bad peer group could keep you from achieving your dream of retiring early.
Third, keep your expenses as low as possible. Maintain a budget. Keep your investment expenses from being higher than necessary. Buying and holding quality stocks through a discount brokerage is a very low cost way to go. Buy a home you can truly afford. Going overboard on a home can wipe you out. Sacrifice short term pleasure and status and invest for your early exit from the rat race. As W. Clement Stone once said, “Of you cannot save money, the seeds of greatness are not in you.”
Fourth, make excellent investments. Take an investments course and read classic investments text. Reading the Wall Street Journal would not hurt. Find an excellent broker or do it yourself. If you are a reasonably intelligent human being, you can study and experiment and make good investments on your own. There are a lot of good quality web sites and advisors who can help you. The Buyback Letter and Value Line, for example, are great services. Look into them. Remember to include stocks and/or mutual funds, and/or rental real estate in your portfolio. If you do not feel you are ready for these types of investments, you must start studying today.
Fifth, keep learning and growing, continue, even after you have retired. Read and listen to your sacred texts, like The Bible. Listen to Tony Robbins and other personal development speakers. Learn about things you may not know about, like art or health or psychology or history or a new sport.
Sixth, take care of your health. What good would it do to drop dead before or right after you quit working? You could be the richest person in the graveyard is about it. Maintain proper weight and be physically active. Taking care of your physical health will keep your medical expenses lower, which matters a lot with rising health insurance costs.
1
Apr
Written by admin on April 1st, 2012
When you start to plan for your retirement this process deserves your total attention and should not be done on a rainy afternoon. There are some things you need to keep in mind when you start planning and some of those is what we will discuss later on.
First things first
Every retirement planning should start with an assessment of your life. You can hire a professional to help you out with this part of the planning or you could do it yourself, the main purpose in this first phase, is to find out how much money is coming in and how much is going out each month. The goal in the end would be that you will be able to save an amount for later on in your life.
You shouldn’t think to lightly about this fist step, a large part of the population of this world is spending more money then there is coming in and because of this they are always in debt. We all know that the only way to reverse this is to stop spending so much each month and at least go back to not spending more then there is coming in.
The specifics
Keep paying attention to your plan, even if the task at hand seems simple, stay focused. A very important step in you plan will be your decision for the retirement plan itself. There are several retirement plans that you can choose from but the IRA type of plan are the ones that are most rewarding. There are two IRA types that are the major players at the moment, they are the traditional and the Roth IRA plan. At first glance you might think that these plans are very similar but when you look at them closer you will see that there are big differences, each with their advantages and disadvantages.
IRA the Traditional way
With a traditional IRA retirement plan you enjoy a tax deduction over the contributions you make for your retirement. You are responsible for making the contributions in the plan and for deducting it from you gross income for the year that you made these contributions on your federal tax return.
IRA the Roth way
The Roth IRA retirement plan can be more rewarding in the way that your employer helps you out by making a contribution as well. Others would say that this is a disadvantage because only someone with a normal job and an employer who is willing to work with this kind of plan can benefit from the Roth IRA. A self employed person or contractor can not use this plan.
In the end it is your choice, even if you are employed and your boss helps out with a Roth IRA you can choose not to join that plan but start with a personal and traditional IRA.
There are of course more steps involved in planning your retirement but you can see now that by taking the time and putting some effort in you can plan how you will be spending those golden days in the way that you want to and with the amount of money that you want to.
1
Apr
Written by admin on April 1st, 2012
Retirement is entirely a different and new chapter of life; some accept it with a smile where as some handle it with lot of stress. A well-planned retirement could get back your smile, and also enable you to enjoy all that which you missed while slogging for your family. Retirement planning can be sometimes quite complicated and one should be very careful and patient while planning for it. Even if your retirement plans are clear set with all your visions and goals in place, it is your financial requirement that will determine the success of the plan. A large percentage of Americans recognize the retirement systems and its undergoing changes but they are not planning well enough to retire comfortably.
- A Retirement Confidence Survey finds that the government regularly changes pension plans and the workers have been experiencing a severe decline in the retirement benefits, but they are not working towards it constructively. Nearly 2 in every 5 workers have not done anything to tackle this issue.
- Some workers depend on the employer provided retirement benefits and they expect that their spouse will receive income from such retirement plans.
- Half of the workers save for retirement, excluding the value of the primary residence. Majority of workers put aside some money for retirement.
- Health care for future retirees will be a huge burden especially with post-retirement financial problems. Workers should understand the use of Medicare and accumulate enough money to even cover the insurance and health costs they would likely face after retirement.
Americans are confident about the way they would spend their post retirement years. A few simple and easy planning strategies could bring order in Uncle Sam’s post retirement years. So get started with some regular saving plan. Developing a savings plan is not very difficult. Simple strategies can put Uncle Sam on a comfortable and financially secured track.
- Goals- Start saving for either your children’s education, a comfortable retirement life or for financial emergencies. Figure out what life would be after 10, 20 or 30 years and then think of the costs and the number of years needed to save enough for it.
- Investing- Figure out the right time to start investing and please don’t get distracted. The best way would be to put aside some amount on monthly saving basis, save right from reducing your monthly expense bill to your telephone bill. If you can then invest to reach your goals. Don’t ever abandon your pre-retirement planning.
- Savings to match goals- This would depend on your needs and how much time you have to reach your goals, your ability to tolerate risk etc. Start by learning the key characteristics of each goal and then narrow your selection to savings as well as investment products. Selecting the right product can help you accomplish your goal.
However, if you decide what you want in life and how you wish to achieve it, it will sort out half your problem. This will help you in your planning and in choosing products to aid you.
1
Apr
Written by admin on April 1st, 2012
In a recent newspaper article by Chuck Jaffe entitled Retiring when the market is down is costly if stocks provide nest egg, the question is asked by John, a participant in an investment seminar, “Is this a bad year to retire?”
Although retirement may seem like a lifetime away, it’s a question that we will all one day have to consider.
In this case, the answer would be “yes” to John although he has $400,000 invested in 18 stock funds. The fact that comes barreling out at people from left field is that if you must withdraw funds from your retirement savings when the market is in the toilet and that loud sucking sound is the additional dollars flying out of your portfolio, you can ruin your nest egg.
It’s ironic that people can spend their whole lives preparing for retirement only to find that when the time comes to retire, they can’t do it.
Stock Picking by Luck and Accident
Investment advisor, Judy Shine says, “People assume that if they pick the right funds and stick with them forever, they’ll be set to retire and they might be, but that’s more by luck or accident than by design.”
Granted, planning for retire is a complicated process. A lot rests on what people determine are their needs and desires. However, there is a better way to get ready for retirement.
The Rental House Option
What could John have done differently? Get born to wealthy parents? Have Warren Buffet crash into his car? Maybe something less dramatic, but requiring similar foresight and planning.
Home ownership is widely recognized as a way to generate wealth. Can you get wealthy by being a renter? Maybe, but the odds are against you. In 2004, the average renter had a net worth of $4,000, while the average home owner had a median net worth of $184,000. If owning one house is good, wouldn’t owning 2 or 3 be better?
Let’s imagine that John bought a house soon after he started his professional life and got married. He lived in his house for 6 to 7 years then bought a better house, as most people do. But, unlike what most people do, John kept his old house to rent out. Six or 7 years later, John does the same thing again. Now John owns 3 houses. He has tenants in two of them who pay off the mortgage and provide rental income for John.
A Different Answer
Fast forward a few years and John again asks the question “Is it a bad year to retire?”. This time he may get a different answer.
John has 3 houses “free and clear” with mortgages paid off. He’s got a good chunk of money coming in each month in rent, and he makes no payments on his residence.
Unlike stocks, he doesn’t have to remove money from his savings or from his investments. His house steadily increases in value when he retires, while he continues to collect rent, which also is constantly increasing in the long-term. With rents providing perhaps 40-50% of his income, if he collects a pension and starts taking social security payments, he is set to retire with barely a change in lifestyle.
In reality, having rental properties is like getting a retirement pension before you retire.
And, John has the option to sell a house to fill up his checking account or to help out one of the kids. He will still have a steady cash-flow from the remaining rental house. If he wanted to cash out and sell both properties, or all three and move into a smaller place, he would be sitting on a small fortune.
No matter how you slice it, John has greatly increased his chances for a successful segue way into his golden years.
1
Apr
Written by admin on April 1st, 2012
Taking care of your family in the future is all about financial planning and one of the fastest growing methods to achieve this financial freedom is through investing. All that is needed is a little bit of common sense knowledge and investing can be done by almost anyone in so many different areas including online. This is how many people believe the will achieve financial security and a way to provide for their family in the future. This article cannot provide in-depth information on this subject but can give some useful basic information if you are looking to do this.
If you are considering the stock market then you will need to study the companies you wish to invest in otherwise you might as well throw your money away. While this is the traditional place to make money, there are many areas where a novice investor can stumble; let’s face it even the professionals get it wrong here sometimes. Of course if you invest in real estate you are more likely to see substantial gains but they will take some time, however, it is a much safer option. Remodeling a home that you have bought inexpensively can be a great way to build up funds very quickly but be warned this does require work as well but the money gained can be put into another project almost immediately.
Before considering this option carry out some research because there is more involved than has been mentioned here; something that does is not so much of a problem with the next area to be looked at. Trading online is the cleanest way to earn money and almost anyone can have a go; you would be surprised at just how many people are now turning their hands to online investment. The basis of this is to work from home on a computer, carefully assessing the companies that you may trade in; it is easy to start with very small sums of money. It is not uncommon for people to become addicted to this in the same way a gambler does so you must stick to your limits and not go beyond them.
Learn about the markets and investing generally to see how they work as this information is crucial if you do not want to start losing money as soon as you start. Do not turn trading into a something akin to the spin of a roulette wheel because if you do, you will surely fail when all that was required was some investigation into the markets. For further information on the subject with some interesting case histories, simply visit the forums, blogs and websites that are a powerhouse of good advice. Set yourself a limit of how much you can afford to lose and do not go beyond this because although investing is a great deal of fun it is also a very deep pit where money can be lost forever.
31
Mar
Written by admin on March 31st, 2012
Can your home secure your retirement? Maybe not all of it, but it is possible that it can cover a lot more than you think. If you, like many Americans, live in a large family-style home, and you wish to downsize at retirement, your home may well be the asset that secures your retirement.
If you and your spouse file a joint return, you may qualify for up to $500,000 as an exclusion on the gain from the sale of your principle residence. Depending on the value of your home when you retire, you may be able to sell a current property, purchase outright a smaller home and invest the difference without incurring a tax liability. That means simply that you may be able to achieve up to a $500,000 tax free addition to your retirement nest egg. You can get more specifics from IRS Publication 523.
Depending on your anticipated lifespan, this means that your current home could provide the following additional annual cash flow for the entire term of your retirement. This would be in addition to any IRAs, 401Ks, Retirement plans, Social Security, or other investments. Here’s a list of additional annual earnings assuming that you never draw down the corpus (the $500,000) and that you leave it, plus your smaller home, to your heirs at your passing. Here’s the possible annual additional cash flow.
At 5% earnings: $ 25,000.00
At 6% earnings: $ 30,000.00
At 7% earnings: $ 35,000.00
At 8% earnings: $ 40,000.00
At 9% earnings: $ 45,000.00
At 10% earnings: $ 50,000.00
There are many other options regarding the use of the equity in your home at retirement, but even in this simple and direct approach you can see the incredible value of owning a home when you retire.
Many people do not consider their home a retirement asset, when in fact it can be a huge benefit. By downsizing housing at retirement you not only free up available capital, but you reduce overhead via smaller utility payments and lower maintenance. In addition, you will make a commensurate reduction in risk and stress. You’ll have less hassle, less cost, less cleaning and more freedom. Those are all great reasons to downsize when the time comes. Based on this information we hope that you have a firm goal to own your home, free of any debt, when you retire. It will serve you well during retirement.
31
Mar
Written by admin on March 31st, 2012
Only if you know what your retirement plan is all about, you can say that it is exactly the right plan for you. You also know precisely when you need to adjust it. Everyone needs one if they want to have a nice future. One should know how it works and what benefits you will get in the end. You should ask yourself these questions because they are too important not to be answered.
Most of the employers these days offer some sort of retirement plan for their staff, this also means that someone is or some people are responsible for the management of these plans. There are a lot of rules that need to be followed and someone needs to keep the oversight.
Retirement Plan Flowchart
One way of keeping track of the retirement plans is by using a retirement plan flowchart. Such a flowchart gives you a graphical view of all the activities that have and are going to occur in the whole process of retirement planning. There will be various lines and symbols all with their own meaning showing all the steps to go through the process.
A retirement plan flowchart is a planning tool that an individual can use as well, then it will show you the whole process at one glance. It will show you how the plan is going to work and what the amount of money will be once you come to your retirement age. If you own a computer you can buy special software that does this perfectly and will draw the graphics on the screen after you answered all of the questions.
Getting some tips
Some of the tips that you should keep in mind are the following. Always be prepared, start with your planning as early as possible and put some money aside even if you are not sure about which plan you are going to take. Some people who start with the planning process sometime wish they had started in their teenage years. This might seem laughable to you but the idea itself is not so strange. The younger you start the more you will ens up at the end of the ride.
Another tip would be to look in to a so called tax-sheltered plan, these plans are also called 401(k) plans and most times are offered by your employer. It would be wise to join such a program and put as much money as you could possible afford in it. your employer is allowed to put extra money on top of the portion you put in, they will get a tax deduction for this as well so everybody is happy with this type of plan.
A final tip could be to give some thought towards investing you money, the way you save is at least as important s how much you save.
No matter how much you save just be aware that you need to put something aside if you want to enjoy the golden days with the same, or even more, joy as you did your working life.
31
Mar
Written by admin on March 31st, 2012
As large numbers of Baby Boomers reach retirement age and as life spans are increasing, long-term financial security has become a major concern among the U.S. labor market. With the prospect of reduced Social Security benefits, volatile 401K plans, and pension plans becoming non-existent, many workers are searching for other viable income options for retirement.
In the current economic recession, with rising fuel and food prices, it has become increasingly difficult to properly save for those later years. Individuals within ten to fifteen years of retirement often seek investments with higher rates of return, but are fraught with equally high risks. Additionally, in many of cases, the average person does not have the large amounts of cash required to earn the highest interest rates, which the wealthy enjoy.
Long-term retirement clubs have begun to emerge on the Internet, which remove these roadblocks for many entrepreneurs. These programs provide their members the opportunity to realize dividends, which are well beyond the reach of the average investor.
Members’ funds “piggyback” private portfolios of offline investments. Profits are distributed among the members and are spread across various stable long-term projects & ventures, to guarantee the clubs’ stability for the long term. The risks normally associated with these types of programs are diminished by pooling funds and spreading the investments across a diverse range of global opportunities.
Contrary to illegal High Yield Investment Programs (HYIP), which use funds from one investor to pay the next investor’s commission, the long-term retirement clubs are completely legal and clean, as members’ investments are combined with personal and private portfolios, which pay high rates of return. While each country has different views on foreign investments and private investments clubs, most operate in a jurisdiction where it is completely legal to manage private funds internationally.
Certain programs offer substantial referral commissions the term that referred members participate in the various plans. However, financial independence is generally achieved without relying on others to participate.
31
Mar
Written by admin on March 31st, 2012
Retirement Plan is of paramount importance in our life. The earlier we put in place the structures to achieve a blissful retirement the better for us.There are some tips here that can be of tremendous help to you if you follow them carefully.
Take Part in Tax-Sheltered Saving Plan
If you are working in a firm that gives a tax-sheltered saving plan like 401(k) make sure you take part and contribute all you can. If you take part in tax -sheltered saving your taxes will be lower, if your company add more, then automatic deductions will make it easy. Over time the effect of compound interest and tax deferrals will make a big difference.
Request Your Employer to Start Retirement Plan
If your company doesn’t have a retirement plan in place it is necessary that you make a request for one. There are many simplified ones that are readily available. In case you need further assistance you can order Internal Revenue Publication 590 by calling 1.800.829.4676. Or view a copy on the Internal Revenue service Web site. You could also request for a copy of Retirement Solution for Your Small Business.
Obtain an Internal Retirement Account
If you can put your money in Individual Retirement Account (IRA) on annual basis you will enjoy tax advantages. There are two options for you in IRA which are Traditional IRA and the newer Roth IRA.
The way your contribution and withdrawal tax will be treated is a function of the option you select. You should also be informed that you after tax value is determined by inflation and the type of IRA you choose.
Never Touch Your Savings, No Matter What Happens
Never touch you retirement savings because if you do you will loose both principal and interest and you may even loose tax benefits. In case there is a change of job convert your saving directly into an Individual Retirement Account or transfers it to the new company’s retirement plan
Set Targets, Stay Focused and Starts Immediately
The earlier you start the better, it is often said that procrastination is a thief of time. Your savings depend on how much time you have to save so the sooner you start the saving plan the better. Ensure that retirement saving plan is given a high priority. Have a plan and set a target that you want to achieve and remain focused. Remember it is never too early nor ever too late to start saving so it is better to start immediately
Basic Investment Principles Consideration Is Necessary
The way you save is a function of the type of investment tool you use and it is as important as how much you save. How much you would have saved at retirement could highly dependent on inflation and your type of investment. In order to maximize you retirement saving know how you saving plan is invested.
Make Enquiries
These few tips are to lead you in the direction to follow. You success will be a function of your full knowledge. Make enquires from your bank, financial advisor and other related bodies and consultants for more information. Make sure you get practical advice and act now
30
Mar
Written by admin on March 30th, 2012
The topic of retirement planning is often dreaded. The amount of job security combined with the state of the social security system can often leave people facing a fear when it comes to having the money needed for retirement. As is the case with most fears the sooner you face them the sooner you overcome them. The skills you want in a retirement planner are basic but not simple. A good retirement planner will have a strong skill set in regards to taxes accompanied by a strong financial investment portfolio.
Retirement Planning and Taxes
Retirement plans often are laden with tax incentives. A good retirement planner will be up to date with the ever changing tax laws in regards to investments and retirement plans. Some of the standard plans may include: IRA-Based Plans: Payroll Deduction IRAs, SARSEPs, SEPs, SIMPLE IRAs, Profit-Sharing Plans, Money Purchase Plans, and Defined Benefit Plans. A dedicated professional retirement planner can not only decipher these plans but can also find the one that fits your unique situation.
Retirement Planners and Financial Investing
A good retirement planner will have a strong background in financial planning and investments. The decisions a planner helps you make for your retirement will be based on the unique set of your financial circumstances. The services gained from a retirement planner will supersede the generic information you would obtain from using a retirement planning calculator. The ability to forecast salaries and cost of your dependants vary greatly between individuals.
Trust and Integrity
The last and most important facet of a retirement planner is that you feel a bond of trust and integrity with who you choose to handle your retirement plan. We know that this subject often evokes fear in many people. If you are unsure of your future you will only become more fearful by placing this task in the hands of a party or company you do not feel reassured by. The ability to meet face to face with a retirement planner may take up some extra time; however well spent time now can make the time spent in retirement that much more enjoyable.
Retirement is a reward all of us should be entitled to after spending a good portion of our lives working to provide for our children. The opportunity to make your golden years golden is at hand now. Regardless of your current situation the future will depend on the actions you take today. If you do not currently have a retirement plan or do not fully understand your current retirement plan I strongly suggest you make the time to seek a professional retirement planner now.
Ken Fry is committed to providing consumers a way to use the internet to obtain the best services and products in their geographical location.
