May 31, 2012
Are you reaching that point in your life when you have to plan for your retirement? You must not rely on your social security money alone for covering all the expenses after your retirement. Not having a proper retirement plan will lead to a bad situation after your retirement and that is something that you must avoid. Here are 4 retirement plans that you can consider and choose from.
1. The 401(K) Plan
This is one of the most popular plans that employers use to secure their employee’s retirement. According to this plan, you must match your employer’s contribution to the plan (which oscillates between 1% and 6% of the payment) to take full advantage of the plan. Plan your investment properly so that you can take full advantage of it after retirement. Failing to match your employer’s contribution will make the investment in this retirement plan redundant. There are many other flexible investment plans for helping you with your contribution to the retirement plan. Choose one that you can afford.
2. Savings Incentive Match Plan for Employees (SIMPLE) IRA
Many small time employers secure their employee’s retirement using this plan instead of the 401(K) plan. The only difference between these two plans is the fact that this plan has no maintenance fee as such from the employer’s side and thus is a popular choice with most small time employers. The contribution that the employee is supposed to make to this plan is deducted automatically from the pay check.
3. Traditional IRA (Individual Plan)
It is always advised that you should maintain an individual retirement plan along with the employer’s retirement plan that is already in place. The contribution that you can make to this plan is limitless and depends on your personal financial abilities completely. The contribution eligibility is set at $5,000, plus $1,000 catch up for those over 50 years old, but not per account.
4. Roth IRA (Individual Plan)
This plan is similar to the Traditional IRA plan with the same limit and eligibility criterions. The only difference is the fact that the contributions you will make to this plan is not income tax deductible.
In case you find out that you are ineligible for the IRA individual plans, you can always set up an annuity fund. The tax benefits are lower than the tax benefits one gets with the IRA funds and also the contribution fees are higher than usual. These shouldn’t deter you from having a solid retirement plan in the first place.
Brenda Lyttle is a contributor for the site, http://www.freecreditreportsinstantly.org/.
, financial planning
, Golden Years
, Retirement Planning
May 18, 2012
Many ordinary people have recently discovered that they may not have the nest egg that they’d planned for in their retirement. Having put away regular monthly installments into investments and other savings plans, people have now discovered that these investments could be worth a lot less than they’d been led to believe. Mis sold investments are likely to cause a lot of heartache
and financial difficulty in the years to come, as people have to come to terms with the fact that they might not have sufficient money for their retirement and they could well have to rethink their plans for the forthcoming years.
With the issue of mis sold investments now coming to the fore, there is some hope for people who were given inaccurate information when they signed up to long-term investment plans. Compensation claims are being investigated and there is at least some hope of recompense for those who genuinely took out investments based on misleading information. Many people put away regular savings for their retirement, or as a means of paying off their mortgage or saving a nest egg for retirement. Without in-depth personal financial knowledge, people will have relied upon the advice offered by financial advisers, banks and other institutions in order to come to a decision about which investments to choose.
It is because this advice was – in certain circumstances – ill thought-out, or the specific investment inappropriate for the circumstances of the individual at the time, that a mis sold investment bond, or other investment product, will now come under scrutiny. It is hoped that genuine cases of mis sold investments will now be rectified to a certain extent, as individuals can make a claim for
compensation and hope to recoup their losses.
Many people will have been relying on the expected return on their investment in order to fund their retirement. The knowledge that this pot of money might no longer be available can put huge financial and emotional stress on an individual or a couple and this also needs to be taken into consideration. The situation needs to be rectified, not only on behalf of the customers who have
been mis sold investments, but also in order to ensure that financial institutions and individual advisers are seen to be held to account for any inaccurate or misleading information that they have given to customers in the past regarding the investment of their money.
With the issue of mis sold investment now out in the open, it is hoped that the message is getting through and that anyone who believes they have been misled will be able to come forward and receive more information about their investment and whether they might potentially have grounds for a claim with regards to their product. When a lifetime of savings could potentially be at stake, it’s imperative that people are now given the opportunity to check up on their finances and to have some peace of mind that their money is safe and their retirement fund will be sufficient for their needs over the years.
, financial planning
, Retirement Planning
May 3, 2012
Saving for your retirement can seem like a daunting task for most folks today, but it is something that should be every working person’s goal and ultimate aspiration. Despite the seemingly impossible task of saving up for your own retirement, especially at the last moment, there are little ways that you can consider that can bring you closer to your goal of saving for retirement, without having to work like a mule. Here are a few tips on how to increase your retirement savings:
Downgrade – Simple living is best
Living on the edge of their means is one of the reasons why a lot of individuals find it difficult to save up for retirement. It is quite common now-a-days to find people that are living well beyond their means. People who are in a situation like this are wasting money that could potentially be saved and used for their retirement schemes. Contrary to what people say, living simply is not something to be ashamed about – so if you’re looking for a fast way to save more for your retirement, then consider downgrading your living expenses is one great way to go about it.
Try investing in businesses or other secure means, this can increase your overall income and is another great way to save up for retirement money quicker. Not all investments promise a good or profitable turn-over in the end, so choose businesses that you want to invest in wisely. Businesses that have a strong long term grow potential are good, so are businesses that cater to the masses have the best chances of providing you with a steady profit.
Pension offers are opportunities
If the company you’re working for offers retirement benefits or saving pools, consider chipping in a little of your income into it. A little goes a long way. Pensions and benefits are also a great means to help out with your retirement savings goals. Availing of healthcare and pensions can add to your savings by cutting down on the need to look for more money. Because these types of benefits can be earned while you’re still in working prime, you can be sure that you’ll have a substantial amount by the time you do decide to call it quits and put your feet up.
If you want to meet a specific amount of money to realize your retirement dreams, then you really have to prioritize for it. Coming up with a viable sum that is more than what you’d expect to spend for the duration of your retirement and beyond, should be the main outline of any savings schemes. It is wise to plan ahead in order to set priorities, but it is also important to set a goal beyond the expected amount that you think would need for a comfortable retirement.
Pooling all of the profits from the above mentioned tips should provide you with enough provender to retire in comfort or at least meet you basic needs, given that you don’t expect anything extremely extravagant or opulent. Investing and not spending beyond your means is the key to a successful savings and retirement plans.
Planning for a retirement needn’t be stressful or difficult. Everything can be planned out and achieved with good old fashioned hard work, determination, and foresight. Utilizing holistic tips like these as part of your overall retirement plan will definitely help to improve your financial situation now, and will also ensure that you will have more savings available for when you are finally ready to retire.
Rosie writes on behalf of a number of businesses ranging from flexible benefits administration to holiday destinations. Rosie enjoys reading design and technology blogs and is looking forward to the summer!
, Finance for insurance
, financial planning
, Retirement Planning
March 20, 2012
If you are like most young adults, you are just starting out your professional career in your twenties. You may be considering how to get your career off to a great start and how to advance it so you can reach professional goals and aspirations. The last thing on your mind may be reaching the end of your career and retiring. Yet there are many reasons why young adults in their twenties should start saving today for retirement.
Increased Savings Over Time
There are so many stories today about people in their 40s and 50s who haven’t saved a penny for retirement. These are individuals who are forced to save large sums of money each month to make up for the last few decades that they did not save regularly. Saving smaller amounts over a longer period of time is easier on your budget than trying to save large sums of money later in life.
Maximizing Employer-Matching Contributions
If your employer has an employer-matching program in place, not taking advantage of that program is like throwing free money away. With these programs, your employer will match the amount of money you contribute to a retirement program up to a certain percentage.
Depending on your salary and the program your employer has in place, this may equate to hundreds and often thousands of dollars over the course of a year. Over time, this can add up to a very sizable amount of money. The longer you participate in such a program, the maximum your benefit will be from it.
You may choose to save your money in an interest-bearing savings account, in mutual funds, in high-yield dividend stocks, or a mix of all of these. These options all provide growth opportunities for your money over time.
Through the benefits of compound growth on interest and dividend reinvestment programs, your money saved today will grow much faster over time than money invested at the age of 50. Saving early not only provides you with the opportunity to save money, but also for your money to grow more.
Fewer Financial Commitments
Many young adults think they will have more money to spend and save later in their working careers, and so they delay contributing to a retirement program or saving for the future. Young adults often do have credit card debt and student loans.
In your later years, though, you may have even greater expenses such as a home mortgage, the expense of children, and more. It is not uncommon for a person’s expenses to grow as their income grows. So getting in the habit of saving now is advantageous over delaying your savings efforts.
Improved Financial Security
Having money in a retirement account, in a savings account, in the stock market, and more improves your financial security. While there may be penalties for withdrawing money early from a retirement account, these are funds that can be used if you lose a job or face some other financial crisis.
Further, the recent economic crisis has taught us that it is best to save early and regularly. Many people in recent years were forced to delay their retirement plans until the recession ended, and this is particularly true of those who had counted on the stock market to grow at a steady rate as part of their retirement planning. When you save early and diversify your savings, you have a larger buffer against economic fluctuations.
There are many reasons why you should start saving early. Take time today to review your budget and establish a plan to save regularly each month.
Vanessa Griffin is a freelance writer and financial expert. She always stresses that saving for retirement should be the number one financial goal for everyone. She reminds that them that like car insurance rates, most of their bills will decrease at retirement but they will never really go away.
Tags: financial planning
, money savings
, Retirement Planning
March 16, 2012
Planning for retirement used to be fairly easy: You contribute to senior benefit plans through the government, and you put some aside in 401(k) plans. If you were really focused, you might have opened a stock and bond portfolio for private investments. After the financial crash of 2008, however, those nest eggs might be so financially nutritious right now, especially for females who live longer and get paid less than men. How can you, the average working female, strategize for an easier retirement?
Same Basic Rules Apply
First, don’t toss aside what worked in the past. Continue your private or employment investment strategy. You might want to closely examine how your retirement dollar is invested by looking at the individual companies in your 401(k) mutual funds and the overall risk categories.
The rule of paying yourself first and last still applies: Not only should you always deposit money in your savings and/or investment strategy but also whatever money is left in your budget at the end of the month. Allow those special-purchase savings as well; those amounts should be included in your budget already.
Change Retirement Paradigms
Rethink how you think of your retirement environment. Owning your own home in which you have lived for decades may be a comforting thought, but can your retirement withstand the extended home owner’s insurance, maintenance costs, landscaping costs and utility bills?
Have you planned for escalating medical costs from that longer life expectancy and the related drug costs? You have additional co-payments, deductibles and premium payments to budget and provide for on top of the extended living costs over males.
Would a communal living environment be more frugal or more suited for you? You might still have privacy in a separate abode or a private room, but you share dining space, food costs, utility costs and even entertainment costs and venues.
If living in a retirement community or assisted living environment doesn’t suit you, perhaps sharing the private home is a viable alternative. Two retirement incomes on communal costs cost less per person, after all.
Many retirees are turning to an RV life as well. Buying a small plot of land and arranging for power and water hook-ups are becoming more popular. Renting space at an RV campground is also very popular, and RV living provides the freedom of movement when desired or a stable living environment with virtually every convenience of a brick-and-mortar home but at less overall cost.
Change Location Considerations
Changing locations of your retirement is another possibility. Communities in Mexico or Central America where the cost of living and medical care are far lower are springing up or growing almost weekly. Quick trips home for visa requirements are easily handled, especially when it’s a group trip: Again, cost sharing helps.
Even if you choose to not live as an “expat,” investigate what part of your country has the lowest overall cost of living – rent, food, utilities and gas, for instance. The less money you have to pay to live, the longer your retirement nest eggs will last.
Jaye Ryan is a freelance writer who loves writing about responsible financial management and retirement issues for Octopus Loans.
Tags: Financing Retirement
, New Retirement thinking
, post-recession retirement options
, Retirement Planning
, saving money for retirement