Posted on August 15, 2011 by Erin
Are you a small business owner? If so, now is the perfect time to create a retirement plan according to many big investors. As the market gets better and hiring begins to ramp up, small business owners will need to remain competitive to maintain their best workers and to avoid high turnover. One of the best ways to accomplish this is to offer your workers a benefit like a 401k or an IRA. Not only do these plans offer your employees a chance to save for their future and give them a sense of loyalty, you as an owner catch a break too. Starting a plan doesn’t have to be difficult and the contributions you make to your employee’s plans are tax deductible.
Everyone is worried about savings right now and everyone wants a great retirement plan. With the markets down, now is the perfect time to ramp up those retirement plan investments and also a great time to take advantage of any tax write offs you can get as a small business owner.
Are you a small business owner that needs help setting up a retirement plan? Read here for an overview.
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Posted on August 12, 2011 by Erin
Spend more money to save more money for retirement? According to Rob Warner, author of the book, “Get a Life: You Don’t Need $1Million to Retire Well,” that’s exactly what to do. It may seem counterintuitive, but he has a point.
My favorite example that he gives his readers is to take more vacations. According to Warner, people want to retire at an early age because they have worked themselves to the bones for many years – they rarely took vacations or when they did, they scrimped and saved and never felt like they truly took a break. Retirement to these people is a permanent vacation where they can finally go to all those places they were never able to. Who wouldn’t want to race towards that! But think about it – if you do take quality vacations, you’ll feel more rested. If you feel rested, you may be able to work another year or two. If you work another year, you are able to delay Social Security which means an extra 8% more in benefits for life. And by working another year, you’re adding to your savings instead of beginning to deplete it. And so on and so on. You can read more examples of creative ways to save for retirement, here.
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Posted on August 11, 2011 by Erin
When I dream of winning some game show that gives away a million dollars to the winner, my mom always tells me, “A million dollars doesn’t go as far as it used to!” Ain’t that the truth!
Recently, Forbes Magazine featured an article that discussed why $1 Million may not be enough to retire on in present day. Seems ridiculous, right? Well, maybe not so much. When you factor in that many people are living longer lives, spending more on necessities like utilities and health care and having high mortgages while going into retirement, it’s easy to see why $1 Million doesn’t stretch that far. A great rule of thumb is this: You can spend 4% of your initial savings per year, and it will last for 30 years. So say you have saved an impressive $1 Million – 4% of that is $40,000 a year. Can you live on that? Some people who don’t have mortgage payments or live in a lower cost part of the country can do this easily. But others who are helping out their children or grandchildren or those with high healthcare costs can see where $1 Million dollars may not be enough.
Figure out when you will run out of money. Use our free Retirement Calculator.
If you need to work after retirement, you might as well have a great job! Find out the best jobs for retirees.
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Posted on August 8, 2011 by Erin
There are many lessons to learn from the government’s handling of the debt crisis, but one of the most important can be how to handle your own finances. Imagine if you made less money than your credit card debt year after year. That would seem extremely excessive and definitely something you would want to take care of, right? Well, the U.S. government is in debt by $14.3 trillion but only takes in $2.16 trillion in revenue each year. So let’s go over some steps to demonstrate how to NOT manage your money this way!
The first step if you feel unsure about how your retirement planning is going is to speak with a financial planner. A financial planner can analyze your plan (or lack thereof) and get you on the right path to a secure retirement. Some advice any planner would give you right up front? Try to meet with one before you want to retire – it will be easier to make a plan when you have time on your side. Same goes with adding to your retirement fund. Don’t wait until the last minute to contribute money to the account. Try adding as much as you can every paycheck over the years so you don’t have to play catch-up. Simple steps and common sense can help make you retirement much more comfortable. You can read more tips, here.
Curious about what types of Retirement Advisors are available to you? Read about them, here.
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Posted on August 2, 2011 by Erin
So, the debt deal has been made, but what does it all mean? Especially for seniors? It all seems to still be up in the air. The bill that was signed into law this week will cut $917 billion in cuts over 10 years, mostly in security and defense spending. A bipartisan committee has been formed and given the task of finding another $1.5 trillion in cuts in spending by December 23rd. If they do not find approval or simply cannot come up with the cuts, automated cuts will begin to be triggered. Where are those cuts coming from? Medicare seems to be a likely candidate for deep cuts.
So what can you do to protect yourself? One way is to carefully watch your stocks that involve government financing such as defense and government contractors. These contractors will likely lose business due to budget cuts in their sectors. Another tip is deferring your Social Security benefits. It’s been estimated that for every year you hold off on taking Social Security, you benefits rise by almost eight percent. And lastly, take advantage of tax deferred retirement savings accounts! You can read more tips here.
Read more about Social Security benefits and when to begin taking them, here.
How much money will you have for retirement? Use our free Retirement Calculator to find out!
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Posted on July 19, 2011 by Erin
When most people think of the tools used for planning their retirement, they think about 401k’s, pensions and other funds that are typically associated with employed wage earners. But what happens if you or your spouse forgo a paycheck and stay at home? What kind of retirement planning is available to you?
One way to collect money is through Social Security’s spousal benefits. A spouse who has never worked under Social Security can receive a benefit equal to one-half of the working spouse’s full retirement. But just like regular Social Security benefits, it’s a good idea to diversify and not rely fully on this as your sole retirement income. Another available option is funding what is known as a Spousal IRA. If one spouse is working and the couple files a joint federal tax return, the non working spouse can contribute up to $5,000 into their own IRA or ROTH IRA.
Need more tips on how to fund retirement for a non-working spouse? Get ideas here.
Would spousal benefits be a good idea for you? Read more about them, here.
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Posted on July 13, 2011 by Erin
Did retirement sneak up on you? Do you not have as much money saved as you had hoped for? If you’re attempting to play catch up, financial writer and equity analyst Glenn Curtis, has some ideas of you may find come in handy. Curtis recommends taking advantage of your current job’s 401k if it is offered. In fact, he recommends funding it to the maximum amount allowed. Consider this, if you’re 40 years old and you contribute $16,500 a year to the plan, you could possibly accrue more than $1.3 million by age 65! Curtis also recommends turning your home equity into liquidity through a reverse mortgage. Though this should not be your primary source of retirement income, it does provide a way to tap into the money you have been paying into your home for all these years.
Read about more ways to quickly increase your retirement fund, here.
Curious to see how your retirement plan is shaping up? Use our free Retirement Calculator to find out!
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Posted on July 6, 2011 by Erin
Do you think it’s a wise idea to take part of your retirement savings to purchase an annuity? That’s what the US Government Accountability Office (GAO) recommends. People are living longer and it’s no secret that Social Security is nearly impossible to live on as a primary source of income. The GAO interviewed financial experts who recommend that in order for retirees to cover the expenses they may encounter further down the line, they should delay Social Security benefits, work as long as possible to continue to save and to systematically draw down their savings to purchase an annuity.
Do you agree with the GAO’s recommendations for purchasing annuities?
Read the GAO’s full report, here.
See some FAQ’s on annuities and get some answers.
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Posted on June 29, 2011 by Erin
You and your spouse have been together for ages now. You’ve raised children and been together through thick and thin. Retirement will be nothing but simple and delightful. Well think again! There seems to be quite a large disconnect between couples and their retirement. Not only are people realizing that their spouses’ views of retirement may be a little bit country and theirs is a little bit condo-in-the-city, they are also beginning to realize that their views on when to actually retire also differ. In a study released today by Fidelity, it was found that 62 percent of preretirement couples disagree on when to stop working. And a whopping 73 percent of pre and post retirement couples can’t even agree on if they have a detailed retirement-income plan!
Think you and your spouse have it all figured out? Fidelity recommends sitting down with your significant other and discussing some major questions such as, what are your retirement lifestyle expectations, where do you want to live and are you both prepared for unexpected health care costs? Fidelity has even provided a six question couples quiz that is available to take. So even though you’ve navigated the waters together throughout the years, be prepared for retirement. It’s something that both of your deserve to enjoy equally.
Read the Fidelity survey or take the Couples Quiz.
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Posted on June 28, 2011 by Erin
In a recent study done by J.P. Morgan, it was found that a large number of Americans are ill-prepared when it comes to turning their retirement savings into income. The majority of those surveyed openly admitted to not understanding how their 401K plans work or how the money saved will turn into their retirement income when needed. The same study also found that a shockingly large two out of three people don’t know how much they should be saving for retirement. And almost half of the same people surveyed assume that outliving their retirement savings is a very real possibility.
Why are American’s so far behind with retirement savings? Some believe it has to do with the recession. When you have bills that need to be paid now, those will most likely take precedence over saving for the future. What do you think? Are YOU prepared for retirement? Why do you think so little people are? Let us know what you think!
Read J.P. Morgan’s report, “Searching for Certainty,” here.
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