Tips for Prepping Your Retirement Fund

Retirement is a long-awaited reward for years of hard work. However, only some people have enough to live their desired lifestyle in their retirement savings account. 

Starting early is key to building a sufficient retirement fund, but there is always time to begin. 

Whether you're just starting or are already a seasoned investor, this blog post will provide valuable tips and strategies for prepping your retirement fund.

Set Realistic Goals

Before starting a retirement account or investing your savings, it is essential to determine your retirement goals. 

Do you want to retire earlier or later in life? What is the lifestyle that you would like to lead during retirement? What are the expenses you can expect during retirement? 

Setting realistic retirement goals can help you determine how much money you will need to save and for how long.

Start Now

The earlier you start saving and investing, the more time you have to build your retirement fund. Ideally, you should begin saving in your 20s, but if you still need to start, don't worry. 

Start by automating your savings, setting aside a portion of your paycheck for your retirement fund, and increasing your contributions regularly. 

The earlier and more frequently you contribute to your account, the more time it has to grow through compound interest.

Diversify Investments

It is essential to have a diverse portfolio of investments to reduce the risk of loss during market downturns. Investing in stocks, bonds, mutual funds, and index funds can help you achieve a well-diversified portfolio. 

Researching and consulting with a financial advisor is important to understand each investment's potential risks and rewards.

Consider Tax-Advantaged Retirement Accounts

Several retirement account options are available, such as 401(k), IRA, Roth IRA, and SEP IRA, to name a few. 

Each account has different tax implications that can affect your retirement income. For example, Roth IRA contributions are taxed upfront, while traditional IRA contributions are tax-deductible. 

A financial advisor can help determine which retirement account or plan, such as a 401K to Gold Retirement Plan.

Re-Evaluate and Adjust Your Retirement Plan

It's important to evaluate your retirement goals and investment options periodically. Your retirement plan may need to be adjusted accordingly as your life changes. 

Having a solid idea of how much you will need to retire comfortably is important, but there are no guarantees. 

Adjustments to your retirement plan may be necessary as life circumstances change or investments underperform. Regularly reviewing and re-evaluating your retirement strategy can help you stay on track.

Prepping your retirement fund may initially seem overwhelming, but it is achievable with the right strategies and guidance. 

By setting realistic retirement goals, starting now, diversifying your investments, considering tax-advantaged retirement accounts, and regularly reviewing and adjusting your retirement plan, you can lay the foundation for a comfortable retirement. 

Remember that preparation is key, and there is always time to start. Seek professional advice and act today to ensure a financially secure future.

Steps You Can Take to Grow Your Savings Before Retirement

No one knows how long they will live, but most people want to ensure they have enough money saved to cover their retirement costs. There are many steps you can take to help make sure you have enough money saved when you retire.

Save Early and Often

It may seem like a no-brainer, but one of the best things you can do to ensure a comfortable retirement is to start saving as early as possible. 

The earlier you begin saving, the more time your money has to grow. For example, let’s say you start saving $200 per month at age 25. If you earn an annual return of 7%, by the time you retire at age 65, you will have nearly $500,000 saved. 

However, if you wait until age 35 to start saving, even investing the same amount each month, you would only have about $250,000 saved by retirement – half as much as if you had started 10 years earlier. 

Time is your friend when it comes to growing your savings! If you have questions about how much money you should personally be saving each year, work with a wealth management professional.

Invest in Yourself

Investing in yourself is one of the best investments you can make. When it comes to retirement savings, there are a few different ways to invest in yourself. 

One way is to contribute to a 401(k) or another employer-sponsored retirement plan. If your employer offers matching contributions, that’s even better! Another way to invest in yourself is to open an Individual Retirement Account (IRA). An IRA is a savings account that offers tax advantages for those saving for retirement. 

There are two types of IRAs – traditional and Roth – and which one is right for you depends on your current income and tax bracket.

Live Below Your Means

One important step you can take to grow your retirement savings is to live below your means. This means spending less than you earn and Investing the difference. 

When you live below your means, it frees up extra money that can be used to save for retirement or pay down debt. 

It may not be easy, but living below your means now will pay off later when you don’t have to worry about where your next paycheck is coming from.

There are a number of steps you can take to grow your savings before retirement. Save early and often, invest in yourself, and live below your means. By taking these steps now, you can enjoy a comfortable retirement later.

401K Tips and How to Stay on Top of Your Retirement

When it comes to saving for retirement, a mix of investment options is integral to your future success. A 2013 report by the American Benefits Institute states that about 94% of employers offer a 401(k) retirement plan to their employees, yet many employees aren't sure how to get the most out of their plan. Here are some tips for maximizing the rewards of your 401(k).

Take the Entire Match

Plenty of employers offer a full or partial match of your contributions. For example, your company may match 100% of the first three percent and will match at 50% thereafter up to seven percent. Read your plan's details to make sure you're getting all the matching you can. Talk to your employer if they might be able to match more if you have a special circumstance like retiring early. It's free money, so don't leave it on the table and take advantage of everything offered.

Consider Your Tax Withholding

If finding the money to bump up your 401(k) contributions is proving to be difficult, take a look at your take withholding. If you aren't claiming enough dependents, you will receive a larger tax return in the spring. That money could be squirreled away in your 401(k) over the course of the year. Review your W-4 form with your HR department, and file a new one if you are claiming zero or not claiming all your dependents. Find other ways to get more for your money by talking to a professional tax accountant or even your credit card merchant account for bad credit and how you might improve it. This way you can really improve your profile and secure future finances more easily. 

Be Cautious of Age-Related Fund Distributions

Some 401(k) plans offer a target-date fund distribution. On its face, this can be a great idea. Simply input how many years left until you retire and the plan will do your allocations for you. However, this can be a bad idea. If you are young, age-related distribution can expose you to far more financial risk than you might be comfortable with. On the flip side, older workers may have far too conservative choices implemented for them. Look at your entire retirement portfolio to determine your comfort with risk. If you have a paid-off home, an investment in a credit card processor of bad credit, and plenty of cash in your IRA, you may feel fine with accepting some risk in your 401(k) to maximize gains. If your other assets are small, you may not want to take risks. Think this through and allocate your funds accordingly.

Reduce Debt and Spending

If you’re starting late on your savings for retirement make an effort to reduce any debts you may have and cut back on unnecessary spending. This might mean getting rid of the cable, going to free community events instead of the movies, and only eating out once a month. Make up a budget and make sure you have a spending limit for things like gifts and entertainment. If you have debts you need paid off before retirement make sure you work on those first and that a good chunk of your paychecks go to getting the balance down on each one.

A well-funded and smartly allocated 401(k) plan can be a great way to save for retirement. However, it should be just one piece of your overall investment portfolio. Keeping these tips in mind will help you get the most out of your 401(k) and give you the relaxing retirement you’ve always dreamed of.

The GOLDen Years: Five Financial Changes You Need to Make When You Hit 60

After spending a lifetime building a career and working toward your retirement goals, it can be an adjustment financially once hitting the age of 60. Although you may be used to living a certain lifestyle, financial adjustments may need to be made to preserve your retirement savings and have your needs met. There are a few changes to make to ensure that the funds last for several decades and are well preserved—keep reading to learn about the most influential changes you should make to your finances once you hit those golden years. 

Reallocate Your Investments

To protect your assets, you might consider shifting to low-risk investments to prevent loss from occurring if you feel comfortable with what you have saved for retirement. If you expect to live longer, you can shift to more aggressive investment options for a few years before you evaluate the success and projected future of your investments. Depending on your financial situation, reallocating your investments could provide you will a little buffer cash to put your mind at ease.

Establish Scheduled Distributions

It's important to reassess your budget each year and make adjustments where inflation may occur for the cost of living. Contact your financial services provider to schedule payments weekly or quarterly, which will ensure that you live within your means and preserve your retirement fund. Look for areas where you can and should make adjustments so that you can take care of payments in a timely manner while still enjoying your finances set aside for retirement.

Downsize Your Home

For those who are in their 60s and have children who have moved out of the home, they are likely living in a property that is too large for their needs. After raising a family that is now on their own, it may be time to downsize and reduce the cost to maintain the home. Consider relocating to gated community or condo where landscaping and maintenance won't be a concern and costs for home upkeep will be lower. When it comes to home insurance, the professionals at Underwriters Insurance Brokers Ltd who specialize in Vancouver home insurance suggest that you increase your deductible so that you can enjoy lower monthly premiums. Living in a house that is too big, and paying too much for home insurance will drain your hard-earned retirement funds much faster than necessary, so consider downsizing before too much money is wasted.
Use the Money from Taxable Accounts First

To avoid paying more in taxes with your 401(k)s, make it a point to use the money from the accounts that will be taxed the most after also using the accounts that are not a part of your IRAs or 401(k)s. Using your taxable accounts first will be more efficient, and will keep you from cringing too much when tax season rolls around.

Take Advantage of Tax Breaks

Each state has age-related tax breaks that offer deductions and exemptions for ample savings each year. Research what you qualify for through the state department or talk to a financial advisor to find out what types of tax breaks you might be eligible for. Many people have no idea that they qualify for any tax breaks, so they miss out—do your research and talk to your accountant or financial advisor to see if there are any breaks you should know about or look into.

By making a few financial changes once you turn 60, it can preserve your retirement funds and make it possible to live more comfortably in your golden years. Although it may take time each year to manage your investments and downsize in certain areas, the changes will ensure that you enjoy a happy and healthy retirement while taking advantage of the fruits of your labor.

Playing Catch-Up on a Retirement Plan Over 50

retirement (Photo credit: 401(K) 2013)

People ask me all the time what is the best way to catch up on a retirement fund after a couple of decades of procrastination. Should start by paying off all debt, start putting all you can muster into a 401k, start heavily playing the lottery with crossed fingers? The answer is a combination of paying off debt and investing in low cost bond funds.

Paying off debt can be better than saving money.

Well, it can actually save you more money because of the obvious interest charges you are paying. You need at least 10 percent of your gross income saved, and a good way to do that is to pay down any debt with a high interest rate (that isn’t tax deductible). Paying off credit cards or car loans with annual percentage rate of 15 percent will give you a 15 percent return on every dollar you pay off. This is definitely the first thing you need to do when playing catch up.

It’s important to note that you MUST make it a point to live within your means, and perhaps a bit below them if you want to really save for the future. This calculator from NewRetirement is a good starting point that brings the future into the harsh light of day. It might be a good idea to downsize your living space; get a smaller house or a car that doesn’t require a monthly payment. Ask yourself if you really are okay with running out of money before you reach 75? 

Low cost bond funds

Once you have settled any high-interest, non-tax deductible debt (or if you miraculously didn’t have any) you need to catch up with a 401(k) plan. It would be ideal if your employer match at least some of your contributions, but even if they don’t this is a great way to save because of the tax-free savings aspect of the retirement fund.

Take a day or two out of your schedule and figure out which fund options your employer offers, and which are best for you to invest in. It’s best to choose the lowest cost bond funds and you can do so by comparing fund expense ratios, and choosing those with a ratio less than one percent. These investment firms will pass on the most return to investors by keeping costs down, and will make a difference in twenty years by the time you retire.

You may have lost sweet time for investments to compound and grow to their fullest potential in your procrastination, but that doesn’t mean it’s too late. An investment will take 15 years to double at a five percent rate, and 18 years at a four percent rate. If you get going now, with the goal of contributing to the 401(k) the maximum amount you are allowed to add, you can have a nice chunk of money waiting for you when you retire.

Figure out your social security plan.

Full retirement age for those born between 1943 and 1954 is considered 66, and will replace some of your salary, but you will most likely need more income. The rate for the average wage earner is 42 percent, but it adjusts based on your specific income and whether your spouse should be expected to contribute as well (estimate your social security benefits here). You can maximize your monthly benefit by waiting to retire until you reach 70, which gives you a 32 percent higher benefit than “normal”.

You might be over 50, and you might be behind on your retirement plan for whatever reason. Hey, it’s going to be okay - life happens. You can start now and really improve your position in the next 15 to 20 years. Retire the way you want to, not the way you have to.

Louis Mack is a seasoned financial planner in San Francisco who specializes in retirement planning. He is a writer for NewRetirement.com and lover of the great outdoors.

Savings Plans for Those Hitting Half Century of Their Lives

retirement (Photo credit: 401(K) 2013)

If you will be reaching the age of 50 this year, it is assumed that your savings for the rest of your life is already halfway through. However, the chances are that you are lagging behind in the savings area and need to start collecting money for your future. The good news is that there are plans which give opportunity to you to work on your financial security for post-retirement life.

Making Contributions:

It is possible that you decide to make savings for post-retirement life at a later stage of your life. You are not an exception and there are many who like you, have just begun with their savings. The concept of ‘catch-up’ is applicable to such citizens who are 50 years or above in age so that they can make contributions above the limit decided for various savings plans.

You may have just reached 50 years of age but you still have a window of opportunity for adding to your savings by making contributions to any IRA or by making ‘salary deferral’ contributions to a 457 plan or 403(b) or a 401(k) plan.

IRA Contribution- To make IRA contribution you can either opt for 100 % compensation or lesser part of $5500. But for those who will reach 50 years you can make additional contribution of $1000 to the account.

Plans Sponsored by Employers- For plans that are employer-sponsored you are granted the permission to make more contributions that the limit that is set only if you are to reach 50 years with the end of the year- a privilege only to those that are of and above 50 years.

• In case of 401(k) and SIMPLE IRA plan where you are allowed to make deference of 100% of the compensation up to an amount of $12,000, you can make a payment of extra $2,500.
• In case of 457, 403(b) and 401(k) plans where the deference amount can reach up to $17,500 an additional amount of $5,500 is allowed for those that are 50 and above in age. 

Multiple Plan Limitations:

While participating in more than one plan that is employer-sponsored, contributions made through the ‘salary deferral’ features should not surpass the ‘dollar limit’ that is applicable for the particular year.

Miscellaneous Issues:

There are other issues too that have effect on all that you plan for your retirement like sponsoring your child’s college tuition fees or supporting your fully-grown child rather than adding to your savings for life after retirement. You might as well think of investing in ‘long-term care’ or LTC insurance for prevention of retirement savings usage to cover long-term illness expenses rather than using it to finance your retirement life.

Conclusion:

Hopefully the ideas mentioned in the above paragraphs will help you to make your life post-retirement a financially independent one. Those of you who fall in the range of mid-forties and mid-fifties, you still have the time to retrace your steps and make financially wise decisions. You should consider investing in insurance plans to cover unexpected expenses like accidents. This will help you to financially secure your post-retirement life.

Author’s Bio: Alisa Martin has been authoring articles on various subjects related to finance. She has knowledge on Second Citizenship for investors and other such topics for contributing articles.

Are Annuities A Smart Investment?

In the economic bust of 2008, we learned that easy credit is no way to stretch dwindling retirement funds. Many senior employees took early retirement trusting that their Market-dependent 401(k) would produce an income stream capable of sustaining their unexpected situation. When it did not, they turned to credit hoping to make it through to better days. As a result they wound up first in bankruptcy, then homeless, and finally destitute. If they and their employers had utilized annuities instead of Market driven investments to create retirement income streams, then a lot of grief might have been avoided.

It’s worth checking how much you need to retire with the lifestyle you want.

Annuities Are Sustainable Even In a Down Market

The rate of return offered by fixed annuity plans is based on the amount of time your money is kept out of your hands by the Annuity Fund. The usual holding period is 5 years or more. This means your money is untouchable during those years. In return for this commitment you will receive a guaranteed rate of return. This rate is usually fixed at 3% to 5% depending on the type of annuity you purchase and the length of time your money is held.

Unlike stock portfolios and mutual funds, the income you receive from annuities does not fluctuate even when the Stock Market rises and falls. This is because annuity rates are anchored on highly stable investments such as US Treasury Notes and Bonds. Because the payout is spread over longer periods of time, Annuity Fund managers can react to changing economic conditions with thoughtful planning instead of panic. This enables them to give you the best annuity rate available. 

Stocks Can Produce More Income In a Shorter Time

While it is possible for an investor to grow wealthy over night in the Stock Market, every downturn produces its share of impoverished investors. It may be fun to pick the right stocks and watch your investment grow, but it is no laughing matter when the very safety net you depend upon to see you through rough times rips apart just when you need it most.

As this article explains, fixed annuity rates are not tied to Market performance. You will get your 3% return even if the Market drops to the floor. And even more important; you will get all the money back intact when the required holding period is up. You will also have made 3% interest on that money. And if, for some reason, you have to withdraw the money before the time is up, a predefined surrender fee will be imposed. But you will still get the majority of your money back. Can your Market-driven 401(k) make that claim?

Sanity and Safety

Make one bad investment in the Market and you can wipe out your retirement nest egg. Annuities offer investors few guarantees. However, most annuity plans are sane and safe. Most important: the money you put into an annuity will still be there after 5 years. Can your 401(k) portfolio make the same claim?

Smart Tips When Preparing for Retirement

retirement (Photo credit: 401(K) 2013)

Between 45 and 54, the idea of retirement often becomes more important to many individuals. But in order to make sure that this goal is attainable, there are several smart tips you will want to follow.

Catching Up After Age 50

For those just beginning to seriously save towards retirement, Investopedia.com says, “Don’t be disheartened.” “Better late than never,” is definitely applicable in this case. And there are actually special provisions for individuals people aged 50 years and up to “catch-up” on their retirement goals.

For people age 50 and older, the limit of contributions to an IRA, 401(k), 403(b) or 457 plan is raised to an excess of the usual threshold. This allows salary deferral contributions to be higher which builds up a nest egg for the future more quickly.

Rebalancing a Portfolio

As you approach retirement, your asset allocation should be reassessed every once and awhile to ensure that your investments become less risky as you grow older. This is because as you move toward the end of your working career, you will have less and less time to recover from investment losses. So rebalancing your investments will help you find places to allocate funds that are more dependable as you near a time in which you will rely on them more.

Supporting Older Children

Another consideration to take into account is any children or other family who are still dependent on you. Although it sounds harsh, you may need to consider your own best interests if you are nearing retirement age and still supporting adult children who live at home. Think about beginning to charge them rent or a portion of their living costs. In most cases, you will actually be doing them a favor by encouraging their responsibility and maturity.

Preparing for the Unexpected

Another life factor which may become more real as you age is the possibility of long-term illness and more frequent medical costs. To protect yourself and your nest egg, it might be wise to look into long-term care (LTC) insurance. These sorts of plans will help cover medical expenses so that your finances remain stored for living and other costs.

Getting Free to Plan and Save

For many individuals, all of these plans sound like great ideas but are really quite impossible because of current debt and other difficult financial situations. In order to devote more attention to savings, you will first want to work your way to financial freedom.

Begin by focusing on paying off any demanding short term loans. TitleBucks.com and similar lending companies can be helpful in a serious bind. But to use them properly requires paying them off immediately and gradually weaning yourself off reliance on quick cash. Asses your lifestyle and find ways to make cuts so that you can live within your means. This is a great beginning step towards savings and investment later.

With these keys to achieving financial stability and preparing for the future, you can look forward to a successful retirement.

Best Tips For Becoming Financially Ready For Retirement

Entering retirement phase of life used to be a matter of age, and most people have a defined retirement benefit plan offered through their employer, once you reach a specific age, you can retire and start receiving those benefits. Even if you plan to rely on social security as your main source of income for your retirement expenses, most people retiring need to have a plan in place for their finances in case anything happens.

Today, the issue of retiring is much less dependent on the person’s age, than it is based on how much money they have saved up for their retirement. Because of the major decline in employer-sponsored retirement plans and the rise in 401(k)s and IRAs, planning to successfully retire becomes a priority. Below are some great tips to make sure you are financially ready to retire.

Planning Where You Will Live

Several retirees in past generations would move from their family homes in the Northwest or Midwest to live in the sunnier states of California, Arizona, and Florida to escape the cold. Today, many find they can make their retirement savings last a lot longer by moving to other states when they retire. Find a place that lets you do what you love, while still offering good retirement plans and standard of living.

Retirement Plan

It’s important you have an organized plan for how you will put money away for your retirement, and to implement that plan as soon as possible. Estimates are that more than one-quarter of the people working in the United States have under $1,000 in their savings account – including funds for retirement. It will probably be a long time before these people can financially afford to retire. Build a retirement plan early in life, and implement it as soon as possible.

Financial Obligations

Unfortunately, not everyone goes into their retirement years with no debt. Instead, many still have mortgages on their residence, co-signed obligations for the college education of their children, and some are still paying off their own student loans. This can add up to a lot of consumer debt in addition to credit cards. Before you decide if you are financially ready to retire, have a solid understanding of your financial obligations and debts so you don’t eat into your retirement funds.

Your Health

The biggest expense for most people retiring is ongoing health care. Even with the most recent health care reforms, the costs for health and medical services continues to increase, and it will probably increase even more. Be completely honest with yourself and identify the potential health care expenses you will face during retirement so you can plan accordingly. Remember, the time might come when you have to consider assisted living homes, or retirement communities to live in with limited medical help available.

By planning ahead, you can feel sure that when you are ready to retire, you will have the finances to make it happen. Use these tips and some smart financial advice to make your retirement dreams a reality.

One Minute to Midnight Retirement Planning

retirement (Photo credit: 401(K) 2013)

A mixture of personal circumstances, economic uncertainty and bad luck can leave people approaching retirement with insufficient savings. If you find yourself in this position you have a few options to maximize your savings.

Increase Savings

If at all possible, increase the amount you’re saving. Standard financial lore says to save at least 15 percent of your income for retirement. Try to increase this even more.

Once you’re past 50 the Internal Revenue Service allows you to contribute more to IRAs and 401(k)s. Take full advantages of this opportunity.

Cut Back

Increasing savings, by necessity, usually means cutting back on living expenses. You may need to cancel expensive vacations or purchases in the last years before retirement. Moving to a smaller, less expensive home can free up equity which you can roll into IRAs, 401(k)s or investments.

Add Some Risk (Or Play it Safe)

Depending on which financial advisor you ask, someone playing catch-up on retirement savings should either play it extremely safe or learn to take some risks. The right decision depends on your saving habits and personal preferences.

Highly conservative savers may not see the returns they require to retire comfortably. This is especially true for people whose savings focus on CDs and money market accounts. Adding some risk to a conservative portfolio, such as increasing corporate bonds and stock portfolios, could increase your returns.

On the other hand, we’re talking about a situation where you already lack the funds you need, and increased risk carries with it the possibility of increases loss as well as profit. If you’re not comfortable risking the savings you have, risky last-minute investments are not for you. 

Use Benefits While You Have Them

If you have medical conditions that require attention, take full advantage of any benefits your employee offers. Whether you need surgery, dental work or even access to addiction rehab centers, use your health coverage before you retire.

Using your health benefits before retiring can have a significant impact on how long retirement savings last. The healthier you are, the less money you’ll spend on medical expenses. In other words, taking the time to lose a few pounds now could save you dollars in the years to come. 

Delaying Retirement

If your retirement savings are particularly low, you have another option: delay your retirement. By working an extra five years or so you increase your eventual Social Security income and may be able to take greater advantage of the IRS over-50 programs. Talk to a financial advisor to see how this option would impact your personal finance.

Many retirees now chose a “working retirement,” either out of necessity or the desire to explore a new career they truly enjoy. Some see part-time employment as vital to their retirement income, while others see the job as more of a hobby that gets them out of the house and provides social interaction.

A part-time job won’t bring in the income you’re used to, but it’s not supposed to replace your old employment. Instead, part-time employment helps you stretch your retirement income further. For many retirees whom need supplemental income, a part-time job makes a significant difference.

A Retirement of Luxuries: How to Save for Your Retirement

It is advised by many financial experts that retirement should be of the utmost importance to everyone. Many people will start out saving small amounts at the appropriate time, and then increase the amount saved for their retirement over time. Retirement funds will increase as time passes, even though it will be subjected to inflation. However, it is better to have some money in a retirement or investment account than to have nothing at all. 

It is best to start by devising a plan for retirement and set realistic financial goals. Be sure to stick to the plan and specific financial goals. It is NEVER too early or late to begin saving for retirement. Of course, most people who don’t decide to save now may be able to work until they turn 70 years old. However, this is only true if those people remain healthy, can still run a business or are able to continue working. There are no guarantees for anyone. Many people are forced to maintain jobs after retirement because they didn’t save at a younger age. Some have to retire early due to illnesses, downsizing or disability.

401K

If someone is working for an employer who offers the opportunity to participate in a 401K plan, they should jump at the chance. With this plan, the employer will usually match the contributions. The employee’s money will accumulate over time because this program allows for tax deferment and compounded interest. Employees should find out how much to contribute in order to receive an equal match from the employer. 

Pension Plan

If there is a pension plan offered by an employer, the employee should inquire about the plan and find out if they will receive coverage from the plan. Get the scoop on the individual benefit statement and what it would be worth. The employee should find out what would happen to the pension benefit if there is a switch in jobs. 

Investments

Diversify investments by putting savings into different portfolios. When investments are diversified, the risks will be lowered and the return on your investments will be improved. The investor should frequently review their investment strategies with a financial advisor because many things can change as the investor gets older, and as their goals and circumstances shift. 

Power Saving

If the prospective retiree has extra money such as a federal tax refund, they should add some of it to their nest egg. If the person were to cut down on spending, they would be able to add money to their nest egg. If the person changes jobs and is receiving a higher annual income, they should consider adding any extra funds to their nest egg. So instead of incurring more debt, the person should try to maintain the same lifestyle so that they can save more money in their nest egg. For those who do fall into debt and are unable to find a solution for their financial predicament on their own, services such as National Debt Relief are available for debt assistance and management. 

Other investments

Hire a financial advisor to see how to capitalize on other investments such as mutual funds, stocks, and bonds. The U.S. Treasury offers the opportunity to invest in guaranteed bonds that carries lower risks. As long as investments are diversified and funds are wisely allocated, the risks will be limited.

Dave Landry Jr. is a personal finance advisor and debt relief counselor who has been blogging his expertise for several years to help those in dire financial needs. 

Early Investments Help You Financially after Retirements

In the past workers were enjoying the security of the pension plan, however today they are not that fortunate. These days it’s up to each and every worker to make preparations for their own retirement, meaning that they have to do some serious planning. Each one of us can enjoy a happy and a much financially secure retirement, however it is very essential to start preparing for it as early as possible.

Take Advantage of the Tax-Deferred Savings

“If you have an access to the 401k plan at your place of work, consider investing in it as much as you can really afford.

• A 401k plan normally provides an opportune way of saving for your retirement and also reduces the current income taxes. 
• That normally means that if you usually get refunds, investing in 401k boosts the size of that particular refund. 
• If you owe money, the 401k reduces what you owe and to some extent tips the scales back to the refund.
• In addition to the upfront tax savings, the cash that you invest in 401k accumulates on a tax deferred basis, denoting that the amounts are only taxed when you receive it once you retire.”

Ramp-up The Contributions

“If the 401k plan has an automatic escalation feature, make use of that benefit.

• An automatic escalation feature normally increases the percentage of your contribution each year until the maximum that has been set by the plan. 
• That makes investment for your retirement automatic and painless, eliminating the biggest impediment to investing in 401k plan in your firm. 
• Avoid the inactivity when it comes to the 401k plans, signifying that you never adjust the contributions to account for the raises and a change in financial situation.
• Placing your savings on an automatic escalation feature helps you to save more therefore accumulating a much larger retirement portfolio.”

Invest steadily

“Invest in dependable and steady stocks, and then leave your investments alone.

• Some blue chip companies like AT&T or even Ford, had been in occupation for decades, and they have consistent and steady growth every financial year, making them a great opportunity for investing. 
• Leaving your invested stocks alone ensures that you are giving them enough time that they require to perform to the fullest.”

Mutual Fund

“Make sure that you contribute more frequently or even annually to a mutual fund.

• A mutual fund is one of the safest long term investment opportunities that you will ever have, with yields above 10% common.
• In many cases, you can withdraw your mutual funds without penalty as well as contributing to it as often as you may like.”

Agency Bonds or Treasury bonds

“Buy either the U.S. Agency Bonds or Treasury bonds.

• Treasury bonds are normally guaranteed, but with lower interest rates. 
• Agency bonds issued by the government agency rather than the Treasury are never guaranteed, but have much higher interest rates.”

Set Up Goals

“Set up a step by step plan.

• Financial experts recommend that you set up your goals based on where you actually want to be 9, 6 and 3 years before getting to the retirement age. 
• This gives you enough time to plan as well as execute your ideas and would let you modify your plan if it becomes hard to meet these goals.
• Step up the speed of your plans as you approach the retirement age. 
• Increase the frequency and the amounts of your contributions, and keep investing in additional stocks.” 

Pay Off Your Debts

“Come up with a good plan of paying off all the debts that you owe long enough before you retire.

• This should be your objective of going into retirement without outstanding credit card debt; however you should also finish paying for your mortgage prior to retirement.”

Decide how much wealth you require to live comfortably

“Think about your day to day expenses, but make sure that you add things that you will want to do in the future that you aren’t doing now, such as pursuing a hobby or even traveling.

• Take into consideration the price changes and inflation, and do not forget to plan for the unforeseen circumstances.”

Opt For Financial Planner

“Consider looking for some help from a financial planner who will help you to set up a good savings plan and investment.

• This is very significant if you have little or no knowledge about the finances or if you’re looking to invest in large capital quantities and need the assistance of a professional.”

Crunch The Numbers

“The Internet has very useful tools available that can help you to figure out exactly how much you should be saving.

• These tools are very simple to use. You just input what you want to be saving every month, and they calculate the estimated worth.”

Level Of Risk

"Make sure that you know your actual level of risk.

• If you are conservative with your money you will need to set up smaller goals. 
• People who are willing to risk can make loftier goals however they need to be much aware of their chances. 
• Knowing your exact comfort level is the key to determining the plans and goals that you have once you retire. 
• Assess your financial situation and commitments that you currently have will help you to determine the amount of money you need to put towards your retirement.”

Avoid Market Timing

“Even major experts in this industry have some troubles calling bear and bull markets, so your chances of getting everything right every time is very small.

• People who try to time the markets usually end up getting in and out of it at the wrong time, and that can eat their profits in a long term. 
• It’s always good to use the dollar cost averaging approach meaning that you invest a similar amount of money every month, despite how the stock markets are doing. 
• This will allow you to accrue more shares when the stock market is down and profit when it recovers.

See your accountant, financial planner or call axa insurance contact number for more objective opinions on how you can save your money for retirement. You may not see some areas of your normal budget to cut more retirement money; however these professionals will convince you otherwise and can give you a much clearer picture of all the options that you have.”

How To Make Sure That Your Retirement Plans Are Safe

Everyone wants to retire at some point in their lives. Unfortunately, you won't be able to retire unless you take steps now to create, fund and protect a variety of plans designed to allow you to retire in comfort. What can you do to make sure that your retirement plans are safe?

Monitor Your Accounts On A Regular Basis

It is a good idea to go over the status of your accounts at least once a quarter. You can make an appointment with your accountant or set aside an afternoon to ensure that your accounts are active and no suspicious activity can be detected. By constantly monitoring your accounts, you can see if anyone is taking money out of them without your knowledge or consent. If you do see something happening with your accounts that you did not authorize, contact your broker immediately to find out what is going on.

Know Your Time Horizon

If you are just starting out in the working world, you can afford to put your money in volatile accounts that are going to make a large overall return. However, you should put your money into conservative income accounts as you get closer to retirement. Although your returns each year will start to decline, you are more focused on not losing your entire investment as opposed to obtaining maximum growth.

Do Your Research Before Investing Any Of Your Money

It is important to read a prospectus before investing in a mutual fund to understand the tax implications of your investment as well as any expenses involved. Before choosing a broker, make sure that your broker has many years of experience in the field of financial management. If you don't take the time to find out how much you will be spending in fees as well as who is managing your money, you could see your accounts drained with no chance of getting your money back.

Always Retain Custodial Control Of Your Accounts

Under no circumstances should you cede control of your accounts to any third-party. Even if your children want to manage your money as you get older, you should refuse their requests. If you cede control of your accounts, you no longer know that your money is going to continue to work for you or be there for you when you retire.

Don't Give Out Account Information Over The Phone

Never give out account information to anyone over the phone. Regardless of who the caller says he or she is, you don't know for sure who you are talking to. If someone needs account information updated or verified, meet with your broker face-to-face to discuss the matter. If anyone asks for your social security information, you can refer that person to your social security attorney Indianapolis.

It is important that you keep your retirement accounts safe from anyone who may want to take your money. You cannot expect anyone else to keep your money safe for you when there may be $1 million or more in the account. By following some common sense rules, your retirement accounts will always stay protected.

401k's Still the Best Way to Save For Retirement

The 401k has been a golden standard for methods that employees have at their advantage for putting away retirement funds. The 401k involves setting aside part of your paycheck into a different special IRS designated 401(k) account and having your employer match your contribution. 

The advantage of the 401k, besides your employer matching to some percentage your deposit, is that it is tax deferred. At the time of deferral, the set aside money is not subject to income tax and is not included in taxable income on the employee's tax return. This means that if you set aside $10,000 from your $100,000 salary, you can report $90,000 as your income for that year. The $10,000 will be taxed only if and when you withdraw it from your account.

But of course, to find the best 401k plan includes a multitude of aspects to consider when choosing the best one. These include:

Type of Plan: A number of 401(k) plans are available to employers who wish to aid in their employees’ retirement plans: traditional, safe harbor, and SIMPLE, each with respective rules and regulations. In order to achieve tax-favored status, the plan must abide by the certain stipulations. This requires that employers familiarize themselves with the rules, to guarantee accordance

• Traditional 401(k) plans: A traditional 401(k) plan enables eligible employees to opt for pre-tax deferrals by payroll deduction. Within this plan, employers also have the option to make contributions on the employee's behalf, either through matching contributions of elective deferrals or simply providing the deferral themselves. To ensure proper employer compliance and verify that employer contributions were not discriminatory, the employer must perform annual tests known as the ADP and ACP, or the Actual Deferral Percentage and Actual Contribution Percentage.
• Safe harbor 401(k) plans: A safe harbor plan is similar to the traditional plan but adds on the stipulation that employer contributions must be fully vested when made. Unlike the traditional 401(k) plan, the safe harbor plan is not subject to the ADP and ACP.
• SIMPLE 401(k) plans: The SIMPLE plan was created to suit the needs of small businesses by providing the framework for an effective, cost-efficient option for retirement benefits. Like the safe harbor plan the SIMPLE plan does not require the ADP and ACP test, and the employer must make fully vested contributions. The plan is only available for employers with 100 or fewer employees who received a minimum of $5,000 in compensation within the past calendar year.

Insurance: Whether the plan has an account, contract, or policy with an insurance company to provide protection such as guaranteed investment contracts.

Type of Plan: Single-employer plans, multiple-employer plans, and direct filing entities all have different implications, benefits, and perks.

Fees: Different fees can seriously stunt growth, even if they exist at small percentages. For example, consider an employee who has a 401(k) account balance of $25,000 and 35 years until retirement. If returns continue over the next 35 years and 7% fees reduce average returns by 0.5%, the account balance will reach $227,000 by time of retirement, even without further account contributions. If the fees and expenses are just 1% higher, at 1.5%, the account balance will only reach $163,000 given the same circumstances. This 1% fee difference reduced the effective balance by 28%.

For a more in depth guide, visit FindTheBest’s guide to understanding 401k plans. FindTheBest also has comparisons for mortgage rates by state and registered investment advisors (RIAs).

Is My Business to Small for a 401(k)?

Image via WikipediaI stop in at Forbes.com from time to time to see if Steve Forbes is making any money and check out the headlines. This time I see they have added a new blog called "Down the Road". It's written by Stuart Robertson, general manager and principal at ShareBuilder Advisors, LLC, a subsidiary of ING DIRECT. Stuarts blog will cover ideas that can help small and mid-size businesses save for retirement and save on taxes too. 

His latest post concerns the common myths associated with 401(k)'s for small business. He estimates only 15-20 percent of small businesses have a retirement plan. He says there is a general perception of these retirement plans that are mostly wrong.

Myth #1 As a small business, we don’t have enough employees: Actually, any size business can have a 401(k), even the self-employed. Any owner-only business can qualify for a type of 401(k) often referred to as an Individual 401(k) or Solo 401(k).

Myth #2 We can’t afford to offer a company match: No worries as matching is not required when offering a 401(k) plan. Not matching can reduce the amount higher earning employees including the owner can contribute to their 401(k) account (below the $16,500 2011 limit), but that’s about it. Still, matching is making its way back as many larger companies are re-adding matches as the economy picks up.

Myth #3 The tax benefits just aren’t that big of a deal: In reality, the tax benefits of a 401(k) can significantly improve a business owner’s tax situation. There are several unique advantages that can make a real difference. Let’s break them down:

• Saving limits are higher versus most any other retirement tax advantaged option. In 2011, individuals can contribute up to $16,500 tax-deferred as an employee ($22,000 if 50+ years of age) plus receive employer contributions up to $49,000 limit or $54,500 if you are 50+. These limits are inclusive of both employee and employer contributions.
• When a small business starts its first 401(k) plan, the business can receive a $500 IRS tax credit each year for the first three years (assumes you have less than 100 employees and $1,000 or more in costs. Sorry, solo(k) plans don’t qualify for this credit);
• Any employer contributions to a 401(k) (match or profit share) is deductible for the business; and

Myth#4 401(k)s are too hard to administer: Setting up a 401(k) plan is now probably easier to setup than your voice mail. How does 20 minutes of online setup and 5-10 minutes each payroll thereafter sound? Online and paper-free is not only easier, but also simpler to manage.

Myth# 5 01(k)s are just too darn expensive: Not any more. Companies can get set-up at a fraction of the cost from what they might think. Couple that with the tax credits offered by the government mentioned earlier and the tax-deferred savings that can help pad your nest egg and the plan nearly pays for itself.


There are probably other myths to conquer but these are enough to conclude that a 401(k) is right for your small company. If you have one for one company please relate the experience to us.

Related articles

• Retirement Plan Options for Small Businesses (thinkup.waldenu.edu)
• You: Pensions at Risk, States Consider Plans Like 401(k) (nytimes.com)
• 401(k) Savings: Up, But Not Enough (abcnews.go.com)
• Tips to Keep Your Retirement Plan on Track (abcnews.go.com)