Archive for the ‘Plan for Retirement’ Category
Sunday, March 14th, 2010
Every working man and woman is entitled to a retirement that is secure and comfortable. Saving and planning for retirement is not necessarily an easy process however because we are living longer and healthier lives in general, which means we need more money to survive retirement than ever before. If you want to learn how to plan for a healthy, comfortable and secure retirement then you need to begin planning wisely using a blueprint similar to the one outlined below:
What do you plan to do in your retirement?
- Save early and often. –
The sooner that you begin to save money, the longer the amount of time you will have for those funds to grow. By putting compounding to use, you can make gains every year that will add on to the gains of the prior year, and so on and so forth. This can really add up, fueling the growth of your retirement fund.
- Set realistic and attainable goals. –
Do not use rules of thumb to project your retirement expenses, because they are based upon your needs and not the needs of others before you. What type of lifestyle do you want to live when you retire? Figure out the expenses accordingly and use these expenses to formulate how much money is needed to supplement social security and other income sources during retirement.
- Save using a 401(k). –
This is one of the best and one of the easiest ways that you can save money. Making contributions towards a 401(k) plan can provide you with immediate tax deductions, matched contributions from your employer, and even a tax deferment on the growth that your retirement savings accrues. This is absolutely excellent advice for anyone who ever wondered how to plan for retirement.
- Utilize IRAs for retirement savings with tax advantages. –
IRAs provide you with large tax breaks much in the same way that 401(k)s can. They offer two different types of tax breaks, one which provides growth that is tax deferred, and one that provides tax free growth but doesn’t allow for deductible contributions the way that traditional IRAs can. Roth IRAs do not allow deductible contributions, which mean withdrawals do not require you to owe any taxes in the way that traditional IRAs do.
- Make wise asset allocation moves. –
This means that your portfolio should be divided between stocks and bonds in a wise manner so that you can make a strong and powerful impact on any of the long term investment returns that you have. Stocks are the best option for stable and long term methods of growth, while bonds work well both in the short term and long term. Still, you should not rely too heavily on bonds when planning for retirement. If you want to stretch your nest egg’s life out to the best of its capabilities, you absolutely must make tax efficient withdrawals.
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Originally posted 2008-11-14 05:57:29. Republished by Blog Post Promoter
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Tags: 401 k, amount of time, attainable goals, blueprint, contri, deductible contributions, how much money, income sources, lifestyle, man and woman, retirement expenses, retirement fund, retirement savings, roth iras, rules of thumb, Social Security, tax deductions, traditional iras, working man
Posted in 401K Retirement, Loanio, Money, Plan for Retirement, Savings, Smart Money Ideas | No Comments »
Wednesday, March 10th, 2010
Question -
Because of the credit crunch, is this a good time to consider borrowing against a 401(k) savings as a means of paying off other loans? My current 401(k) planning investment return is 5 percent, and the interest I will be paying on it is 9 percent.
To borrow or not borrow against a 401K.
Answer -
If you only really consider the numbers in the situation, taking out a loan against your 401(k) in order to pay off a high interest credit card or some other higher interest debt may seem like a no brainer decision. This is because you would be paying yourself back the interest by paying back a 401(k) loan, but with credit card debt or a high interest loan you would be paying as much as 15 percent or more straight to the bank. Plus in today’s market, the 9 percent that you speak of is more than you would make if you were just keeping the money to sit in your account.
With that said, however, most 401k planning experts would shudder at the mere idea of raiding tomorrow’s intended nest egg to fund the financial indiscretions of today. This kind of thing may work out in terms of pure numbers, experts will gladly agree, but that does not make this a good idea, or even one worth putting consideration into. Financial planners generally agree that there are a number of concerns to touch on before you ever make a decision as large as this one, for example:
What if you leave your company?
If you leave your company for any reason at all, you generally only have 30 days to pay back the entire loan in full; otherwise you will have to pay ordinary income taxes on the withdrawal along with a 10-percent IRS penalty, assuming you are under the age of 59 and a half.
The bottom line here is that this is a pretty foolish move in most if not all situations, even if you are desperate to pay off a high interest credit card or some other high interest debt that has been accrued. If you are likely to rack up more debt in the process, have concerns relating to job security, or are paying off loans that are tax deductible or low interest, then this is definitely a foolish way to go. On the other hand, there are scenarios where this could allow you to come out financially ahead, but they tend to be few and far between. If you’re not sure, then it would be wise to sit down with an investment advisor or financial advisor who can help you weigh your options.
Before you take out any loan you should sit down with an expert that can help you review your choices. You just may discover that there is a better, less risky and less costly option that you have not yet explored for this particular situation.
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Originally posted 2008-11-10 20:58:13. Republished by Blog Post Promoter
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Tags: 401 k, bottom line, brainer, credit card debt, credit crunch, financial planners, foolish move, good time, high interest, income taxes, indiscretions, interest credit card, interest debt, interest loan, investment return, irs penalty, job security, nest egg, s market, straight to the bank
Posted in 401K Retirement, Career, Loanio, Money, Plan for Retirement | No Comments »
Friday, March 5th, 2010
Most people have questions when it comes to 401k planning and retirement. These people often wonder what 401k planning is, how 401k planning works, and how a dwindling balance can be revived. 401k plans can be complex, but they can also be quite easy to understand with a little bit of preparation.
What is 401k Planning?
A 401k is a retirement plan sponsored by an employer. Employees can contribute some of their income to their plan before taxes. The maximum amount of the contribution can be limited by the plan or by the federal government. Once the employee goes into retirement, their distribution is going to depend on how much the plan has grown over time. Because of this, employees should choose their investment choices carefully. Once they begin to take distributions, the withdrawals will be taxed. If the money is withdrawn before the employee reaches the age of 59 and a half, then there will be a withdrawal penalty.
Plan for your retirement.
How does 401k Planning Work?
If a company does offer a 401k retirement plan, then the employee usually has some option to select their investment funds based on a list provided by the 401k planning company. The employee’s contribution is going to be deducted automatically from the employee’s paycheck before taxes are taken out. Each employee is allowed to contribute up to a certain percentage, and some employers will match this percentage. The contributions that are made along with matching funds are invested into the employee’s funds. Sometimes loans can be drawn out of 401k plans, and some hardship withdrawals are also permitted. There is also a vesting period where an employee must be employed for a defined number of years before the money in their account is actually their own.
How is a declining balance repaired in 401k planning?
The first thing that you should do in order to address a declining balance is to look more closely at the investment mix that you are working with. If you invest too heavily in company stock, this can cause significant problems if the company ever faces financial troubles. Contributions should be adjusted in order to make the most out of contribution limitations, and the maximum tax deferred contribution should be made whenever possible. At the very least when this is not possible, employees should contribute enough to gain matching funds from the company.
How can a 401k portfolio be best balanced?
Balancing your 401k planning portfolio is important because it shows you whether or not your investments are on track with your game plan for retirement. If you are wondering whether or not you need to rebalance, it may be time to consider your goals, your risk tolerance and any other concerns that you have alongside a financial advisor. Some of the things that will dictate the next steps in your 401k planning process include age and how close you are to retirement. Your 401k planning process will involve investments for growth and investments for income.
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Originally posted 2008-11-05 05:09:37. Republished by Blog Post Promoter
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To Borrow or Not to Borrow against a 401K Question - Because of the credit crunch, is this a good time to consider borrowing against a 401(k) savings as a means of paying off other loans? My current 401(k) planning investment return is 5 percent, and the interest I will be paying on it is 9 percent. [/caption] Answer...... -
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Tags: 401k retirement plan, company stock, distributions, federal government, hardship withdrawals, investment choices, investment funds, investment mix, little bit, loans, matching funds, Money, paycheck, planning company, vesting period, withdrawal penalty
Posted in 401K Retirement, Loanio, Money, Personal Finance, Plan for Retirement | No Comments »
Thursday, January 14th, 2010
Start saving now!
Don’t you think that every working man and working woman is entitled to enjoying a secure and comfortable retirement once they are no longer working? Due to the fact that we have taken so many strides in health care and in medicine, many people are living longer and healthier lives, which translates to many people having longer periods of retirement. In other to attain the goal of having a secure and comfortable retirement, it is vital that we plan for retirement wisely by beginning with a solid blueprint for success.
* Save early, and save often.
The sooner you begin to save money, the longer your funds will have to grow in preparation. Putting compounding to use for you is one of the best possible ways that you can build your wealth, because the gains that you make with every new year will be added to the gains that you make with every previous year.
* Set goals that are realistic.
Rather than relying on rules of thumb to project your future retirement expenses. If your expenses are based upon your needs, you need to set realistic goals rather than simply assuming. Formulate how much money you will need based on the type of lifestyle that you intend to lead, and keep your potential future income in mind.
* Save up for retirement using a 401(k).
Why? Because making a contribution to this type of account will provide you with immediate tax deductions, employer matched contributions and even tax deferments on your retirement savings growth. This is excellent advice for anyone who is wondering “how do I plan for retirement?” without a clear cut plan.
* Another example of a way to invest for your future is IRAS.
IRAS provide large tax breaks like 401(k) accounts do, offering you an excellent level of tax advantaged aid. There are traditional IRAs with tax deferred investing, and Roth IRAs where there is tax free growth but no deductible contribution capabilities.
* Allocate your assets wisely rather than investing too largely into one investment over another.
Spread your portfolio out, and enjoy numerous types of investments rather than just relying on 401(k), or IRAs, or savings. For example, for stable long term growth in your investment portfolio, stocks may be one of the best options that you can choose to invest in. If you are looking for high returns over a long period of time, which is ideal for retirement saving, then stocks are an excellent choice for you to consider.
* Do not rely to heavily on bonds.
When you are saving for retirement, bonds should not be your primary source of investment because they are not as tax efficient as other investment vehicles when saving and investing for retirement.
* Having a part time job once you are retired may be a good bet.
It will continue to put money into your savings even after you have retired.
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Originally posted 2009-01-16 05:39:03. Republished by Blog Post Promoter
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Tags: assets, blueprint, capabilities, deductible contribution, deferments, health care, new year, periods, previous year, realistic goals, retirement expenses, retirement savings, roth iras, rules of thumb, set goals, strides, tax deductions, traditional iras, working man, working woman
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Wednesday, January 6th, 2010
If you are young, and you are just beginning a career, then the idea of retirement planning may seem so very far off that it is probably the last thing on your mind right now. But if you are on the other side of the fence, and retirement is approaching faster than you can handle, then you may be trying to figure out what you can do to handle it. Regardless of which situation you are in, it is absolutely vital that you begin to prepare right now. There are so many forces that are working against you financially, and for this reason, it is vital that you begin to plan now, and you do not stop saving for retirement until long after you retire.
Do you have a 401K Plan?
The first thing to look into is whether or not your current place of employment offers a retirement plan. In the past, the only type of retirement plan was a pension plan, and pension plans were a sturdy and solid part of the everyday retirement planning process. However, because the economy is turning into a completely new beast all together, these older and more reliable pension plans are quickly and unfortunately becoming a thing of the past.
To replace the pension plans of days old, most companies are now offering a retirement savings and investment plan known as a 401k retirement plan. A 401k retirement plan is a powerful way that you can invest for your retirement over a long period of time. They usually involve investing in a number of different mutual funds as well as in company stock. When making your selection of investments, it is really important that you know how to practice diversification, meaning that you should not invest too much into one thing but instead should spread your investments out across multiple investment vehicles, like stocks, IRAs, 401ks, bonds and mutual funds. You want to make sure that your investments fall within your company and outside of the company you work for as well, because things can go bad no matter how well you think they’re going within the walls of the company you work for.
If your employer does not offer a 401k retirement investment plan, then it truly is more important than ever that you take a proactive approach to the concept of investing and saving for retirement. You are going to want to have an IRA set up, either a Roth IRA or a Traditional IRA depending on how you want to handle the taxes, withdrawals and investments.
The most important step to take when it comes to retirement planning is simply to make sure that you have a plan that you can stick to. The earlier you begin to take action when it comes to your retirement plan, the more you will be able to prepare and plan before it gets to be too late.
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Originally posted 2009-01-08 05:03:27. Republished by Blog Post Promoter
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Tags: 401k retirement plan, beast, Bonds, company stock, current place, diversification, investment plan, investment vehicles, Investments, iras, mutual funds, pension plan, pension plans, period of time, place of employment, retirement planning, retirement savings, saving for retirement, side of the fence, Stocks
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Thursday, December 31st, 2009
Plan for Retirement Now!
If you are young and just beginning a career, then the concept of retirement planning may seem so far away that it is the last thing that you put any consideration into. However if you are on the opposite end of the fence and retirement is just around the corner, then you may find yourself struggling to figure out how to keep things handled. Regardless of what your unique situation currently is, it is an absolute must that you begin to prepare for your retirement now if you have not done so already. Considering everything that is going on right now, like gas price fluctuations, fears of recession and the instability of Social Security, planning for retirement is simply not what it used to be. You need to invest, plan and save for your retirement these days rather than simply saving and hoping for the best.
First of all, your place of employment may be able to offer a retirement plan or 401k plan, but this is not always the case. Back in the day, 401k planning was known as pension planning, and it was a vital and solid part of the retirement planning process. However, as the economy turns into an economy that is more competitive than ever, these older and more reliable retirement plans are becoming a thing of the past. Still, 401k planning can be absolutely vital, and most employers do offer 401k planning support to their employees.
401k planning is a vital and powerful way for you to invest for your retirement over a period of time. 401k planning usually allows for you to invest in a number of different company stocks and mutual funds. When making your selection for investments, it is important that you learn how to practice diversification, which means spreading your investments out into different asset classes. Most importantly, it’s important for you to learn from others mistakes. Do not put all of your retirement funds into the company’s stock, for example. No matter how solid you think the company is that you are working for, things can go wrong, and you can lose your retirement plan when you lose your job if you’re not careful.
Now, if your employer does not have a 401k planning process, then it is more important than ever for you to take a proactive approach to retirement planning. You can set up an IRA or Individual Retirement Account, which is an excellent way for you to kick start the retirement planning process when you do not immediately have 401k planning options available to you. Traditional IRA accounts allow you to deduct your contributions so that you can take advantage of growth with taxes deferred until retirement. Roth IRAs work differently, in that they are not deductible when you contribute, but when you go into retirement they will be completely tax free.
401k planning is an important part of preparing yourself for retirement, so take it seriously and do not wait. The sooner you begin planning for your retirement, the better off you will be.
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Originally posted 2009-01-02 05:53:44. Republished by Blog Post Promoter
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Understanding Investment Returns for Retirement Planning One of the problems that many investors have (and that I used to have) is how to interpret and practically apply investment return data published by the mutual fund companies. I frequently read statements made by uninformed investors about historical annual rates of return that cause them to be over-confident......
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Monday, December 28th, 2009
Thinking about retirement?
If you are serious about getting the most out of your retirement, then it is absolutely vital that you begin the planning process now. When you begin putting together your plan for retirement, you should make sure to include the following:
- First you should sit down and take inventory of your finances.
You absolutely must know where you are financially, as well as where you would like to be and what it is going to take to get you there. If you are deep in debt right now, then the chances are that you are not prepared for retirement. Your retirement plan is going to have to keep in mind that you will need around 70% to 90% of your current level of income in order to maintain your current standard of living.
- Now you need to sit down and focus on what your retirement goals are. What does retirement really mean to you?
For some people, retirement is all about sitting on the porch all day and watching the grandchildren play. For others, retirement is all about traveling to see the entire world. These types of retirements are going to involve considerable expenses. For other still, retirement means a balance between these two things. The more you know about what you want out of your retirement, the easier it will become to make your retirement plan.
- If you want to enjoy retirement in the future, then you need to lead a healthy lifestyle now.
Lose those extra pounds, get rid of the cigarettes and get yourself healthy. If you are not healthy when you retire, then good living habits and frugal spending will mean nothing. If your employer offers a retirement plan, make sure you have an explanation of this plan so you can figure out whether or not you can contribute to it, and whether or not your employer will provide matching funds.
- Speak with your loved ones about your retirement plans.
If your spouse has a retirement plan, find out more about it. Are you entitled to receiving any benefits as the spouse? Make sure that you understand waivers and consent forms that you my need to sign.
- Another good idea to consider is to open an IRA.
Almost all Americans can open up an IRA account if they have earned income of any type. An IRA can either be a traditional IRA or a Roth IRA. Your bank will be able to tell you how to open up an IRA account. Once opened, you should contribute the maximum possible amount to your IRA every year.
If you are near your retirement age, then you really need to spend more time discussing your retirement plans with your spouse. You may have completely different plans, and some kind of compromise may need to be made. Your family needs to have a good idea not only of your retirement plan but also what other long term goals you have that may affect them.
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Originally posted 2008-12-30 05:03:51. Republished by Blog Post Promoter
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Tags: cigarettes, consent forms, entire world, grandchildren, healthy lifestyle, matching funds, retirement goals, retirement plan, retirement plans, retirements, sitting on the porch, waivers
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Thursday, December 3rd, 2009
One of the most common questions people have is how do I plan for retirement? Whether you’re looking at retiring in five years or thirty five, it is important to come up with a plan that will provide you with more than enough to live comfortably. It is no longer sufficient to rely on social security to make ends meet once you are no longer working and it’s time to get proactive about securing your future. Here are some answers to the question, how do I plan for retirement?
Plan for your nest egg.
1. How do I plan for retirement in five years?
If you have nothing saved away at this point, planning for retirement is not going to be an easy task but it can be done. Depending on your financial situation and the amount of your paycheck, this is the time to start thinking about putting a significant portion of your earnings into savings. Although many are tempted to get into a high risk situation in order to make more money quickly, this is usually a bad scenario.
When you need to plan for retirement quickly, the best option is to speak with a financial adviser that can assist you in developing a portfolio of investments that will begin returning right away, as well as in the future. This is the safest means of getting your finances in order in a short period of time.
2. How do I plan for retirement in fifteen years?
This gives you a little more leeway, but it doesn’t mean that you should put off saving money and setting up alternative income streams right now. With fifteen years before retirement, you’ll need to take a hard look at how much you can save each year and whether or not it is possible to increase that amount, either through getting paid more money at your current job, or finding news ways to make more income.
At this stage, investment properties and stocks that have a solid history of returns are an excellent idea for many people. However, you should consult with a financial adviser to get a better idea of where you stand and how much time you have to start putting money aside. They can help you develop goals and stick to a plan to make sure your retirement will be worry free.
3. How do I plan for retirement in twenty five years?
At this point in many people’s lives, retirement is far enough away that it isn’t a real worry. However, this is the ideal time, or even before this point, to start saving money seriously and developing a long term plan to secure your financial future. Keep in mind that the cost of living will go up each year, and that your money today may not be worth the same amount in twenty five years.
This period of time should be spent developing a solid portfolio, multiple streams of income and a reliable savings plan that will help you get prepared for any eventuality.
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Originally posted 2008-12-05 05:02:33. Republished by Blog Post Promoter
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Tags: alternative income streams, developing a portfolio, earnings, fifteen years, financial situation, finding news, getting your finances, high risk, investment properties, leeway, paycheck, period of time, proactive, retirement, risk situation, saving money, short period, Social Security, stage investment
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