Can I Afford to Retire Now?

Hello-

This is a question plaguing most baby boomers today.  For those on the cusp of retiring, statistics show they plan on working longer.  For those who have decided to retire, the decision may carry long-term consequences.

If you have a 401K plan, the maximum annual contribution you can make in 2009 is $16,500.  However, if you are over the age of 50 you can contribute a total of $22,000.

If you have an IRA, you can contribute up to $5,000, and for individuals 50 years or older, another $1000 can be added.

The problem with retiring now is that since the market downturn, many people lost a hefty sum of money from their 401K.  So the question is:  How much do you currently have available in your 401K and can you live on the pension and retirement funds during this recession?

The only way to determine this is to go over your financial accounts to assess how much is available and how much you will need to live comfortably.  If you find that you cannot afford retirement now, you may need to postpone it for two to three years.  Since we know that this recession may last well past 2009, it would be a prudent step in your favor to wait.

In addition, if you decide to retire at 62 years of age you can delay receipt of the Social Security benefits until you reach age 66.  Why is this important?  The full benefit at age 66 is approximately $1900.  However, if you decide to collect earlier you can lose $500 per month.

Also consider that if you postpone collecting Social Security, there is an 8% credit for each year you do not receive a check up to the age of 70.  The benefit at age 70 would be approximately $2500.  Therefore, the difference between collecting benefits at age 66 and 70 is $1000 a month.

Yes, there is a lot to consider before taking that last step to retirement.  For one woman who retired at age 57, the loss of pension income was significant.  Moreover, her 401K is far less than what it would have been if she had worked an additional three to four years.

Before you decide to retire, make sure that you have enough money saved to see you through this recession and beyond.  If not, you may find that retirement is not at all what you had envisaged.  In fact, you may have to find another job after retirement just to supplement your pension.

These are difficult times.  Weigh all the factors; think it through carefully and soberly before you sign on the dotted line.

-Adam

Calculate your retirement income needs

Hello-

While you can calculate your retirement on your own, the best way to obtain an accurate forecast is to seek the services of a financial planner.

A financial planner can be objective about your finances.  He or she can advise you as to the approximate amount of your pension based on the contributions you have made over the years.

Moreover, they will probably advise you to begin contributing the maximum amount of pension contributions the closer you get to retirement age.  This is significant because it can boost your pension earnings more than you know.

In order to receive the best advice, you have to do a little calculating of your own.  The planner may ask when you plan to retire, whether you plan to move to another state, travel, pursue higher education, and what type of lifestyle you hope to maintain.

You also have to take into account your healthcare expenses.  For example, a city worker may have a healthcare plan such as Blue Cross/Blue Shield and GHI (Group Health Incorporated).  This type of insurance is worth approximately $12,000 a year and is a necessary component that can alleviate expenses resulting from ill health.

If you would like to calculate how much you will need for retirement, there are many online calculators you can use.  One is located at: How much you need to retire calculator

You simply enter your current annual income, 70% post-retirement income, expected annual pension, expected annual Social Security payment, current age, age at which you will retire, and life expectancy.  Note these are approximate figures.  The figure of 70% is the amount of your income that one would need to retire comfortably.

Once the calculations are made, you can then proceed to increase your pension contribution, if applicable, and/or begin a savings program outlined by your financial planner that will yield a high rate of interest and allow you to retire knowing there will always be money available to you.

If you are years away from retirement, calculating your pension income now will give you a clear and concise measure of what to expect.  Here is an example of an individual who did not plan well for retirement.  A man retired at age 57.  He contributed less than 10% to his pension and the result is that he now receives under $1000 a month.  Although he did consult a financial planner, the pressure of the job was such that he had to retire early for health reasons.  He is currently working full-time in another position.

Thanks,

Adam

Save more money for your retirement in 2008

Hello-

Re: Saving money for retirement

It’s never too late to start saving money for your retirement. The sooner the better though. The earlier you start saving the earlier you get to start enjoying the benefits of compound interest. As 2007 comes to a close and 2008 jumps out at us, start making your New Year’s resolutions that will benefit you for many years to come – especially in your retirement.

If you have not started investing in your company’s 401k plan, do so now. Make an appointment with your HR manager to get you the paperwork you need to start automatically investing in your 401k. If your company offers a matching contribution of whatever you put in then make sure you invest the maximum amount they match. If they match 3%, at a minimum you should put in 3%. If they match 6%, then you must at least invest this amount. You are literally giving away free money with each passing paycheck if you do not take advantage of the company’s 401k matching program.

Using the company’s 401k match can mean the difference in you eating at McDonald’s in your retirement or eating at Chris Madrid’s in your retirement. Those burgers are awesome. If you’re not familiar with Chris Madrid’s, if you’re ever in San Antonio check them out. Great burgers.

Anyways, back to my point. You can save a lot of money effortlessly for your retirement by just investing in your company’s 401k so do it as soon as possible.

If you’re already enrolled then think about increasing your contribution by a percentage point or two. Then once you max out your 401k, it’s time to start thinking about an IRA. They can automatically withdraw this from your paycheck and put it into an IRA and invest it in stocks and bonds of your choosing.

Don’t forget about long term care and life insurance. Millions of people will need long term care as they get older. The earlier you buy it, the cheaper it will be for you. And you do not need to be rich to invest in long term care insurance.

Another thing to keep track of is your Social Security benefits statements. You should get these every couple years and they indicate approximately how much you should expect when you begin to withdraw from Social Security. Make sure the incomes reported on these are the same as what you actually make. You want to make sure, your full income gets reported so you get the full benefit of Social Security you’re eligible for.

One last thing is to look for opportunities to make more money so you can save faster and possibly even retire sooner. There’s nothing like the feeling of being able to retire early. You should do it just for the looks your coworkers will give you. :o)

Keep these tips in mind as you start planning your goals for 2008 and for your future retirement.

Here’s to a healthy, happy, and prosperous New Year!

-Adam

Free Retirement Planning Tips

How to Save Money for Retirement

Saving money for retirement can be easy or difficult depending on your current salary. If you are like 75 percent of the American population, earning just enough money in your current job to meet your monthly bills, then it’s time to do some serious thinking on how you are going to live when you retire.

Social Security isn’t going to meet all your monthly payments. That is, if Social Security, or some revised form of it, still exists when your day of retirement arrives.

Here are some tips on how to save today for your future. No matter how little, or how much, you earn today.

Estimate how much you must save to give you the income you know is necessary for you to retire in comfort.

Experts suggest that you will need an income equaling about 75 percent of your current take home pay. Be sure to estimate a rise in inflation which has historically been about 5.3 percent per year.

Figure out how much of your current salary will need have to save each year to achieve your retirement goal by counting backward from the year you plan to retire to see how many years you have before retirement. Include the possibility of being on a fixed income for as long as 20 or 30 years. Depending on how many years you have until retirement a U.S. Treasury bond that guarantees six percent interest might be considered, while stocks might have the potential for a much higher return, but has a much higher risk of loss.

A financial planner, stockbroker, or an accountant, can offer guidance, expertise and access to knowledge about almost any type of investment or retirement planning concerns.

Spread your money out over a variety of investments. Some will prosper while others may fail.

Set up an automatic draft from your bank account from your paycheck so that a portion of your income goes directly into your retirement funds. Pay off major debts, such as home mortgages, college loans and other significant cash-flow drains, as quickly as you can.

For more information visit: http://www.apluswriting.net/finance/retire.htm

Diversify your 401k

Golden rule #5 for your 401k: Diversify

Diversify. Diversify. Diversify.

Financial experts agree that the best way to hedge against risk is to diversify so that you own a variety of stocks and bonds. That means paying attention to funds, and company stock that may be in your plan.

“Asset allocation is the most important thing,” says Dick Bellmer, chairman of National Association of Personal Financial Advisors.

That’s a message more employees need to take to heart. These days, plans boast on average 19 funds, according to PSCA. But that doesn’t mean workers are necessarily spreading their risk. According to Hewitt Associates, workers generally invest 401(k)s in four asset classes, half the number that are typically available through their program.

One easy way to ensure that your investments are diversified is by investing in lifestyle funds, which automatically adjust holdings depending on age and retirement goals. Planners recommend them as a great way to get started, especially for younger workers who need help picking investments. However, as you approach retirement, you’ll need to tailor your investments to your personal goals.

“They take the decisions out of your hands, so pick one of those. Find one that feels right in terms of your risk tolerance and age and then it’s more or less a no-brainer,” says David Foster.

Meanwhile, tread lightly if your company contributes matching funds exclusively in their stock, or if your shares have gone up. Those investments could quickly make up a good chunk of your 401(k) balance. And if that’s the case you’re at greater risk of watching your savings evaporate, should that single stock drop in value. So what’s the ideal limit? “Personally, I like to see no more than 5 percent,” says Bellmer.

Many workers need to take this limit to heart. On average, company stock makes up 24 percent of 401(k) balances, according to PSCA. If you want to rebalance your shares, there’s good news. It’s becoming easier to diversify. Employers may make you wait a certain period of time to do so, but 46 percent of plans that make matching contributions exclusively in company stock let employees diversify those shares at any time. That’s up from the 15 percent who did so back in 2001, according to Hewitt.

Read the other 9 rules below:
10 golden rules for your 401(k) (Bankrate.com via Yahoo! Finance)

Follow these rules for wise investing of your 401.

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Make ideal retirement meet reality

Getting to the ideal retirement
The ideal retirement: After a lifetime of hard work – raising the kids, sweating out the bills, and building a stable and secure life – you and your spouse will be able to enjoy your golden years doing the things you’ve always dreamed about.
The reality of retirement: It probably will be years of fun and leisure, but retirement can also be a time of financial difficulties, compounded by possible illness and loneliness.
It’s prudent to prepare for the worst while hoping for the best.  That’s why couples need to arrange for their retirement security as early as possible.  Much of this preparation has to do with recognizing the need to “save money ahead” to fund a comfortable retirement.
t Life as a healthy, retired couple.
This is the ideal, the retirement dream that most couples envision.  If they’ve planned well, they’ll have the money to do everything they’ve dreamed about doing.  Unfortunately, “dreaming” is about as far as retirement planning goes for many people.  As our life expectancy increases, so does the possibility that one partner becomes the caregiver.  Without adequate medical and long-term care insurance, the financial strain can be devastating.

t One partner dies, possibly leaving the survivor in a financially threatened position, unless proper plans have been made.  When the two of you consider retirement, also consider these financial aspects.  Draft a will with your attorney and keep it current.  It’s the starting point for all retirement planning.

Take time to map out a retirement game plan together.
Identify common goals and determine the methods for achieving them.
Make sure both of you know where all the financial records are and how to access them.
Know the benefits of your pension plan and Social Security.
Then begin to build up a supplemental fund of your own.
Take charge of your own retirement – a large portion of retirement funds may need to come from personal savings.
A will can only go so far.
Estate taxes may erode a substantial part of your lifetime legacy.
It’s important to develop relationships with professionals in several areas – legal, tax, insurance, and financial.
These are the people who can help you map out and fund your retirement plan.

The ideal and reality of retirement sometimes don’t meet (Half Moon Bay Review)

The ideal retirement: After a lifetime of hard work – raising the kids, sweating out the bills, and building a stable and secure life – you and your spouse will be able to enjoy your golden years doing the things you’ve always dreamed about.

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How to buy your dream home in your retirement paradise

Buy your dream home in your retirement paradise

Who hasn’t fantasized about escaping their cubicle and catching the
next plane to someplace warm and tropical to start a new life in
paradise? For most people it sounds like an impossible dream. To help
these people make their dream a reality, Santa Fe Films is pleased to
announce “Home:World,” a new video series designed to help viewers find
top-notch and affordable real estate in some of the world’s most
beautiful countries.
The first two episodes of the Home:World series, available now at www.HomeWorldOnline.com,
combine the best of travel, lifestyle, and real estate programming to
offer viewers the inside scoop for the best places to buy their dream
home abroad, all for up to 90% less than in their own countries.
With over 1 million US citizens living in Mexico, and with over 20%
of baby boomers in the UK reporting that they plan to move abroad after
they retire, the migration of people to other countries is set to
skyrocket. “I spent years dreaming about living overseas,” says Sasha
Owen, Executive Producer of the series, “and I found several websites,
ebooks, and real estate brochures, but I couldn’t find videos that
could show me what these countries were really like. That’s when I
conceived the idea for Home:World.”
Starring popular British presenter Howard Stableford, from the BBC’s
flagship technology program “Tomorrow’s World,” the first two episodes
focus on two very different countries in Central America: Panama and
Nicaragua.
“We created ‘Home:World’ and our web site, www.HomeWorldOnline.com
to be entertaining and informative tools to help people research living
abroad,” says Owen. “To that end we interview expats, real estate
professionals, and government officials to find out what it really
takes to buy property in each country. And online we have additional
‘video postcards’ to share about each country we spotlight.”
In 2007, the series will explore additional Latin American
countries, including Mexico, Costa Rica, Belize, the Dominican
Republic, Columbia, Guatemala, Uruguay, Argentina, and Brazil.

Santa Fe Films Releases New Video Series to Help People Buy Their Dream Homes in Paradise (PRWeb via Yahoo! News)

The first two episodes of the Home:World series, available now at www.HomeWorldOnline.com, combine the best of travel, lifestyle, and real estate programming to offer viewers the inside scoop for the best places to buy their dream home abroad, all for up to 90% less than in their own countries.

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Earn retirement income with your own Ebay specialty store

Hello-

If you’re like most retirees you are going to be worried about not having enough money saved up for retirement.

Also, if you’re like retirees you’ll want to do some work you love now that you’ve retired from your job that you may or may not have liked very much.

Here’s a solution to help you earn more money doing something you are passionate about.

Do you love antique lamps? Or how about building model ships? It doesn’t matter, you can earn more with your own ebay specialty store like thousands of other people are doing every day.

You have a choice of over 28,926 different specialty markets to choose with your own ebay website. If you want to create a golf website you choose golf, an antiques website then you choose antiques, and so on.

The software provided to you makes it very easy to build your first very own money making website. You can be up and running before the end of the day with your own ebay specialty website. You can supplement your fixed retirement income doing something you enjoy.

You will be able to see a live demo of your new website before you have to buy anything  which will give you a much clearer picture of how Build A Niche Store works and what it is going to enable you to do.

Click here to supplement your retirement income with your own specialty ebay store

-Adam

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Earn more money before you retire

Hello-

If your retirement funds are lacking and you haven’t saved up enough to fully retire, you may need to take on a second job to supplement your income.

How would you like to get paid to use your digital camera? You can take a picture right? You always like to travel and take hundreds of pictures. I know I do. How would you like to get paid for doing that now?

There is a photography business that you can work from home and earn up to $300 a day just taking pictures and uploading them to websites. You won’t be alone either. There are over 18,000 people who have taken advantage of this and started to make a full time income working from home just taking pictures.

How would you like to retire earlier instead of later. This may be your chance.

Click here to learn more about how you can get paid to use your digital camera

To your success,

-Adam

Get Paid To Use Your Digital Camera!

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Yahoo launches personal finance site – tools to manage your budget, retirement, college, and more

Yahoo is banking that Internet users want online tools to manage their budgets, retirement, college plans, taxes, debts, investments and more personal finance matters.
Internet giant Yahoo has offered information and services aimed at investors for years, but now the taken the wraps off its new Yahoo Personal Finance Web site, aiming to provide everyday users with online financial tools and information to help them better manage many aspects of their money and investments.
Rather than attempting to offer an online ledger application, in which users would directly monitor accounts and transactions, Yahoo Personal Finance aims to provide a wealth of information, advice, guides, calculators, and other tools designed to help users get a hand on their money without getting into risky privacy territory.
“The goal of Yahoo Finance has always been to help our users make informed financial decisions, and now we’re able to do that across every aspect of their financial lives,” said Peggy White, Yahoo Finance’s general manager, in a statement.
“Not all of our users manage an investment portfolio, but we all manage a checkbook.
This presents a huge opportunity for Yahoo Finance to expand beyond our core investing-focused offerings.”
Features in Yahoo Personal Finance include more than five dozen calculators designed to help users get a handle on common scenarios like retirement planning and loan payments, as well as advice and guides covering topics from college planning, having children, tax planning, insurance, real estate, and more.
Yahoo Personal Finance has partnered with twenty-five content providers (including CNNMoney.com, Consumer Reports, The Motley Fool, Smart Money, and The Wall Street Journal) to provide top-notch material, and will also carry exclusive advice columns from thirteen financial exports, including a career advice column The Brazen Careerist by Penelope Trunk.
Of course, Yahoo wouldn’t be Yahoo if it didn’t tout the online advertising opportunities afforded by a personal finance site.
Their message to advertisers: if you want to reach consumers as they’re making important life decisions, buy an ad on Yahoo Personal Finance!

Yahoo Launches Personal Finance Site (DesignTechnica)

Yahoo is banking that Internet users want online tools to manage their budgets, retirement, college plans, taxes, debts, investments and more personal finance matters.

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