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Best New Retirement-Planning Tools

Wed, 22 Jun 2011 16:00:22 +0000

By Glenn Ruffenach

Three new financial tools, all released in the past few months, can help you with filing for Social Security, tapping your nest egg and finding a financial adviser.

Analyzenow.com has long been a valuable website for people looking for help with retirement finances. Started and run by Henry “Bud” Hebeler, a former top executive at Boeing co. and author of “Getting Started in a Financially Secure Retirement,” the site has introduced a free calculator called “Social Security Planner.” The tool shows you how various “claiming strategies” – including the ages at which you and your spouse begin collecting benefits from Uncle Sam – can affect the long-term health of your nest egg. (As Hebeler notes, “You do not want to run out of money before you run out of life.”)

The “look” of the tool takes some getting used to; the text is tightly packaged. but if you give it some time, this calculator does a very nice job of simplifying what is normally some terribly complicated math.

Next up: Fidelity Investments’ “Income Strategy Evaluator.” This free tool, which is designed primarily for people nearing or living in retirement, shows users how different investment strategies and portfolios – stocks, cash, annuities and bond ladders, among others – can generate a paycheck in later life. You also can see how inflation, taxes and medical costs could affect your savings.

One caveat: You don’t have to be Fidelity customer to use the tool, but you need to sign in as a “Fidelity member.” (As such, you’ll need to provide a name and email address.) Visit this site to do so.

Finally, check out BrightScope inc.’s new “Advisor Pages,” a nationwide directory of financial counselors. The company, based in San Diego, is best known for its evaluations of employers’ retirement offerings – more than 55,000 401(k) plans covering some 30 million workers. The new service takes much the same approach – mining hard-to-access public records – to help investors search for financial help in their backyards.

Among the data available: advisors’ qualifications, the assets they have under management, areas of specialty and legal disputes.

With a combined income of $225,000 and a nest egg of $330,000, Rick and Amy Mendez, 41 and 43, seem like they are in good financial shape. but a closer look reveals that they’re lacking something crucial: emergency savings.

Build that emergency fund

Reclaiming Your Nest Egg, And Why Investing Is Like Driving A Car

Wed, 25 May 2011 14:00:12 +0000

About Me

I am a reporter for Forbes in Intelligent Investing. I write about investing, personal finance, markets, news, music and whatever else falls through the cracks. As part of my job with II, I have the privilege of interviewing some of the greatest minds in investing, business and politics. keep an eye on this space to see what guests are sitting down with Steve Forbes, suggest questions you’d like to hear answered, and keep tabs on what today’s movers, shakers, and rock-solid veterans have to say.

See my profile »

More individuals are turning to Roth IRAs for retirement saving purposes as there are both positives that can be gained for investors and benefits after an individual retires that could be helpful when it comes meeting costs later in life. while Roth IRAs do have contribution limits, many men and women who used this retirement fund have done so as either a supplement to another form of retirement planning or they can contribute the maximum amount into the Roth IRA each year, more personally manage their retirement account, and build a decent nest egg for their financial needs after retirement.

As reports from sources like the Wall Street Journal have stated, “The retirement savings plans that many baby boomers thought would see them through old age are falling short in many cases,” there is concern as to whether young employees should begin not only saving for retirement but diversifying their retirement plans outside of traditional 401(k)s. This quote from the WSJ is in reference to 401(k) plans that have taken a hit over the past years and are simply not offering the financial security that many retirees need.

Yet, Roth IRAs are one form of retirement planning that has allowed many men and women the options they need to not only find more diversity when it comes to their income after retirement, but Roth IRAs do not require minimum distributions and, even if an investor works into their retirement years, income from earnings can be applied to this retirement account and, if left alone into one’s retirement years, could potentially draw more.

Also, one of the major benefits of a Roth IRA, which has spurred conversions over the past months and have led many to choose this route in terms of their financial planning for retirement, is the fact that earnings that an investor withdraws from their Roth IRA will be tax-free. Understandably, if an investor could build up a sizable sum in their Roth IRA account, they could leave these funds to build into their retirement years and, when they decide to begin taking payments, they will not owe taxes on these funds.

While, again, 401(k)s have been quite popular and one of the more used methods of retirement planning, using other forms of retirement savings can also be beneficial if one retirement fund is simply not enough to meet all of one’s costs after they have moved on from their job. there may be benefits for some employees who are later into their career but have decided to begin saving in a Roth IRA, but an article on Kiplinger.com states that, “The more you can take advantage of tax-advantaged retirement accounts, the easier it is to stretch your savings.” This may seem like common sense to some, but it’s yet another reason that many men and women who are early into their career or are in a position to begin investing in retirement accounts like a Roth IRA may want to consider this course of action as it could make their financial life during their retirement years much easier.

Roth IRAs For Retirement–Contribution Limits And Required Minimum …

How to Set a Retirement Savings Goal (US News & World Report)

Sun, 27 Feb 2011 23:00:17 +0000

If you are approaching retirement, you’ve probably played with a few online retirement calculators, interrogated your financial planner, and even crafted some retirement spreadsheets of your own. Even though you’ve done all your homework, you might still question whether you really do have enough money to retire. Here is how to determine if your nest egg is likely to last the rest of your life.

Start with the safest answer. for a traditional 30-year retirement, the safest approach is to follow the 4 percent rule. Figure out what your annual retirement spending will be and multiply that by 25. Let’s say you expect a comfortable retirement to run you about $50,000 a year. That means you’ll need a nest egg of $1.25 million ($50,000 x 25). each year, you’ll withdraw your inflation-adjusted budget from your retirement accounts. for example, if inflation is 3 percent the first year of retirement you’ll withdraw $51,500 in the second year. Historically, the 4 percent rule would have provided at least 30 years of retirement security, as long as you had invested no less than 50 percent of your retirement assets in stocks.

[See how Much Money will you Need to Retire?]

Refine your number. Don’t despair if the math comes up short. this was just the first step. consider any income you will earn from other sources, such as pensions and Social Security. Review your Social Security benefits statement. If it shows that you will earn $15,000 per year, instead of $50,000, you’ll now only need to withdraw $35,000 annually to cover your living expenses. this brings your target savings down from $1.25 million to $875,000.

Consider some adjustments. If you still don’t have the results you’re after, you may not have to resign yourself to working longer. If you are really eager to retire, consider getting creative with your retirement budget. maybe a city with a lower cost of living appeals to you. Perhaps you’d rather stay put, but not necessarily in the four-bedroom spread where you raised your kids. consider ditching yard work for a condo within walking distance of downtown or snag the chance to trade the hassles of home ownership for life as a renter. You’ll have to increase your budget for rent, but you’ll save on property taxes, insurance, and home maintenance costs. And all that equity from the sale of your house will top off your retirement reserves.

[See how to Retire in a Recession.]

Be a little flexible. If staying in your home is important to you, a reverse mortgage might serve to fill the potholes down the road. Working part-time or starting a little side-business might also do the trick. If your retirement budget includes a mortgage that will be paid off in a few years, you’ve just found a little more spare change in those cushions. There may be years that you find you don’t need the full 4 percent withdrawal, so don’t take it that year. If you can take a flexible approach, perhaps forgoing a trip every few years, you might be able to get away with a little less at the start.

[See Why Retirees Shouldn't Shun the Stock Market.]

Work backward. It’s hard to argue with the idea that more money is always better. but if you’ve tired of the save more and work longer chant, maybe it’s time to start asking how little you’ll need instead of how much. Contemplate a retirement budget that works with your existing resources: Divide your nest egg by 25, add in your other income sources, and see how far you are from your ideal budget. what tweaks would you be willing to make to get the numbers to work? you might find it’s worth a few concessions to swap your full-time job for a life of full-time play.

Sydney Lagier is a former certified public accountant. Since retiring in 2008 at the age of 44, she has been writing about the transition from productive member of society to gal of leisure at her blog, Retirement: A Full-Time Job.

How to Set a Retirement Savings Goal (US News & World Report)

Tips On How To Create A Nest Egg Meant For Your Retirement …

Thu, 06 Jan 2011 21:00:18 +0000

Retirement may perhaps be a long way off for you personally – or it might be right round the curve. regardless how near or far it can be, you have absolutely got to start saving for it now. still, saving for retirement isn’t what it was once with the rise in cost of living as well as the insecurity of social security. You have to invest for your retirement, vs saving for it!

Let’s open by taking a look at the retirement arrangement accessible by your corporation. once upon a time, these plans were quite positive. On the other hand, after the Enron distress and all that followed, people are not as protected of their business retirement plans to any more extent. In case you select never to create a nest egg in your corporation’s retirement plan, you do have other options.

Foremost, it is easy to have a nest egg in shares, bonds, mutual assets, certificates of deposit, and wealth market accounts. You would not have to state to any person how the proceeds on these investments are for use for retirement. just straightforwardly allow your funds increase overtime, when individual reserves reach their maturity, reinvest them and prolong to let your cash increase.

You may as well launch an Individual Retirement savings account (IRA). IRA’s are rather widespread because the currency will not be taxed until you withdraw the funds. You may also have the ability to subtract your IRA contributions from your taxes you owe. An IRA are usually opened at most financial institutions. a ROTH IRA is a new type of retirement bank account. Using a Roth, you pay taxes on the money that you’re investing in your bank account, however when you cash out, no federal taxes are owed. Roth IRA’s can also be opened at a bank.

An additional widespread type of retirement savings account is a 401(k). 401(k’s) are typically presented through your company, but you might be able to begin a 401(k) on your own. You should talk with a financial planner or accountant to assist you with this. the Keogh proposal is another type of IRA that has become correct for self employed consumers. Self-employed business owners may also be interested in Simplified Employee Pension Plans (SEP). this is now one more version of Keogh strategy that consumers normally find simple to administer than a regular Keogh proposal.

Whichever retirement investment you elect, just make sure you choose one! again, will not rely on social security, company retirement plans, including an inheritance that might or might not come through! Handle your financial future by investing in it now.

Now, you should look into 401k rollover advice for more information. You can find more tips and suggestions at 401k rollover school.

Tips On How To Create A Nest Egg Meant For Your Retirement …

Average Boomer Will Only Have $190 Per Month in Retirement – BV on …

Sat, 25 Dec 2010 15:00:18 +0000

10 Deadly Sins of Retirement

Retirement Wreckers to Avoid

Warning: make the wrong decisions in today’s treacherous economy, and it could kill the retirement of your dreams. it doesn’t matter if you’re 30 or 70, your nest egg is at risk, and the money moves you make now are critical. do you want to live on baked beans and boxed macaroni and cheese in your twilight years? We didn’t think so! So click through our gallery as the Dolans warn you about 10 deadly sins of retirement planning.

10 Deadly Sins of Retirement

Sin No. 1: not Getting started right Now

This may sound simple, but this is hands-down, the No. 1 deadly sin of retirement planning. if you haven’t started socking money away for retirement, do it now. not next month or next week or even tomorrow. NOW. just $100 a month will go a long way. in fact, thanks to the power of compounding, $100 a month at 8% annual interest will turn into $50,000 in just twenty years. $200 could, eventually, turn into almost $100,000! to see how fast your money could multiply, plug your numbers into our easy-to-use calculator.

10 Deadly Sins of Retirement

Sin No. 2: Passing Up Free Money

If your company still offers a 401(k) “matching” program to which it will contribute a certain percentage of whatever amount you contribute, we hope that you are taking full advantage of that match. otherwise, shame on you! This is free money! We’ve heard from some people who aren’t contributing to their 401(k) because they are scared of losing money in the market. We say “hogwash!” every dollar your employee contributes is pure profit! and no one said you have to invest your 401(k) in individual stocks or mutual funds. Review your plan choices to find an investment option that fits your comfort level.

10 Deadly Sins of Retirement

Sin No. 3: Putting All your Eggs in one Basket

Putting too much of your retirement nest egg in one basket is actually a common “sin.” You might love your employer’s stock, your favorite mutual fund or even a “safe” bank CD. But if something should happen to your company, your fund or your bank, you could be in deep trouble. We’ve heard heartbreaking stories from people who lost everything because they had all their money in their company stock when it plummeted. Diversity can help your nest egg grow consistently and safely.

10 Deadly Sins of Retirement

Sin No. 4: Underestimating How Much You Will Need

Now let’s talk about everyone’s worst fear — outliving your money! Many people completely underestimate how long they’ll live and how much they’ll need. your everyday expenses such as groceries, gas and even household utilities, likely won’t drop much, if at all, once you retire. Plus, other costs, such as medical care and long-term care — will go up. Don’t fall into this trap! Assume that you’ll need 100% of your current income in retirement to maintain your pre-retirement lifestyle. Many people use 70%–80% as a rule of thumb, but unless you plan to dramatically scale down your lifestyle in retirement, you really need to aim much higher (especially considering inflation).

10 Deadly Sins of Retirement

Sin No. 5: Raiding your Retirement Funds Early

Come on, do you want to have a carefree retirement, or not? Raiding your nest egg early is not going to enable that to happen. We don’t care if you need a new roof or that your child can’t get a scholarship. consider taking out a fixed rate home equity loan for the roof and have your child get a student loan for college. We know it sounds harsh, but the point is, do whatever you have to do to NOT touch that retirement account!

10 Deadly Sins of Retirement

Sin No. 6: Putting Retirement Savings last on the Priority List

How many people have you talked to in the last month who are putting off retirement because they have not saved enough money? Our answer is, “Too many.” We all have lots of personal financial obligations competing for our hard-earned dollars: paying off debt, buying a home or car, putting the kids through college. Don’t let today’s distractions derail your future personal financial well-being. make saving for your future a top priority.

10 Deadly Sins of Retirement

Sin No. 7: Retiring too Early

If you’ve saved “enough” by age 62, should you retire? not necessarily — especially if you’re healthy and can work a few more years to help make up for any investment losses you may have experienced lately. Plus, at 62, you’ll only get partial Social Security payments. Depending on what year you were born, you can collect full payments anywhere between age 65 and 67. See Social Security’s benefits page to calculate your optimum time to retire.

10 Deadly Sins of Retirement

Sin No. 8: Mis-Managing your Tax Advantaged Retirement Account

If you mis-manage your IRA or 401(k), your wallet (and future) will pay the price … and dearly! Here are a few critical rules that too many people break:

1.If you change jobs and you need to move your 401(k), you MUST move it into another 401k plan or another qualified account within sixty days from the withdrawal.
2. You can’t make a withdrawal on your IRA or 401(k) before the age of 59 ½ (though there are exceptions).
3. You MUST start making yearly withdrawals from an IRA or SEP when you reach 70 ½.

Break any of these rules, and you’ll be in for a boatload of extra taxes and/or penalty fees.

10 Deadly Sins of Retirement

Sin No. 9: not Having a plan … and Sticking to it!

The old saying is true — if you fail to plan, you plan to fail. without a plan, you can’t answer critical retirement planning questions such as: How much can you live on once you pick up your last paycheck? How much can you afford to sock away for retirement? more importantly, how much do you need to save? Surveys report that 59% of people who take the time to calculate how much they need to save, end up increasing the amount of money they are putting away!

10 Deadly Sins of Retirement

Average Boomer Will Only Have $190 Per Month in Retirement – BV on …

Portfolio Risk And The Near Retiree

Wed, 15 Dec 2010 19:00:09 +0000

Identifying and sticking to a manageable degree of portfolio risk can be problematic for the near-retiree with inadequate retirement funds, especially as he or she may be tempted to invest heavily in high-risk income sources for bigger yields or tend towards very conservative investments to safeguard what little money he or she has. when it comes to stocks, which are an essential growth-oriented investment necessary to any well-balanced portfolio, it is all about finding the right balance.

If you only have a small part of your overall portfolio invested in stocks (possibly because you avoided equities in the crisis two years ago), you can increase expected returns and accumulate a bigger nest egg by buying into more stocks. some advisors say that this move will also possibly increase the amounts of money you can withdraw per year when you retire.

Moderation is the key here.

Make sure that you do not invest too much of your money in stocks that you will lose a lot in a future market drop. Theoretically, getting involved in more investment risk may be sensible; although financial planners find that many investors do this and simultaneously think that they can take on more risk because of necessity. if you already have much stock, adding to these can be a disadvantage, at least the returns may fluctuate and become unpredictable, and effectively reduce the sustainable annual amount you can withdraw in retirement.

For an investor who is nearing retirement, investing heavily in individual securities can actually be an obstacle to accumulating enough funds due to the risk involved (these securities include shares in the company that employs you).

Statistics show that around a fourth of all 401K participants aged above 59 have upwards of a fifth of their account balances invested in company stock. They confuse familiarity with safety, as many of these individual stocks come with twice or thrice the risk of an equity portfolio that is diversified better.

A good number of financial firms calculate possible investment outcomes by examining market performance patterns. this method of analysis has caused many financial and investment advisors to recommend that workers who only have three years to five years before retirement should not go beyond 60% of their portfolios in stock, but ideally at forty percent. Twenty percent of a portfolio in stock can lower your portfolio risk and be viable, if a near-retiree works with a sustainable annual withdrawal rate of 3.8%, not four percent.

Portfolio Risk And The Near Retiree

Buy Gold Online | Buy Gold Coins using Younique Nest Egg Saving Plan

Wed, 01 Dec 2010 17:00:26 +0000

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Saving early for retirement is how to ensure a good nest egg

Tue, 19 Oct 2010 22:00:11 +0000

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