Archive for the 'investing' Category
If you are in your forties and you have no financial plan for your future, this article is for you. Maybe circumstances of life have kept you living paycheck to paycheck and you haven't given any thought to the future. Now is the time to make plans.
Divorce, illness, job loss and other unforeseen life events can throw you off a good financial path. When you were in your twenties maybe you didn't give too much thought to how you were going to survive once you got “old”. Your thirties went by as you married and raised a family and now, with the passing of time you realize that you do not have a financial plan for the future.
Many people still ignorantly think that they will have Social Security benefits as an income to count on. Most baby boomers who are now in their 50's know that living off of Social Security is living in poverty. You are going to need more than that to survive.
Ignorantly some people might think that they will just plan to never retire. This is not realistic. As we age there is no guarantee that your health will allow you to work the way you can now. When a serious health crisis strikes and you are not financially prepared to deal with it, you can lose all your assets.
Having health insurance isn't enough for the coverage of serious illnesses such as cancer. If you were to lose your job, you may lose your health insurance also. Not planning for these life challenges could leave you at risk for financial ruin.
No one wants to be a burden to their children when they become unable to take care of themselves, whether it is physically or financially. Someone who has worked their entire lives shouldn't find themselves at the brink of homelessness once they become unable to support themselves financially. Here are some tips on what you need to do right now in order to set a plan for your future.
Sit down and determine your net worth.
If you own a home or other property, what is the true value of it? How much of a mortgage do you still have on it? If your children are grown and out of the house, do you really need to be making payments on a home that is too big for your needs?
Consider the idea of downsizing in order to be able to have cash to use for planning for your retirement. If your home is paid off, you still need to pay for the upkeep and taxes. How long will you have an income to support living in your home?
Health issues
Look at your health and the health of your partner (if you have one). If one or both of you have struggled with health issues, expect these issues to possibly worsen as you age. Do not take for granted that you will be able to work into your 70's or 80's.
Wills
Do you have a will? If you do not, both you and your spouse need to write one. Having a will is more than deciding who will inherit your fortune. Just because you have no significant amount of an estate doesn't mean that you shouldn't have a will. A will spells out your instructions for your burial plan and division of any property you may have.
Blended families
Especially if you and your spouse have been married previously and have children from a different spouse you need to have a will to spell out your individual wishes. Protecting your spouse and your children can only be done if you make your wishes known legally.
Professional help
Find a financial planner who charges a fee for his/her services but is not selling anything to you except for advice on investment planning. Be wary of anyone who is pushing you into making an investment that sounds too good to be true. If you cannot get references from a friend, go to your bank where you hold an account and get retirement investment advice from them. Do your own research. This is about your financial future so don't jump into opportunities without checking them out fully.
Life insurance
While you are thinking about how you will support yourself during your golden years, check out how much life insurance you have. If your spouse should die before you, will there be enough money to cover funeral expenses, bills and help to support you until you die?
People who depend on their spouse for financial support can be devastated when they are left on their own before they expected to be. Although couples should plan for their financial future together, they should also plan that when one of them dies that the other one is not destitute.
It is never too late
Taking care of making a plan when you are younger is easier. You will have more time to set aside money every month without it being a burden. When you have ignored the impending future, you will need to scramble in order to come up with a workable plan.
It is necessary to do. You have ignored it for long enough. Life offers no guarantees and the ones who plan for the future are the ones who can enjoy aging without worry about finances.
http://refinancelifeinsurance.com/
July 27 2011 | investing | No Comments »
You start investing for retirement the first time you buy shares in a mutual fund, stock, a real estate property or other investment regardless of how old you are. Investing for retirement simply means investing your money in such a way so that you get the best return possible over the long term, so that when you do retire, the money that you need to live on will be there.
Government programs such as Social Security, (as well as many company pension and retirement plans), simply will not provide enough money for you (and your spouse, if married) to live on once retired. It’s important to start now to make plans and set in motion those investment strategies that will provide the means for you to live comfortably and without financial fear and anxiety once you have retired.
Retirement Goal: To have enough passive income from all sources, including social security, employer and retirement pensions, as well as your own investments, so that you do not have to keep working, (unless, of course, you want to!)
When you retire, you want to have the financial means to enjoy those things you have always wanted to do, but did not have the time for while working. What would those things be for you? Painting? Travel? Restoring old cars? Learning a musical instrument? Continuing your education? Or perhaps even starting a second or new career or business? Live your life fully, now, each day, but also plan ahead and invest wisely so that when you do retire, financial worries and concerns will not be an unwelcome part of your life experience.
Retirement Planning
Retirement planning is an essential part of personal financial planning. The sooner you take the time to think through and implement your best investment strategy for retirement, the better off you will be, and the more time you will have to allow your retirement funds to grow. In order for you to plan effectively for your retirement, and invest accordingly, you will need to make the following determinations:
1. How long will it be before I plan on retiring?
2. How much money will I need to live on (how much money will my spouse and I need), in order to maintain my (our) current standard-of-living once I retire? (As a general rule of thumb, you will need approximately 70% of your current annual working salary in order to live at, or reasonably close to, your current standard-of-living, when you retire. 70% is not written in stone, but it will give you a number to work with. Some people can live comfortably on less, some need more.)
3. How much money will I need to save and invest, starting now, and at what interest rate, so that the accumulated funds will generate the necessary income I need once I retire? (For help in determining the specific amounts you need, see my article, Your Investment Money: The Value of Compound Interest, Associated Content.)
Sources of retirement income to consider when making your determinations would include: social security, employer-based pension and retirement plans, and also personal savings and individual retirement accounts that you have set up. In order to supplement your income once you retire, you will need to find those investments that will provide the needed additional income. Such investments would include fixed-income securities, such as bonds, or bond mutual funds, annuities, and/or other investments specifically designed for retirement income. However, before you retire, invest in those financial products that are going to build your assets.
Prior to actually retiring, the types of investments you should be considering would include such things as stocks and stock mutual funds - growth-oriented investments. Again, the sooner you start your retirement investing program, the more time you will have to allow your funds to grow. That’s why it’s so important to start investing now for retirement, regardless of age, or the current career stage or position you find yourself in.
Make use of auto-savings and investment plans, either at your place of employment, or from your own financial savings and investment accounts. Better yet, use both! You can arrange to have money deducted from your payroll check and deposited to a tax-deferred account such as an IRA or 401k plan at your place of work, and you can set up an auto-savings or investment account through your bank, savings, or brokerage account. (See my article, Starting a Savings and Investment Program, Associated Content, for help and information in setting up your own auto-savings or auto-investment plan.)
IRA’s and 401k Plans
Individual retirement accounts (IRA’s) and 401k plans are traditional retirement plan accounts whereby earned income can be set aside, tax-deferred, and this is the primary benefit and attraction of such accounts. As with other types of investments, the point to remember is to invest, and then leave the funds alone. (If you withdraw early from these types of accounts, you will have to pay a penalty to the IRS.)
IRA accounts can be set up through banks, savings and loans, credit unions, mutual funds, and numerous investment/brokerage firms. The types of investments that will build a retirement fund most effectively, providing you invest early enough, are growth-oriented stocks and stock mutual funds, and you can invest in these types of products through an IRA.
A 401k plan is a savings plan offered through your employer whereby a portion of your salary is automatically deducted and deposited or set aside for your retirement. Earnings from your 401k plan, such as interest, dividends, and capital gains, accrue on a tax-deferred basis, as with an IRA.
Take advantage of both of these types of plans. They can play an integral part in the success of your retirement planning strategy.
For your own peace of mind, start your retirement planning and investing now, regardless of your age, stage of life, or current income level, so that you can provide for yourself and those who depend on you, and then, enjoy yourself, enjoy your family and friends. Enjoy and live life to the fullest.
http://healthywealth.us/
July 11 2011 | investing | No Comments »
Whether you are in your 20s, 30s, 40s or 50s, you need to think about how you want to live when you retire. If you don’t plan soon enough, you’ll find yourself working well into your 70s. Start now - no matter what your age - to ensure your future will be filled with a well-deserved, relaxed lifestyle, not punching a time clock.
Individual Retirement Account. Yes, you need one of these whether it’s a traditional IRA or a Roth IRA, you must have some system of regularly setting aside money each month. Set up an automatic payment with your bank so that a set amount - even $25 - is taken from your account each month and deposited in your IRA. You may not notice the funds each month, but they will add up over time and if you’re young enough, time is your friend when it comes to retirement planning.
Employer Sponsored Retirement Plan
Maybe your employer offers a plan that you can join after a year or more with the company. If this is an option, you will be wise to join. Many employers will match your contribution or even contribute a greater matching amount than you contribute. This is free money toward your retirement - don’t pass it up. Your contributions to your retirement plan could even be taken out of your paycheck before your taxes are calculated, which is another bonus.
Meet with a Financial Advisor
You don’t have to be a millionaire to benefit from the advice of a financial advisor. Find someone you can trust who will show you how to develop a diversified portfolio of investments so that you will get the best returns given the time you have to invest.
Make the Best Use of Time
If you’re young and just starting out in your career, you have the benefit of time. Compounding interest will be your best friend as you establish your retirement accounts and watch them grow. The older you are and the less time you have, the more you’ll have to contribute.
An Employer Sponsored Plan May Not Be Enough
Just because you’ve set up a retirement account through your employer and are benefiting from the generous matching contributions, you’ll need to make sure this account will be enough for you and your family when you’re ready to retire. It is likely that you will need to maintain an IRA in addition to any employer sponsored account you or your spouse may have. You can find a retirement calculator online to help estimate your future needs.
A Non-Working Spouse Needs an IRA
If you are a woman who is not employed outside the home, you can be eligible to open your own IRA. Talk to your financial advisor about your future needs and look at your combined retirement accounts to see if this is a prudent option for you.
Other Investments
You can save for retirement in other ways by learning to invest in stocks, for example. With discount online stock purchase plans, it is easy for nearly anyone to participate in the stock market. Do your research and buy stocks in companies you can hold for the long-term and reinvest all your dividends. Many of these plans can also be set up for automatic stock purchases once you are in the program.
Retirement should be a time of leisure after a life-time of hard work and diligent efforts to earn money and support the family. Don’t get caught in the trap of having to work well into your 70s because you didn’t do any retirement planning. You’ll sleep better at night knowing that you and your family will be comfortable and able to travel, enjoy your grandchildren and pay for healthcare expenses.
http://governmentretirement.com/
July 11 2011 | investing | No Comments »
