Posts Tagged ‘security’

How To Retire Well

Monday, August 25th, 2014

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How well prepared are you for the retired life?

The first consideration for retirees is to be sure that you have enough money saved and invested to sustain your financial needs during your retired life. Aside from the basics, you want to be able to sustain a chosen lifestyle. Setting aside some funds for emergencies and cash needs adds to your security. Continuing to save and invest during your retirement helps you to hedge against outliving your retirement assets. According to U.S.News & World Report contributor, Dave Bernard, there are steps to help you make the transition into a happy retirement that involves setting personal goals and working toward achieving them.

The first consideration in your preparation is to decide what will you do? (more…)

Expenses You Must Include In Your Retirement Budget

Saturday, August 9th, 2014

Man in home office on telephone using computer smiling

How accurately can we estimate and budget for our retirement future? While individual lifestyle will dictate your expenses, a report published by U.S. News & World Report lists the expenses that are shared by all retirees and must be budgeted for.

  • Health care costs will be one of the biggest expenses you must deal with in retirement. A 65 year-old couple retiring in 2013 will need $220,000 to cover health care costs during retirement, according to calculations by Fidelity. This figure is based on average life expectancy. The cost of long-term care services depends on whether you receive it at home, in adult day care, at an assisted living facility or in a traditional nursing home. The average cost of a private nursing home is about $90,000 per year, assisted living facilities average $3477 per month and hourly home care rates average $46 for a Medicare-certified home health aid, according to MetLife.

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Five ways to wreck your retirement (and marriage)

Monday, July 21st, 2014

Spending your retirement in comfort depends largely on what you and your spouse do today.

Retirement, like marriage, comes under enormous strain when money is constantly an issue and recognizing this sooner rather than later can make the difference between traveling and living out your years together in relative comfort or having to scrape by for years as you get older and less healthy. It’s a pretty stark contrast.

Here are five things to avoid with your retirement today:

1. Not saving early or often

It’s the little things that add up. While you may think there’s plenty of time between your current situation and retirement, saving now means you won’t have to catch up later, when you may face other issues or unplanned expenses. It’s also the single most effective habit you can develop: saving a little bit all the time.

2. Underestimating your needs and lifestyle (more…)

Insuring your retirement is not unlike insuring your car

Sunday, July 6th, 2014

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You can insure your home and car from disasters and accidents. Life insurance essentially protects your family from the loss of your income should tragedy strike. You can’t insure your retirement accounts in the quite same way, but there are a few tried and true strategies that can help safeguard them.

1. Save for retirement even during…retirement

There is no rule that you have to stop investing when you hit your golden years. One of the best hedges to outliving your retirement assets is to continue investing even when you reach retirement age. While there are mandatory age distributions from 401(k) retirement plans and traditional IRAs, you can continue to make investments in other assets during your retirement.

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Grow up financially while you’re still young.

Monday, June 23rd, 2014

imagesThe old adage of ‘the earlier you start to save for retirement, the better’ holds true today especially today. Here are a few questions you should ask yourself when starting to think about your options:

How much should I save?

Try to start out at around 15 percent, and that’s a minimum figure — 15 percent of your salary. It should be as easy putting that much away and more into a 401(k) plan. If you have a 401(k) with a match, up to half can of your savings can come from your employer.

Where should I invest my savings?

Index funds are a great way to get started since they allow you a wide range of investments including funds that invest in domestic stocks and bonds, and international stocks. A solid investment portfolio mixes equal parts of all three. The key aspect of an index fund is that it is generally cheaper.

What if I have a low paying job that doesn’t allow me to save much? (more…)

Being financially savvy with your 401(k) can earn you more.

Tuesday, May 27th, 2014

If ever you needed an incentive to learn more about money, this might be it. A new study shows that the more financially savvy you are, the more you’ll earn on your 401(k) plan. And not just a little bit more, a whole lot more–up to 1.3 percentage points more per year on your retirement plan investments than your less sophisticated counterparts.

In fact, being financially literate could help you build over the course of a 30-year working career a retirement fund some 25% larger than that of less-knowledgeable peers, according to the study, “Financial Knowledge and 401(k) Investment Performance,” which was recently published as a working paper on the National Bureau of Economic Research website.

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Your 401(k) can start to blossom this spring with these handy tips

Monday, May 5th, 2014

Unless you scour the voluminous info about your plan (which you should, but probably don’t) you might miss some important tips that can make a real difference in your planning down the road.  Here are seven things to bear in mind when reviewing your porfolio.

1. You can rollover.  When you leave your employer, you can transfer your 401(k) plan to an individual retirement account – and it is not a taxable event. This type of transfer is called a rollover. Many 401(k) participants think that any type of distribution from their 401(k) plan is taxable and subject to penalties. That isn’t true.

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Happy retirement: Stop worrying about paying taxes.

Monday, April 28th, 2014

When you contribute to a Roth IRA you typically don’t have to worry about paying taxes on that money or its investment gains ever again. And employers are increasingly adding a Roth option to their 401(k) plans. Aon surveyed 400 employers covering 10 million employees in 2013 and found that half now offer a Roth 401(k) plan. Here are some of the benefits
of saving for retirement in a Roth account:

Having a tax-free account in addition to your pre-tax savings gives you more options to reduce taxes in retirement.
Tax complications don’t end when you leave the workforce. In fact, your taxes in retirement can actually be more complicated than in the years when you were working. For the most part, you’ll want to withdraw money you have in taxable and Roth accounts first and delay paying taxes on your savings in traditional retirement accounts as long as possible. But it’s also possible that you could pay significantly higher taxes if you delay too long and your traditional retirement account gets big enough for required minimum distributions to force you into a higher tax bracket. With money in different pots, you’ll have a chance to run different scenarios and maximize your after-tax retirement income.

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Key questions (and answers) for Plan Sponsors

Monday, April 7th, 2014

Q: Is there a relationship between automatic enrollment and employer decisions about matching contributions and total compensation?

A: Recent research by the Center for Retirement Research at Boston College (CRR) found that auto-enrollment is related to relatively low employer match rates and default rates, but not overall compensation. The How Does 401(k) Auto-Enrollment Relate to the Employer Match and Total Compensation? report indicates that auto-enrollment plans had a matching rate of about 0.4 percentage points less than plans without auto-enrollment, even taking into account other factors.

The researchers also investigated whether low-default contribution rates adopted by employers who have auto-enrollment in their plans. It appears that employers who have this feature may be using a relatively low default rate, with resulting lower matching, to offset the higher costs that occur from higher participation rates found in auto-enrollment plans. 
The study concluded that auto-enrollment increases saving for workers who would not have participated in the plan without that provision. However, employees who would have participated in the absence of auto-enrollment may, over time, save less because of relatively low employer match rates.

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Employers: How does your plan compare?

Sunday, March 23rd, 2014

The good news is that the Participant Deferral Rate rose slightly year on year.

The average participation rate in 401(k) plans was 88% at the end of 2012, according to the 56th Annual Survey of Profit Sharing and 401(k) Plans by the Plan Sponsor Council of America (PSCA). The rate is defined as the average percentage of eligible employees who had a balance in the plan, as the average number of investment choices offered to participants remained at 19 across all employer plans.

The year before the rate was 86%. An average of nearly 81% of eligible employees made contributions to the plan in 2012. The average participant pre-tax deferral rate was 6.8%, compared to 6.4% the year before.  Here are some highlights:

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