100 Cost-Effective Articles - Retirement Planning
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When It Comes to Retirement—Age Matters
In order to enjoy your retirement, you should have a good idea of how much money you will need each year to fund your desired lifestyle. To ensure that lifestyle, you will need to set aside enough money to supplement known sources of retirement income, such as a company pension and Social Security. Finally, it is important to be aware of how your age can affect your retirement decision-making.
(709 words)
Retirement Planning to Reach Your Goals
We are living longer, healthier lives. As a result, retirement, for many, may last 20 years or more. So, if "time is money," how many years do you have in the bank? Because inflation will most likely decrease the purchasing power of your money, your dollars may buy less during your retirement than they do today. For example, at 3.5% inflation, $100 today would be worth only $42.31 in 25 years, and it would be further reduced to $30.00 in 35 years. The first step in developing a savings strategy that best meets your retirement needs is determining your objectives. How do you envision your "golden years"? (793 words)
The Pension Payout Puzzle
Many couples find themselves confronted with a dilemma as retirement nears. If you plan to collect your pension on a monthly basis (rather than in a lump sum), you must decide whether you would prefer to receive a higher payment during your lifetime alone (the life option) or a lower payment that will span the lifetimes of both you and your spouse (the joint and survivor option). In choosing between these options, you will need to consider such things as the current and anticipated health of both you and your spouse, how long you each expect to live, your financial situation, and your income requirements. Here is a brief look at how each of these options works.
(672 words)
Early Retirement: Some Rules of the Road
Have you ever reviewed your pay stub and entertained thoughts of taking an early retirement? Suppose you are age 55 and could take home a pension income that amounted to 60% of your pay if you retire now. If you earn a high income, it may seem that you’ll be able to retire in reasonable comfort. However, before calling it quits, weigh all of the facts carefully to be sure an early retirement makes financial sense for you. Here are eight rules you should consider if you’re thinking about taking an early retirement.
(872 words)
Baby Boomers Look toward Retirement
Over the next two decades, the most chronicled generation in America will gradually enter retirement. At that point, each wave of baby boomers will quickly discover if their retirement plans, Social Security, and personal savings will be sufficient to maintain their existing lifestyles and needs. Unlike the previous Great Depression-to-World War II generation, many baby boomers believe they cannot depend on receiving Social Security benefits during their retirement years. In fact, many economists question the future "security" of the Social Security trust funds. What can boomers do to determine if their savings and assets will sufficiently fund their retirement years? (478 words)
Calculating Your Retirement Needs
If you are approaching retirement age, or just beginning to plan for it, you might be interested to learn that retirement may require 70%—90% of your current annual income in order for you to maintain the quality of life you presently enjoy (American Savings Education Council (ASEC, 2003). Setting goals—such as where you might like to live and the activities you plan to pursue—is an important factor in any savings plan. How do you determine the total amount needed for retirement and calculate the amount of savings you'll need to accrue each year? This article contains a worksheet that will help you answer these questions, based on calculations developed by the ASEC.
(826 words)
IRAs: Roth vs. Traditional
In today's busy, financial scene two popular Individual Retirement Accounts (IRAs) are vying for your attention: the traditional IRA and the Roth IRA. While both are long-term savings vehicles with tax benefits, each treats contributions, age, and income differently. An analysis of your personal financial situation and retirement objectives can help you decide which IRA—or combination of IRAs—best meets your specific needs. Studying the details now may save you time and money in the future.
(583 words)
403(b) Plans: Beneficial Tax Law Changes
In 1958, the Internal Revenue Service (IRS) created 403(b) plans to encourage employees of certain organizations to begin saving for retirement. Organizations eligible for participation in these plans include those "organized and operated exclusively for religious, charitable, scientific, public-safety testing, literary, or educational purposes." Paragraph (7) was added in 1974 by Congress, which gave participants the right to invest in mutual funds as opposed to only insurance company investments. In 2001, the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) increased the amount employers and participants could contribute and created a Roth option. Thanks to the Pension Protection Act of 2006, these changes will be permanent.
(729 words)
Taxes and Your Retirement Destination
What will you look for as you approach your "golden" years? Do you want an affordable condo on the golf course with room for visiting grandchildren? Would you like to remain in a community surrounded by old friends and family, or would you prefer living in close proximity to new friends? Is access to excellent medical facilities a priority? As you decide where your retirement haven will be, in addition to considering these lifestyle questions, you should research the effects of state tax structures on your projected retirement income.
(519 words)
Required Minimum Distributions for Traditional IRAs
Saving as much as you can for retirement, as soon as you can, and as often as you can, is crucial to your financial well being when you finally leave the workforce. Suppose you have spent a lifetime contributing to a traditional IRA and hope to leave your nest egg untouched for your heirs. The IRS says that once you reach a certain age, the time to spend has come.
(583 words)
How Social Security Affects Your Retirement
When contemplating retirement, you, like many other people today, may be counting on Social Security benefits to provide you with a basic level of income. The age at which you choose to retire is an important part of the equation. In addition, there are many other issues to consider when making that choice.
(563 words)
Savings Strategies for Those Approaching Retirement
The baby-boom generation is about to trail blaze into another new era: retirement. Never a generation to accept the status quo, they are ready and set to redefine the outmoded image of "golden years." Forget about endless days spent in repose. This group seeks an unprecedented time of adventure, travel, creativity, and new business pursuits. If you are approaching retirement and find your funds coming up short, it is never too late to take charge. There are plenty of things you can do—right now—to get on the right track.
(710 words)