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Retirement Planning

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Why Plan for Retirement?

This is a question that I come across quite often when researching and
discussing retirement planning and options. Despite the constant news coverage
of impending doom in regards to Social Security many Americans are still
counting on their social security payments to support them through their
retirement. The sad fact is that it simply isn't possible because the money
isn't there. Sadder still is the fact that even if the money were there, it is
doubtful that it would be enough to get the average American through their
twilight years.

Americans are living longer than they have in decades past. In addition to
longer lives we are leading more active lives. Gone are the days when retirees
sat at home reading newspapers and mowing the lawn every other afternoon.
Today's retirees are traveling, taking classes, learning to dance, and trying
new things that they didn't have the opportunity to experience while setting
aside funds for the future and going about the business of raising their own
families. Now they are taking the time to do all these great things and these
wonderful activities and pastimes require funds in order to enjoy.

This is the number one reason you should begin as early as possible not only
setting aside funds for your retirement but making active plans on methods by
which you can invest those funds in order to maximize the potential of limited
funds. This is the time that it is best to take your plans, goals, and concerns
to a financial planner and see what advice he or she can give you on setting
specific goals, better defining your plans, and making the most of your
investment means while establishing a realistic investment strategy that will
not leave you feeling strapped for cash month after month.

We often overlook the important role that a good financial planner and good
planning play in our financial futures. The same could be said of our financial
retirements. We need to take every opportunity that is available to us in order
to maximize our money. A good financial advisor will know of funds and
strategies that we have never heard of. It makes sense to go to an expert when
it concerns our family's future. We see experts when it comes to matters of
law, health, and taxes-why on earth shouldn't we see an expert for our finances?

Why is it so important to have a plan? The long and short answer to this
question is so that you won't end up needing a job in order to put food on your
table once you've reached retirement age. The sad truth is that many of our
retired citizens are finding themselves strapped for cash financially and
barely able to make ends meet. If they are fortunate enough to have homes that
are paid for, they often find the property taxes are a little more than they
can handle without some sort of assistance. Medications are expensive despite
government programs to keep costs down for our elderly, and then there are
those who are simply living longer than their original retirement plans had
accounted for. Combine all these factors with the fact that the cost of living
has gone through unprecedented increases over the last two decades and you have
some very real reasons to make plans for your future retirement.

It is best to begin making these plans as early as possible. It is not
impossible to recover, however, if you begin the process a little later. The
problem is that you will need to make some extra investments along the way in
order to make up for lost time. The sooner you begin making plans for your
financial retirement the healthier your retirement options will be. The best
way to go about this is to define your retirement goals, make plans, and then
take your goals and plans to a financial advisor and get his or her input.
Investing smarter is much wiser than investing harder.

Types of Retirement Plans

We all know that there is a growing need in this country to take our
retirements into our own hands if we want the funds necessary to have any
quality of life upon retirement. The problem is that most of us have no idea
where to begin when it comes to financial retirement planning or investing. The
sad news is that for most of our lives retirement was something that was taken
care of if we put in an honest lifetime of work. However, the climate has
changed and the retirement funds that many of us have labored to pay for the
vast majority of our lives are slipping away.

The good news is that this need has not gone unnoticed by the powers that be
and while they aren't offering solutions for the funds we've already invested
or in salvaging what is left of the failing system, they are empowering people
to take some control for their personal retirements by offering investment
options and strategies that provide tax benefits along the way in order to
reward you for your efforts.

The four common types of retirement plans include 401(K) plans, Keough Plans,
IRAs (individual retirement accounts), and qualifying pension or profit sharing
plans offered by corporations. In most retirement plans, the contributions to
those plans are tax deductible and taxes aren't paid on these plans until the
funds are received and retirement payment begins. You should be careful of your
investments and guard them well as there are often hefty penalties involved when
you take funds out of your retirement funds before you actually retire.

These of course are not the only types of investments you can make for your
golden years and it never hurts to have more eggs in many baskets. The more the
merrier in most cases. My personal preference for investing is real estate. This
is an investment that you can actually see and reach out and touch. It is also
an investment that often gets overlooked when planning for retirement, though
when you consider it is an excellent choice. Property values are much lower
today than they will be ten, twenty, or fifty years from now. This means the
sooner you buy the property the more it will be worth (in theory) when you
retire. The thing to remember is that property investing, like other types of
investing, requires some degree of risk. You need to learn as much as you can
about the process and discuss your interest with a financial advisor before you
make any major decisions concerning your retirement investments.

There are more traditional investment methods you may want to consider as well.
Mutual funds and the stock market are great ways to invest your money, build a
decent portfolio, and increase your net worth. This type of investing also
carries some degree of risk and isn't always considered financial retirement
planning but more along the lines of simple financial planning.

The thing to remember is that it is always good to have a plan. For this
reason, I strongly encourage you to engage the services of a good financial
planner. He or she can help you navigate the tricky language that is involved
in many transactions, set realistic and obtainable retirement goals according
to your needs as well as your means, and offer excellent advice and guidance on
other investment ventures you may wish to pursue. In other words, a good
financial planner can help you plan for your retirement.

When it comes to the world of finance, many of us are far from experts. We seek
legal advice from attorneys, tax advice from accountants, and medical advice
from doctors yet very few of us go to financial planners when planning our
financial retirement. In many ways it makes little sense to approach our
futures so carelessly and yet this is not something that our parents and
grandparents would have done so there is no precedence for doing so. The
problem is that money is such a limited commodity in this world, we are living
longer than ever before, and we are enjoying much more mobility in our golden
years than in times long past. We now need expert advice and guidance in order
to insure that we are in the best possible position when the time comes to face
our own retirements.

Properly Planning for Financial Retirement

The vast majority of people reading this will never receive the benefit of
social security for the purpose of retirement-unless of course serious
adjustments are made in the current system. There are simply too many people
living much longer than anticipated. At the same time, regardless of how much
you've managed to pay into social security over time it is doubtful that anyone
could live on the amount of money they would receive in social security benefits
even if they had no other significant bills to pay such as house notes, car
notes, or insurance on a home or automobile.

It amazes me that my grandparents managed to live on the modest sum that was
earned from my grandfather's retirement and social security. They were never
wealthy but in the last decade or so I understood just how little they had and
yet they managed somehow to have all the things they absolutely needed in order
to survive. I know that in the world of today, their meager incomes would not
even begin to make ends meet for groceries let alone utilities and other
necessities in life.

It is because of the struggles my grandparent's faced that I have devoted a
good deal of time and effort into making sure that we do not go through those
same challenges and struggles upon retirement. We have taken steps today to
insure that we will have income throughout our retirement as well as a few
carefully crafted investments to pull us through. I do not believe that I have
all the answers and for this reason we have relied heavily upon the advice of
our financial planner. He has helped us discover avenues for investing money
and methods of doing so that have been nothing short of amazing for us as we
watch our holdings grow year after year in preparation for retirement.

If you haven't taken the time to find a financial advisor for your investments
there is no time like the present to do so. Even if you are nearing that
magical number you might be amazed at the guidance and advice that can be
offered by a competent financial planner to maximize your short and long-term
investment and retirement planning needs. I believe you will be amazed at the
financial miracles a good financial planner can work with even the most modest
of investments with which to work.

You should also make sure that you take care of as many of the recurring bills
as possible before you retire. It helps greatly if you have your home paid off
and do not have the worry of a monthly mortgage payment. Another thing that is
good to keep in mind is that you will want to downsize rather than upsize at
retirement. Eliminate the second car and ride together when possible (this also
eliminates an insurance payment as well).

If you are planning to move to a particular area of the country for your
retirement you may want to begin now, as early as possible, seeking property in
that area at a much lower price than you will pay ten to twenty years down the
road when you actually get around to retiring. This will increase the
likelihood that you either have your retirement home paid for or are very close
to having it paid for. Another thing to remember is that you will want to get a
smaller home for your retirement rather than a larger home that you will need
to care for. This means you can eliminate some of the utility costs, which may
prove substantial.

The most important thing to remember when planning for retirement is that it is
your retirement for which you are planning. Make sure you set aside funds to
make your retirement worth retiring for. Don't merely exist throughout your
retirement because you can't afford to live, take the steps now to insure that
this is not going to be a problem for your retirement years.

Long Term Retirement Planning

We all know that sooner is much better than later when it comes to planning
your retirement. The more money you sock away and the longer that money has to
grow and work for you, the better the position you are in to enjoy your
retirement to its fullest. With this in mind, you need to approach all of your
retirement investments as long-term rather than quick turnover investments.

It is often tempting to risk it all for the promise of a high return on your
investment but you must remember that with great reward comes great risk and
most of the time your security is simply not worth that particular risk. There
are several different types of long-term investments that you may find to be
reasonable and even attractive investments.

Bonds are a popular long-term investment. These are very much like bank issued
CDs with the minor exception that bonds are issued by the government. There are
many kinds of bonds and you should research them all before committing to one
over another. If you select the right bond you might find that given enough
time your bond will double in value over time.

Mutual funds are another popular investment for long-term investors. These are
pools of money that are combined in order to invest in stocks, bonds, and other
short-term investment ventures including securities. These funds are handled by
the fund manager who decides where and how the money will be invested. This
leaves you to reap the rewards that his or her experience will bring in for you
over time.

Stocks are another popular option for those interested in long-term investing.
It should be noted that investing in stocks is much riskier than investing in
mutual funds though the payouts when things go well are often much more
substantial. If you decide to delve into the realm of stock market investment
you should be aware that every transaction costs money, that you need to
thoroughly research the ins and outs of this type of investing, and that you
are taking a substantial risk with your retirement investment. You should also
be absolutely certain that you thoroughly research the companies in which you
plan to invest and only invest in companies that are well established and
showing strong potential for future growth.

With any major financial decision you should consult your financial advisor for
guidance and advice. His or her job is to help you turn your limited investments
into as much money as possible in order to secure your future and your
retirement. The guidance that a good financial advisor can provide when it
comes to long term investing is invaluable and should not be discounted or
taken for granted any more than the advice you would receive from a doctor or
an attorney.

My favorite type of long-term investment is real estate. While there are those
that will argue that the return on this investment is too minimal to save for
retirement I would argue that the fact that properly maintained and rented
units will pay for themselves over time making them pure profit when the time
comes to sell or simply to maintain a monthly income throughout your
retirement. The more rental properties you own the better your financial
position and the more options you have when the time comes to sell those
properties. Real estate is one field in which fortunes are made and lost on a
regular basis. Rental property is the safest bet for most when it comes to
long-term investment and the most significant return on investment. There are
options that go well beyond buy and hold when it comes to real estate. If this
doesn't excite you perhaps rehabbing property or the even more speculative
field of pre-construction investing will offer more appeal.

Long-term investments will be the primary fuel for your financial retirement
funds and plans. You need to carefully consider the best possible option for
your needs and work towards you financial goals.

How Much Will You Need to Retire?

There are levels of preparedness when it comes to looking down the road at your
retirement and how much you will need when you get there. The basic level of
retirement planning is to sign up for your 401k at work, support legislation to
keep Social Security intact, buy some life insurance and let it go at that. This
system will work so there is reason to call this bad retirement planning. After
all, if you began preparing for retirement in your early adult life and stayed
with it, you will have a resource to retire on and that's a good thing.

But there is a way to take it to the next level and that is to actually start
putting some flesh and bones on your vision of your retirement and get a feel
not only for the fact that you will retire but how you expect to live in
retirement. Very often, we have idealistic visions of retirement life based on
media images or the fantasy life of living in luxury and having little to do
but golf in the morning and drink campaign and eat caviar all afternoon. So if
you can get a realistic view of what you have as your expectations for
retirement, you can start making adjustments to your retirement planning
package right now.

Start with how you see your retirement lifestyle working. If you want little
more than a manageable retirement apartment, a cat and the chance to knit or
watch ESPN without interruption, that is a fairly modest retirement lifestyle
to prepare for. But other people have adventure and high living in their
retirement dreams. So if world travel or living in a luxury setting is part of
that dream, only one person is going to make that dream a reality and that is

An exercise that is fun and eye opening is to detail every aspect of your dream
life in retirement. Start by picturing your living conditions. Include your diet
needs and wants as well as any entertainment and recreational needs you expect
to be a part of retirement. For example, if you know you will want to go on
long fishing adventures several times a year, you will need a RV and the
finances to support taking off for the most scenic spots within driving
distance to kick back and enjoy the fishing. So include the physical and
financial needs for that lifestyle in this "detail" step of retirement planning.

You can complete the exercise by getting to such a level of detail that you
could go out and price the dream in today's dollars. Then when you take your
"dream retirement shopping list" out into the open markets and use retail
locations, catalogs and internet sites to actually find out how much it would
cost to have that retirement today, that will shed a lot of light on your
retirement preparations that you are doing.

Now, the actual cost of those different components will be much higher when you
actually get to the point of retirement. You could try to factor in inflation
and make those kinds of adjustments but don't play with the formula so much
that you get the idea that it's impossible and give up. However, another factor
that offsets the inflation factor is that your retirement life will be less
expensive then your current lifestyle. Your daily needs may not be as
demanding. If you sell your house after paying off the mortgage, your monthly
expenses will go way down and you will have a significant surge of retirement
capital that will come from the sale of the house. And you are not raising
kids, putting them through college or having to support the lifestyle and
wardrobe of a working person. All of these things offset the inflation issue.

The Who, What, When, Where and Why of Retirement

In the newspaper business, when a reporter wants to find out all about a case,
they always ask the big five questions which are who, what, when, where and
why. If the reporter can get these basic questions answered about any story,
that is considered good research.

We can use the same approach as we begin to process the idea of retirement
planning. It would be a mistake to only look at retirement planning as strictly
a financial step. If all retirement consisted of was a change to where you get
your money, that would be one level of change. But retirement also brings with
it big lifestyle changes and changes to your priorities and how you use your
time. So it's a good idea to prepare for all of the changes retirement brings
by asking the big five questions.

Who will you be retiring with is a very important question because your mode of
living is going to change in every way imaginable. That man or woman who has
been part of your life for so many decades will now become central to every
move you make when retirement puts you together every day all day. So you
should think that through and decide how you want to arrange your time so both
of you still have your own interests, activities and friends but you can also
enjoy a new closeness that retirement affords you.

What you will be doing with your time is a huge question as you walk away from
the working world. Retirement is a great time to start enjoying those hobbies
that never got enough time. You can catch up on your reading, write the great
American novel or take classes to learn to paint or do woodworking. See
retirement as a time when the sky is the limit for you to explore your creative

When you retire is a big factor on how much of your retirement savings you have
to have ready by a certain time. For many, dipping into the retirement savings
can be postponed for years. If you get to the point that you can collect Social
Security and still make a fair amount of money part time or performing some
cottage industry job, you might be able to keep your retirement savings growing
even for the first five to ten years of retirement. And that means a longer more
prosperous retirement time frame for you and your spouse as well.

Where will you live once you settle into the place you want to call your
retirement bungalow. If you plan to sell the house and buy a condo or move into
an assisted living center, there is a lot of preparation for both of those
steps. There isn't time like the present to begin that retirement planning by
getting the house ready to sell and by getting out and researching the best
retirement living options for you to consider.

Why retire is more than just a philosophical question. You may be retiring
because you got to a certain age and it is required of you. But to enter
retirement with a good attitude, it's good to find your own motivations for
wanting to scale back your responsibilities and enjoy some leisure time as a
senior citizen. And if retirement means more time for hobbies, chances to
travel or enjoy time with your spouse or greater access to those sweet
grandbabies, those are great reasons to enter the life of a retired person.

But the one question we did not list that may be more than all the rest is the
"how" of retirement. How you go about moving from a life of working, selling
the house and getting settled in a completely new world, perhaps with new
friends and new objectives for living is a major challenge for anyone
especially if you have been a productive member of the business or working
world for many decades.

There are a lot of levels to the "how question". That is why in a lot of ways
the period of time leading up to retirement and doing retirement planning can
be as active as retirement itself. But it's good you are getting started now
because by being prepared, your transition to retirement will be smooth and as
painless as possible for such a big change of life.

The Many Levels of Retirement Planning

The concept of retirement planning brings up the image of you working with your
investment counselor or setting up your 401K so you have adequate financial
resources when you retire. And it is true that a big part of being ready to
retire involves being ready financially to be able to step out of the work
world and start to take life easier.

But just as life is not just about making money, retirement is about so much
more than having the money not to work. Preparation for retirement also means
preparing to live a simpler life, preparing to become a "senior citizen" and a
grandparent and preparing to look at life differently.

Your health care is going to be an important issue in your retirement years. As
you enter retirement, you may be strong as an ox and active and full of health
and life. But any of us can fall prey to poor health or accidents. And if your
employer from whom you retired does not extend your health care insurance for
you to continue your coverage past your employment, you should make other
plans. You can continue the same coverage that you had under the Cobra system
but that can get pretty costly and dip into your finite retirement savings
pretty significantly. Medicare can be helpful too. But to be perfectly
comfortable that you have coverage, look to Medicare supplement insurance so
you maintain the same quality of care in retirement that you have now in the
working world.

Don't just limit your retirement planning to your money. Your retirement will
be a time of a big change of lifestyle and a change to your values and how you
spend your time as well. You will have more time on your hands and studies show
that those who enter retirement without "an agenda" can become adrift in all
that time and that isn't healthy. Human beings are doers so even though you may
no longer be working for a living, find ways to be productive and make a
difference in your community. You can start finding those opportunities long
before retirement so when you finally step out of the work world, expanding
those hobbies and volunteer efforts is as natural as can be.

In addition to the change of where you spend your time each day, you may have
even a bigger change in where you live ahead for you in retirement. Many times
people who step into their retirement years find that maintaining the house
where you raised the kids is just not necessary and more work than it worth.
Selling the home and using the equity to finance a leisurely retirement life is
a great way to go. But you should start early both preparing the home for sale
and preparing the family that "grandma and grandpa's house" is going away.

In addition, where you go to live is something that can be great fun to dream
about and doing some research on just the right place. You may choose to rent a
small place in an older part of town and enjoy a whole new lifestyle in that
setting. Or you might go for a high-rise condo with a view of the river or a
nice quiet apartment in a retirement oriented apartment complex where you and
other retirees can explore this new world together.

Above all it's important to embrace the retired lifestyle with the enthusiasm
and excitement that you might greet any new opportunity. Don't let being
retired mean just not working. In fact, go through the mental and emotional
exercises of putting the working world behind you and redefining yourself in
this new role. You are retired now and you are a senior citizen and maybe even
a grandparent.

These are not negative things. There is a strong role for grandma and grandpa
in society and in your family. And the world takes great joy in a senior
citizen who embraces that time of their life and sets out to be the best senior
citizen they can be. If you predetermine that this is the kind of retired person
you are going to be, that attitude will propel you past that sudden change of
life shock and get your retired life off in running in an exciting way that
will lead to many happy and fun times in your life of leisure as a retired

The Hidden Dangers of Retirement

We can all remember a time when we took the children to some event or theme
park that was supposed to be "totally awesome". Then when the kids get there
and see that Mickey Mouse is a guy in a suit and that the rides are about the
same as the local Six Flags, an inevitable let down and disappointment sets in.
And that is no fun for the parents on the trip home when all of those
expectations did not come to pass when the kids came face to face with reality
which did not line up with their dreams and hopes.

But sometimes even adults can be guilty of letting dreams and images of a
golden time ahead get the best of us. We often develop a mythology of how
retirement will be when we get there and when that retired life actually
starts, there are some real, down to earth adjustments that need to be made. So
if you can know some of the hidden dangers of retirement in advance, it is so
much better to go into retirement with your eyes open and have realistic

There are two negative reactions to the sudden shift of lifestyle in
retirement. They are loneliness and boredom. Even if you are going to be home
all the time, there is no question that once you stop going to an office or
having regular responsibilities, you can often feel a sense of loss and grief
because you miss the people, the regular human contact and the fun of being out
and that can result in loneliness that can get pretty chronic.

For men especially the feeling of boredom can also set in pretty fast when the
challenge of the work world goes away. In a lot of cases, men live for their
jobs and when that world goes away, there is a sense of disorientation and not
knowing what to do with themselves that is disconcerting for the family and for
the retired man himself. You may have been looking forward to a less stressful
life only to find that it was the stress that makes you tick and without it,
you feel adrift in life with no direction or goals.

Both of these problems can be addressed by not letting your retirement life be
to idle, at least not at first. You can fill your life up with volunteering,
getting busy with family or by getting involved socially with other retired
people. One area of volunteering that can go a long way to replace the
gratification of the work place is to work with habitat for humanity to help
build homes for people who cannot afford a home any other way. Both retired
married partners can find ways to pitch in and it gets you out with people
doing things that are worthwhile.

Give yourself time to get used to the idea of retirement and to the new
lifestyle. It should be a simpler lifestyle because your responsibilities are
reduced and you have more time on your hands. Be aware that if you and your
spouse are suddenly around each other every day and every hour of the day, that
is going to create new stresses which can also qualify as a hidden danger of
retirement. By being aware that this is not the fault of either spouse but a
natural reaction. The best response is just to get out and do things separately
and create that natural space you are both used to more often.

There will be a natural down time when you first retire and treat the first
month like vacation. But don't stay on vacation. Let your ambition and zeal for
life find new outlets. It will be fun and exciting to see where it takes you and
that is what retirement is all about.

Serious Considerations for Financial Retirement

There are a few things you should keep in mind when planning for your
retirement. First of all, you probably shouldn't hold your breath when it comes
to social security being able to cover even a small portion of your retirement
if the service even exists in any form of its former self by the time you are
facing retirement. The second thing you need to keep in mind is that your needs
upon retirement depend greatly on how you live your life now and how you plan to
live once you retire.

There are many who live very conservatively now in an effort to save up their
money for retirement and really live it up at that point. The problem is that
they are basing their retirement living on their current lifestyle, which is
not a good comparison. The problem is that the vast majority of Americans are
earning just enough money through their jobs in order to make ends meet. The
idea of finding any money to sock away for retirement for most Americans is
difficult at best and absolutely impossible in some situations.

The first step when it comes to successful financial retirement planning is to
map out how much money you are going to need in order to maintain your current
lifestyle upon retirement and go from there. Most estimates are that you will
need to bring home on average 75% of your current take home salary in order to
maintain your current lifestyle. The understanding is that you will eliminate
many monthly expenses by no longer working however some find that this simply
isn't enough so you should be careful when relying on this figure.

You should also plan for inflation when planning your retirement as well. It
will take more money in the future in order to have the same standard of
living. You should also consider that our expectations tend to increase over
time and you need to be able to live within the limits of your budget when the
time comes. It will be difficult to take out additional funds once you've
reached retirement age. For this reason it is in your best interest to plan
ahead and plan carefully. The more modestly you live today in an effort to
invest more money for your retirement the better chances you will have to enjoy
a better lifestyle upon retirement.

You should also be careful that you do not sacrifice the moment in search of a
better retirement. You need to be able to take vacations, save money for the
things you want and need, in addition to covering the necessities of today. We
aren't guaranteed that we will be here for retirement though that is hardly a
reason not to invest and save for that day. However, we should never sacrifice
the moment and the childhood of our children for the sake of an eventual
retirement. As long as you are making significant progress you are doing better
than a large section of the population and you can opportunities later to invest
greater amounts of money towards you retirement.

The problem is that most people do not begin growing concerned over their
retirement picture until it is too late to make significant progress. Begin
early making plans for your financial retirement in order to insure the
greatest possible success. Pay off your major debts such as student loans, home
loans, doctors' bills, car notes, and credit cards whenever possible. These are
constant drains on your income that you do not need once you've limited or
'fixed' your income. In addition to your 401 (k) or IRA funds you can start
your own investment account by having the bank automatically draft a portion of
your check each pay period. You can also 'pay yourself' an extra bonus by
depositing extra funds anytime you get extra money like a bonus check at work
or payment for services outside of work. Take every opportunity you have to
boost your retirement account.

Avoiding Retirement Shock

Have ever talked to someone who when speaking on the subject of retirement acts
like it is a death sentence? For many the idea of not working and stepping down
into the life of retirement with fewer daily duties is frightening and
something to dread. That is why a big part of retirement planning involves
getting emotionally ready for retirement so there isn't a huge shock when all
of a sudden you are a man or woman of leisure.

There is a term from the world of scuba diving that refers to a medical problem
that happens when a diver returns to the surface to fast and the shift from high
pressure to lower pressure of the world above the water is too fast. It's called
"the bends" and it's a serious medical moment. Well, we don't want to get "the
bends" when we leave the high pressure world of work and achievement for the
low pressure world of retirement and a life of ease.

So to avoid retirement shock, you should start well ahead of you retirement
party getting ready for that lifestyle. The worst thing you can do is wake up
on the first day of your retired life with nothing to do and that feeling of
emptiness and loneliness because you miss your old life and have no plans for
how to fill the hours and days that lay ahead in your life as a retired person.

One way to avoid retirement shock is to do a bit of daydreaming about all the
things you want to do once you are retired. Many of us put off creative
interests and adventures we might have pursued except as a member of the
working world, a parent an active participant in school, church and civic
groups, there is just no time for that before retirement. But now that you have
laid down so many of those responsibilities, give yourself permission to throw
yourself into a creative hobby to let that side of you out to grow and mature.

Another great coping mechanism so the shock of moving into retirement isn't so
severe is to continue to work at a reduced pace. If your employer values your
decades of experience and devotion to duty, they may put you on in a part time
capacity to come in and help the young people learn the ropes and learn the lay
of the land of the business world. You know that landscape well so you can be of
real value to make that transition a success.

Retirement is also a time when you can travel and spend more time with family
and friends. If you always wished you could be available to baby-sit the
grandchildren, now is the time. Your kids not only will love having free child
care while they go about dealing with their busy lives but you will enjoy
getting to know your grandkids and maybe being a kid with them for an afternoon
as well.

Volunteering is another great way to fill all of that extra time you now have
on your hands. By keeping busy helping worthy causes, you keep your self esteem
because you are making a real difference in the lives of others and for your
community. You can meet so many wonderful people while volunteering and the
social side of it keeps you young and overcomes loneliness which is a big
problem when you first enter your retirement years.

By laying out plans to enjoy a hobby, continue to work part time or volunteer
when retirement starts, you can get rid of that sense of dread that you may
have about your upcoming retirement. Instead start to get excited about this
new phase of life and the new life that lies ahead of you in retirement.

Your Financial Future Is In Your Hands

All of us have one big transition facing us not that far down the road. Of
course life is all about transitions. We make a transition from childhood to
adolescence. We transition from being a child of a house to adulthood and
independence. And we make big transitions through marriage, parenthood and even
becoming a grandparent. But of all of these, maybe the one we need to focus on
in terms of preparation is the big transition to retirement.

Moving from the world of work and the active life that all that entails to
retirement and your golden years is a huge adjustment for people. There are
lifestyle changes, changes to your goals and priorities and even in how people
view you. But the changes to your finances are perhaps the ones you will notice
the most. When you move from getting a steady paycheck to living on your Social
Security and retirement, that is a major shift in your expectations and how you
plan your life.

The saddest thing we see when it comes to people in late middle age are those
who are depending on Social Security to be the sole means of their support in
retirement. While Social Security is a fine program, it has created a false
illusion of "security" that somehow the government will take care of you in
your old age. The "brass tacks" truth is that if you are depending on any
outside agency to be your means of support in your retirement years, your
assurance that you will be conformable in your retirement years is not assured.

Even if you are currently working at a job that has a retirement program or a
401K that you put some into, you may still be allowing yourself to "depend" on
your job to be there for you when you get to retirement age. And the horror
stories of the elderly who finally arrive at retirement age to discover that
what they thought they could depend on was not reliable are tragic.

This is why starting now to prepare for you financial future will be the best
way you can be absolutely sure you will have what you need as you enter that
time when you should be able to relax and enjoy the fruit of your labors. This
is a major attitude shift and if you can accomplish it and take charge of your
financial future, you will approach retirement with much greater confidence.

The outcome of your decision to take charge of your retirement will be that you
won't just let money get put away for you without any oversight on your part.
You cannot always trust that the managers of your retirement account at work
are handling the money correctly. By staying on top of how those funds are
being invested and doing all you can to direct where those funds go, you are
making sure that you get maximum return on your investment all along the way.
And when its time for you to need those funds, you will be ready to use them
because you are acutely aware of their value.

We cannot control Social Security and there is a chance it will be there for
you when its time for you to retire. But instead of depending on Social
Security, build a financial future that is secure whether it is there or not.
Then when you retire and your retirement packages begin to kick and give you
that lifestyle of leisure and financial safety that you want, if you do see
Social Security add a few dollars to your monthly funds, so much the better.

By taking control over your financial future, you are putting the security of
your funds and the planning that you will have what you need when those
wonderful years come along. You are depending on the one person you know is in
turn with what you will need and has always been abler to plan and provide for
yourself and your family and that is you. It's a good feeling to put the
management of your financial future in your own hands in preparation for
retirement. But it's a wonderful feeling you worked hard to enjoy so you
deserve it.

Why a Financial Advisor?

Many people will readily and admittedly seek the services of legal
professionals, medical professionals, tax professionals, even domestic
professionals but when it comes to financial planning, they rarely seek the
assistance of financial professionals. Perhaps it's the result of our grand
parents generation and a fundamental lack of trust when it comes to sharing our
financial situation with others. But could it be that this is one area where we
are simply afraid to admit that we do not hold the answers? It's money after
all; we should be able to control it, where it's going, and what it will do
when it gets there right? I'm afraid the answer to that would be, "Not exactly."

Just as the tax codes in this country have become so complicated that you need
a magic decoder ring in order to sort through them and actually pay your taxes,
so have the rules and regulations when it comes to setting aside funds for the
specific purpose of financial retirement planning. One of the reasons they are
so complicated is because that many of the plans have very unique and very
specific tax benefits either before or after the money is received. In other
words, don't put away those magic decoder rings too quickly. You may need them
in a few years.

The bottom line is that a good financial planner can help you navigate your way
through the treacherous territory of taxes in relation to your financial
planning and so much more. Most importantly however, a good financial planner
can clue you in to opportunities that you may not know about or may not know
enough about. It is their business to know about the many opportunities that
exist to set aside and make money for you and your family.

A good financial planner can help you plan for so much more than retirement. In
fact, a very good financial planner can help you plan for your retirement, the
college funds for your children, emergency funds for life's little mishaps, and
a little bit to put towards those special purchases we like to make along the

They can do all the things mentioned above by assessing your current situation,
your future needs, your current means, and your future goals. They will discuss
spending issues that may be problematic, make suggestions, and help you come up
with a realistic plan for meeting your goals. Their work doesn't stop there
however. They will monitor your progress and when necessary make adjustments
that will help you get back on track with your financial planning.

Many people feel that they are perfectly capable of doing this on their own and
the truth of the matter is that some people are. The vast majority of us
however, lack the discipline, willpower, and the knowledge of investment
strategies to make nearly the return on our investments that a good financial
planner will yield. When planning your financial retirement and the future of
your family you should keep the bottom line in mind at all times. If a good
financial planner can net you $100,000 or more in retirement funds over time,
he's well worth the price you pay for his service.

Some of the best things about a financial advisor is that you won't have to pay
the sometimes high price that comes with learning from your mistakes. You will
have his or her knowledge and experience working for your money rather than
your own inexperience risking it. He or she can also help you with estate
planning and tax guidance so that you aren't left floundering in these matters.
He or she can also help you determine your insurance needs in order to protect
those you leave behind. There are many ways that a decent financial planner can
help you maximize your retirement money the hardest part for you as the consumer
is making the call.

When should you Retire

Once you have all the wheels in motion for your financial retirement it is
often difficult to wait for that great and liberating day but you must take the
time to make sure that there is no detail that hasn't been covered or has been
overlooked in the planning process. Most of us worry over whether we'll be able
to maintain a certain level of income when we retire and little else. The
problem is that maintaining the same level of income during retirement is often
not enough to keep things going and take care of all your family's needs during
your retirement.

Have you checked out your insurance expenses? You should make a point of
checking that all of your current insurance plans will either cover you during
your retirement or at least that you have something in order until your
Medicaid benefits kick in. This isn't only about medical insurance. There are
all kinds of insurance coverage that we need in order to avoid potentially huge
amounts of debt during our retirement. Some of the common types of insurance you
will need include the following: homeowner's insurance, auto insurance, health
insurance, dental insurance, long-term care insurance, and life insurance.

Once you've taken care of your insurance for your financial retirement. Have
you established a budget that you and your partner can live with during your
retirement? You need to be absolutely sure that you are in agreement on the
budget or hard feelings could develop over time. Talking about things can
accomplish so much and smooth many ruffled feathers you didn't even know

Have you mapped out plans for things to do both together and individually? This
is another thing that is important. While you are a couple you are still
individuals with independent needs and desires. Make sure that you both have
time and funds set aside to pursue interests that appeal to you as individuals
as well as those that appeal to you as a couple.

Do you have any special needs that should be addressed in the budget or in your
planning? Do you need a vehicle with handicap access (these cost a lot of extra
money in many cases and should be strictly budgeted when making retirement
plans) and do you have a little tucked away into your budget for emergencies
that may arise?

Other important considerations include what bills you have. Are your student
loans paid off? How about those pesky high interest credit cards? Those can add
up over time and you need to eliminate as many of these as possible along the
way. You should also take great care to make sure that your home is paid for
and all the taxes are caught up. You do not want any surprises that might
jeopardize your security once you retire.

The list may seem endless but each question is very important in the grand
scheme of things. You will want to take every effort to make sure that there
are no nasty surprises along the way. Those surprises could mean the difference
in you enjoying your retirement and facing the need to return to work at some
point during your retirement in order to replace funds that must be spent for
emergencies that were unexpected. Once you have all the answers to these
questions and the answers are good, then you are ready to retire.

What is a 401(k)?

When searching and sifting through copious amounts of confusing and conflicting
information concerning financial retirement savings and plans it is quite likely
that you have come across the term 401(k). You may have wondered if that was the
newest robot in the Star Wars saga but the truth of the matter is that it is a
type of retirement savings plans that is designed so that employees and
employers alike can contribute to a fund that is set aside for your future

Many people invest pretax earnings into their 401(k) funds, which they then
have the option to invest in mutual funds of many options. You will find these
mutual funds in a wide array of choices from money market accounts to very
aggressive and risky stock portfolios. If you work for one of the many
companies across the country that offers the option of a 401(k) plan you would
be literally robbing your future self not to take advantage of this offering.

There are 3 general types of contributions to 401(k) plans: matching
contributions, elective contributions, and non-elective contributions.

Matching contributions are very nice from the standpoint of the employee as the
employer matches a predetermined amount of the funds invested by the employee
towards this fund. Different companies will offer different amounts for their
matching contributions. If your company will match up to a certain percentage
of what you invest into your 401 (k) you should take them up on their offer.
This is money that will benefit you later in life and should not be thrown away
without a darn good for doing so.

An elective contribution is money that you invest before taxes are taken out of
your salary. This means that you aren't paying income taxes on these funds at
today's rate of taxation. Many people believe this is a good plan because the
assumption is that you will be in a lower tax bracket upon retirement though
there are no guarantees that that will be true. This money is money that you
have elected to invest in your 401 (k) plan, rather than bring home in the form
of salary, thus the name of elective contribution.

Non-elective contributions are money that employer deposits into your account.
In most cases you cannot opt to take this money as cash rather than an
investment in your 401 (k) plan.

There are limitations for how much you can invest into your 401 (k) plan on a
given year. You should check with the IRS to get the actual numbers as they
have changed over time and are likely to continue doing so as the cost of
living increases across the country. Once you reach the age of 50 you are
allowed to make extra contributions to your plan in order to 'catch up' and
better prepare for retirement.

When studying your options for retirement financial planning you should
carefully consider taking your employer up on any type of assistance they offer
in this endeavor. If they offer to match the funds you invest in your retirement
you can bet that money has already been deducted in their calculations of your
salary. In other words, they are giving you the money you've earned in a
different manner. The good news is that when the time comes to retire you will
be able to appreciate every dollar that has been invested along the way.

We could never hope to simply save the money that we will need in order to
retire. Even investments are tricky for the vast majority of the population.
For this reason, it is a wise investment plan to take advantage of any
opportunity to increase your funds by employers matching your contributions.
Take the maximum benefit they will match and if you are seriously worried about
your financial future more than your current financial situations, invest the
maximum allowable amount each year in your 401 (k) plan.

What are IRAs?

With all the three letter names floating around our society what is one more?
Really? It's not like we don't have enough to worry about without adding this
burden. However, when it comes to real life, these three letters will have a
greater noticeable affect on people than many of the other three letter names
that we here on a regular basis such as the CIA, FBI, NSB, ATF, and countless
other abbreviations that are hidden behind three little letters. The good news
is that an IRA isn't nearly as insidious as its name would imply. This is a
useful tool to most Americans who hope to someday retire from their life of
work and life out a somewhat comfortable existence.

There are actually many different IRAs, which is the abbreviation for
individual retirement account.

A Traditional IRA is the most common. The only requirement for this particular
IRA is that you are employed and that you invest no more than 100% of your
income or $4,000 per year, whichever is greater up to the age of 49. At the age
of 50 your maximum investment is 100% of your income or $5,000 whichever happens
to be greater. If you meet the requirements of the IRS to their satisfaction
your contributions to your traditional IRA will be tax deductible. As a result,
the funds are not taxed while in your IRA account but once the funds are
withdrawn they are subject to federal income taxes.

This is not necessarily a bad thing, particularly for those who plan to be in a
lower tax bracket when the funds are withdrawn. However, there is a growing
number of people who are interested in the benefits that Roth IRAs and similar
funds present by paying the taxes now when the rates are known rather than risk
an even higher rate of taxation in the future, even in a lower tax bracket. The
best advice I can give is to discuss the matter thoroughly with your financial
planner and listen to their advice.

This is a case where only you can ultimately decide which decision is best for
your needs but he or she can provide valuable guidance. You should also keep in
mind that though laws favor non-taxation for Roth contributions that could
change between now and the time you are ready to withdraw your funds, which
will have you paying double taxes on those funds and is the primary reason that
many people elect to stick with Traditional IRAs instead.

There are several distinct disadvantages to the traditional IRA funds. One of
those would be the requirements in order to qualify for tax deductions. First
of all, if you have the opportunity to invest in another retirement option
through your employer you must be below a certain income level in order to
qualify for the tax deduction. If you do not meet that qualification all the
funds that are deposited into your IRA fund are subject to federal income tax.
You will need to seriously discuss your stock buying strategies before
determining if this is the best choice for you as those who buy and hold tend
to be penalized when it comes to capital gains.

As things are currently, a Roth IRA is often preferable as the money isn't
immediately tax deductible but not only is the investment not taxed upon
withdrawal but neither are the gains that were earned on the investment.
Another serious setback when it comes to the traditional IRA is that you are
required to begin receiving payments at age 70.5. As we are seeing more and
more people work well beyond the traditional retirement age this is becoming
more and more of an issue.

There are advantages and disadvantages to traditional IRAs. It is important
that you decide which of these you are prepared to live with and which you
would rather live without. These differences will matter a great deal when
retirement comes. Take the time to discuss your goals for the future with your
financial advisor and see what he or she recommends.

Turning that Mortgage Around

Your house that you bought so many years ago represents one of the biggest
investments of your life. By the time you approach retirement, if you have
stuck with it, you may well have that house paid off. And with appreciation,
that home may be worth twice or three times what you paid for it and you have
all the equity from those years of house payments. Therefore, in addition to
the joy you have had living in that house and raising your family there, that
house is also can be a big part of your retirement planning as well.

It used to be that to take advantage of that equity when you enter retirement,
you either had to sell the house and go live in a nursing home or retirement
community or you took out a new mortgage borrowing against the equity and you
find yourself paying huge interest payments all over again.

But a new kind of mortgage called the "reverse mortgage" is now available so a
senior citizen who is preparing for retirement can begin to realize some of
that equity as capital and not have to take on a loan payment or move out of
their home. This innovative new program allows you to set up the equivalent of
a home equity loan but instead of getting a huge lump sum, you can have the
equity sent to you in the form of monthly payments so the equity of your home
can actually become part of your monthly budget to supplement Social Security
or other retirement funds.

What is great about the reverse mortgage type of financial vehicle is that you
are never required to pay back the loan of the money that is based on your
equity. The only time that loan amount would be required of you would be if you
moved, sold the house or passed away in which case the sale of the house would
realize the equity to retire the loan. In other words, if you take out $100,000
from your home for medical costs or just to finance a comfortable retirement
living, you are not called upon to pay back that money and you can continue to
live in the house for as long as you want to.

This is a phenomenal arrangement that seems tailor made for senior who want to
enjoy their retirement years without financial worries and do so living in the
house where they raised their children and a home that has become so precious
to them.

For children of a retiring parent, the reverse mortgage is a godsend because
mom or dad can stay in their own home where they are happiest. And if they can
keep the old homestead, the whole family will continue to enjoy coming to visit
there, seeing the grandkids run and play in the same yard they grew up in and
having holidays there as well.

Like some of the best programs for retiring persons, the reverse mortgage was
originally put together by the US. Department of Housing and Urban renewal. It
isn't often that the government gets something right but they hit one out of
the ball park with the reverse mortgage. It is a program and provides federally
insured funds to seniors so they can supplement their income in a safe way that
allows them to use the equity of their home for their retirement comfort
without ever having to give up that home. And because the money coming out of a
reverse mortgage is technically a loan, you never have to pay taxes on that
money which is another big financial blessing. The reverse mortgage is an
option worth considering as part of retirement planning. It gives seniors one
more option for keeping their homes. And that is good for everybody.

Thinks to Consider when Considering a 401(k)

When it comes to financial retirement plans, the sad truth is that far too few
people actually have a plan. It is estimated that somewhere in the neighborhood
of 30% of employees who are offered a 401(k) through their employers fail to
sign up for them. There have been instances in the past when unscrupulous
administrators have taken advantage of the temptation that having access to
those funds provided as well as many, many cases where the worst enemy when it
came to 401(k) investing was the investor.

The good news is that like many things around the world we are learning from
our mistakes and working to create a new and improved 401(k) for employees
across the country. With this in mind and the advances that have been made very
few people can honestly state that they are worried about the security of their
money as a reason not to participate in their company offered 401(k) programs.
The problem remains that far too many people believe in the sanctity of a now
dieing system for retirement funds.

The truth of the matter is that no matter what, chances are very slim that
social security will provide any sort of security for those that are retiring
and relying on this as their 'golden' years. There have been mistakes along the
way and will continue to be. Not only do the administrators of these plans make
the mistakes but also by those receiving the benefit of these plans, which can
be so very important when, it comes to establishing some degree of security for
your financial retirement planning.

Along the way we've learned that the penalties for borrowing against your funds
can be much more harsh than a mere slap on the wrist. We've also learned the
cashing out is very rarely a wise decision in the grand scheme of things when
it comes to your 401(k) plan. These lessons are hard learned in many cases and
cost years if not decades of your retirement plan. Do not make these mistakes
unless the stakes truly merit the costs involved.

Don't be afraid to actually make the investments you feel are necessary in
order to maximize the potential of your 401(k). This is your retirement after
all and the new rules regarding your 401(k) are putting you in the driver's
seat so to speak. Don't let yourself and your investment down by not doing the
necessary research. If you plan to invest in stocks make sure that you are
diversifying your stock holdings and that you have thoroughly researched the
stocks in which you are investing.

You should also take the time to research the differences in a traditional
401(k) and a Roth 401(k) and see which one you feel will best suit your needs
as a consumer and as an investor. There are marked advantages and disadvantages
associated with each and ultimately which is better comes down to a matter of
preference as there really is no absolute right or wrong answer to this

I strongly encourage you to seek the services of a competent financial planner
in order to help you properly diversify your portfolio for long-term investing
with maximum potential. I believe you will be amazed at the miracles that the
right financial mind can work when it comes to your funds.

Scaling Back the Farm

When you are in the middle of your years of raising a family, there is nothing
like owning your own home to make that experience rewarding. So if you bought a
home with the conventional yard, fence, neighbors, dog and all of the trappings
of suburbia, you no doubt have many happy memories that you had "back at the
farm" as you may have called it. Many people even go so far as to name their
home something like "Happy Acres" to give their homestead even more personality
and add that sense of ownership to it.

Probably to your kids, the house you raised them in will forever to your home
and the idea of anyone else living in it is heresy of the worst kind. But as
you begin to move toward retirement age, you may see the value in selling that
home and getting into something smaller, cozier and with less overhead.

Retirement doesn't always mean moving into a nursing home or retirement center.
You may have many happy years ahead of you where you are plenty able to get
around and have no need of "assisted living". But selling the house as you
enter into your retirement years makes a lot of sense for a lot of good reasons.

For one thing, you may have that house paid off and there may be a lot of
equity in that home that you can use to get into a cozy little condo or
apartment and have plenty of money left over to pad your retirement savings or
afford a bit of travel with your spouse. If your home can finance some of the
trips you have been dreaming of all these years, that is a good payback for
being so careful with your money during your working years.

You can take a one time tax exemption that we all are allowed to use which
permits you to sell the house and not have to pay taxes on the proceeds even if
you don't sink the money into another house. That means that all of that equity
money is sitting there waiting for you to put it to work. While you cannot sell
your memories, if the house isn't serving your needs as a family any more, why
bother with it?

Many times when you get done raising the kids and no longer are tied down to a
job, it might be time for you and your spouse to get out there and enjoy life
and travel. Retirement is often a time to get rid of a lot of your material
possessions and get lose to get out and enjoy your freedom and see some of the
world that you couldn't do when you were raising children. But if you live in a
small place that is not difficult to lock up and walk away from, you have the
freedom that you always dreamed of when you thought of the word "retirement".

Another great reason to get out of your house as you move toward retirement is
that a house with a yard and all of the other trappings of ownership is a
constant ownership problem. You are responsible to fix the fence, get the
plumbing fixed, grow a yard, a garden and keep up the house year in and year
out. If you sell the place and rent or move into a smaller place such as a
condo, a huge amount of that maintenance if not all of it disappears. Now when
the appliances break down, just call "the super" and let them deal with it. You
deserve to have those worries taken off of your back. That is what retirement is
all about.

So getting rid of the homestead might be a great idea for your retirement
planning. But be prepared for the move and the work that getting the old place
ready will entail. You didn't clutter that place up in a week and you won't get
out of it that fast either. But by going through your stuff and streamlining
your life now, that is something your kids won't have to do later. And when you
are moved out and another young family is getting started in your old homestead,
you can congratulate yourself on a great move to put yourself in a perfect place
to enjoy a happy and fun retirement with the love of your life.

Roth IRAs for Financial Retirement

This is entirely an opinion based on the facts that I have available and should
be viewed as nothing more than that. However, I feel I would be remiss in not
pointing out the incredible value that Roth IRAs can bring to the table for
savvy people who are planning their retirements. There are actually advisors
that straddle the fence on this particular issue and I can honestly see the
validity of both sides. For me, a Roth IRA is preferable to the Traditional IRA
for one reason and one reason only. I would much rather face the evil that I
know and pay taxes on that money now than the evil that I don't know by paying
taxes not only on the investment but also the earnings later.

I know what tax bracket I am relegated to at the moment. I know about how much
I'm going to pay in taxes on the income I've labored to receive about 65% of. I
know these things in terms of what a dollar means today and would much rather
pay that price now than later when I have no idea what tax bracket I'll be in
or how much money I will actually see of my retirement earnings.

Many point out that the laws regarding the Roth IRA could change between now
and then. This is very true. At the same time the laws in regards to the 401
(k) could quite possibly change in time as well. In the art form of
complication the IRS could put out next years tax code in Greek and the average
citizen would not be able to tell the difference, I for one think they already
do this in the ultimate practical joke on the people. Bottom line is I would
much rather retain the maximum allowable control over my money when I need that
money rather than trying to write off the taxes I will gladly pay today.

Putting the taxes off until a later date is like getting a credit card with 0%
interest for 12 months. What they don't put in the big bold print is that after
the one year period or the 'honeymoon' so to speak is over that number goes up
to well over 20%. At this point in time I have no magic crystal ball that can
in anyway indicate what my tax bracket will be nor can it indicate that
percentage of taxes I will owe five years from now much less 35 when retirement
comes knocking on my door. The peace of mind that goes with not wondering if it
will be enough after taxes is well worth the inconvenience of paying taxes on
those funds today.

If you're looking for some even better news, try this on for size. By not
paying taxes on the final amount you are actually adding hundreds of thousands
of dollars to your income if you invest the full amount allowable over the
course of the next 50 years. You will still save a huge amount of money if you
only make the maximum investment over the course of the next 30 years. Every
year you add to those figures helps wildly of course when it comes to the
bottom line but if you are looking for a way to maximize your retirement funds,
eliminating the taxes on those funds by and large is the way to go.

Retirement Starts Young

It isn't too surprising that the time when we really start thinking about
retirement and planning for it is middle age. Perhaps it is when we have our
lifestyles pretty well defined, perhaps the career is where you want it to be
and the kids are here and growing up that you start looking down the road to
the future. Perhaps it is looking toward the future in terms of insurance,
planning for college and other issues such as this also gets your mind moving
on how you will be ready when retirement gets here.

But if we were able to step back above our lives, the best time to start
preparing for retirement is not the middle age years. Retirement planning
experts tell us that if young people in their twenties or even teens can start
putting a little bit back toward retirement, the rewards when they reach their
golden years will be phenomenal. If a youth in his early twenties or teens were
to just put one percent of what they make back, and that money stayed in some
form of investment vehicle that would grow into a retirement account, the
growth between the time of investment and retirement at 60 or 65 can be
explosive even at a modest interest rate.

Unfortunately, few young people are looking that far ahead when they are in
their early adult lives. That is a time when the transition from teen years to
family life is pretty all consuming. So it might be the responsibility of
parents and older advisors to help youth see the value of starting to work on
their retirement savings well in advance so they have a well developed program
when their retirement years come along.

One of the best places for a young person to start their retirement program is
with the 401k or retirement benefits at their job. Now, in the last decade,
many businesses have eliminated retirement benefits where the company pays for
the retirement. But if the young person works for a company that offers 401K,
they can set aside a percentage of their income and it will be put into a
retirement fund before taxes. Moreover, often the company will match the funds
up to dollar for dollar and the company will manage the investment of the funds
as well.

The outcome is a healthy and rapidly growing fund that starts out with an
immediate doubling of the invested funds and then grows steadily over the years
as more is put into the fund with each paycheck. The young worker gets used to
the retirement money coming out so they adjust their budget to live without it.
And without giving retirement much more thought than that, within a few decades,
the 401K can evolve into a very impressive retirement account to be sure.

If you are a young person and you are considering if you might think about
starting a retirement account, congratulations. You are one of just a few
people who have the foresight to think about retirement this early in life. And
by starting now, you take advantage of the thing that is your greatest asset --
time. Because if you only put a little bit back, that can grow and grow and
grow and become a sizeable retirement nest egg for you and your spouse even if
he or she is the spouse off in your future.

Retirement Planning for where you Will Live

There are many things that people plan for when planning their retirement. They
plan for the travel they wish to do, to have money for gifts for the
grandchildren they hope to have, and all kinds of wise and practical thing. In
the process, however, many people neglect to plan for where they wish to live
upon retirement. We are seeing a growing trend of retirees moving to certain
communities. This is all well and good. It's nice to be around people of similar 
ages and interests and live in communities that cater to those interests. 
However, one thing is often overlooked during the process. The prices in these 
communities, and the average cost of living are quite likely to be different 
than the cost of living where you are. This is true unless you plan to retire 
where you live.

The fact is that there is a growing trend among retirees to migrate to certain
population centers. The entire coastal region of Florida would almost qualify
though not all communities in this area are equal when it comes to being
retiree friendly. The problem is that most people who retire live on limited
budgets and can't afford the high dollar real estate that is part and parcel
for these areas. One solution to that is to decide where you'd like to retire
and buy real estate in that area early.

There are all kinds of housing communities being built around the nation as we
speak. In addition to these communities high rise towers and condominiums are
being built to cater not only to time-share renters but also retiring baby
boomers that are moving into these areas. The earlier you buy the better, as
property values do tend to increase gradually over time. There are trends and
twists and turns but for the most part, property will gain in value given
enough time in which to do so. The good news in these 'time share' and popular
destination areas is that you can own the property and rent it out for a little
extra income while you are biding your time waiting for retirement.

Once you've purchased a property in the area you can make the rounds and get a
good comparison for the value of goods and services in the area compared with
what you are accustomed to. You can add the difference in your calculations for
what you will need when making your retirement plans. Failing to do this can
result in some very sad situations many retired people find themselves in.
These could include living in sub standard and unsafe housing and not having
enough money left after paying the rent to cover the cost of food and
medication much less other needs that may be encountered.

You should also make sure that you add the little cushion of money into your
planning so that you can occasionally through caution to the wind and do
something fun. After all, what good is it to be retired if you can never afford
to live it up a little? Make sure you have enough money set aside to take that
cruise every spring or fly up to see the grandkids two or three times a year.
You want to make sure that you can enjoy your retirement or you will find
endless days of staring at the television. What fun is that?

The costs of living in this country from one region to the next can be
significantly different. If you do not consider where you will be living upon
retirement when calculating the numbers you are doing yourself a great
disservice. This is definitely something you will want to discuss with your
financial planner before it is too late to make the changes that will affect
your future and retirement needs. It is good to have dreams of where you'd like
to retire but it is even better to take the steps necessary to make your
retirement dreams a reality.

Property Investment for Retirement

While many fortunes have been made and lost in the real estate business, many
people overlook the value of real estate investing when it comes to planning
for retirement. There are many great ways that you can let real estate build a
nice little nest egg for your retirement and the sooner you begin the process
the better.

While there are all kinds of stocks and mutual funds that confuse even the most
intelligent among us, real estate is a pretty straightforward business to get
into. The problem is that many people feel it is too risky. The truth is that
there are many different types of real estate investing that all carry
different risk to the buyer. One thing is for sure and that is that with proper
care and attention properties tend to gain value over time rather than lose
value. If you purchase properties today and properly maintain them, you can not
only reap years of rental income while paying the mortgage on these properties
but you can also find your retirement home and pay today's prices for it rather
than the prices of tomorrow.

When it comes to real estate it is always good to arm yourself with knowledge
before taking any steps and you should carefully discuss all plans for your
financial future with your trusted financial planner or advisor. His or her job
is to give you guidance when making plans and purchases that will affect your
financial stability and security. They can also help you with the matters of
taxation, cost analysis, estimated inflation, and the average rise in property
value for an area.

As I mentioned before there are always risks when it comes to any sort of
investing. The same holds true for real estate investing. Things can go wrong.
On occasion you will find lemon properties, for this reason you need to have a
complete and thorough inspection performed before you purchase the property.
You should also make sure that you are aware of your state and local laws as
they apply to landlords. For this reason it is a good idea to consult with an
attorney that specializes in this type of financial investing in addition to
your financial advisor.

Rental properties aren't the only way to build a property investment portfolio.
There are all kinds of property investment opportunities for those that are
willing to take the risk. When it comes to property investing, the greater
risks often net the greater potential rewards. The thing you must remember is
that you are gambling with your financial future. I tend to stick with rental
properties as they are a fairly safe bet and actually pay for themselves over
the years while building a nice nest egg for my future.

There is the eternally fascinating investment opportunity that property
flipping presents for one. When flipping a property you purchase a property
below market value-preferably one that requires minor cosmetic repairs. Make
the repairs. Then sell the house for a substantial profit. This is a risky
venture for those who are novices to the field and many would be investors have
lost a great deal of money doing this. Successful investors however can net
significant profits in a very short amount of time if they have the knowledge
and skills to do the work themselves and time things perfectly.

There are even more property investing opportunities that provide even greater
risk, as they are highly speculative known as pre-construction investing. This
is the type of investing that creates millionaires. On the flip side it has
sent many into bankruptcy along the way as well so tread very carefully before
engaging in this sort of real estate investing and take great care never to
invest more than you can afford to lose.

As you can see there are ample opportunities in real estate to create an
outstanding financial retirement plan for you and your family. The only
decision you need to make is whether or not this type of investing is a good
fit for your comfort zone.

Planning your Financial Retirement

While there was once a standard age for retirement in this country and people
could count on their company pension plans or retirement funds to get them
through their twilight years we are finding that people are often living longer
than their funds intended and that their quality of life in these years is much
better than in decades past. In fact, we are seeing a growing number of
retirees that are dedicated to health and good, clean, fun living. This is
something almost unprecedented throughout history and yet our retirees are
younger in many ways than ever before.

This is where the problem kicks in for most. If you haven't heard, social
security, which was meant to secure our golden years is in serious financial
trouble. Part of the reason for this is because people are living longer than
was intended when this program was invented. For this reason, we are seeing
more and more young people taking their financial retirement planning into
their own hands-particularly as we are witnessing more and more retirees coming
out of retirement in order to put food on their tables because their retirement
funds aren't enough to make ends meet.

It's really sad to see those that must return to work in those years where they
should be watching their grandchildren playing rather than going into work day
after day. If you don't want this to be you then action needs to be taken. You
cannot depend on social security for your retirement and chances are that
social services will be a long forgotten thing of the past by the time we reach
retirement age. There are several things you can do that will help you when it
comes to setting aside and investing money for your retirement.

The earlier in life you begin socking away money for your retirement the
better. This of course does not mean that there is no hope if you wait until
later in life only that you will need to make more substantial investments and
save more aggressively if you choose to wait until a later date.

One thing you should carefully consider when planning for your retirement and
setting aside funds for that end is how much money you feel you will need in
order to have the quality of life you hope to have upon retirement. Many people
are working longer than in the past in order prolong their investment period. It
helps if you set specific goals so that you have a number to work towards. You
should discuss your plans and goals with a financial advisor from the very
beginning in order to get the most accurate advice that is customized for your
individual needs.

Just as there are very few things in life that are one size fits all, the same
holds true when it comes to planning for your financial retirement. We all have
goals for our golden years. Some of these goals include jet setting around the
world while others of us seek little more than a modest existence, a garden to
call our own, and a steady supply of good books to on our nightstands. There
are all kinds of retirement plans and they will each require their own unique
and individual means of funding.

One important thing you need to keep in mind is that while saving is great,
investing is often the wiser option for increasing your funds and netting
larger earnings upon which to retire. There is risk involved in investing and
you need to be aware of those risks before choosing to do so, however, there
are many times where the rewards far outweigh the risks that are associated
with investing.

You should always discuss your retirement plans and goals with a qualified
financial planner. He or she can offer advice and guidance that could make a
huge impact on the scope of your retirement and your lifestyle upon retiring.
Choose your planner with as much care as you choose the plan for your financial
retirement and you should be in good hands.

Planning for That Final Moment

There is a phrase people use when referring to estate planning and all the
things you do as a responsible adult so when you get into retirement years, you
don't have to worry about those things. That is because one of the big
objectives of retirement planning is to put all of your "affairs in order" as
they say so if something came up, your kids would not have to deal with it. So
you go through the checklist and make arrangements for your will and your DNR
or "do not resuscitate" so the medical people will know what to do in the event
you cannot be brought to consciousness.

But one level of preparation for your final years of a very full life that you
may not have decided about is funeral preparations. Many funeral homes sell
packages where you can pay for your casket and much of the funeral expenses
well in advance. This is very appealing because you can think ahead about how
you would like the funeral to go and select the casket and make arrangements so
there is less guesswork for your family and loved ones if the moment comes up
too quickly.

That is the real appeal of preplanning all aspects of what might happen when
your final moments come. You don't want to leave your children to have to try
to figure out your life insurance, your estate issues, your will and your
funeral if your demise comes along suddenly. Most of these preparations are
pretty cut and dried and you want all the paperwork in order, legal and the
person assigned to resolve your estate informed and legal so there is no time
lost on getting things the way they should be if the moment were to come.

The big step of pre-buying your funeral plot, casket and paying for the funeral
in advance is something to give some serious thought to. For one thing, you must
be absolutely sure you are in the town where you will want to be buried. Many
times later in life, a retired person wants to pack up and move to where the
kids are living. That is one of the good things about begin retired and
relatively unencumbered by a lot of possessions. If you are living in an
assisted living center, the move is just not that difficult. So you don't want
to own property, even if it's just a burial plot and have to deal with
transferring all of that paperwork to another town if you do move with your

But the compelling reason not to put money into a funeral arrangement package
is that funeral homes are not great at managing those funds. There have been
plenty of stories come out of late of mismanagement of funds buy funeral homes.
Or if the company owning the funeral home is bought, many times the new company
will not honor your contract with the previous owners and your relatives find
this all out just when they least need to hear about problems.

A much better option is to take the same money you would have put into funeral
arrangements and put it into a trust set aside just for this purpose. You can
name who you want to have access to the trust and even write out in specific
detail what you want the money used for and how you want the funeral to go.
That form of living will or ethical will gives your relatives the resources
they need to conduct your affairs and the directions you want them to have. But
they have the flexibility to pick the funeral home and buy the plot that seems
right at the time. The money can accrue interest and it is secure because it is
still owned by the family right up until it is needed.

The desire you have to get your final arrangements arranged is a good one. But
thinking through some of the problems that can come up if you do too much
prearranging gives you the wisdom to make the right choices so you can enter
your retirement years knowing that everything is arranged when and if, God
forbid, the moment of your departure comes along.

On How to NOT Screw Up Your Retirement Planning

Planning for retirement is something grown ups do. So as soon as you can when
you settle into your adult life, if you can get your retirement planning
moving, you will benefit from the wisdom of moving on this early in life when
its time for you to retire. Too often young people live in a fantasy world that
they will never grow old. But short of the worst case scenario of an early
demise, everyone is going to get old and its far better to do so with a plan
then to "let it sneak up on you."

This is something you don't want to screw up. Is it possible to screw up
retirement planning? Of course it is. If you speak to senior citizens who did
not start planning in advance and got to their senior years with nothing to
fall back on and no funds to use so they can step out of the working world and
enjoy a more leisurely retirement lifestyle, that is an example of people who
screwed up their retirement planning. So it's good to know the common mistakes
people make so you can avoid them.

Probably the biggest mistake that you can make in your retirement planning is
to wait to start it until you are pretty close to retirement. If you want to
retire at 60 and you don't start getting ready until you are 55, you will not
have nearly as well prepared a retirement package as if you had started when
you was 25 or 35. By starting early, you can set back a small amount each month
and put it into an IRA, your employer's 401k or some other retirement vehicle.
Then just let that money continue to accumulate and grow and before you know it
you are sitting on top of a pretty substantial nest egg.

Speaking of sitting on top of a nest egg, the second big mistake people make is
not leaving that nest egg alone. When that retirement investment fund starts to
get big, it is really easy to look at it as a way to get you out of credit card
debt trouble or to borrow against for some new plan or possession you want.
Above all, resist this temptation. If you lose that retirement fund due to
foolish use of the funds in your middle age years, you are back to square one
with nothing to show for your years of hard work developing that retirement
nest egg.

The plan of setting up withholding from your checkbook or a direct deposit to
your retirement account of retirement savings allows you to go about your busy
life knowing that your retirement planning is underway. This is step one but
its not a good idea to never go back and review your retirement plan and see if
how you are going about getting ready for retirement well in advance. Make it a
regular ritual to sit down and review what is going on with your investment
funds. Look at the way your investments have been performing and if you are not
getting a good return on those money, make some changes. Remember, just because
your retirement funds are being managed by the company you work for doesn't
mean the money belongs to them. It's yours so be responsible and manage it.

Starting early and staying proactive about your retirement is your best
approach to retirement planning and one that will result in a much bigger
retirement fund for you to start your golden years with. And by taking good
care of your retirement before you need it, you are guaranteeing that it will
take good care of you when its time to depend on that fund for a happy and
prosperous retirement lifestyle.

Money Management for Financial Retirement

Learning to manage your money while you have more disposable income is one of
the greatest gifts you can give yourself when it comes to your retirement. One
of the best things you can do in order to prepare yourself for living on a
'fixed' income that goes along with retirement is to establish a budget and
spending limit each month and live within that budget. In fact, you might wish
to establish a smaller budget than you actually think you will need in order to
maximize the effect and add a little padding to your savings account. Over time,
the little savings can either provide a nice boost to your retirement fund or a
great night on the town as an occasional treat.

Living on a budget is one of the most difficult things that many Americans will
ever face. As a matter of fact we have the nasty tendency to live at the very
edge of our abilities and over extend ourselves heartily. A good method for
learning to create and establish a budget is to make a list of all your monthly
spending right down to your miscellaneous expenses and convenience store and
break room snacks and stops. Then add up the totals and see where you believe
you can cut costs. Of course it isn't enough merely to say you want to cut
costs in certain areas, you need to create a plan of action for doing so.

If you are creating greater costs by having an afternoon coffee or snack at
work see if you can bring them from home in order cut costs. Cook one extra
casserole per week and freeze it in order to eliminate those last minute fast
food runs when you simply don't feel like cooking. Take baby steps when it
comes to cutting costs and over time you will find that you have learned to
live with even less than you thought possible. In fact you can make it fun by
making it a challenge. See who can eliminate the most money from the budget
each week and actually stick to it.

The thing you do not want to do is deprive yourself to the point that you will
eventually go out and undo all the good by splurging. You need to reward
yourself along the way for the small steps you have taken. Set goals for saving
as well as your budget and you will find that you are much better prepared to
budget your money you are confined within that budget. While you were at it,
you just might find that you've saved enough to increase your investments
enough to bump your budget a good bit when the proper time comes.

You do not have to have an all or nothing approach when you begin learning to
manage your money, especially if you are making the effort before you reach the
point of retirement. Little things we do on a daily basis that help us make more
responsible decisions about our money will become habits over time. Those habits
will serve you well throughout life and retirement. They will also help you
prioritize your spending once you are living with limited means in order to
decide what you can and cannot sacrifice in order to get the most out of life.

Make your Retirement Money Walk With You

Planning for retirement is a project that you do for virtually your entire
adult life. The earlier you start putting money back for retirement, the better
your golden years will be. And if you have been faithful in participating in
your employers 401K plan, you can start to some serious money begin to build up
as you realize the vesting of the employer matching funds and you continue to
make your contributions month after month. It can get pretty exciting when you
get those statements and you see your retirement fund really start to take

But your career in business can take a lot of twists and turns along the way.
And sometimes you change jobs for a lot of reasons. But the question comes up
then, "What happens to my 401K money if I leave before retirement?" The good
news is that you don't lose it. The 401K program is federally monitored and
once those funds go in there, they are yours if you are vested in them.

But if you move jobs several times during your career which is very common in
the modern business marketplace, if you don't take some action, you can end up
with retirement money scattered over all of your last jobs which is messy and
makes for a nightmare to keep track of. It would be better if you can make your
retirement money walk with you so you know where it is and you can keep all of
your retirement planning funds in one place so you can take advantage of them
all at once when you are ready to retire.

When you first leave your employer to go to another company you are given a
couple choices of what to do with your retirement funds. One option is to leave
them behind to catch up with them decades later when you are ready to retire. In
addition to wanting to keep this important asset with you as you travel from job
to job, you have no idea if that employer will even be in business when you are
ready to retire. You don't need that kind of uncertainty when it comes to your
retirement money.

Another option that is offered to you is to cash out your 401k and withdraw the
results. While this may be attractive if you are between jobs, it's really a bad
idea. For one thing, the laws governing the 401k call for you to pay a large
penalty if you withdraw them before retirement age. Not only that, once you
take that money out of your retirement funds, it's gone and your retirement
planning will suffer a serious set back.

A very good option that is available to you is to roll your current 401K over
to your new employer. Now if you left the last job without a new employer
either through termination or leaving to start your own business, that may not
be an option. If you are looking for a new job and think you will have one in
the next year or so, you can leave your 401k money where it is and transfer it
later though. In that way, your 401k continues to accumulate as one fund, not

But a third option is to roll the 401k money into a tax sheltered privately
owned retirement fund. You own this account and you usually have an investment
management company helping you with the investment and protection of that money
until it is time for you to retire. This is an outstanding option because that
investment company works for you so you call the shots about your retirement
money. And if you use this option, you can still start with a new 401k fund at
your next employer knowing you have a place to put the funds in the event of
another change of jobs. And that puts you in the driver's seat which is a very
good feeling when it comes to retirement planning.

Make a Plan and Make it Work

Being ready for retirement is not something that just happens. Every single
person you see in retirement today that is enjoying a leisurely life in their
golden years are where they are because they planned for it. The first question
that may come to mind is when the right time to start planning for your
retirement might be. The answer is that if you are asking the question, it's
the right time. You really cannot start planning too soon. If you could start
putting money back for retirement as early as right out of high school, that
would be just that much more time you have to build up a really comfortable
retirement nest egg that will serve you well when you need it in your golden

But most of us start thinking about retirement in our adult years and usually
in association with some big life event such as getting married or having a
baby. So we have one word of advice if you have been thinking about beginning a
retirement plan. That advice is stop thinking about it and take action. If you
make the subject a focus for you and your spouse to look at, you both will be
glad you got off the dime and got moving on a plan.

Often the trouble with making a retirement plan is you don't know where to
start. Too many people just wait for their employers to introduce a 401K plan
and they just dump some money in there and count on Social Security to be there
in a few decades. Then they call it a day and call that a retirement plan.

You and I both know that your security in your golden years is too important to
not take more seriously than that. So set aside some time each week for both of
you to sit down and start thinking about how to create a retirement fund and
how to plan to build a retirement plan that you can grow into. The first step
always begins with you.

If you don't know where to start, then admit that and set about to do some
reading to get ideas. You are doing that right now by reading this article. But
get out there on the internet and find some of the great books out there on
retirement planning and take some time and read them. You will start out
ignorant and end up an expert in retirement planning.

Keep plenty of notes during the discussion and learning phases so you have a
road map of ideas to build into a plan for building a retirement fund. Once you
have a simple plan, its time to talk to a financial advisor. If you trust your
bank, go talk to them and see what they can do for you. Or you can seek out a
friend or someone in your community who you know will be able to steer you
toward how to build a retirement fund that is structured properly to protect
your retirement money from taxes and be there for you when you need it when you
are old and grey.

Now it is time to kick it up to the next level. Once you have a plan and
perhaps are seeing it start to take off, start learning about investments.
There are lots of places you can see your retirement funds go that will give
you a nice yield that can make that fund grow more quickly do to shrewd
investing. You can divert money to real estate, the stock market, mutual funds
or other well know investments. Diversify where you put your money so no one
financial reversal can whip out your retirement funding.

Above all stay on top of your retirement fund and your retirement plan. Review
it together frequently to see if your retirement goals are still the same and
your investments and pans for building our retirement fund line up with that
plan. By making retirement planning as big a part of your thinking as planning
your family or your career, you will give it serious attention over the years.
And the result will be a strong financial plan that will give you good
resources to enjoy a happy and worry free retirement life.

IRA vs. 401 (k)

Many people find all the options that are available when it comes to retirement
planning to be quite confusing. If you are one of those this article is
dedicated to explaining the differences between a 401 (k) plan and an IRA
(Individual Retirement Account). There will be many terms you will come across
during your research that will be somewhat confusing until you get the
terminology down. The path to financial doesn't have to be as complicated as we
tend to make it.

I would like to take this opportunity to encourage you to seek the guidance and
advice of a professional financial planner. The resources and knowledge that a
competent financial advisor can share with you will be invaluable when it
becomes time to make the decision that will affect how your retirement savings
are put to work for your retirement. We go to a mechanic for mechanical advice
(at least I do) so it only makes sense that we would go someone who has trained
in financial matters for financial advice.

Getting back to business, when it comes to financial retirement planning you
should find that both IRAs and 401 (k) plans have strengths and weaknesses.
There are also limitations as to how beneficial they can be when used in
combination with one another as well as their own limitations. Every benefit
that aids you in taxes and retirement should be considered carefully before

Let's first look at the 401 (k) plan. This is a plan that offers a few benefits
that are much preferable to many over other retirement plans. The first thing
you might want to consider is that you can invest up to 15% of your salary or a
maximum of $15,000 per year (as of 2006). Of course that is assuming that your
employer doesn't have limits on how much you can invest. The money invested in
your 401 (k) account is pre tax money so it lowers the amount of taxes you are
paying out of each paycheck. Many people also find that because the money is
taken from their checks before it arrives it is far less painless to part with.
As someone who has closely watched taxes, FICA, and Fido get my money for years
I can say that it is no less painful for me but some find it comforting and
that is a real benefit. Finally and perhaps the most important thing to
consider is that many employers will match a percentage of your contribution up
to a certain amount each check. As an employee this is a boost to your
investment that is well deserved and hard earned. I hope you appreciate the
implications it has on your future earnings. You should keep in mind that the
penalties for accessing these funds early are harsh indeed in order to
discourage this practice from occurring. Take care that you do not over-invest
in these funds to the point that you will need to access them in times other
than dire emergencies.

IRAs are another creature all together. You will find much stricter limitations
on IRAs than on 401 (k) plans beginning with the fact that if your employer
offers a 401 (k) you must make very little money in order to qualify for the
tax deductions that this particular retirement fund generally allows. The
maximum yearly contribution for your IRA will be $4,000 or 100% of your annual
income; whichever is greater up until the age of 49. Once you've reached the
age of 50 you can invest an additional $1,000 to your fund. The other major
drawback when it comes to an IRA is the fact that you must begin receiving
payments at the age of 70.5 from your account. You will also be heavily
penalized if you make an early withdrawal from these funds.

Whether you choose a 401 (k) plan, a Traditional IRA, or both for your
financial retirement investments, I hope you will take the time to discuss the
benefits and disadvantages of each with your financial advisor before making
your final decision.

Investing in Bonds

When it comes to planning your financial retirement many people focus on the
different types of accounts that you can use in which to defer payments or
avoid taxes for a little while but very few people discuss in depth the
specific things in which you can invest those funds that you have so carefully
squirreled away for the important day that is to come in the dark dank future
that seems as though it will never arrive.

Bonds are not your typical high risk-high yield investment but they are very
likely to earn a return for you. If you are not in dire straights for
retirement funds this is a slow and steady way to build a decent retirement for
yourself over time. If you are in the final hour this is an investment strategy
that might be more than slightly too timid for your specific needs. There are
other more investment strategies that will be discussed elsewhere.

There are essentially three different types of bonds: corporate, municipal, and

Corporations trying to raise funds for ventures such as building new facilities
or launching new product lines typically issue corporate bonds. The interest on
these bonds is taxable. As a result these bonds tend to pay higher and are
better retirement investment options than government or municipal bonds.

I have said before and will continue to say that there are no sure things when
it comes to investing. While many bonds tend to be safer than some of the other
investments on the surface there are significant risks involved when investing
in bonds that would be negligent to overlook. Where you find the risks of
market ups and downs when investing in stocks, mutual funds, and options the
risk is that yours may lose value. When it comes to bonds the risks include the
following: default, changes in the interest rate, and inflation. The risks for
some are far weightier than the benefits of a slow and 'steady' investment.

You should really carefully consider whether or not bond investing is a good
idea of your retirement needs along with your nerves. We weren't all born with
nerves of steal, for this reason it is probably a good idea to carefully decide
whether or not you are comfortable with the risks that bonds introduce into your
investment picture.

I always recommend that you take the time to discuss your plans and goals with
a financial planner before taking the plunge and making any major financial
decisions whether they concern your retirement or your child's college fund.
These all affect your future and the security you can provide your family when
the time comes. A good financial advisor can help you weigh the pros and cons
of investing in bonds and help you decide whether or not the potential payout
on these bonds is worth the risks that are involved in the process. This is not
the case for everyone. I tend to be a more cautious investor than most and will
think long and hard before investing on things that I do not consider a
carefully crafted and calculated risk.

Only you can decide whether or not you are comfortable with the idea of
investing in bonds when it comes to your financial retirement hopes and dreams.
I hope you will discuss this with our advisor and carefully consider the
ramifications of this decision.

Insurance for Your Retirement

If you are like me, it's easy to get fed up with constantly paying insurance
premiums. Writing a monthly check for car insurance alone will drive you crazy.
Not to mention the direct withdrawals from your paycheck for health insurance
and the hit to your mortgage for home owners insurance and you have a lot of
money going out the window to pay for disasters that might not even happen.

But if those disasters do happen, you will be very glad you had insurance. But
there is one big life event that is coming that you want to do all you can to
prepare for financially and that is old age and retirement. While there is no
"old age insurance", you will find as you do your retirement planning that
there are some very valuable insurance policies that are absolutely critical to
a retirement life that is enjoyable, safe and prepared for.

We may or may not think of life insurance as part of retirement planning. After
all, the benefits of life insurance, at least on the surface are for those who
survive you after your death which doesn't do you a lot of good when you are
living and breathing. But you can invest in life insurance that also serves as
a long term investment as well. These policies which are sometimes called
"whole life" allow the funds you put in to be invested and to build a cash
value that you can cash in on when you retire.

So you may want to carry $100,000 insurance when you are in the working world,
paying a mortgage and trying to get the kids through college. But if you can
then hit retirement, cash in on the investment value of that insurance and
spend your golden years with just enough insurance to cover some protection for
your spouse and funeral expenses, that is a better way to organize your
insurance programs.

Another layer of insurance that a lot of people are taking advantage of is
Medicare supplement insurance. Medicare is a great program that benefits a lot
of people. But Medicare can only go so far. Those corny commercials for
Medicare supplement insurance are goofy but they are on target that you need to
have another safety net in the event you find yourself needing more extensive
medical coverage than Medicare can provide. If you took the time to set up this
kind of insurance early in your retirement planning, it will pay you big time
when the need is there during your golden years.

A level of insurance that can be one of the biggest blessings if you become ill
in your elderly years is in home health care insurance. Many times illnesses
that you endure due to old age are not the kind of thing you would want to get
through in an expensive hospital room. You will recover more quickly in your
home but you still need someone to make sure you get your medications, take
care of the little life details that you cannot tend to when you are poorly and
be there if you take a turn for the worst.

This is where the care of an in home nursing service can be so valuable. This
insurance can enable you to have care with you right in your home which will
give you the care you need and take a lot of worry and work off of your family.
And since all senior citizens need medical care at some point in their
retirement life, in home health care insurance is a must.

By setting up these different specialized insurance policies early enough in
your working life, you can get some value into them when the time comes for you
to retire. Then you can you enter retirement with confidence knowing you have
policies with reliable insurance providers to take care of the needs that you
expect to come up during your golden years.

Insurance and your Financial Retirement

When planning your financial retirement there are many things you should
consider before taking the plunge and not all of them are overtly financial,
though in some large way they are all very financial considerations,
particularly if you don't take the time now to consider their importance later.
Insurance is an important consideration when it comes to retirement. Depending
on your age at retirement you may or may not qualify for Medicaid, which could
leave you in a bit of a pickle when it comes to covering the high cost of
insuring your health.

If you have a spouse that will continue working for a year or two you may want
to consider the cost of being added to his or her insurance coverage. Chances
are it will be less expensive than striking out on your own for health
insurance coverage, which tends to increase in cost with age and according to

Dental insurance is another huge consideration among those approaching
retirement age. The cost of actual dental insurance can be quite cost
prohibitive but there are other options in the form of discount programs. There
are quite a few programs that exist and all you really need to do is a quick
Internet search in order to find more than a few good prospects. You will want
to make sure that the plan you are considering has providers in your area
before signing up. Some of these plans actually offer discounts on other
services such as vision, prescription drugs, and even medical care. The costs
typically vary according to the offerings of the plans in question.

Medications are another important consideration when retiring, particularly if
you are planning to retire early or prior to the traditional retirement age of
65 when Medicaid kicks in. Some of the plans mentioned above offer discounts on
prescription drugs and there are other things you can do such as asking your
doctor about generic options or less expensive methods for medication that
might exist. Some drug companies are offering free medications to people who
meet their qualifications.

Long-term care insurance is a relatively new concept and something that many of
us do not wish to consider but is something that really should be considered
when you are young enough to get reasonable rates. If you are in your 50's and
early 60's you should be able to get this particular type of insurance for
around $100 a month. Whether you want to acknowledge that this could be a need
for you or not, the odds are that it will be a very real need in time. Unless
you plan to leave significant amount of debt in your wake it is a good idea to
make sure you invest in long-term care insurance.

Home and auto insurance typically go through a reduction in cost as you age.
This is good news on many levels as it leaves you the option of picking up
additional insurance coverage or at the very least filling in the gaps that
some of your other insurance costs are leaving in your carefully planned
budget. You should keep in mind however that once you reach a certain age they
will begin to rise again. Save the pennies you save on the premiums during the
good years in order to cover the costs during the lean years. Insurance is one
of those costs that simply must be covered. It helps greatly if you plan for
these costs when creating your retirement budget.

Helping Your Employees Retire

You know one thing about an employee that takes interest in your company
retirement program. That is that he or she is taking a proactive interest in
staying with the company long enough to retire. This is not a given for every
employee. It used to be in the generation that was in the workplace of the
nineteen fifties and sixties that staying with a company for thirty or more
years and retiring with full benefits was the norm. That is not the norm any

We cannot just blame the job hopping ways of employees for the change of
culture away from going for the gold watch and retiring in a company. From the
corporate side, so many companies have eliminated retirement packages entirely
that there is a strong belief of "do it yourself" retirement in the working

A company offers retirement benefits for employees for one purpose. That is to
aid with retention. When you have a pool of talented, well trained and
energetic employees, that is a corporate resource. So if you can keep those
employees all the way through to retirement, that is a real value to any
corporate entity.

So if your company does offer these benefits to your employees, its important
that you take advantage of them in more ways then just sponsoring them. A
retirement package for aging employees sends a message to the employees that
the company cares about them and about their families. And this may be true in
your company that you have a corporate culture of being involved with your
employees at a personal level and maintaining that "we are family" feeling for
people who work for you. If that is the case, it makes sense that you would
extend that feeling to care for the retirement planning of any employee that
you have that shows signs of being a long term value to the company.

You should highlight the company retirement package as early as the interview
with your prospective employees. Remember that an interview is about more than
you looking for qualified people. It is also about qualify people interviewing
you. And that is exactly where the value of a strong retirement package is of
greatest value. If a job hunter who is looking for a place to work that they
can retire at knows that you have a good plan to help them with their
retirement planning, that will draw the brightest and best to your HR

Your HR department should not let the retirement issues of employees lie idle
for very long at all. The more you help your employees plan for and participate
in a retirement program, the happier they will be and the more engaged in their
work they will be. Hold regular retirement planning meetings to have employees
review their level of participation in the program. This is where you will put
in front of the employees your most empathetic HR employees to show genuine
interest in the employee's retirement issues.

Above all be sure to show particular concern and caring for aging employees.
And when an employee finally crosses over into retirement, throw a party and go
out of your way not only for the company to help the employee transition to
retirement but to demonstrate to all employees that the company lives up to its
claims to be faithful to employees all the way into retirement. In an economy
where so many companies throw people away, your employees will notice that this
is not that kind of company. And your faithfulness to retiring employees will
result in a rich crop of faithfulness from ongoing employees who stand behind
you because you stand behind them from the day they start work in the company
all the way through to retirement.

Heading off the Dreaded Nursing Home Nightmare

When you are looking down the road to retirement, the images that spring to
mind can vary from the pleasant and fun to those of fear of the unknown. The
image we get from the front cover of AARP magazine is one we want to envision
for ourselves for our golden years. That idea of retiring in luxury to a life
of golf, maybe roving the country in an RV or pretty much living on cruise
ships is fun to look forward to and let it bring a smile to your face even if
retirement is a ways off.

But many people in those years leading up to retirement also have to be of
assistance to aging parents and you see the realistic side of the golden years
as well. So that changes how you think about retirement and how to prepare for
it. On the darker side of thinking ahead to retirement and the years of
decline, there is one dread that outweighs all the others pretty much
universally. That is the dread of ever having to go to a nursing home.

The concept of the horror of a nursing home has not been helped in our modern
times by stories of nursing home abuse and horrible experiences older people
have in those institutions. So the idea that we all might end up in such a
place can be quite terrifying and create a lot of anxiety about ever retiring
and letting someone take over your care that might put you in a nursing home.

Many of the terrors of nursing home life are the result of myth and stories and
the media who love to portray nursing homes as torture chambers, But if the fear
of a nursing home gets you in the mode to prepare for retirement and start doing
your research well in advance, then that is a good fear because it is mobilizing
you for doing something good for you and your family.

The good news is that a lot has changed maybe even since you had to deal with
nursing homes when your own parents were aging. There are a lot of new formats
for where an elderly person might go live once continuing to live alone in
their house stops being an option. It is no doubt the surge of elderly people
into the system caused by the graying of the baby boomer generation that has
fueled a revolution in elderly car. Now there are all kinds of levels of care
and the kinds of places you can look forward to spending your golden years in
may resemble an apartment complex or resort more than a nursing home.

You can do a lot to reduce your anxiety about retirement by starting now and
going to visit some of these retirement apartment complexes, assisted living
centers and senior centers. You will be pleasantly surprised at how nice and
comfortable the options are out there that you can look forward to taking
advantage of in your retirement years.

But there is another important change in how you view retirement that looking
into alternatives to nursing homes will bring about as well. That is the area
of planning to finance these kinds of retirement options. There are many forms
of retirement insurance and you may already have started paying on a policy
that would provide care for you in a nursing home or a place where medical care
was available in the event you had a medical decline in your golden years.

By getting a good idea what kind of facility you might prefer once it is no
longer feasible or desirable for you to keep a full house going, you can
anticipate preparing for that move financially as well. You can check on your
insurance and if the funding you have set aside for retirement will not help
out with assisted living centers, make those changes now so that insurance can
accumulate value for you.

The administrators at assisted living centers can help you prepare for your
move to their facility. They will be thrilled to meet someone thinking that far
in advance about your future needs and because these folks are in the business
of helping people like you and I move comfortably into retirement, they can
help you know about programs, financing and other ways you can prepare so you
are fully ready to go to a wonderful future.

Have you Properly Planned your Retirement?

Gone are the days of the past when people went from years of labor only to go
home and live a rather stale and stagnate lifestyle until reaching death.
Today's retirees are more active than ever. Unfortunately, those activities
take money and unless you're planning to sit at home and wait for death you
should be making plans to take care of all those things you wish you had done
earlier in life once you retire.

While you are planning for your financial retirement you should also take the
time to make plans for what you will do once you retire. Do you need to join a
travel club now in order to have an established membership when the time comes
to actually enjoy the benefits of belonging? How about that book of the month
club? Many of these clubs are great to join while you have the extra
'disposable' income that goes along with working and having a career. You can
take the time now to build up your library. Even if you read the books now,
chances are that by the time you retire you'll enjoy the ability to read them

If you are retiring today you will want to make plans to go parasailing, take
cruises, ride horses, and maybe learn to golf and/or knit. You do not want to
spend your golden years sitting at home waiting for the inevitable end. You
want to leave this world laughing about all the fun and good times you've had.
The stereotypes associated with retirees are changing quickly as the world
evolves and people are living longer than ever before.

When you plan your funds you also might want to take the time to have a few
daydreams about the places you will go and save a page or two to write about
those dreams and sharing them with your partner in life. You should also take
time to find out what he or she hopes to do, where he or she hopes to go, and
the things that he or she would like to see when making plans for your
retirement. After all, you have shared your lives together it only makes sense
that you will share the best years of your lives with one another.

There is no better input to get when it comes to your retirement than the input
of your life partner. You should also take things in stages and not try to do
and see everything in the first months or year of your retirement. The novelty
of not going into the office each and every day will wear off quite soon. You
will then find that you can only mow your lawn so many times a day without
actually doing more harm than good to your grass. You'll know every leave of
every flower in your garden, and you will know the inside and outside of every
book on your shelves. Don't become a victim of boredom in your retirement as
that brings on spending sprees. Find a hobby that doesn't require a
considerable investment and you will help prolong the limited funds you will
have at retirement and save them for the more important things on your list of
"things to do before you die".

Getting Rid of the Stuff

One of the things that often keeps us from mentally crossing that bridge into
retirement is the sheer volume of "stuff" that you have accumulated during a
life of raising kids and just buying things over several decades of family
life. If the kids have moved out but you and your spouse are living in the home
you have occupied for years, the layers and layers of accumulation can be
tremendously intimidating to think about going through and deciding what to
keep and what to give away.

Now there is no reason not to go ahead with plans to retire from your job and
start that lifestyle as soon as your finances are able to let you do that and
you are ready to step out of the working world. But for many of us, the real
transition of becoming fully retired happens when we pare down our possessions,
sell the family estate and move into a quaint bungalow, retirement apartment or
assisted living center to begin enjoying a life of fewer responsibilities and a
lot more fun.

The first step of taking on the challenge of how to attack the mountains of
stuff is to get a rough inventory for what you have and what you can get rid
of. You can start on this quest as early as you feel ready to put your
retirement planning on the front burner. Many start on it as soon as they enter
the "empty nest" phase of their life and the kids are gone and you can begin to
convert their rooms into usable space for you and start getting their stuff out
of the house as well.

So your kids are the first line of defense or rather of offense of attacking
the sheer volume of stuff you own. Now is the time to start the inheritance
process early. There is no doubt many things in your family possessions that
the kids cherish from their upbringing in your home and that you will want to
pass along to them. So let them know that over the next year or so, you are
going to expect them to come along and get the stuff they want before you sell
the house.

This can be a progressive process. If the kids live far off, you can use visits
for the holidays to go through closets and box and ship their precious memories
and mementos from their childhood years so those things can start living at
their homes and not at yours. This is a big step toward getting rid of all the

Next you should start to think about the amount of space you will have in your
new space and what you are going to need and use regularly when living in that
smaller living quarters. Be pragmatic here so you are only looking at things
from a usability point of view. On your first pass, many things will make the
cut to be saved because they are either useful or nostalgic or both.

But also begin to go through the house room by room and separate things into
"keep', "give away" or "trash". You will find lots of stuff you can give to
Good Will or to charities which gives those things a new life and you a small
tax write off for next year. But be brave about throwing away things that just
have no real value any more. Remember, if you don't get rid of it, you are
going to be living with it for another twenty years and that is what we are
trying to get away from. By giving yourself some time to get ready to move into
the smaller space, this process of paring down the possessions can be rewarding
and fulfilling and a good next step into your next phase of life.

Getting a Professional into the Act

Do you see planning for your retirement as your responsibility or something
someone else should do for you? That is a pretty shocking question isn't it? It
is the kind of question that makes it sound like if your retirement funds are
under the care of your employer, that you are not being a responsible person.

Of course that is not the purpose of the question. If you have taken the step
of participating in your employer's retirement program or 401K, then you are
definitely showing
plenty of personal reasonability for your retirement planning. But when you
think about it, what happens to your 401K funds once they are given to your
employer? Most of us don't know. We know that we get statements that show that
what we invest is gaining in value and that the principle is safe and for us,
that is often enough.

But it is easy to trust your employer that the funds are being managed well and
that it all will be there when the time comes for you to use that 401K for
retirement. The truth is that your employer probably has nothing to do with how
well your retirement portfolio performs once the funds are taken out of your
paycheck. In most cases, your employer hires a professional retirement planner
who invests those funds to give you at least a modest return on investment. And
that service is also taking a fee from your funds which is something that is
done without giving you the chance to evaluate if they deserve the money they
are making.

You have some rights when it comes to your retirement funds. So part of your
rights is to see that people that work for you, such as a retirement planner,
know what they are doing and are held accountable on a regular basis for the
outcome of their financial management of your retirement funds. At the employer
level, you probably won't fire the financial planner. But you can demand to meet
with them and communicate your financial plans. You can get a name of is
responsible for what happens with your money. And if you find out who they
really are, you will have more success in getting them to be accountable to you.

But you may also find yourself engaging a financial planner for funds that fall
outside of employer 401K plans. For example if you leave a job, you can roll
your 401K into a private IRA account and engage a financial planner to invest
that money so it continues to grow steadily until you need it at the time of

Develop some standards by which any retirement planner you engage must be
judged. A good way to pick a good financial planner is to use people you know
and trust to give you guidance. If family members or close associates already
are using a good financial planner, get that person's name and phone number and
schedule an interview. You can also find out if your bank, insurance company or
credit union provides this service. They already work for you the good
reputation of these trusted financial services people can pay off when you use
them for financial planning for retirement.

Put some time and effort into researching if the retirement planner you are
considering is capable and has a good reputation. They should have no trouble
giving you references and documenting their success to show you that they can
be trusted to take good care of your retirement funds. And if you do some up
front due diligence, in the end you will be able to entrust this important
resource to them knowing they are good stewards of the money that is going to
give you a happy and peaceful retirement life.

Final Notes for Financial Retirement

When it comes to investing, whether you are putting aside money in order to
send your children to college or aggressively saving for your eventual
retirement there are many things you should keep in mind when making your
investments. Keeping these things in mind will help you take the successes and
losses you experience along the way in stride. This is important as we must
keep going and investing if we want to build a solid retirement for ourselves
or education for our children. If we give up and decide to play it safe we are
seriously limiting our potential. You must learn from your mistakes and work
hard not to repeat them rather than letting them rule your future investments.

The first and most important rule to remember is that there are no absolutes.
There is no absolute right or wrong method of investing just as there is no one
right or wrong way to save your money. There are only the methods that you are
more or less comfortable with. The good news is that while diversity is the key
in building a strong portfolio, there are many options from which to choose in
order to keep your portfolio diverse and, more importantly, profitable.

For today's investor there are all kinds of venues to pursue. You have the
choice of stocks, bunds, mutual funds, property investing, and many categories
of each of these in between. You should seek the services of a financial
planner in order to help you get through those areas that are confusing to you
or those that make you uncomfortable. If you are still uncomfortable with
certain types of investing after speaking with a planner there is no specific
reason that you must pursue any one course of investing over another. It is
often the wiser course of action but not necessarily the correct course of
action for you as you are likely to make mistakes out of nervousness rather
than allowing the fund to do their job and make money for you.

You should also never invest in companies, bonds, funds, etc for any reason
other than you feel they will provide a good return on your investment or you
really want to support that particular company. Do not be pressured into making
an investment decision that you are not comfortable with unless you are having a
hard time risking your money at all. In order to get the returns you will need
to provide a proper retirement you will need to take some risks. The greater
the risks the greater the potential rewards.

Whether or not you realize it, the choices you make when it comes to your
investments affect every aspect of your future retirement or your child's
education. You cannot afford to risk those important things too terribly long
by being paralyzed by your fear. Fear and anxiety are quite common emotions to
experience when handling funds that will have such a profound effect on your
future and that of your family. This is a time when a financial advisor or
planner is an excellent idea as he or she can take over the reigns within
reason or course, during these times and pick things up and get them moving in
the right direction once again.

There will be setbacks along the way when you are investing funds. I do not
personally know anyone who has never lost any money in the stock market. I also
know that when you lose money even 50 cents can seem like a tragedy if you allow
it to. You must see the bigger picture rather than hyper-focusing on one good or
bad decision.

Diversity is Key in Retirement Planning

When it comes to planning your financial retirement diversity really is the key
to turning a significant profit. You do not want to have all your eggs in one
basket. For this reason it is an excellent idea to have a number of fingers in
a number of pies, financially speaking of course, at any given time. There
happen to be a lot of interpretations, unfortunately, of what it means to truly
diversify your investment portfolio.

There are those who believe that to diversify your portfolio you only need to
choose stocks in various sectors rather than focusing on one. This was a huge
problem when the Dot Com boom went Dot Bust. Many people learned valuable
lessons during this time frame and have taken it a little bit to heart.
However, there is nothing to say that we will never again experience a
significant stock market crash. If this were to happen and your entire
retirement hopes, dreams, and funds rested on the stock market for salvation
you would be in deep and shark infested waters financially as a result.

I do not mean to imply that a stock market crash is probable or imminent by any
means. The closest we've come as a nation to a stock market crash in recent
memory was immediately after 9-11. The good news is that safeguards were put
into place years ago to prevent a crash of the scale that we all know as "The
Crash". This means that while you may take heavy hits, chances are the market
will recover if you are willing and able to wait it out. However, if you are
putting yourself in a position to rely solely on stocks you need to take a
serious look at your overall investment plan and see where changes can be made.

It goes without saying that no decision in regards to your financial future
should be made without first discussing them with your financial advisor. My
purpose here is to bring up questions and ideas you might wish to consider or
at the very least discuss with your advisor.

My personal preference is to have some money tied up in mutual funds and other
money tied up in real estate, which can provide some form of continuous income
month after month. I'm not much of a gambler however and have chosen a low risk
path to retirement financing and funding. There are those who are far more
adventurous than I when it comes to investing in their financial futures. For
those of you who are willing to take the risks there are securities as an
investment in order to provide a wildly speculative ride. Securities are very
risky for investors; particularly those who are novices and even some seasoned
investment veterans tend to shy away from this sort of investment. If you do
invest in securities, I strongly urge you not to risk your entire investment on

Mutual funds provide a little safer bet when it comes to your financial future.
Again there are no guarantees but these are much safer bet than securities. The
problem with mutual funds for many is that there are so many from which to
choose that it is still a difficult decision for beginning investors to make.
These decisions are the reason that a good financial advisor is so terribly
important when mapping out your financial destiny.

All in one funds are essentially collections of mutual funds. These provide a
safe bet for those who wish to find an easy investment possibility that is a
fairly safe (if not wildly conservative) to place your money and watch it
slowly grow over time. All in one funds do tend to become less aggressive in
time. This means that as you age, they will become more conservative in the
placement in your money in an effort to best protect it while still growing
your money.

By placing a little of your money in many different places, you will see a much
greater safety net when it comes to protecting your profits. Discuss your plans
with your financial advisor and any concerns that you may have. Chances are
they can help clear up any questions or doubts that you may have.

Consolidation or Multiple Accounts

When working with those planning financial retirements one question keeps
coming up. Should I consolidate all my accounts or keep them separate? Chances
are that you have several different types of retirement accounts from different
companies you've worked for along the way. This is not necessarily a bad thing
but can be frustrating to try and keep track of.

Combining these funds can be a rather tricky endeavor as many of them are
designed to only mate with like accounts. For this reason most 401 (k) plans
can only be combined with another 401 (k) the same holds true for many other
common retirement accounts including a 403 (b). The one type of account that
can accept them all and consolidate them together is a rollover IRA.

Having only one account can simply so many aspects of your retirement that most
people wonder why on earth they didn't do this from the very beginning. There
are many more benefits than mere ease that goes along with consolidating your
accounts and eliminating those extraneous accounts. One of which is the fees
that are often charged simply for having the account. These fees can add up
over the course of several different accounts and consolidating them into one
lone account will eliminate the fees of all the others.

One misconception that people have when it comes to rolling over their accounts
is that they will lose their investment options. This is especially a
misconception when it comes to a 401 (k) program as if you own a particular
investment while it is a 401(k) you will still own the same investment when its
within your IRA account.

In other words a rollover IRA account offers the ultimate flexibility when it
comes to your financial retirement needs. You can consolidate all your accounts
into one, have all the information in one location and still enjoy the freedom
that all the different accounts allowed you to experience in your investing.
Diversity is a key ingredient when it comes to successful financial investing

If you are looking for the best when it comes to financial freedom for your
retirement investments you should take the first available opportunity to
consolidate your investments into a rollover IRA. Of course you should discuss
this with your financial advisor first in order to see if there is a better
situation for your unique and personal needs however in many cases the
convenience factor of this process is far too tempting to overlook unless there
is a very big and specific reason for doing so.

In other words consolidation by and large is very much the way to go when it
comes to your retirement funds. You do not however want to sacrifice the
diversity of your plan in the process. You should keep your actual investments
as diverse as possible in order to insure a well-balanced portfolio that is
designed to maximize your profit potential while minimizing your risks.

The decision of whether or not to consolidate your many retirement accounts is
as personal as your decision to wear brightly colored socks and ties. There is
no absolute right or wrong answer and it quite literally comes down to a matter
of preference. If you thrive in chaos then by all means keep five or six
accounts going at any given time. If you need neat lines and nice rows that
balance out in a glance then consolidation might be the very best thing you can
do for your retirement fund.

Consider your Financial Retirement Options

When it comes to planning your retirement you will find that there are many
options available to the savvy investor. The problem isn't necessarily in
investment opportunities but the knowledge that is needed in order to turn
those opportunities into wild successes. For this reason alone, I recommend
that your first stop along the path to financial retirement investment be at
the door of a competent financial planner.

Most of are more than willing to go to the experts for advice when problems
arise and yet for some reason have major problems seeking the services of those
who are trained to assist us in our financial planning endeavors. You should
consider your options carefully and decide what is in your best interest. The
best way to do this is with the information that a good financial planner can
provide and by listening to his or her guidance.

One thing you will probably be told is the importance of diversity in your
investment portfolio. We all have been told many times never to put all of our
eggs in one basket and the same holds true when it comes to investing your
retirement. All investments are a gamble; some carry more risks than others.
You must keep in mind that every penny you invest is subject to loss however
and make your investment decisions by how much of a risk the particular
investment presents and how much you are willing to lose if the investment
doesn't pan out.

Perhaps the most common investment choice for retirement funds is mutual funds.
These offer the ability to invest long-term with lower risk than many other
investment options you will come across. These funds present a higher risk than
other investments but are a good moderate risk investment for those who have
little knowledge of how the market actually works. There is a fund manager that
is in charge of making the actual investment decision for the collective pool of
the fund and his or her job to decide where to put the money for which they have
been entrusted. This leaves the critical decisions out of your hands and off
your mind.

If mutual funds seem boring to you, there are other higher risk investment
opportunities in the form of stocks. I seriously recommend studying the market
carefully and completely before making the leap into stock trading but this can
be quite the short-term quick profit rush that you are looking for if you are
willing to risk your retirement investment for the sake of increasing your net
worth. If you do choose to invest in the stock market please take the time to
learn the proper procedures, the risks, and the process before diving in. If
you have a financial planner (and you definitely should) then he or she may
prove to be an exceptional resource when it comes to the practice of 'playing'
the stock market.

Securities are a very complicated process that many of us would feel better
never needing to understand. If you need a little more adrenaline pumping,
heart clutching moments when it comes to you financial retirement and are
willing to risk the need to work for the rest of your life in the process you
may find that this is just the boost for you. Be sure however, not to rest all
of your hopes and dreams for retirement on the allure of securities trading as
this is a very high risk field for those who do know what they are doing. For
those who have little experience it can prove to be a financially fatal flaw.

Learning the ins and outs of the investment process in addition to the options
that are available to you through the course of your own financial retirement
planning is like going to war with the proper weapons and armor rather than a
slingshot and a rock. The problem is that while there are some financial
Goliath's out there that are simply waiting to be tamed, most investment
strategies present their own unique needs that should be understood and

Conquering the Skill of Saving for Retirement

There is no magic to getting financially ready for retirement. We all wish we
could come up with some amazing way to put money back for retirement such as
the famous genie in the Aladdin's lamp. But if that genie came up and we asked
him for a way to get ready financially for retirement, his answer would be
short and to the point -- "Start Saving!".

But for millions of people in the working world, it's hard to save. You need
every dime you have to pay the bills, get the kids through their dentist bills
and clothes for school and have a little left over at the end of the month for
matinee movie with a small popcorn. So how can we ever find a way to put money
back for retirement under these circumstances?

The key to savings is to take advantage of changes in your income to start a
savings program. For example when you start a new job with a new salary. Before
you get used to that paycheck, set up a direct deposit of a small amount of
money into a tax deferred financial fund such as an IRA. The money goes
straight in there and you never see it in your paycheck. The funny thing about
how we all think is that you live up to the level of money you are getting. So
if you never see that $50 or $100 in your paycheck, you will adjust your
lifestyle accordingly and suddenly you have a program in place to save for

You can apply the same principle to payments you may have automatically
deducted from your account. If you are paying a car payment or you have a
health club due taken directly out of your account, when those things come to
an end, think about whether you want to see those direct withdrawals stop
entirely. If you are not used to having that money in your budget, you may be
able to have your bank direct deposit some or all of that amount directly into
your retirement account.

Just think how great it would be if you could put a car payment a month into
retirement savings. You would see a very significant amount of money build up
in that account in no time. And when you start seeing the financial reports
start coming in from your bank or whoever is managing your retirement funds and
you see it really start to build up, the vision of a secure retirement future
for you and your spouse will begin to become a reality for you.

Another fun way to build up that retirement account is to make a project of it.
You and your spouse could take on the challenge to do some form of contract or
temporary work every month or so and put all of that money into your retirement
fund. Maybe he can go out with friends and cut wood and sell it around town for
firewood. Maybe she could use her artistic skills to make original art works
and sell them at the local crafts fair or flea market.

There are lots of ways each of you can find odd jobs or part time employment
just to build up that fund. You can work department stores at Christmas time or
sign on with Manpower and go on one day assignments every once in a while. You
can even find ways to make money on the internet if you have technical skills.
Tap your talents and find that work and the amazing thing is that it will be
fun because this is not working extra because you are in financial trouble. It
is building for a secure retirement together and making it a challenge and a
game is a way of putting your creativity into the process.

Common 401(k) Mistakes

Believe it or not there are many mistakes that can be made along the way when
it comes to financial retirement savings and investing. Unfortunately a good
many of these mistakes center around the 401(k), which can be a tremendous
boost to your retirement plans when used properly in order to build your
portfolio. The problem is that the mistakes are often the only things we hear
when it comes to retirement plans and investing. I suggest begin with the
mistakes so that we can move along to better information and advice in the near

The first and perhaps largest mistakes that people make when it comes to 401
(k) plans is not signing up. Yes you heard that right. What people do not
understand is that this is something your employer offers so that you can have
some security for your future. It is a manner of saving money for your future
that shouldn't be overlooked or taken for granted. Even a bad 401 (k) plan is
better than no 401 (k) and with strict regulations those are few and far
between. More importantly, if your company offers to match the funds in your
401 (k) plan not taking them up on that offer is literally tossing money in the
garbage can.

The next big mistake when it comes to your 401 (k) is risking too little.
Rewards come with risk. If you aren't taking any risks with your investment
then you are by and large throwing money down the drain. In addition to that,
it is nearly impossible to meet your retirement goals without taking some
risks, and some hits along the way. This doesn't mean you should be reckless
but along the way you are going to need to take some calculated risks in order
to receive the bigger payouts that most of us hope for when investing in their
retirement funds.

Risking too much. There are many risks involved when investing in the stock
market. There are a few that deserve a little more mention than others. First
of all, stocks present a fairly large risk, particularly to the uninitiated.
While it is true that great rewards are most often the product of great risks
you do not want to risk the bulk of your retirement by investing it all in
stocks. Another thing you want to avoid doing if at all possible is investing
in your company stock. We've seen too many lives destroyed when companies go
under taking the financial stability of their employees along with them. Many
companies offer incentives to employees for investing in their stock, which may
be tempting but I recommend investing as little as possible in your company
stock whenever possible as this could lead to problems down the road.

Finally, the worst thing you can do for the health of your 401 (k) is borrow
against it. There are so many ways in which this could go wrong and the
penalties for this are more than a little prohibitive. They are designed to be
that way so that you will use the funds for their intended purpose. If you
absolutely have no other option is the only way I would recommend borrowing
against your 401 (k) and I would seriously consider selling a kidney before
doing that.

When it comes to your financial retirement, 401 (k) mistakes can be far more
costly than you may realize. Work to avoid these common mistakes and you should
be well on your way to a successful retirement.

Can Your Parents Retire?

Not everybody is as good about getting ready for retirement as others.
When you are growing up as children, you always had trust that mom and dad
always had good control over their finances. But as we grow older, the roles of
child and parent are often reversed.

When you and your brothers and sisters grew up and moved out of the house, it
was natural that you would become absorbed in your new lives of raising
families of your own and getting your careers established. You may know that
there is coming a time when you will take on the responsibility to help your
parents make that transition to retirement.

Sadly, as much as you would suspect that they did prepare for retirement, you
should not take that for granted. The trials of raising a family with all the
financial demands can take its toll on any budget. So it's appropriate to ask
the question, can your parent retire? And if there is any doubt, you should
begin looking into how you as their children can help them.

This is a natural first step toward you and your siblings being more involved
in mom and dad's life as they age. Many times the toll that aging takes makes
older people less able to plan and perform financial maneuvers with the same
skill they had when they were raising you. Be sensitive when you are around
them to find out if they can speak intelligently about their retirement and the
next step along the way of living a full and rich retirement lifestyle.

One service you can offer to your parents that may be more welcome than you
could imagine is for you to start helping them plan their finances and organize
their money. It might be true that in many ways, your parent has already started
that path into retirement. If dad has stopped working or Social Security is
starting to be collected, they may be in that category. But they need some help
to lay down the worries of adult life and make the transition to a lifestyle
where life's worries are not such a burden and they can relax and enjoy their
golden years.

You might take advantage of the sibling with the strongest financial skills and
start to move the handling of your parent's accounts to a child so they can let
that area of worry go. This is where you would work with your parent to get
that child the Power of Attorney so they can sign on their account, pay bills
and do business on behalf of their parents. And once that is all in place, an
organized evaluation of your parent's retirement preparations can be most

By helping your parents simply organize the assets they may already have, they
may be able to step into a much more worry free life and really start enjoying
the fun and relaxed lifestyle that retirement can really mean for them. Along
with organizing their finances, there is a lot the kids can do to help mom and
dad get ready to become retired people not just in a financial sense but in
terms of lifestyle. The biggest transition they will go through and the one
they will be the most resistant about will be giving up the house and moving
into an assisted living center or retirement community. But as your parents
continue to age, having them somewhere that they can get care if it is needed
will give everyone more peace of mind about their future.

The best approach to helping mom and dad transition to this move is to put it
in the most positive of light. If they are experiencing some physical decline,
they may already aware of the danger living alone in that old house might pose.
You can use that to get their interest in living in a place where there is
always someone to come running in the event they fall or have a medical problem.

But also emphasize the social side of living with other seniors and enjoying
their company. By helping them see that retiring in every respect possible is
the best thing for them, they will eventually embrace the change. And when they
are happily "retired" and enjoying that life, you will know that you kids did
the right thing taking good care of your parents the way they took good care of

Born to Be Wild

In the 1960s, when many who are now entering retirement age were youths, a
movie called Easy Rider made quite a stir. It was the story of two young men
riding motorcycles across country to discover America and enjoy the freedom of
unrestrained travel.

The song that got most associated with that movie was called "Born to be Wild".
This is an image of unrestrained freedom that seems to stay in our spirits even
as we move through life and into our retirement years. Small wonder you may
have as your retirement dream the idea of selling the house, moving into an RV
and hitting the road to discover America yourself, maybe not as young hippies
but with that same sprit of adventure and fun.

This is an "alternative lifestyle" that many people enjoy in their senior
years. And to be fair, RV technology is so advanced that you really can enjoy
virtually all of the luxuries of home but be able to rove the countryside
bedding down anywhere you can find an RV hookup and some water.

But even though this exciting prospect for your retirement years scratches that
itch for you to be "born to be wild", you are not so wild that you are not going
to do some careful planning so you and your spouse can pull off this big change
of lifestyle comfortably and safely. And because it is a big change for both of
you, careful planning is in order.

Probably the biggest investment of this retirement dream is that RV itself.
Fully loaded, these magnificent living centers on wheels can often cost as much
as a house itself. Now one way to really get your preparations underway would be
to buy the RV well in advance of retirement. You can make payments on it and
plan to pay it off when you sell the house and use the proceeds to make that
traveling home your own.

By buying in advance, you can take some trial run trips for a few weeks at a
time and begin to get used to the lifestyle on the road. These are important
trial runs because there are going to be a lot of new issues that go with
staying gone virtually forever that you will need to cover so you are not being
irresponsible in your wild wanderings across the landscape.

Your kids will worry about this big adventure. But if you listen closely,
buried in those worried lectures they are giving you is a sense of envy and
admiration that mom and dad had the courage to get out there and live their
dream with their retirement years. And you can help them feel less anxious by
keeping communications active on any trip. With modern cell phone technology,
not only can you always stay in touch, you can text them, email them and even
send them pictures from your travels for them to live the traveling lifestyle
with you vicariously.

You will need to make arrangements for mail to do your banking from the road.
Your retirement program and Social Security can auto-deposit in your bank back
home but you will be using those funds all over the country so it will take
some smart planning to stay fiscally responsible while living the free and easy
lifestyle of a road warier.

One approach to organizing your finances is to do all of your financial
activities through the internet. You can keep wireless communications going in
the RV and be able to log into your bank accounts to make sure everything is as
it should be. You can pay for most things by credit card and pay the credit card
off via automated bill pay from your bank account. And by making arrangements
that all of your bills be sent to you via email, you can do your budget and pay
your bills all at the comfort of your laptop computer screen.

By living smart and using the best of modern technology, you can hit the road
and enjoy the wide open spaces and the freedom that will make you and your
spouse the "easy riders" of your time. And by living out your dream, you are
doing what millions of people say they will do with their retirement years but
never do. You are living life to its fullest and letting retirement be the best
time of your life.

A Place to Settle Down With

When you are looking down the road at that new lifestyle of retirement, there
is a whole new way of life to be anticipated. And that is the fun of retirement
planning because, as they say, anticipation is half of the fun. And part of the
preparation for retirement is looking at various retirement facilities and
retirement communities that you might look to call home.

It's appropriate to use the term "retirement community" because when you are
considering selling your home and moving to an assisted care facility or a
senior apartment, community is just as important to you as the food and the
layout of your space. So when you start that search process, it's good to know
what questions to ask and how to evaluate different retirement communities
against each other.

Anytime you go to "interview" the administration of a retirement community,
they are going to put their best foot forward. But that's ok because you want
to know what their bragging rights are all about. So in addition to discussing
price and amenities, make sure you include community activities as part of the
things you ask about and use to evaluate the community. One of the big
advantages of moving to a senior center is that you can have a more social
lifestyle then living in your home by yourself. So the retirement center must
be the kind of place that facilitate a lot of social interaction so you can
make friends and get out and have fun.

The layout and how the residents are interacted with by staff make a big
difference for how well people get out of their apartments and enjoy their
living arrangements. Take the tour of the place but don't just look the carpet
and the views out of the display apartment windows. Look at how many people are
out and about, how much informal communication is going on and if public spaces
are available and in use on a daily basis. That is something that cannot be
"staged" and you will be able to tell if the people are having fun and enjoying
each other at the retirement community.

Of course there are the "brass tacks" questions you will need to go through
when interviewing a possible new place to live. The facility has to be within
your price range so they should be forthright about costs. But even if you can
afford what they charge, there has to be value for the money. Look at the
facility both for what is being offered and how well they seem to be able to
fulfill their promises. Look at the physical arrangements. How old is the
facility and does it seem to be in good repair?

Make it a point to talk to various staff members during your stay. If the
person assigned to host you lets you talk to residents and staff but they must
be present, that might indicate that they are putting on a show for you and not
letting you know the real story of the facility. Make arrangements to be "cut
loose" to wander the halls, talk to residents and visit staff on a surprise
basis. If the staff is irritated by your attempts to communicate, always busy
or cold and hostile, that is a culture issue that you don't want to be part of
your new lifestyle.

A real test of a retirement community might come in giving them a test drive.
If the facility owners have a guest apartment and they offer to let you stay
for a few days to just sample life in the community, that is a strong statement
of faith that you will find everything to your liking. By living amongst the
people, you have lots of chances to eat with the residents, begin making
friends and find out the real scoop on whether this is a good place to live or

By coming up with a strategy for looking at different retirement centers to
find out what they are really all about, you will do a much better job of
evaluating retirement communities. And it's worth the effort to dig a bit
beneath the surface because if this place wants to be your new home, they must
be able to make you retirement life happy, social and fun. Because that's the
way it should be.

A New Life -- A New Career

For many the idea of retirement comes with the automatic translation that it
means that you will stop working is just not acceptable. For many, retirement
from work is equivalent with no longer living. If you have been a productive
worker all of your life and someone asked you what your dream retirement might
look like, you might respond "to work" because you may be one of those people
for whom work is what gives meaning and purpose to life.

It isn't fair for us to impose the same standards of retirement on everyone. To
say that to enjoy your golden years, you must take up fishing, start sleeping
until noon, sit in a rocker and watch the day go by and gradually turn into a
senior citizen would to many be the same as sentencing them to life in prison
without parole. So for many it's very possible that working would be the thing
that would make your retirement meaningful.

Still others must continue to work into their retirement years because they did
not or could not prepare for retirement. Whatever the situation, there are some
adjustments that should be made to shift to a retirement career that you can
continue to do well into your senior years.

You can get a running start on your retirement planning if you find that a
career change is appropriate later in life. Many times we do find that the
career we are in may either be changing so fast that it's hard to keep up, it's
too physically demanding when you are older or in some other way that job has
become a "young man's game". If that has happened to you, you can get a jump
start on finding a career that you can stick with well into your retirement
years, that career can be an income generator that might never go away.

It is not at all uncommon for men in their later years to start a new career.
Perhaps you just want a career where you can use the creative side of you and
one that can be a natural transition into retirement. Perhaps you reached the
maximum vesting of your retirement account with a job you held for decades so
you can "retire" from that job with full benefits and funding and still start
another career that you can take on into retirement and keep doing as you enjoy
the fruits of retirement as well.

Many times the skills and knowledge you learned in the business world during
your first career can transition you into a lucrative consulting career late in
life. One way to explore this option is to think of the venders who sold goods
and services to you when you were in your previous career and contact them to
see if you might now represent their services as a former satisfied customer.
If you had specialized knowledge and training in how to use their software or a
technical product, that training which your former employer paid for can now
transition into an exciting career as a sales representative or sale support
for the very companies who once had you as a customer.

The internet can also open up worlds of money making opportunities that you can
use to land work or sell something you may have made by setting up your own web
site and learning how to promote yourself online. Many cottage industries have
taken off and been hugely successful just getting what you do out into
cyberspace. For example, if you are talented at making beautiful artistic
pottery, you can create a line of pots that is perfect for sale over the
internet. You can work with a skilled internet web developer and marketer to
get your product out on the internet and before long, you might have more
orders than you know what to do with all flying out through your web site which
is collecting the money and filling your back account up with all the profits.

The ways you can create a new business in your retirement years are only
limited by your imagination. And once you have a good new career going that you
can continue well into your retirement years, you won't have many of the worries
other retired people have. You can enjoy the freedoms of a retirement lifestyle
and made plenty of money at the same time. And that's a great combination.

A Financial Planner may be your Best Gift to Yourself

There are many ways in which you can plan for your financial retirement. The
first step in making the right moves is always the step that involves actually
creating a plan of action that you can follow as a family. Many people focus
too much on the now or too much on the later and have a great deal of
difficulty when it comes to creating a happy medium for savings and investing.

Throughout our lives we will have both long and short-term goals that need to
be assessed, addressed, and often revisited. Whether you need to find a way to
pay for your children to attend college, home improvement projects, or a method
for saving for your retirement you can find information and assistance for all
these things and so much more if you seek the services of a qualified financial

A good financial advisor will help you find that balance that so many people
and families lack. He or she will also help you assess your means in comparison
with your long and short-term needs in order to see where your funds would
experience the greatest return in order to suit your specific needs with
minimal risk. It is important to remember that going with a financial planner
or advisor does not eliminate the risks that are an integral part of investing
but it does help you learn to better calculate those risks.

Investing is a risky business. Learning how to weigh the odds and go for the
prize is the best way to earn the biggest possible return on your investment no
matter how modest your investment may be. We are all starting from different
means, isn't it amazing to know that we could all end up with very similar
abilities when all is said and done and we are living out our 'golden years'?

Good financial planning is the key to success when it concerns your financial
retirement. With so few people around the world adequately prepared to retire
it is great to know that there are options and assistance that is available to
help you get started on your retirement no matter how late in the game it is.
Even better is the knowledge that limits are lifted a little once you reach the
age of 50 and retirement is much more eminent. This allows those who got a late
start on their retirement planning or who have hit a speed bump or two along
the way the opportunity to 'catch up' on their investing and work up to the
place they need to be in order to establish a more comfortable retirement for
themselves and those they love.

401 (k) plans offer some of the best retirement benefits your money can buy at
the moment. They certainly allow you to make the maximum possible investment
for your money. If you aren't taking your company up on their offer to match
your investment in a 401(k) then you should seriously rethink that thought.
Seriously, you're throwing away free money.

When it comes to the murky water of retirement investing it helps to have a
guide to get you through. Utilizing the services of a financial planner may be
the best move you've ever made in your life when it comes to the financial
health of your family and your retirement.

Taking Your Retirement Around the World

One of the most common dreams many people have for their retirement years is to
travel. So often when you are in the middle of building a career and raising a
family, your travel consists of trips to Orlando for Disney World or doing
something focused on the kids. So when you get to that phase of life where your
children are grown up and it's just you and your spouse, now you can focus on
trips that are for just you two going places you to go and doing things you
want to do.

So if you feel that you will be taking your travel life to a new level when you
reach retirement age, there is plenty you can do to get ready. Obviously, you
will need to focus your savings and financial preparations so you have an ample
budget for travel when the time arrives. The last thing you want is to come up
on the time when your dream of traveling together can be a reality only to find
that you did not set aside the budget for it.

One way you can do that is to take advantage of the years between when the kids
all move out and are done with college and the beginning of you retirement
years. This can be as much as a ten to fifteen year time span when both of you
can work to payoff bills and build that retirement nest egg. If your basic
retirement fund for you to live on is healthy and you are meeting your
financial retirement goals, to take one of the spouse's salary and put it all
aside for future travel can result is a very healthy budget to get out and see
the world in your golden years together.

It might feel like it's a little self indulgent for you to set aside so much
money for you and your spouse to have travel adventures late in life. Well, you
have been a good citizen, a good dad or mom, a good worker and in every respect
done the right things all these years. So nobody would deny you the joy of
really enjoying the thing you love the most when you do reach your retirement
years together.

You can afford a few "training trips" in the years coming up on retirement from
time to time to begin to retool your travel skills. If you have been in your
career a long time, you may have sufficient vacation that you can take an extra
week a year just for adult travel and still have plenty to go see the kids and
do all the family stuff that you must do and you enjoy so much.

It will be during these training trips that you will hone your ability to stay
on the road longer each time out. Traveling for long periods of time is a
developed skill. You will need to learn how to pack, how to manage your
international paperwork if international travel is in your plans and how to
handle jet lag as well. These are "travelers skills" that you can be developing
leading up to that big moment when both partners are able to retire full time
and really start getting out there and seeing the world.

Another adjustment and financial resource that can put some additional funding
into your travel funds is your house. Many people sell their homes late in life
when you don't need so much space to raise kids and you no longer have the
desire or take great joy in taking care of a yard and managing the upkeep on a
home. If you know you are going to make this big change of lifestyle away from
the home bound mom and dad and toward the world travelers you want to be, you
can be preparing the house for sale in the last few years before you retire.

Because you know well in advance that you have a new life of adventure and fun
ahead in your retirement years, you can use the last few years before both of
you stop working to get ready. Then once your retirement is official and you
walk out of the retirement party at work, you can walk right onto the jet way
and take off on a brand new life of fun and adventure seeing the world together
during your retirement years.

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