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Top 7 Retirement Considerations

As time goes by, life expectancies have continued to go up. This means that, as a whole, humans are living for longer than ever before. That means retirement planning and pensions are becoming more important than ever, as nobody wants to spend their leisure years struggling to pay bills and meet other expenditures. To make sure you aren’t caught in this type of situation, you need to keep on top of retirement planning. Let’s take a look today at important factors you need to consider for your retirement plan.

The Earlier You Start, the Better

The simple way to look at this is the earlier you start planning and saving, the easier it will be for you to meet your desired goals. Starting to save and plan for retirement in your 50s is not as ideal as starting in your late 20’s, when you should have around 40 years to get debts sorted out, plans made, and a secure amount of savings put away.

Don’t Rely on Social Security

Too many Americans think they can retire without savings and simply rely on Social Security payments. Payouts from Social Security are only enough to meet costs for a very basic lifestyle. This means you can forget about a comfortable, retired life, and many people find themselves still trying to get some form of work at times, just to meet their financial needs. Retirement is supposed to be a relaxing and enjoyable time of your life, so don’t make the mistake of not planning for it.

Don’t Rely 100% on Secure Investments & Cash

This is an area where good advice and pre-planning becomes an invaluable asset. Most of us don’t have the kind of large funds available to us where we can simply plan to sit on the cash and last out our lifetimes in comfort and style.

In order to increase our gains, ready for retirement, it’s a good idea to keep some of your funds invested in some type of equities. This allows you to reap bigger rewards in exchange for a little risk, which can of course be calculated carefully to a level you are comfortable with.

Increasing the funds available to you in this way is a great idea, though it’s generally a good idea to also keep some more secure funds available, especially for earlier retirement periods. The risk associated with equities can be mitigated further by holding them for a prolonged period, which means using these types of funds for later retirement is generally a good idea.

Make Clear Goals

To know how much you actually do need to save, and what budget you will need for your retirement, you should make clear goals and what you want to do and how you want to live. An adviser can help you figure this out by creating a budget based on the lifestyle you want, and working out the actual costs of achieving these goals. Remember, it’s hard to budget for something if you don’t know what you’re budgeting for!

Get Advice on Different Investments

As mentioned earlier, some investments are more secure than others. Generally speaking, the safer the investment is, the smaller the returns are likely to be. Cash held on to for long time periods is always going to lose value, due to inflation. This means investments are almost always going to be a better idea, as they can at least hope to keep up with inflation and hold their value over time. The riskier investments could pay out a lot more and create a nice profit rather than just holding value.

An adviser can help you to consider a variety of different options, and although they are very useful for this reason, you should also always be keeping an eye on the investments themselves. Any personal expertise you might have can also come into play here, and open up different avenues of investment for your retirement.

Get a Pension

Less people than ever before have an actual pension plan given to them by their employer. This type of plan can often give you a good enough payout in later life to cover a chunk of your expenses. If you aren’t one of the lucky people with a workplace pension, look into getting a plan of your own created. Also, consider how you will want it to pay out (lump sum or payments).

Keep Your Overall Plan Flexible

Another consideration is that your plan, your needs, and also your potential payoffs might change over time. This makes it a good idea to not only spread the ways in which you hope to pay your way through retirement, but also to vary them by time periods so you can adjust if an investment doesn’t perform as well as you had hoped for, or if life throws you a sudden curve ball and you need to cash in an investment early to deal with the costs.

Of course, there are a number of other considerations you should make as well, which is why retirement planning is such an important thing for all of us. The help and advice of a professional is always recommended, even if only as a side consultation. Specialists will always be able to help you with extra knowledge on how to make the most out of what you have, and how to keep it as safe & flexible as possible.

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Ten Most Common Social Security Questions

Social Security – An increasing number of “Baby Boomers” are retiring every day; an estimated 76 million in all. Yet very few who are ready to receive their Social Security benefit, understand how the system works. Therefore, I have put together a list of Social Security facts for you to consider, when your day to clock out for the last time arrives. Even if you are already receiving Social Security benefits, this information can be very helpful, especially if you have been on Social Security Disability, and you are reaching full retirement age. This information will be especially beneficial for those who are considering full or part-time employment after your benefit payments begin. The details are in no particular order. Read more

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Hidden Fees May Be Lurking in Your Company Retirement Plan

Anyway you figure it, Steve Jeffers is a formidable investor. For 18 years now, the Belpre, Ohio, plant manager has been diligently stashing money in the 401(k) plan of his employer, Kraton Polymers. Thanks in part to a generous match by Kraton, the 43-year-old Jeffers has amassed almost $400,000.

Yet Jeffers didn’t have a clue what his 401(k) investments were costing him — (and neither, I wager, do you). A recent AARP study found that more than 80% of 401(k) plan participants were unaware of how much they were paying in fees associated with their company’s retirement savings plan. And what you don’t know, you can’t change.

Mutual fund returns in 401(k) plans are normally reported as net returns, meaning that fees for managing your investments are subtracted from your gains or added to your losses before calculating the annual return. Other costs, such as administrative and record-keeping fees, are often divvied up among plan participants but are not explicitly listed on individual investment statements.

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Save More for Retirement or Live in Poverty

Let me ask you a question. Are you going to retire someday or not? If you answer in the negative, stop reading this article, and go enjoy some ice fishing. If you say yes, why are you behaving as if that day will never come?

When I was in college, I spent an entire 24-hours, at an all-night diner, learning a semester’s worth of history. I passed the class, but not with stellar marks. Procrastination caught up with me, but I was able to soften the blow of neglect, by devoting myself to an intense period of “cramming.”

That is what most retirees-in-waiting think they will be able to do with their savings. They will enjoy life during their young years of employment, and then get real serious as the day of labor-departing draws closer. Wrong!

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