Archive for the 'Retirement Plans' Category

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.

Retirement Plans - Make a plan and 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 years.

Retirement Plans

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.

How Much Do I 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.

Retirement plans Night Mare

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.

Retirement Plans

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.

Retirement Plans

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.

Employees Retirement

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 more.

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 population.

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 toc, that is a real value to any corporate entity.

Retirement Savings

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 shape.

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.

Retirement Plans

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?