You need to pay attention to many aspects during the course of your retirement planning. There are several hidden risks that can spoil the entire process, if neglected. Some of the possible and such potent risk factors are inflation, health costs and stock market crash. Hence, when you are preparing for retirement savings, don’t forget to consider these important elements.
There is nothing to worry as you can tackle these situations with devoting little care and caution. Most of the people, who are on the verge of retirement, find inflation to be their main concern. This has been corroborated by the survey reports of Employee Benefit Research Institute and Mathew Greenwald and Associates as well. 58% professionals (on the verge of retirement) along with 71% people (already leading a retired life) fear that their savings and investment’ values may fail to tap inflation. However, you can alleviate your concern to certain extent by investing some amount in real estate, mutual funds and annuities.
According to 49% of retirees and 67% working professionals, meeting healthcare costs can be a challenge for them. You can deal with this situation by opting for Medicare. It would be ideal to sign up for this before you reach 65 years of age. In addition, 76% retirees obtain health insurance to make up for the area not covered by Medicare. Along with these, you need to take care of your lifestyle incorporating healthy diet in your routine. Regular exercises and prevention are the other two factors to be considered.
The other major concern is related to stock market. If you invest in stock markets during your retirement age, make sure that you have some emergency fund with you to be least bothered by poor market conditions. Many retirees prefer to opt for conservative investments for security reasons.
Recently, the Employee Benefit Research Institute conducted a survey to measure Retirement Confidence of the Americans. According to the survey results, 54% of Americans manage to pool less than $25,000 through their home savings and investment plans. The value of their basic home and other specified benefit schemes is not included in this. The shocking detail is that about 27% Americans can manage only $1,000 in their savings. And, only 11% reported to save over $250,000. Both young and old populace participated in this survey.
After seeing the above results, it has become evident that Americans need to opt for a different pattern for spending and savings in order to have an access to enjoyable living standards. There are various means by which the scenario can be ameliorated.
In case, you are entitled to a 401(k) scheme at work, you must start investing in this. The Bank of America Merrill Lynch believes this would help natives in improving their financial condition.
You are advised to up your investment in 401(k) plan. According to reports, employees invest around 7% of their earnings in a 401(k). However, it is believed that by adding 1 or 2% extra in the 401(k) scheme, you can increase your retirement savings wealth to a dramatic extent.
Another important point is that you must not withdraw your savings amount of 401(k) plan after changing your present job. In case of early withdrawals, you have to pay 10% fees plus tax on the amount that has been withdrawn.
There is no definite parameter as such to say when an American can be termed as a senior citizen. Some people, who retire from work place, call themselves senior citizens. Some consider themselves seniors, when they become eligible for Medicare. There is another group which feels that if a person gets an invitation for AARP can be said to be a senior.
The Del Webb’s survey results show that 96% of 50-year old people don’t count themselves as seniors, whereas 56% of 64-year old people term themselves as senior citizens. According to 50-year old citizens, they cannot be called seniors because they haven’t reached 65 yet. Besides, they are not entitled to any benefits applicable in case of a senior citizen.
Another interesting observation is that about 50% of the 64-year old people feel that the status of senior citizen is not applicable to them as yet. They still feel young and energetic. However, some 64-year old people recognize their senior citizen status for the fact that they have become eligible for senior discounts and are more than 60 year old now.
The previous and current baby boomer generations feel quite young and energetic as against their actual age. The 50-year old people feel as young as a 39 year old and 64-year old people feel as lively as 50 year olds. The current generation of baby boomers suggests 78-year olds can be termed as seniors, while the older ones suggest the senior life begins at 80.
Most of the retirees prefer to spend their life in peace. They like to travel to a place, which is safely away from the crazy urban dins. In fact, we are also not much different from them. Many of us make plans to buy homes in ideal locations so that in our later period of retirement we can simply move in with comfort and there is only a feeling of peace in our mind.
It is in this regard that quite often we try to figure out which can be a perfect place for us to live in during our retirement age. The survey reports of the Del Webb show that earlier retired people used to find Sun Belt to be an apt choice for them. But, the trend has changed over the years. Now, North and South Carolina have become the favorite destinations among the baby boomers.
Around 36% of the people belonging to 50-year age bracket have the plans to shift their base to Carolina. Popularity of Florida, Virginia, Tennessee, Arizona and California among the baby boomers is found to be much less compared to Carolina this time. Only 15% of 50-year-old people think that Florida would be a nice place to relocate. Virginia, California and Arizona have managed to find only 8% preference votes for them as against Carolina.
We get so tied up in our retirement planning solutions regarding real estate, cars, housing and tax benefits that we entirely overlook a very simple yet important aspect. You must be wondering what it is? It’s the cost of food. It might appear to be a trivial task. But, once you sit down and ponder over your food expenses on weekly basis, you would realize how significant it is.
As food costs form a daily part of our expenses, we really can’t afford to omit it from the list of our consideration. If you also agree on this part, you must start your calculations right away. Begin counting your food costs on weekly basis, and, then move on to monthly and yearly calculations of the same.
Once you are done with calculating your food expenses for one whole year, you can multiply the available figure by 25 or 30, as many suggest. The final figures will reflect the amount of money you would be spending on food during your retirement phase. Well, this might not be one of the perfect solutions, but it’s undeniably a way out to make our retired life smooth and enjoyable. We must not forget that every step/ effort counts.
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Look at the list of Best Websites that can help you…
You must be busy with your retirement savings plans. Sometimes, the money saving solutions may have been handy. But, sometimes it may have caused you a great deal of effort as well as time. You can now get rid of these problems too.
There are few wonderful websites which have been specially designed to offer you extensive information on money saving tips. You can access the online sites to gain helpful details on topics like ‘how to do smart spending’, ‘investment plans’, ‘nitty-gritty of real estate investments’ and ‘credit issues’.
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The Dollar Stretcher (URL: http://www.stretcher.com/index.cfm)
The Simple Dollar (URL: http://www.thesimpledollar.com/)
Get Rich Slowly (URL: http://www.getrichslowly.org/blog/)
There are few websites which you can visit to find excellent tips pertaining to savings & investment and credit issues. Some of the recommendable websites in this category are:
Don’t put your retirement savings plan on hold merely because you could not save enough money due to tax bills. Let your worries take a back seat, as there are effective ways to manage your rising tax bills.
You can invest in municipal bonds or munis. These non-taxable bonds offer attractive profits and are safe. However, you need to buy them from the designated authorities. The bonds with AA or AAA ratings are the suggested buys.
You can contribute fund to the traditional IRA to cut down your tax bills. The limit of contribution to IRA stands at $5,000. If you turn 50 or more than this by year end, you can add an extra amount of $1,000 in the overall contribution of $6,000.
On discovering that you have missed out on few deductions while filing returns in previous years, you can go through the past three years’ records and amend them. You must take an advice of the tax professional in order to get all the deductions on which you have full right. Not only this, you must talk to your advisor before opting for any new tax plans.
It is advisable to organize all the tax papers in correct order to ensure optimum tax benefits. By going for smart investment plans, you can also reduce your tax bills. In addition, you need to be fully aware of the tax rebate schemes.
There is good news for all the credit card users. The Credit Card Accountability Responsibility and Disclosure Act has provided a breathing space to the credit card users by eliminating issues like sudden rate hikes, double-cycle billing and overlimit charges.
According to the new law, interest rates cannot be increased in the first 12 months. The rates can be increased only in case of new charges. The application and annual charges cannot be more than 25% of the opening credit line. The credit issuers cannot charge interest rates on the current and past bills. This means the users are relieved of double-cycle billing process.
The credit card companies cannot impose overlimit fees without the consent of the card holder. The promotional rates can be availed for at least 6 months. If the customer is making bill payment over phone or online in advance, he doesn’t need to pay any fees for that.
The companies need to notify customers 45 days in advance in case of pending rate or an increase in fees. The Act has barred rate hikes on balances. It is not in favor of retroactive rate hikes due to delayed payments.
Considerable changes can be noticed in the realm of billing statements, disclosures and payments too. The credit issuing companies need to dispatch billing statements 21 days in advance. The due date of the bills should not change from one month to another. If the payments reach the concerned company by 5 pm on the last day of the bill, it will be treated as on-time payment. The billing statement should contain details on the scenario of full and minimum payments including interest rates.
There will be a warning in the statements saying minimum payments calls for high interest rates, which in turn increases pressure on debt payment. The statements will contain a toll-free number enabling you to avail credit-counseling service.
You are saved from the trap of late-fees also. The credit card companies will have to give customers minimum 21 days from the day mail has been sent to them. It thus eliminates the issues of due dates and weekend deadlines that affect the monthly and mid-term deadlines.
Also, the credit card companies have been restricted from issuing cards to the college students. Issuer cannot increase credit-limit if the user is less than 21 years and have a cosignatory.
Life is fraught with difficult questions. Some can be resolved smoothly and some may require a great deal of effort. But, as per retirement planning is concerned, there are so many ways to secure our future that we really needn’t worry. The common problem in this realm is we don’t know how much money needs to be saved for that better tomorrow.
According to survey results, about 44% of the American professionals along with 29% of mature adults of the age group 55 and more hold that they don’t know what percentage of money should be saved for retirement. However, some of the people belonging to the age bracket of 55 and more opine $250,000 or may be less than this should be sufficient when they retire. Moreover, President of ShareBuilder Dan Greenshields holds retirement savings need to be pretty much higher as in old age an individual is more prone to illness which results in greater healthcare and medical expenses.
According to Mr. Dan Greenshields, an individual’s retirement savings should be around $500,000 and $1 million. However, it may vary depending on the living style of the person. To be more precise, he added “If you live in a low cost state you need less because the cost of living is lower” and “If you live in Washington DC, New York, or Los Angeles, you need more.”
It has been found that as much as 20% of the American population nearing their retirement age believes that saving $500,000 should be adequate while 13% aims at $750,000 retirement savings. The survey reports also reflect that about 20% of Americans are trying to save $1 million minimum and 6% aiming at $1.5 million savings before retiring. About 8% of the American population is striving to maintain $2 million in their bank accounts for the retirement.
However, it is interesting to note a large number of Americans do not calculate savings for retirement in actual terms. Almost 47% of them indulge in guesswork to decide the amount of savings to be adequate in their retirement age. In contrast, 29% of the Americans believe in doing their own research, 9% take the advice of the financial consultants and another 9% rely on the retirement calculator. Those who calculate their retirement savings on their own consider factors like healthcare and living costs, inflation, income at retirement age and Social Security income.
The Olympic Games are the largest event to all the athletes indeed. This is the platform that brings opportunity to demonstrate their skill and excellence before the spectators and sports analysts from across the world. The 2010 Winter Olympics or the 21st Winter Olympics is in full swing. This year, it has been organized in Vancouver, British Columbia, Canada from February 12 to 28, 2010. Athletes who are in their late teens, 20s, and 30s are vying for the best pennant in the sports realm. Not just the youths, as per the U.S. News analysis, 30 Olympic athletes are representing 19 countries in 9 sports, and all of them are at the age of 40 and above.
With 5 athletes Germany is leading the list of the older competitors and it is closely followed by Sweden and Canada. The list also include counties like the United States, Great Britain, Denmark, Nepal, Norway, Japan Latvia, Italy, Greece, Argentina, Mexico, Slovenia, Croatia, Switzerland, and the Russian Federation.
Some 50% (14 athletes) of all the older athletes are contending in curling events. Rest of the others are competing in sports like biathlon (3 athletes), bobsleigh (3 athletes), free style skiing (3 athletes), alpine skiing (2 athletes), and ice hockey (2 athletes). Some of these competitors are even in the age group of 50. The name of the senior-most competitor participating in Vancouver 2010 Olympics Games is Hubertus von Hohenlohe. This 51 year old alpine skier is representing Mexico. Tracy Sachtjen is the oldest American athlete. She is 40 years of age and competing in curling events.
