Retirement Planning Blog

Post-retirement is the perfect phase of life to go for a long holiday. You don’t have the head-ache to manage a few days of leave from your office, you don’t have to look after the education of your children, or you don’t have any other commitments which can restrict you to go for a vacation – post-retirement days offer you a wonderful opportunity to spend a few days away from your home and also from all the worries of daily life. And there is more in store for you – as a senior, you are entitled to a number of discounts in your traveling expenses, which make your trip a truly affordable one. Let’s see how you can make your travel a truly affordable one.

The travel industry has come to realize that retirees could be a potential segment of customers in this field of business. They are the ones who can spend some time in visiting various tourist attractions. Seniors are also economically quite strong to afford the cost of the trip as they don’t have children and their education to take care of. So, they can easily spend their time as well as money to go for a pleasant vacation. And realizing it, many hotels, airlines and other transportation services are focusing on providing lucrative discounts to the seniors in order to woo them. A lot of discounts and attractive deals are on offer for the seniors. However, you may need to do an extensive search for that. But these deals certainly lower down the cost of your vacation.

One of the most popular travel discounts that you can find these days is certainly the hotel discounts for the seniors. A number of hotels, chain of hotels and motels offer attractive discounts to the seniors. Hyatt hotels offer 25 to 50 percent discounts to the seniors of 62 years and above. Marriott hotels offer 15 percent discounts to them. Ramada Inn also has good deals for the AARP members, which offers discounts up to 10 percent.

As a retiree, you can save a few bucks on your airfare as well. Though, not many of the airlines are currently offering discounts to the seniors, however Virgin Atlantic and US Airways have some discounts for the seniors in selected routes. If you are going to travel in buses and trains, you can also get some discounts there too. Greyhound offers 5 percent discounts to the U.S. retirees with an age of 62 and above. Amtrak offer discounts up to 15 percent.

Not only these, as a retiree, you can also avail of various other discounts like entry fees in museums, national parks and others. So, retirement brings you a wonderful opportunity to travel in a much lower cost. It is the right time to go for long vacations and see the beautiful world. Bon Voyage!

Are you a user of IRA and 403(b) accounts? Well, according to a recent report by Government Accountability Office (GAO), you might be paying higher fees than 401(k) savers. As a user of 403(k) and IRA accounts, you might be investing in various products like retail mutual funds and variable annuities, which often charge more comparing to the other investments.

As an IRA and 403(k) user, you may also have fewer bargaining power to negotiate for reduced costs. Again, the 401(k) plan sponsors often pool the assets of the participants to negotiate lower fees on investments. As they account balances of the single IRA investors are too low, those don’t get eligible for volume discounts. As a result, the investors need to pay higher retail costs. On the other hand, it has also been observed that, the 403(b) plan sponsors often lack the required resources to hire retirement plan specialists as well. An able retirement specialist can guide you to reduce participant fees, which the 403(b) plan sponsors often get deprived of. On the other hand, a 401(k) plan can offer you bundled arrangements for fees, which in turn, reduces the costs for the participants.

It has been noticed that, the choices of investments also play a pivotal role in the savings of the account holders. While the 401(k) account holders often found investing in the group annuity products and institutional funds, on the other hand, IRA and 403(k) account holders often prefer individual annuities and various expensive mutual funds. As a result, they pay more than the 401(k) account holders.

Finally, at the time of leaving a job, employees do also have an option to roll over a 401(k) balance into an IRA. However, you need to consider it very carefully before you do so. Though in some cases it has been found that, moving assets from 401(k) to an IRA resulted in increment of investment fees, but all 401(k) plans may not give you the same result.

Come 2010 and the Roth IRA Conversion is going to play the most crucial role in investment decisions as never before. Starting next year, the existing requirements of $100,000 income test is going to be waived as everyone can convert their existing traditional IRA to a Roth IRA. Unlike the other Roth IRA Conversions, 2010 Roth IRA Conversions provide an unprecedented opportunity to hive up tax free retirement income to the retirees. You can now even pay the taxes due on a conversion as well as remove income limits. Due to some significant changes in the new Roth IRA Conversion rules, it has become pretty crucial for the investors to learn the rules clearly in order to take the full advantage of it.

Before we learn more about the 2010 Roth IRA Conversions, just take a look at the two different forms of IRA – the traditional IRAs and the Roth IRAs. It’s 1998 when the Roth IRAs were implemented for the first time. Many opted to convert from the traditional IRAs to Roth IRAs, where many others had to stay away from it due to income limits and some other restrictions. According to the existing Roth IRA Conversions rules, one cannot get converted to Roth IRAs from the traditional one if his/her modified gross income crosses $100,000 mark. There are several advantages of Roth IRS over the traditional one. You don’t get tax deduction for contributing to a Roth IRA. The contributions grow without taxes. And when you withdraw the amount, you don’t even have to pay any taxes. But, in spite of all these advantages, many had to stay away from it for some constraints. However, the 2010 Roth IRA Conversions have brought a wonderful opportunity to the tax payers to get converted to this.

So, where is the 2010 Roth IRA Conversion different from the existing one? To be very frank, it’s in several ways. The new Roth IRA conversion rule allows you to convert your traditional IRA to Roth IRA even if your adjusted gross income goes beyond $100,000. Moreover, you can spread the income tax due on 2010 conversion over next two years. It means, one can include the 2010 conversion amount as taxable income in 2011 and 2012.

Now the question is, who can take advantage of the 2010 Roth IRA Conversions? The golden rule is, learn the rule well. According to the new rule, anyone can convert an existing IRA to a Roth IRA, but it doesn’t imply that anyone can fund a Roth IRA. Good practice would be to start funding a traditional IRA. If you don’t qualify for making traditional IRA contributions or Roth IRA contributions on a ‘before tax’ basis, you can still qualify for making contributions to traditional IRA on an ‘after tax’ basis. If you have been investing in a non-deductible IRA since 2006 through 2010, you will be able to convert those IRAs to Roth IRAs next year as per the new rule.

It has been seen that many investors stay away from making non-deductible contributions to IRAs. There might be several reasons for this. First of all, these are not tax deductible; these also provide a minimal tax shelter. However, by converting these into Roth IRAs, you can easily overcome those drawbacks.

It is always good to be well-informed. And it is also true when it comes to Roth IRA conversions. A bit of knowledge can work wonder for your. Learn the new Roth IRA conversion rules and be prepared for an exciting investment journey.

Gone are the days when people used to get amazed while associating the term ‘retirement planning’ with ‘single’. There was a time when people considered retirement planning only for the couples. It’s a general conception that singles hardly need to have any retirement planning as they do not have any family or spouse to look after in the post-retirement days. The same emotion also get reflected in various books and articles on retirement planning as well, where you can find couples dreaming for a comfortable retired life. But the time is changing, so is the conception of human beings.

With each passing day, human beings get matured. They come to learn more about the life, its significance, values, and needs. The conception gets changed by the experience. Which was once considered for the couples, seems appropriate for the singles these days. People have come to realize that for a better retired life, it’s not only the couples who need a proper retirement planning, singles do also need the same. Being single doesn’t mean being neglected. The needs of the singles should be met with same importance as the needs of the couples.

With change of times, a growing number of singles are going for retirement planning these days. Let’s have a look at the available statistics. With the population touching 96 million mark, the singles make up 43 percent of adult population in the US. Among those, almost half are over 40 years of age. 13 millions of them never married. The number of divorce is also in the higher side. Thankfully, they all have come to realize the importance of proper retirement planning for a better future.

So, what should be the proper retirement planning for the singles? There can be many. However, the process must start from the psyche. As a single, you have to be more conscious while making your retirement planning. Singles have a tendency to spend too much of money, which often proves to be dangerous. The first thing that you need to do is to save a few bucks for your future days.

Once you have made the basic habit of saving money, you need to concentrate on the other aspects. Try to calculate your retirement income. You can use the traditional “three-legged stool approach”, which takes employer pension, Social Security and personal savings into consideration while doing the calculation.

Life is full of uncertainty and you never know what is in store for you for the coming days. Therefore, you always need to be prepared for any unwanted situations. Hence, your next job would be to get disability insurance for yourself. As a single, you won’t have anyone to look after you in your future days. Insurance can prove to be extremely helpful for you in those days. You should also make it a point to go for long-term care insurance.

Finally, do also make your estate planning. You may also need to do the extra planning to ensure who is going to get the legal rights to manage your assets.

Believe it nor not, it’s true! It has been observed that it’s quite possible for the school employees to get paid twice! Wondering how it became possible? Well, let’s start with the real-life story of Janice Collette.

It was June 30, 2003 when Janice Collette, the Personnel Director of South-Western Schools received a letter upon her retirement from the service from the district saying, “thanks and appreciation for your past service”. Interestingly, Janice got the letter at a time when the district had already decided to rehire her for future assignments. To be more precise, the district decided to bank upon her service for one more term just the month before her retirement. The end result – Janice, at 58, keeps on working for South-Western schools drawing an annual salary of $107,000 for her present assignment, while getting a pension of almost two-thirds of her $86,000 salary per annum at the same time for her past assignment. So, exciting enough, isn’t it? Well, at least for Janice.

According to the latest reports, in the last school year, the State Teachers Retirement System of Ohio had to disburse more than $741 million in pension benefit to 15,857 faculties and staff members who were still working for the system. It leads to a second retirement plan for thousands of employees. It has been found that, on an average, a retired re-hired professional earns a pension of $46,000 per annum, which is higher than the median household income of Ohio in 2007. To add with this, you include the present salary of the employee and the amount would surpass well ahead of $100,000 per annum in most of the time.

Since the enforcement of the law that allowed employees to rejoin their organization after retirement, a steady rise of the number of retired rehirees could be observed. If the current growth rate of 5 to 12 percent per year is maintained, by next year, the number of retired rehirees would become almost twice the number of 1999. Now the question is, where the number is heading for? Can it de-stable the system? Let’s see what the State Teachers Retirement System has to say on it.

The State Teachers Retirement System believes that rehiring retired personnel neither leads to early retirement of the employees, nor it costs the system more money. According to the rule, in order to retire, an employee either has to be 55 years old or should have served the organization for 30 years. According to the spokeswoman Laura Ecklar, the system is not allowing anybody any special privilege. They are only following the state statute. Moreover, according to her, the majority of retired rehirees get the opportunity to join in jobs that offer $20,000 a year or less, which are more like part-time jobs and hence it saves a lot of money for the system.

Whatever be the amount they earn while rejoining their organization, school employees get the unique opportunity to enhance their earnings by getting paid twice. And it also makes you wondered sometimes, isn’t it?

You may be lucky enough to avoid losing your job in this economic down slum, but there may be some benefits that you may wish to take into account. Whether you have a high flying corporate career or you are working in some non profit organization, having some Employer sponsored retirement plans will add to your funds and help you to be financially stable in the post retirement period.

Of all the employer sponsored plans, the 401 (k) plans are the most preferred by the retirees. Most of the companies and organizations in the private sector offer the 401k plans. They provide you with compounded increase on your funds and also help you to enjoy a number of tax exemptions.

If you are covered under the 401 k plans, you can earn around $15,500 of pre-tax earnings. If you are 50 years or more, you can even around $20,500. Another advantage of the 401 (K) plans is that your contributions are tax deferred until you withdraw the money from the account.

401 (K) plans also includes the matching contributions. If your employer or company is offering you the match to your 401 (k) contributions, it is wise to accept it. Recent surveys say that Americans prefer these contributions to cope up with the present economic challenges. The limit on the combined matching contributions is $45,000 for every individual while it is $50,000 for those who are 50 or above.

However, the present recession has forced many companies to suspend their 401 (K) matching contributions. Recent surveys have showed that since 2008, around 90 companies have lowered or stopped their 401 k matches to cope up with their losses.

So what do we do in this present situation? Experts say that the best way is to play the waiting game. Invest carefully in the 401 k retirement plans and after the present down slum ends, you will really enjoy great benefits.

To get that financial stability and enjoy long term returns, you need to follow some basic retirement planning tips. Retirement is a vital decision in our lives and as such we need to make some proper planning in advance and later reap the benefits. Proper planning needs to be done to get the best benefits and be financially secure.

Savings are the key

Money is an important factor in the post retirement period. To get extra money and steady returns even in the post retirement period, you need to make proper savings. It is an important aspect of retirement planning. Experts say that you need to have at least enough savings that can support you for at least 6 months. To have proper savings, you need to cut down on your expenditure and add more to your savings account.

Invest in the stock market

Investing in the stock market is also an important part of retirement planning. However, you need to have a diversified portfolio which will help you create a balance between the profits and the losses. Usually, a diversified portfolio is a mixture of equities, short and long term bonds, stocks, debentures and other investment channels. A diversified portfolio is also not so affected by market swings.

Have a retirement account

Opt for a retirement account and get good benefits in the future years. There are lots of retirement plans that are available for the aged Americans and the retirees. By being covered in these plans, you can get better benefits and can also enjoy various tax benefits and exemptions. The 401k plans and the IRA or Individual Retirement Account plans are the most common among the retirement plans. In addition to these, there are also some other plans such as SARSEP, 403b plans, 457 plans, Keogh plans, Thrift Savings Plan and so on that you can get enrolled in. Those who are working in the state agencies and the federal agencies can also get covered under the various pension plans. Another very good option is to reinvest the dividends that you get from the direct re-investment plans or direct purchase plans. The municipal bonds can also be a wonderful choice.

Look for a good place to live

Through proper retirement planning, you can find the right accommodation that suites you. There are a number of retirement communities where you can enjoy an array of facilities and services. Lower income groups can opt for the Naturally Occurring Retirement Communities which provide good facilities at inexpensive rates.

So make your plans for retirement now and get the benefits in the long run.

Are the one who loves to test the skills and feel that rush for adrenaline flowing in your blood? Then embark on some adventure trip to get that rush for blood! Age can never be the limit, what actually counts is the will power! There are many adventure tours that the aged can opt for. Select your proper adventure tour and get optimum satisfaction and enjoyment.

Cycling and mountain biking has always attracted aged Americans to overcome the hilly barriers. Places such as Arizona, Colorado, Alaska and other areas offer a great scope of cycling and biking. It really needs strength and courage to overcome the steep hills and rugged landscape. Biking and cycling, gives the adventure lover an ideal scope to test him or her under stressful circumstances. The mountain ranges of US like the Rockies are challenging and the cyclist and biker has to be aware of blizzards and landslides.

For lovers of water sports, the wonderful coastline of US is an ideal place to opt for various types of water sports. The lovely ocean, bays and seas matched with the idyllic beaches and scenic surroundings provides a great scope of different kinds of water sports.

Retirees and aged Americans can embark on a number of water sports such as scuba diving, kayaking, sailing and so on. Water sports give you the opportunity to experience of underwater surroundings. You can go to the lovely coral reefs and get to witness the habitat of various marine flora and fauna. The ideal time for undertaking scuba diving tours is in the dry season.

Other than these, the aged can also indulge in other forms of adventure sports like bungee jumping, wildlife tours and so on.

So undertake the right adventure tour now and enjoy to the fullest!

Social Security is the national retirement care plan that is available in the US. Pension is one of the important benefits that are provided through the program. The pension is also known as Old-age Insurance benefit or Retirement Insurance Benefits. The pension benefits are applicable after one attains the age of 62 or more.

In most cases, the payments and the benefits that you get from Social Security are made in the third of each month or on the fourth Wednesday. Usually, the benefits that you get that based according to the date of the birth and some other factors.

In order to be covered under the Social Security pensions , there are certain things that one needs to comply with. The requirements of the benefits are made as per the mode of payments and also the age of the applicant. Some of the requirements that you need to follow are:

• You need to be of the age of 62 and above to enjoy the benefits

• You need to be fully insured in the Social Security System

• You either need to apply for the benefits or convert the Disability Insurance Benefits after reaching the age of full retirement

One can apply for pension benefits through a number of ways. You can make applications for Social Security benefits :

• By making applications through the net

• By making applications through the mail

• By applying directly at the office of Social Security

• By making applications with the Immediate Claims Taking Unit

There are also some factors which determine the amount of the Social Security pension. Some of them are the amount of the payroll taxes that you pay into the Social Security Trust Fund, the age when you can claim the benefits, the current income that you are earning and also whether you are a part of any type of military service.

If you are planning to make a delightful after you retire from your job, go to some of the beautiful beaches. Beach vacations can be a great way to have a wonderful time and have a great travel alone or with family members or friends. A beach vacation takes you away from the mundane activities of life and makes you days enjoyable and full of fun.

There are many beaches locations in the US and aboard where you can go for vacation trips. According to recent surveys, a greater number of Americans are opting for going to the beaches for spending their holidays. The beaches provide the right setting for a lazy outing or a charming vacation. Take a bath in the blue waters of the sea or enjoy a wonderful basking session under the sun.

The ideal time for making beach vacations in any part of the world is between the months of October and February. The weather in this part of the year is pleasant with very little rainfall.

Adventure lovers can also enjoy a wide range of water sports and recreational activities during their beach holidays. One can enjoy an array of water sports such as surfing, para-sailing, scuba diving, jet skiing, kayaking and lots more.

There are many beach locations in the US where you can go for vacations. Some of the popular among them are Florida, Virginia, Hawaii, North Carolina, Georgia, South Carolina, and California and so on. If you wish to spend a vacation full of solitude amidst a serene surrounding, then head to these places.

If you are looking for some beach vacations outside the US, then you can go to place such as India, Cyprus, Naples, the Caribbean Islands, Australia, New Zealand and so on. These places are full of scenic beauty which makes them ideal for vacations.