Retirement Income Planning

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Retirement Planning Company
If you think that you will be financially secure when you decide to retire just because you invest in a retirement plan, think again! Did you know that there are common mistakes on retirement planning that you should know about in which you can also use as a guide to reevaluate your status? If you are making these mistakes, you could be in a big trouble.

Here are some of the mistakes of... Read personal finance article



How to Buy a Big Home on a Good Budget
The dream of owning a luxury home, yacht, race horse or some other luxury item can become a reality with Shared (fractional) ownership.

So What Is It?

Shared or fractional ownership, not to be confused with timeshare, is where a number of people contribute funds to buy a leisure asset (e.g. house or yacht) and share the use of it. Crucially you also own a proportion of the as... Read personal finance article



Retirement Income Planning
Following are the guiding principles that I use in my retirement planning process. I use these rules to guide me in my decision-making.

1. Don't pick a Retirement Age, Choose How You Want To Live!

More people take their pensions at 62 rather than at 65 or 66. I believe that is because they can get an income check rather than it being a part of their plan. If you make a plan, your retirement age will fall out of the math. Just figure out how much you need to live life your way, then add up all your monthly incomes, use the social security numbers for different retirement ages and voila, retirement age drops out.

2. The Social Security Pension and Medicare are not enough.

The average pension check is just over $1000 per month. Can you live on that? Suppose there are two wager earners both getting checks of $1000 per month. Can you live on that today? Probably not! Even those fortunate enough to have a private pension will have a meager living. Medicare will become more expensive and cover less. There is a growing trend towards "Medicare Top-up" private insurance that costs the going Medicare rates plus some. Bottom line: you will need to save.

3. You Can't Rely On The Government

I expect them to renege on their promises and weaken Social Security and Medicare. Medicare problems are imminent and Social Security problems are on the horizon. Bottom Line: build contingency into your plan so you are not destitute. For example, worst case on Medicare is that it will be worthless (not likely) so plan on buying insurance. Can you afford it? You will need to save.

4. Debt Is Your Enemy

Figure your current budget, with and without debt, and then compare that to your last Social Security statement(s) that arrived a couple of months before your last birthday. It will become obvious to you. Plan to get rid of as much debt as possible.

5. You can draw down 4% of your savings per year.

(According to Fidelity research.) So figure out how much you want in cash each month to live how you want. Multiply by 12 to get the annual amount. That number is 4% of your total savings so you can calculate what you need in your nest egg. (Don't let it be an empty nest)

6. Inflation Is Your Enemy.

Current inflation is approximately 3%. This means that your savings must earn your 4% drawdown plus 3% inflation to have the same value as when you started. That is 7%. If inflation were 0% your savings will only have to make 4% to sustain itself. Currently you can get about 5% in money markets or CDs. Go Fed!

7. You must be in the Stock Market

Since inflation is not zero, the best place to invest a part of your savings over the long haul is the stock market. Over a long period of time the stock market has returned an average of 10%. Do not put short-term needs in the stock market. Take the long view. From point 5 above, it should be obvious that if you earn above 7% overall your nest egg will grow in value. If you make less than 7% overall, it will shrink and you may run out of money.

8. Max-Out Your Employers 401K

Anytime your employer wants to give you money in a matching contribution, take it. They are no longer giving pensions so you need to take what you can get. If you can't max them out then do what you can, but get started.

9. Make A plan

Obvious, but most people do not. Get help if you need to.

10. Forget The Rocking Chair

Forge a new life. Get ready for retirement before you get there by accumulating interests. You'll need to know how you want to live for your Retirement Income Plan to make any sense.

I am a retired Engineer and co-author of the Blog site "Empty Nest". This site covers many aspects of the empty nest topic, including retirement income planning.

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How to Stretch Your Dollar and Save More

With the cost of living soaring and your pay check staying the same you need to be able to get the most out of your money. Below is seven ways to help you to squeeze the most out of your hard cold cash.

Clip and save. It is well worth the effort and time to clip the coupons in the Sunday paper. Check the supermarket and places like K-mart, Target and Walmart weekly ads to see if the product you need is on sale and who is offering the best price. Also check the ads for some of the big name drugstores that sell other products as well. Shop at supermarkets that offer double coupons, this little extra saving adds up in the end to more money in your pocket.

Pay once instead of over and over again. With big screen movies being released much sooner on DVD then before, rent it from your neighborhood movie store instead of going to the movie theater. Better yet most libraries have a VHS and DVD sections where you can take out old movies, new movies and documentaries all for FREE. These two options are the most cost effective especially if you have children when going to the movies can become a huge expense.

Why pay for it. Why pay for it when you can get it for free, your local library offers a vast array of books from new releases to old favorites hardback and paper backs even books on audio tapes and CDs. Instead of paying $20.00-$30.00 for a hard back book or $5.00-$10.00 for paper back books read it for Free. Also available at your local free libraries are books on audio, so you can listen to when you are in the car, exercising, or doing chores. If you prefer to own your books instead of borrowing it, make your purchases at stores that off anywhere from 10-25% off the cover price. Check out your free libraries book sales and the bargain tables at big name bookstores, you can get hardback books for less then the price of paperbacks. Take advantage of online booksellers that offer used books.

Cash instead of plastic. Late fees, over the limit fees and high interest rates. Unless you can pay your balance off each month in full it makes more sense to use cash then a credit card. Add an extra 12-30% more to your purchase when you use your credit card. Do the math? Is the item you are going to purchase worth the price after adding your cards interest rate fees to it? Paying in cash allows you to pay only the sticker price. If you fall into the category of those who hate to carry cash then use your debit or check cashing card instead of your credit card.

Feed the pig. It is well worth your time to toss any loose change you have each day in a piggy bank or an empty coffee can or glass jar and forget about it. By feeding the pig each night your loose change can put an extra $100.00 or more into your pocket by year's end. This is another benefit to using cash instead of plastic.

Put your cash to work. Put your money into savings, checking accounts and money market accounts that offer high bearing rates of interest. Shop around for banks and/or credit unions that offer free no minimum accounts. It's your money and you should be making the most of it not a bank. A good place to start for a savings account is ING Bank.

Make your own luck. The odds of you winning the lottery are way too small to invest your hard earned cash in. Instead take the .50-20.00, you would spend on the different lotto games available on a daily bases and put the money into your piggy bank or savings account by the end of the year you will have created your own jackpot winnings.




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