Question:
How should I plan for retirement?
Smart planning for your retirement
It's so easy to get confused by all the retirement planning option names and terminology, something that helps keep many a retirement planner in business. You can simplify things if you remember precisely what a retirement plan is. Basically, you can think about a retirement plan tax-proof "container" in which you can put your investments and thus avoid taxes. Usually the money going into the container is not taxed, and its contents hopefully grow over time. No taxes are taken out until you start to remove money from the container.
Smart planning for your retirement
Is your retirement planning getting all the support it can? Employees lose literally billions of dollars each year in free 401(k) money by failing to put enough in to capture company matching funds. If your employer provides any kind of matching funds, contribute enough to get every penny of it. This money is otherwise lost to you. Once it's in the retirement plan, it's yours, even when you change jobs.
Smart planning for your retirement
If you change jobs, smart retirement planning says to roll your current retirement assets into an IRA rollover account. This can be done years later, as long as your former employer lets you keep your money in the old retirement investing plan. Why rollover the old company plan? You give you or your retirement planner a wealth of additional investment possibilities. Company retirement plans are usually limited to six or fewer investment options. With an IRA rollover, particularly at a mutual fund company the number of investment choices rises into the hundreds or even thousands.
Smart planning for your retirement
As you go about retirement planning, look at your retirement investing assets as part of your overall asset allocation. Don't think of your retirement investments as a separate portfolio to be managed. Your retirement investments are part of your overall financial situation. Remember, a sound retirement plan is intended to eventually cover your entire financial world.
Smart planning for your retirement
Careful retirement planning means deciding in what order to use your retirement plan resources. After you've stopped working, use up your non-retirement money first. When you sell non-retirement investments, the only taxes you pay are on the increase in price. With retirement investing that you have contributed to with pre-tax dollars, money you withdraw is taxed as ordinary income in the year you liquidate the investment. Always, always try to defer taxes as long as possible.
Smart planning for your retirement
When you're retirement planning, stocks should represent the bulk of your retirement investing portfolio -- up to 75% or 80%. But not all that money should be in the same fund. Divvy it up like this: 40% in large-company U.S. stocks, like an index fund; 20% in small U.S. companies; and 15% in an international fund. If your plan has a good emerging market fund, you might even put a token amount there. For the other 25%, you might put 10% in a bond fund, 5% in cash -- or a money market fund -- and the rest in a hedge fund like a natural resources fund, a real estate fund or an energy fund. Using some commercially available retirement planning software can help you be your own retirement planner, or at least keep track of your growing nest egg.
Retirement Frequently Asked Questions
What benefits does Medicare offer?
How is Medicare different from Mediaid?
When can I get Medicare benefits?
What is Medicare supplemental insurance for?
How can fi find the best place to retire?
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I want to learn more about retiring to Florida.
Is is possible for me to retire early?
I want to learn more about retiring toNorth Carolina.
Can a retirement calculator help me plan for retirement?
Can a retirement calculator help me plan for retirement?
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How can I make an informed choice when shopping for a retirement home?
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I need some ideas for the perfect retirement gift.
I need to learn more about military retirement.
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How can 401 retirement plans and IRAs help me save for retirement?
What does Social Security offer retirees?
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How would Social Security reform affect my benefits?
I want to learn about the history of Social Security.
How can estate planning or wills help take care of my family when I'm gone?
How can estate planning or wills help take care of my family when I'm gone?
If I don't have many assets, do I need an estate plan?
How will taxes effect my estate?
How do I figure out my medicare and medicaid benefits?
When and I Eligible for Medicare?
| Guru Spotlight |
| Sherril Steele-Carlin |
