Read these 10 Retirement Planning Tips tips to make your life smarter, better, faster and wiser. Each tip is approved by our Editors and created by expert writers so great we call them Gurus. LifeTips is the place to go when you need to know about Retirement tips and hundreds of other topics.
If you want to attend a retirement seminar but your employer doesn't offer a retirement planning seminar, there are other ways to get the same information. There are companies that offer retirement workshops and retirement counseling for a fee to people who are self-employed or don't otherwise have access to retirement planning. You should also check your local community college or learning exchange to find out if they offer retirement seminars, workshops, or classes.
It never hurts to get a second opinion on something as important as retirement planning. If you go to a retirement seminar, you might use that as preparation for retirement counseling from a financial planner. Even if you choose a good, reputable planner--and you should--the extra education from retirement workshops will help you understand the dizzying world of retirment investments and options.
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.
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.
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.
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.
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.
The internet and the world wide web has spawned a vast number of learning resources for people who need to find their own answers. Online education now includes retirement seminars, retirement workshops, retirement counseling provided in the form on an online course. However, be choosey. Before you plunk down money to take an online seminar, ask around. Find out if the online school is licensed and by whom. If they say they are "accredited", find out who the accrediting body is and check with the Consumer Affairs Department in the state where the school has its main office to make sure they are legit.
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.
If you work for the Federal Goverment, you can take advantage of their retirement seminar program. You can attend a Federal Retirement Seminar provide prospective and potential retirees, generally within five years of eligibility for regular or early retirement, with accurate information on civil service retirement and other benefits. In addition, it provides other useful information essential for planning a successful and financially stable retirement.