Eric Bayne asked:


If you are one of the many retired people managing their own self directed accounts, you need to find yourself a good retirement calculator. But even if you’re young and just starting to work, you need to begin planning for your future retirement. How much money will you have to retire on if you continue to save and invest at your current rate? This is what a good retirement planning calculator will help you to figure out.

Very few things are certain in life. Not your current salary. Not your current rate of return on your investments. Not your good health. All of these things are variables that can change in an instant. Nevertheless, the purpose of creating a retirement plan for yourself is to help to give yourself the best odds of being able to live the good life when you retire. A retirement calculator will help you to do this, but you need a few prerequisites to get started.

How old are you now and when do you plan on retiring? The bigger the distance between these two figures, the greater the choices you have in your options and the greater the odds are that you will be successful. On the other hand, if you are age 60 and plan to retire at age 65, a retirement calculator will not help you much. It will be able to tell you what your income will be when you retire, but aside from that, it won’t be of much use. On the other hand, if you are 30 years old and plannig to retire at age 65, a retirement calculator can help you a lot. It can tell you what interest rates you need inn order to meet your desired income targets. It can tell you if you can accomplish your goals with conservative investments or whether you need to take a chance on riskier investments that will normally compound at higher interest rates. An excellent retirement calculator will also let you try out different retirement dates to see how they will impact your future income. You may find that you can retire much sooner than you thought you would.

What is the minimum amount of money you need at retirement? This is a different question than how much money you would like to have. The minimum amount calculation takes into account the cost of basic human needs and services such as – food, shelter, health care, and so on. A good retirement calculator will look at what you’re spending now on these items and extrapolate their costs into the future, taking into account inflation and other cost of living variables such as age. The calculator may alert you that what you thought was necessary to maintain your current standard of living will be, in fact, woefully inadequate 35 years from now. Having this knowledge in hand will let you adjust your savings plan in time to make a difference.

Once you’re retire, how much money can you safely withdraw without significantly impacting your principal? The principal is your retirement lifeblood. If it disappears, so does your monthly income. The best calculators will let you “play” with the principal amounts and desired monthly income amounts until you are satisfied that the periodic amounts you withdraw, will last you for your lifetime.

Everyone, who is not yet retired, should plug these retirement variables into a calculator at least once a year to ensure that their retirement plan is still on track. You do not want to discover any negative financial surprises when you are finally ready to retire. In fact, even if you are retired, it’s always a good idea to periodically take stock of and reassess your financial condition.



Jose

jagorion asked:


I am a foster parent and I get paid by my agency through a per diem. That means the money I get paid is tax free. And since I don’t have a full time job, I don’t have a retirement plan. I want to start saving for the future. Can any one help?

Lance

Nadeem M asked:


When someone dies, leaving an estate to their beneficiary, it could include stocks, bonds, investment accounts, retirements, real property, etc.

I believe everything under $2 million passes to the heirs without any tax obligation. (Is this correct?)

My question is about the tax-deferred retirement accounts (non-ROTH) that collect ordinary income tax when you draw the funds. Would this tax be required from the heirs?

Thanks.

Martin

Helen Smith asked:


Retirement is one of the most significant changes that any of us will ever experience.

Everyone approaches retirement differently and with a mix of emotions, some of us can’t wait and others of us will be worried or even fearful.

Planning for retirement courses are more important today than they have ever been. We are much healthier, much more active and can expect to live much longer – a whole new phase of life and opportunity is opening up. Unlike other phases of life, this time there is less structure. For the first time we are faced with a period of maybe 30 years when we essentially write our own ‘job description’. That requires plenty of thought and planning, to avoid pitfalls and to ensure we make the most of it and enjoy a balanced retirement.

You can take a big step by getting some expert advice through a retirement course on how to make the most of your retirement, thereby making your remaining time in employment as stress-free and productive as possible.

It is important to recognise that many retirement courses still focus far too heavily on just the financial side of retirement, even if lifestyle aspects are in theory covered. Although finance is important it should not be dominant because the lifestyle aspects of retirement and decisions about them are fundamental to making the most of retirement.

In the past many retirement courses have also focused too much on information giving. A good course will also include methods that cause the individual to examine each aspect of retirement from their own point of view and encourage discussion between delegates.

Value to the individual of Retirement Courses

A retirement course that provides the right balance will lead to a number of benefits for attendees including

• Overcoming concerns and fears, making retirement an opportunity to look forward to.

• Making attendees of the retirement course consider retirement in a way they won’t have done before and as a result clearly identifying both the issues that need to be addressed and the opportunities. Raising new areas to consider even for those who have done a lot of thinking about retirement. Making them aware of common pitfalls.

• Making the level of change they are about to undergo clear and the retirement course will enable them to produce a personal plan which makes their transition to retirement smooth

• Generating lots of ideas for enjoying retirement – their own, their colleagues’, and the tutor’s. Different perspectives help them develop their own plan.

• Understanding how their relationship with their partner and others may be affected and the importance of planning this together (ideally attending the retirement course together)



Gregory

Elijah James asked:


Most people don’t think about how much money they need to save for retirement until they really need it. After all, with the pressures of daily life taking up most of our awareness, who has time to think about it?

The truth is most people drastically underestimate just how much they’ll need to keep themselves going once they do retire from the workforce. What many people seem to forget when they try to work out the amount of money they might require is that the value of money changes over time.

This means that what looks like a really large sum of money to you now sitting in your retirement fund probably won’t buy the same amount of things once you do retire. If you’re close to retirement age already, then this argument won’t hold true for you. However for anyone that still has more than a decade left in the work force, you should consider the change in the value of the dollar as time goes by.

How Much Do I Need To Save For Retirement

Some financial advice firms estimate that you should consider perhaps 50% of your current income per year as a healthy start to give you an annual income figure after retirement. If you think about how much you earn right now, could you imagine living on half this amount for the entire duration of your retirement years?

Of course, you should figure that you won’t have the same types of expenses to pay for once you leave the work force, so your expenses in this area may be reduced. Unfortunately, you may also find that some of your medical bills may be increased as time goes on. This shift in the cost of living after retirement is often where people go wrong in their calculations.

The other issue you should consider is how long you expect to live once you have retired. Most people stop working at 65 but the average life expectancy is well over 80. That’s 15 years you’ll need to survive on only what you have in your retirement savings.

How Do I Increase The Amount of Retirement Savings I Have?

No matter how old you are or how close to retirement you are, there is always plenty of opportunity to increase the amount of savings you have. If you’re still working and earning income, then you can voluntarily increase the amount you contribute to your plan each pay period.

Compounding interest can have a dramatic effect in increasing your savings, so any amount you can put in will increase over time well past the amount you spent simply because interest accumulates on top of interest already paid.

If your retirement is still a long way off, then consider some very carefully chosen investment options to help increase the amount you have available for later years. As you get closer to retirement age the extent of your investment activity should be more conservative to maximize and retain the amount you already have.

So if you’re trying to calculate how much money you need to save for retirement, perhaps consider using an online retirement calculator to give you an estimate of how much you need so you can begin making plans now.



Susan

Elijah James asked:


Retirement Calculate planning can be complicated. There are numerous factors that you need to take into account, several of which will not be within your control. For example, you cannot predict the inflation rate, or the number of years you will need an income for post-retirement. Depending on how complex your financial affairs are, you may need expert advice. Using a retirement calculator is a useful way to get an idea of how suitable your existing retirement planning is or, if you are just starting to save for retirement, gaining insight into how best to go about it.

They can allow you to enter your key financial and personal information in order to estimate how much you will need to pay in, or how much you can expect to get out of your existing plan over the years of your retirement. You will need to have a variety of information to hand about your financial status. This will typically include your current income (or joint income if you are married); the proportion you are investing in retirement funding; the rate of return you are expecting both before and after retirement; the age at which you plan to retire, and how many years you want your retirement funding to cover. Some will give you the option of factoring in the impact of Social Security eligibility and other data that will impact upon your retirement income.

The calculator will do all those complicated sums for you. Some will also generate a report, giving some analysis of the status and financial implications of your actual or proposed retirement calculate plan. As a tool, a retirement calculator can be invaluable in your retirement planning. It is not something you should do just once. The analysis should be run regularly, especially if your circumstances and/or the economic climate change. Alternatively, running different figures through the calculator will allow you to plan your contributions and envisage the different outcomes that different retirement saving strategies can yield for you.

All retirement calculators are based on some pre-existing assumptions. For example, it may assume that you make payments at a certain time of year. Such small assumptions could make an impact on the final figures and for this reason the calculator should be regarded as a guide, not the last word. Though you enter your own specific data, retirement calculators are nevertheless designed for an ‘average’ individual and, if you have special circumstances that may affect your tax and investment status, it will not be able to take those into account.

However, even an accountant or actuary is not going to be able to give you a fully accurate report, since the world is a changing place. For example, changes to tax laws or fluctuations in the rate of inflation simply cannot be predicted in advance. Nevertheless, using a retirement calculator is an invaluable exercise and may alert you to problems or oversights in your retirement plans and strategies.



Dawn

Dan Skriver asked:


Whether retirement is right around the corner, or several years down the road, it’s never too early, or too late, to start planning for your future. Some people feel intimidated by matters of finance, while others simply don’t feel comfortable with their knowledge regarding retirement planning. Make it a priority to learn as much as you can about your finances by reviewing the following essential 5 top baby boomers retirement tips.

It’s no secret that retirement can be expensive, especially with the rising costs of just about everything, which is why most experts recommend planning on needing anywhere from 70 to 90% of your current earnings after you retire to maintain the standard of living you’re accustomed to.

Here are the 5 top baby boomers retirement tips for those who are serious about planning for their future:

Start With a Definitive Plan

Start by noting your current standard of living and then examine whether or not you’re willing to make sacrifices, or if you plan to live just as you always have. Most people expect to enjoy the same lifestyle along with travel or vacation plans after retiring, but really have no true idea of how much money they’re going to need to actually do so.

A retirement calculator is useful for figuring out exactly what you will need each month to meet your goals. Either online or through your own calculations, use your current age, the age you plan on retiring, your current savings, and how much you need to live comfortably per year after retiring to get the final amount.

For solutions to your specific circumstances, seek out the advice of a professional, such as a financial advisor, your bank or union, as well as your employer’s human resources department. Ultimately, trust your own instincts and educate yourself before making any decisions.

Review Your Social Security Benefits

On average, the Social Security Administration (SSA) pays roughly 40% of one’s pre-retirement earnings after retiring. Earnings statements are usually mailed three to four months before your birthday that outline what you have paid in taxes, along with a summary of your estimated benefits depending on the age you retire. If you haven’t yet received any statements, contact the SSA to request one by visiting their web site at www.ssa.gov.

Learn About Your Employee Benefits

Any employee who is covered under their employer’s retirement plan is entitled to a clear explanation of their benefits and receive what is known as a summary plan description. Also remember to inquire about your spouse’s retirement benefits through their employer, or open a spousal IRA (Individual Retirement Account) for those who do not work outside of the home.

Contribute to a 401k

One of the most often overlooked of the 5 top baby boomers retirement tips are investing in a 401k, which is a tax-sheltered savings plan that your employer also contributes to. It is estimated that an entire quarter of all people who were offered the chance to participate in a 401k plan chose not to. If your employer doesn’t currently have any type of retirement plan in place, suggest that it start one as soon as possible.

Follow Through

Although a growing nest egg may be tempting during those times when you might need a little extra cash, it’s imperative to stick to your plan to avoid any withdrawal penalties, as well as falling short of your ultimate goal when you do retire.

By simply following these 5 top baby boomers retirement tips, it really is possible to retire the way you envisioned and truly enjoy your future without worrying about finances.



Vanessa

BeenThereDone That asked:


I just graduated from college and will start to have to pay student loans within the next 5 months (about $13k) . I am also very interested in starting out a retirement account soon. I have been told that I can open an IRA for as little as $50 a month. Should I start to pay off the debt or start a retirement account? What is the best place to invest? I am 23 years old.

Darlene

**A Perfect Gentleman** asked:


Do you know a good place to start when your employer is not doing retirement because you do not have enough hours? I dont feel like Social Security will be around when I get to the age to draw. That will be like in 2040 something.

Esther

Cindy Heller asked:


When life or working conditions become difficult, many people fantasize about early retirement as a form of escape. Early retirement can be a reality if you have taken steps early enough to prepare for this. If you have the foresight and the discipline to set aside savings from your employment income and invested them wisely, perhaps you stand a good chance to do whatever you want to do whenever you want to do it. For people who enjoy their work, mandatory requirement to retire at a certain age may not be looked forward to. They dread the day when they will need to stop going to work as part of a regular routine, fraternizing with their colleagues and basically keeping themselves productively occupied. Another group of people are content with their previous life stage as employees and look forward to transitioning to their next stage of retirement. In summary, different people take to retirement in different ways.

A minority of people start saving for their retirement from their first paycheck. Many people do not start saving for retirement until it is a little too late. Those who started early with saving and investing for retirement, usually can look forward to comfortable retirement. For those who are unprepared, they may survive their retirement out of sheer luck – inheritance from parents who may have passed away or funds from an insurance payout due to the early death of one’s spouse. For everyone else who is unprepared, life will be pretty hard during their retirement. They will have to severely limit their choices in terms of quality of accommodation, activities like travel and potentially even the types of food consumed.

Do Not Daydream About Your Retirement; Prepare For It

If you wish to enjoy the flexibility to do whatever you wish upon your retirement, you need to prepare for it by saving and investing wisely according to a financial plan. You can choose to wake up whenever you wish. You may decide to spend time with your friends and neighbors. You can spend time with your grandchildren and watch them grow up. You may wish to work in the garden or take long naps. You can catch up on your favorite TV programs or movies. In fact, your leisure choices are limitless. The key proviso is that you have the financial means to do so. So put in place a retirement plan as early as possible.

There are some who dread retirement, since they miss the sense of order in their day from employment. They do not have any particular hobbies or interests. They may not socialize easily. They just do not know what to do with themselves with all the time they have from retirement. Some of them may take on another job post-retirement. A job that may not demand much in terms of skills or physical strength. These people are contented to work as long as they can and do not look forward to their retirement.

Retirement Jobs Are Increasingly Becoming Available

The issue of retirement jobs may seem really odd to some, but the reality is that not everyone can afford to retire. In developed countries, the two issues of a shrinking population arising from fewer babies being born and an ageing population living beyond the previous lifespan estimates have meant that retirees who need jobs can usually find them. Since more people can expect to live longer, they need to take this extended longevity into their retirement financial planning. For some this may be a little too late, so they will grudgingly have to consider working longer. Many governments around the world have been systematically raising the mandatory retirement age over the last few decades.

Opportunities For Retirement Jobs In Consulting

Many professionals today can develop new careers in retirement by offering their services as consultants in the fields in which they have expertise and from which they retired. This allows them to stay in the workforce without the pressures of day to day job demands. Most will work on a part time basis and others will work as contractors, working only when there is work, leaving plenty of time for hobbies and other interests.

Those lucky enough to have lucrative part-time consulting retirement jobs have the luxury of working productively for short durations at a time, while having the flexibility to spend the rest of their time on other activities like hobbies and social service. Many retirees who elect to work usually do so with a strong work ethic. Businesses may benefit substantially from offering these charged-up, motivated and active retirees.

There is a great span of retirement jobs available for the retiree who is seeking suitable work. Some may be simple and undemanding work at retail stores like fast food joints and cafes right up to high-end consultancy positions. If retirement jobs give retirees some sense of purpose along with other tangible benefits, then society at large benefits too. National welfare systems do not end up being over-burdened.



Mike