Essential Considerations in Retirement Funds

Will your  your retirement fund deliver the retirement life you want? It may not. There are two problems with getting enough into your retirement fund. First, the investment industry has been overly optimistic about  the return you can expect on retirement funds, and this has most people who are saving also being overly optimistic. Are you?

The second problem is that the USA is getting older, so there are fewer people in work to support people who have retired. This will reduce the amount of money being spent in the economy, and will reduce social security payment to retirees. It could also be a drag on house prices – just when you want to retire.

Now is a good time to reconsider whether you are saving enough in your  retirement fund. The reason for the excessive optimism was the big returns given by stocks in the 1990s up to about 2001. Since then, stocks are delivering lower dividends, and growth has been poor for the past few years – maybe that’s the Bush effect. It could have a seriously adverse effect on your retirement fund.

Stocks may generate a return of 8%

Nowadays, if you invest in stocks for your retirement – quite a risky business – you should not expect to get more than about 8% a year, whereas you probably need 10%. This is not much better than you can expect from treasury and other bonds of good quality, with some good quality stocks that will pay good dividends. One problem with stocks is that fewer pay their shareholders dividends than in the past – bads news for retirement funds.

So, if your retirement fund is heavily into stocks, you need to look again, and see what return you are getting. And if your retirement fund is invested in mutual funds, don’t forget that they charge fees for the service. Try to get lower fees, but the quality of the fund and fund managers comes first.

Overseas investment for retirement funds?

Some savvy investors have done well with their retirement funds by investing overseas, largely because the value of the dollar has fallen against Sterling and the Euro, and is likely to continue to do so long term. Of course, you should only put a small proportion of your retirement fund in any one investment, and you should always keep the bulk of your retirement fund in dollars, but having 10-25% in overseas markets could work well. But what seems a sure bet today could turn sour in 10-20 years time, so you need to keep monitoring the situation.

In fact, the way the world is going, monitoring your retirement fund closely is another thing you really need to do.

Retirement
Retirement

Disclaimer

The information on this web site does not constitute an offer in any way. It gives general information, but is not financial advice. The aim is to help you decide what to do about your retirement plan, and the importance of saving for retirement. You should consult a retirement planning adviser with a proven record before setting up a retirement plan.

There is a lot to be said for retiring in Costa Rica, but you need to go there first to see what it is like. Be sure you learn about it prior to your trip. This will save you plenty of hassle. If you’re not certain how to go about this, I assure you it’s simple. On the Internet you’ll find a Costa Rica travel guide, or any travel guide for that matter. Just punch in your destination of choice and start reading. You’ll have the skinny in no time flat.

One thing you may assume about a Costa Rica travel guide found on the web is that it’s biased. You probably think it’s a travel guide created by the country’s officials in order to draw tourists. Hey, I don’t blame you. I would assume the same thing. In fact, you can probably find a Costa Rica travel guide that does just that. But, there are also a variety of others, which are fairly objective.

This is what’s so wonderful about the Internet. You can get online and sort through a few different Costa Rica travel guides and find the kind you’re looking for. Clearly if you just hit up the Costa Rica website, it’s going to tell you endless great things about the area and all it has to off. By the time you’re finished reading it, you’ll think Costa Rica is the most amazing place on earth.

Investigation is imperative when we leave the safety of our own countries. That’s why anyone and everyone who’s traveling there should take a look at a current Costa Rica travel guide first. Find out what places are recommended by other tourists. Learn about the dangers of the area as well. There are surely some spots to avoid while visiting this amazing getaway. The point is to get informed and travel safe. This will result in a much better trip, and give you a better insight into whether you would enjoy retirement in Costa Rica.

Retirement
Retirement

Saving is not easy, but turn it into investment and it sounds sort of sexy and smart. It is not easy to find spare money to invest, so the best way to do it is to invest some each month immediately you are paid. Or have the money put straight into a retirement fund by your employer.

There is a trick to investing – especially for retirement. It’s called will power. Okay, that may just be my personal view, but I would imagine some folks agree with me. They even make commercials regarding this very issue. You really need to get control of your debt and credit cards for a start.

I know I should focus more on investing my money, and not spending it on lattes and food products. This is probably my greatest weakness. I love to eat and I love to drink java even more. The plus side is I have a super fast metabolism. The down-side concerns wasted income.

But if you put some money into your retirement account every month,you will not notice the money not being there. And if you invest each month in your retirement plan you will be surprised to see how much it builds up. believe me, it does!

As I said, the best way is to have the money deducted by your firm, or have a regular payment from your bank about two days after your pay check arrives. That way you will not miss  the money.

Oh, and by the way, these days investing for  your retirement is not an option – if you don’t do it you will end up in the poor house. The government has already spent all your other retirement money, so now it is down to you.

Where to put the money? It depends on your type of employment whether it is a straight IRA, 401k, 403b, Roth IRA or whatever. If you look through http://www.retirewhenulike.com (here) you will find plenty of information on the best plan for you.

Retirement
Retirement

My father is turning 60 in a few months. He isn’t taking it too well and has started to notice more and more gray hairs protruding from his scalp. His body has more aches and pains nowadays too. He’s actually dreading his birthday this year, not that I blame him – retirement is getting close.

Our family has decided to throw him a surprise birthday party and make a big celebration out of it. We’re having it catered and holding it in a hotel’s conference room. Amazingly, it isn’t costing us more than $300 for everything. I have racked my brain trying to come up with some ideas for 60th birthday gifts that won’t be insulting to him. I’m hoping that the guests will not turn this into some gag gift evening that will leave him feeling even more depressed than he already is.

I haven’t found too much on games and ideas for a 60th birthday party. I don’t want it to be boring, but really - what can you do at a party when most of the guests are older and classified as boring and stuffy? I don’t want people bringing him 60th birthday gifts that are based on the age. Of course, the party shouldn’t be about bringing him gifts. It should be a celebration of the milestone he’s reached. Giving him 60th birthday gifts that are all gag items isn’t about celebrating, that’s about teasing and reminding him of all of the gray hairs he’s noticing. (This guy is obviously too young to know that old people are not all boring – Ed)

I have found some really great 60th birthday gifts that I may look into getting him. I found a really nice gift basket that has items from the year of his birth. It has a CD with songs that were popular that year, a newspaper headline page, coins with the year, and some other items. It will cost almost $100, but I think that compared to some of the other 60th birthday gifts that I have found, it will be a great choice and something that he will appreciate.

I also have considered putting together a nice photo album for him. I know that he doesn’t have many of his childhood photos all in one place. They are scattered around the house, stored in some old boxes, at his mother’s house, etc. A friend of mine does a wonderful job of scrapbooking, so I was thinking of asking her to help me decorate the cover of the album and perhaps some of the photos on the inside. I think that might make an incredibly meaningful 60th birthday gift.

I suppose I’ll just have to cross my fingers and hope that people decide to bring some tasteful 60th birthday gifts and that the party is a huge success. Hopefully, it is the start of a new milestone and journey for him. And let’s hope every card doesn’t say happy 6oth birthday – now that is boring!

Retirement
Retirement

You may be saving for retirement, but not sure whether you will live long enough  to retire. What a waste of your money!

To keep healthy you need a plan. Not just any plan, but a health plan. One that involves a healthy diet and exercise. If you have a family, the plan should include everyone, not just you. You need to exercise, and to eat healthily.

If you do exercise routines – it could be cycling or another activity – then each person will help the other. And you know everyone is getting some exercise – no slacking. Children will exercise so long as the exercise is interesting – make it a game, or roller skating, or football or whatever – but make sure it is fun and goes on long enough to be real exercise.

How long? Well, if it is true aerobic exercise, raising the heartbeat by about 40%, 10 minutes is enough. If it is lighter exercise you will need at least 30 minutes – or 2 hours a week.

What about food? Don’t eat junk food like McDonalds or KFC – and don’t allow your children do so, either. They are full of fat. Now some fat is good and some is bad but they have lots of saturated fat – that’s bad and puts the weight on in no time. On the other hand, olive oil, nuts and seeds are among the foods that have plenty of the good fats, the sort your body needs to keep going.

To improve your diet, eat less red meat and chicken and more fish, nuts, seeds pulses – these are beans mostly. Also, eat plenty of fruit and vegetables. And make it part of your plan. Cookies? Throw them in the bin now, and learn to make tasty alternatives.

As you get closer to retirement, you will need to eat less because you are not burning up the calories. The way to do this is more of the same – don’t eat red meat, and do eat more pulses, while grains, vegetables and fruit.

With a plan like this you will enjoy your retirement.

Retirement
Retirement

With a change in the laws, there never was a better time to start a 401(k) retirement fund. In fact, you may find that you have already started one, because under the new law, your employer can put you into a 401(k) retirement fund automatically.

If that happens – or has happened  - to you, you might not pleased at first because some of your salary will be deducted to pay it. But believe me, any investment for your retirement is a good investment – and if you have not started one, do so today. It is that simple.

Other changes in the law are that the Roth 401 (k) is now permanently available. The difference between a Roth and ordinary 401(k) retirement fund is that you invest out of taxed income, but with withdraw tax-free. With a 401(k) retirement fund, you get tax relief on your investment, but get taxed when you start to withdraw from it.

401(k) or Roth 401(k)

Which is best? That depends on your situation, and it is best to discuss this with a financial adviser – but make sure you find a good one. You are likely to do better with a Roth 401 (k) if you are a high earner and will pay a lot of tax on your retirement income – but this may not be the case for you. It depends on your tax payments now and expected future tax payments.

Once you have set up a 401(k) retirement fund, you need to take some interest in it – this will repay you handsomely. Most people just put their money in one fund, and forget it. Then, 30 years later they might find it has not grown as much as they expected.

Review your funds annually

To avoid this happening to you, review your fund or funds every year. If you are unsure how to do it, find a good financial advisor – one who puts your interest first. You need someone who will spell out the fund charges, compare them, and recommend you invest in more than one fund. It is never a good thing to put all your eggs in one basket, and this is very true of investing for retirement.

Whether you use a financial advisor or not make sure you do review your 401(k) retirement fund each year. Also remember that if you use a financial advisor he or she gives you a service they will charge for it one way or another, and you need to know how they are charging. It may be coming out of commissions – not a good way – or they may charge you a fee.

You do not need a financial advisor if you are happy to keep up to date with mutual funds and investment – it is not so easy to learn.

Retirement
Retirement

Disclaimer

The information on this web site does not constitute an offer in any way. It gives general information, but is not financial advice. The aim is to help you decide what to do about your retirement plan, and the importance of saving for retirement. You should consult a retirement planning adviser with a proven record before setting up a retirement plan.

Are you saving enough for retirement? Probably not. One safe place to keep your money is in a high interest savings account - but beware: if the interest rate seems much higher than anywhere else, it may be too good to be true! The last thing you want to do is lose your extra savings.

A high interest savings account is a good option if you don’t like risk, but would like to see some return on your money. The stock market can bring about great gains in little time, but you can also lose everything in the blink of an eye. If you have a high interest savings account, it will take a while for the interest to add up, but your money is pretty secure. The FDIC insures most banks. This means that if the bank somehow loses the money in your high interest savings account, you can recover your money up to the limit set by the FDIC. It is in your interest to learn what this number is, and to move money around if you go over that amount.

If you want a high interest savings account, you need to go into your bank and talk to a financial planner or someone who can help you decide what to do with your money. All banks have these people. They just have different titles, depending on the bank. A high interest savings account will require, in almost all cases, you to have a minimum balance in that savings account. You can start out with a regular account, and when your balance meets that minimum requirement, you can switch to a high interest savings account.

If you don’t make a lot of money, you don’t want to take a lot of risk. This is up to you, of course, but those who don’t have a lot to throw around try to be cautious. You can find security in a high interest savings account, but remember the earnings won’t be huge. Take advantage of any savings plans you may have through your work, and also try some other types of accounts if you find you have more to save as time goes on.

Retirement
Retirement

When you think of somewhere to retire, why not consider Costa Rica? Many people consider it the ideal retirement place.

Costa Rica has been a democracy since 1948, rejected the idea that it needs a military force, and so can spend all the tax money on things that benefit the economy and people. It is a stable economy, so it passes the first test as a suitable retirement home.

Costa Rica is an excellent retirement home because the weather is good, costs are low, the country and coast are beautiful, and the people are friendly. It is a good place to sail, scuba dive and also play some sports. Costa Rica is known the world over to bird watchers, so if you like birds you will find Costa Rica a wonderful place.

Most people looking for a place to retire to are concerned about  costs. Well, Costa Rica is inexpensive to live in, and once you become a registered resident, you will be eligible for many services, some free and some at reduced cost. Also, you will not be taxed on income coming from outside Costa Rica. So, you will not pay taxes on your US pension.

Two classes of foreign residents

How do you retire  - or go to live – in Costa Rica? Well, there are two classes – one is intended for people who are not fully retired. This is called a Rentista. To qualify you must be able to transfer $1,000 each month into colones, the local currency, each month for five years.

As a retiree, you qualify for the Pensionado status. To do so, you must be retired and transfer $600 each month into Costa Rica. In this case, the money must come from an authorised pension fund, which could be your pension from Social Security, from an IRA or any other retirement fund so long as it is payable for the rest of your life.

Is life in Costa Rica perfect for Americans? No, not for everyone. Every country has its own culture, and Costa Rica  is more laid-back, in the Mediterranean way, whereas the US is get-up-and-go.

The mail service has a poor reputation, with thefts being reported. There are five banks, and the aim is now to allow in foreign banks to provide competition – one of the banks collapsed not so long ago.

So you must be ready for things to be different, for them not to be done when people say they will do them, to have to wait for service, and so on. Of course, you must also like hot weather!

Life is so different that before deciding to retire anywhere other than where you live – even the next State – you should spend some time there before moving. In the case of Costa Rica, it is recommended that you live there for six months before deciding whether it is for you. If you do enjoy hot weather, and like a simple life, than Costa Rica could be the retirement paradise for you! So take a look at retiring in Costa Rica.

Retirement
Retirement

If you are an employee, your retirement plan is protected by US Federal laws. In fact, most pension plans are covered by he Employee Retirement Income Security Act (ERISA). It is a good idea to check whether your pension plan is covered by ERISA or not. If not, ask your employer to consider making it compliant.

You se, ERISA provides protection for yourself and family in any employee pension plan operated by your employer. It also ensures that you have access to full information about the retirement plan, so you can make your own judgement about its value.

Also, the people who manage pension plans must meet certain standards of conduct. These are specified in law, and protect you from total loss of your fund which could happen if an unscrupulous manager found the company short of cash - or indeed himself short of cash. If your fund is covered by ERISA this is very unlikely to happen.

Most private sector pension plans are covered by the Employee Retirement Income Security Act (ERISA) - schemes operated by government or churches are not covered. Among other things, ERISA provides protections for participants and beneficiaries in employee benefit plans, including providing access to plan information. Also, those individuals who manage plans (and other fiduciaries) must meet certain standards of conduct under the fiduciary responsibilities specified in the law.

You should receive full documentary information about the plan from your employer.
Also, if you make a claim under the plan, the company is required to comply with that request in a timely manner.

You should make sure that you get full information about payments, tax allowance, expected benefits, etc for your plan. Remember, though, that although there are guidelines for the estimation of final benefits, the state of the economy between now and when you retire will affect your benefits - you will be given estimates only about the true value of your pension plan.

Retirement
Retirement

Get a Financial Plan – then a Retirement Plan
With a financial plan in place you can face your retirement with confidence!

To have enough money to live on comfortably in retirement you need a financial plan – a retirement plan will follow. You see, if you have a financial plan in place, you will find it easier to save for your retirement.

Where should you invest when you start a financial plan? Well, you need to consult a good and tried investment advisor who hqas shown the ability to do well for his clients in bad times. Almost anyone can do a good job in good times, when the stock market is racing ahead, but it is more difficult to do well when stocks are doing badly.

In any case, a spread of investments in stocks, mutual funds and Treasury Bonds and other high quality bonds is what you will need.

United States Savings Bonds are one of the safe investments you can make – they may seem boring compared with equity investment – but you will always get your money back with interest. That’s not the case if you invest in a dodgy – but apparently good company.

There are many other investment opportunities for your financial plan and many of them may promise higher rates but as recently seen in the market you have to be doubly careful when investing in your future. Savings bonds offer diversification to your savings plan and tend to be safer than many of the other options.

Savings plan as a basis for your  financial plan

Most savings plans include a combination of stocks, mutual funds, certificates of deposit, IRAs, as well as cash. The reasoning for this is that the more places you have the money spread out the higher your return should be. This diversified approach is one that most financial advisors recommend. Savings bonds can provide a reliable, steady-growth option with significant tax advantages if they are invested correctly.

They are considered a safe, secure investment because the United States government backs them, however with a growing national deficient there has been some debate on this front. It is important to sit down with a good financial advisor and talk about what investing in U.S. Savings Bonds means.

Another advantage to this type of investment is that they are designed never to decrease in value. Unlike other investments, savings bonds appear to be a solid investment. The other advantage touted by many is that savings bonds also have tax advantages. Interest on savings bonds is always exempt from state and local income taxes and allows some or all interest to be excluded from federal income tax, this in an incentive for many as opposed to interest bearing savings accounts and other investments.

Of course, it would not be wise to put all your money into one type of investment when planning retirement, be it stocks, bonds, mutual funds or certificates of deposit.

Retirement
Retirement

Disclaimer

The information on this web site does not constitute an offer in any way. It gives general information, but is not financial advice. The aim is to help you decide what to do about your retirement plan, and the importance of saving for retirement. You should consult a retirement planning adviser with a proven record before setting up a retirement plan.