Retirement Financial Planning and Retirement Ideas

By Anthony J Smith

Too soon we get old, and too late we get smart is the old Yiddish
proverb. This applies to most people as they do retirement planning.
Retirement ideas range from imagining yourself living in a life of
luxury, playing golf, taking 9 month vacations, and enjoying life,
down to living in a retirement community where your basic needs are
taken care of. Failing to plan for your retirement can have very
negative consequences on the quality of your retired life.

To do proper retirement financial planning, you should start early –
that's the "too late smart" part of the proverb. You're getting older
every day – are you getting smarter? Fortunately, there are retirement
books that can help you with this. One of the most important is
"401(k) Basics" by Motley Fool publishing. It will steer you into how
to make the most of a company 401(k) plan, while taking an
unsentimental retirement view – telling you that there is no fast road
to riches, only steady, regular savings and investing will help ensure
you against retirement losses.

Your retirement benefits should contain a mix of growth funds early
on, wealth preservation funds and income generation tools as you age –
this can be found online through a number of retirement calculators,
and will help you plan the day when you can send your company your
retirement letters and say "I'll be on the golf course!" Most
retirement calculators are driven by an investing rule called the Rule
of 72 – take 72 and divide it by your rate of return in points (for
example, getting 6% on a savings account or CD) and that will tell you
how many years it takes for your investment to double. In this case,
72 divided by 6 is 12, meaning that sitting an investment down in a 6%
account means it will double in 12 years.

Remember that slow and steady contributions win the day; you can't
rush this later in life. Start early, invest everything you can afford
to, and know that your money is working for you in the long term. If
you're eligible for a 401(k) program, you should take it – it benefits
you in multiple ways, from employee matching (which doubles your
investment) to being take out of your paycheck before taxes (which is
fundamentally giving you a 20-35% increase in the net investment from
doing it in post-tax income) to tax deferral on the interest it
accrues. A 401(k) is by far and away the best retirement investment
vehicle possible.

One thing you should not count on is Social Security; due to changing
demographics, we're going to be disbursing more from Social Security
than it takes in in about 5 to 10 years, and the fund will literally
run out at the current rate of contributions in thirty years. Presume
that you're on your own and plan accordingly.

For further ideas on retirement, check out the advice at
http://retirementinformation4u.com.

Anthony Smith is a 1978 graduate of the Ohio State School of Business.
Read all Anthony's articles on Health Insurance at:
http://healthinsuranceinfo4u.com

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