Everything You Ever Wanted to Know About Retirement Income

Joshua Mosshart

 

For instance, it's important to figure out how much retirement income you may need. To do that, you'll need to consider your housing cost, the length of your retirement, whether you have earned income, your retirement lifestyle, health care and insurance costs and the rate of inflation. You'll also need to identify all of your potential retirement income sources and review your asset allocation. Remember, decisions made now could make the difference between your money outlasting you-or vice versa.

The following frequently asked questions about retirement income should help you begin the final stages of retirement planning on the right foot.

When should I begin thinking about tapping my retirement assets and how should I go about doing so?

The answer to this question depends on when you expect to retire. Assuming you expect to retire between the ages of 62 and 67, you may want to begin the planning process in your mid to late 50s. A series of meetings with a financial consultant may help you make important decisions such as how your portfolio should be invested, when you can afford to retire and how much you will be able to withdraw annually for living expenses. If you anticipate retiring earlier, or enjoying a longer working life, you may need to alter your planning threshold accordingly.

How much annual income am I likely to need?

While studies indicate that many people are likely to need between 60% and 80% of their final working year's income to maintain their lifestyle after retiring, low-income and wealthy retirees may need closer to 90%. Because of the declining availability of traditional pensions and increasing financial stresses on Social Security, future retirees may have to rely more on income generated by personal investments than today's retirees.

How much can I afford to withdraw from my assets for annual living expenses?

As you age, your financial affairs won't remain static: Changes in inflation, investment returns, your desired lifestyle and your life expectancy are important contributing factors. You may want to err on the side of caution and choose an annual withdrawal rate somewhat below 5%; of course, this depends on how much you have in your overall portfolio and how much you will need on a regular basis. The best way to target a withdrawal rate is to meet one-on-one with a qualified financial consultant and review your personal situation.

When planning portfolio withdrawals, is there a preferred strategy for which accounts are tapped first?

You may want to consider tapping taxable accounts first to maintain the tax benefits of your tax-deferred retirement accounts. If your expected dividends and interest payments from taxable accounts are not enough to meet your cash flow needs, you may want to consider liquidating certain assets. Selling losing positions in taxable accounts may allow you to offset current or future gains for tax purposes. Also, to maintain your target asset allocation, consider whether you should liquidate overweighted asset classes. Another potential strategy may be to consider withdrawing assets from tax-deferred accounts to which nondeductible contributions have been made, such as after-tax contributions to a 401(k) plan.

If you maintain a traditional IRA or a 401(k), 403(b) or 457 plan, in most cases, you must begin required minimum distributions (RMDs) after age 70½. The amount of the annual distribution is determined by your life expectancy and, potentially, the life expectancy of a beneficiary. RMDs don't apply to Roth IRAs.

Are there other ways of getting income from investments besides liquidating assets?

One such strategy that uses fixed-income investments is bond laddering. A bond ladder is a portfolio of bonds with maturity dates that are evenly staggered so that a constant proportion of the bonds can potentially be redeemed at par value each year. As a portfolio management strategy, bond laddering may help you maintain a relatively consistent stream of income while limiting your exposure to risk. Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and are subject to availability and changes in price.

When crafting a retirement portfolio, you need to make sure it generates enough growth to prevent running out of money during your later years. You may want to maintain an investment mix with the goal of earning returns that exceed the rate of inflation. Dividing your portfolio among stocks, bonds and cash investments may provide adequate exposure to some growth potential while trying to protect against market setbacks.

This article is not intended to provide specific investment or tax advice for any individual. Consult your financial advisor, your tax advisor or me if you have.

http://www.mosshartwealthmanagement.com Joshua D. Mosshart CHFC, CEA Article Source: http://EzineArticles.com/?expert=Joshua_Mosshart

Plan Ahead And Build Your Own Business After Retirement

Anna D. Banks

 

Starting a Business after retirement requires you to plan ahead and build a good foundation. You need to face a number of issues and questions such as:

" What is a good business for you to undertake?
" How much time and effort are you willing to devote?
" Does this match with the time and effort demanded by the business you want to start?
" What are the key processes involved in starting a new business?
" What are the skills that are necessary for business success?
" How much should you invest in a new business?
" How do you go about developing an action plan for the business of your choice?

The process of starting a business can be a challenging, and an exciting experience. It can also be frightening, exhausting, and frustrating. The key to a minimum stress start-up is to plan ahead and build your own business after retirement, in a planned and rational way. Understanding, and planning out, the entire process of start-up makes a huge difference to the end result. There are, some basic steps that are common in planning and starting any business:

Assess your areas of strength. Are you a person who can easily take risks with money? If the idea is scary, it may be better to think twice before considering a business. No matter how you look at it, and how well you play it, being an entrepreneur involves risk. You must be willing to lose money if it comes to that. You must also have the ability and the will to work hard, be able to handle uncertainty well, and possess self-discipline.

Pick the right business. There are generally has two kinds of people. One kind consists of people who love something to the level of passion and are driven to make a career of it. If you belong in this category, make sure you conduct research to check that a market exists for the business. The other kind of person is one who is fascinated by the idea of being an entrepreneur, rather than a particular idea. In this case, pick a business that has instant demand and potential for future growth.

Come up with a solid business plan. Think of it as a map that tells you the direction you should be heading in and helps you to identify important markers you may see on the way. Before you open your doors to clients, think and plan out exactly what you want your business to be. Figure out what makes your product or service different or special, how you plan to attract customers, how you intend to beat competition, and other such essentials.

A major part of the business plan consists of a financial analysis, including:

" The amount of money needed
" How it should be spent
" Amount of profit expected etc.

Figure out where you will get the funding needed to start. Explore options like:

" Your own savings
" Your credit cards
" Your retirement accounts
" Second mortgage
" Advance on inheritance
" Loans from friends or family members

© 2008 Anna D. Banks, GCDF ANNA D. BANKS, GCDF is an adjunct professor at Essex County College, career development and marketing coach, speaker, and author. Anna helps individuals design a game plan for an extraordinary career or business. Since 1996, Anna has helped hundreds of job-seekers, managers, business owners, and sales professionals achieve career success. For more information send an email to Anna@AnnaBanks.com Author's Note: Do you have any questions about career development or lifestyle changes for Baby Boomers, which you think others, like you, would want to know the answers? Please place a post on my http://www.annabanks.com or email your questions to me at Anna@AnnaBanks.com  Article Source: http://EzineArticles.com/?expert=Anna_D._Banks

Four Tips To Help You Soar In Your Second Half Of Life

Kristina Von Rosenvinge 

 

These four tips are for people in their second half of life who realize it is possible to have more in life. They find themselves fantasizing about being content and productive doing something they really enjoy. Studies show that people who pay attention to this inner voice and take action end up feeling much happier.

This dreaming is about self-actualization and the belief that ones life has a purpose. For most people life has become routine and filled with obligations. Doing something different would involve moving out of the familiar comfort zone. Some people gradually let go of their dreams and settle for a life that is not all it could be. Others start pursuing their dreams and add vibrancy and energy to their life. These four tips are designed to help you begin to soar.

Tip 1. Shift your thinking

What may be keeping you from getting started is that you first have to shift your thinking. Shifting allows you to envision new possibilities for yourself. You may have unwittingly given yourself negative messages that have helped you talk yourself about taking the steps necessary to go after what you really want. It is easy to come up with rationalizations and explanations as to why it is better to stay in the status quo. Whenever we take steps to stretch ourselves there will be fear and trepidation. Accept them as normal and push yourself forward. When you shift you are upgrading yourself and your vision of yourself changes. As your vision changes you begin to see opportunities for yourself.

Tip 2. Write down your dreams

Take out a piece of paper. Write down what you have been fantasizing about. There is no limit as to what you may want for yourself. Perhaps it is a career change, more time with your family, starting a new business, giving back to the community or having a sailing adventure. This exercise helps you see what all is floating around in your active mind.

Tip 3. Assess your dreams

On another piece of paper draw a line down the middle. On the left side write the heading:Somewhat Important; on the right side write: Very Important. From your previous list divide your ideas into the two categories. After you have completed this exercise you will have a clearer idea as to what is really important to you.

Tip 4. Take Action

Look at the very important items. Decide which one do you want to start with. Ask yourself what can you do to take the first step towardsyour goal. Make the steps small in the present while holding the big goal in front of you as a beacon towards which you will move. As you start taking action you may actually find that new path that you had not imagined open up. Hold your goals as a beacon but loosely enough so you can see new possibilities as they occur. Anything you do to upgrade your life will give you pleasure. Enjoy the journey.

For more tips and tools on enhancing your relationship please visit: http://www.vibrantrelationships.com and http://www.kristinavonr.com by relationship expert Kristina von Rosenvinge Article Source: http://EzineArticles.com/?expert=Kristina_Von_Rosenvinge

Make the Leap to Home Business Success

If you are going to have a successful home business, you need 3 "intangibles." These are things that must come from WITHIN you.

===> Intangible 1 <===

First, you must have a strong WHY.

Why MUST you have a successful home business? What is driving you? What is it that you CAN'T have in your life anymore and/or what is it that you absolutely MUST HAVE now?

For me, I couldn't stand working 12+ hours a day anymore and missing the experience of my children growing up. I also absolutely HAD TO HAVE the freedom of being able to control my life and finances through a little box (laptop computer) that I could carry with me anywhere in the world and not be tied to anyone's time pressures or demands but my own. That was my carrot and my stick. I felt a great pain deep in my gut of missing out on my children's lives and the incredible freedom that succeeding in a home business would provide for me. I found my why. You MUST find yours.

===> Intangible 2 <===

You must BELIEVE that it is possible.

If you don't believe that it's POSSIBLE for you to have a successful home business or make your living from home, you won't. It's that simple.

For me, figuring out that it was possible was just a matter of realizing that many other people were ALREADY making great money working from home. If they could do it, I could too. It would just be a matter of figuring out what those people were doing and then adapting it to my situation.

There is no shortage of undeniable PROOF that people (millions of them) are making money working from home. Just get online and do some research and you'll find countless testimonials and stories of REAL PEOPLE making real money on the Internet. Or head to your local bookstore and you'll find the same documented evidence of this fact. Truth is, it's getting easier and easier to make money with your own home business.

I've always said that "affiliate marketing" (a simple way to make money from home) is the job of the future. In the "old" days, you had to go to a potential employer, apply for the position and hope for the best. Now you can simply go to any company you want, fill out their affiliate application and start work immediately. Affiliates are the new working class. In fact, making money with affiliate programs or making your living on the Internet is WAY MORE than possible. It is pretty much (or will be soon enough) unavoidable now. Affiliate marketing is the "job" of the future that's already here TODAY.

===> Intangible 3 <===

You must be willing to MAKE THE LEAP.

Ready, FIRE, then aim... This is the operating philosophy you MUST adopt to succeed with a home business.

That's backwards for most people who like to aim before they fire. The fact is that home business success is a moving target... The only thing constant about it is change. You need to stop analyzing the game and simply jump into it. You can't learn from the outside... You have to be IN THE RING to truly understand it.

The lesson here is that you will never really be READY to start a home business. You simply have to start one. It's like having children... You're never really ready, but when it happens you adapt and grow. This is what I call "Making the Leap."

The good news is that the cost of failure with having your own home business is very small. In the "brick and mortar" world you need to evaluate things very carefully before you decide to open up a business. It's almost always necessary to invest thousands of dollars to get an offline business off the ground. However, on the Internet you can often start a successful business for less than $100. The Plug-In Profit Site is a great example of this: http://www.HomeBusiness.us (this link re-directs to the Plug-In Profit Site service)

You simply need get IN THE GAME... Each moment that you stay "out there," you're wasting valuable time that you could be learning and skills necessary to build a successful home business. In fact, if you're not in the game yet, you're ALREADY behind the times. Make the leap to creating a successful home business today!

Stone Evans, The Home Biz Guy has helped thousands of people in over 200 countries around the world start and run a successful home business. Discover 3 easy steps to start your own home business and subscribe to The Home Biz Guy's Free Home Business Secrets Mini-Course at: http://www.Home-Business.com

The Basics Of Retirement Planning - It's Not That Hard

John Chomsky 

 

Most of us can't wait until we reach the years of retirement, no more working, just enjoying the rest of our life. And when you have planned your retirement as you should have done you will be able to do so. Hopefully you will have the money saved that you need and even some extra compared to when you had in your working days. It isn't as difficult as it sounds, retirement planning is something we all have to do at some time so why not start as early as you can and start right now.

The first thing you need to do is come up with a solid plan that you can follow for the next several years. In this way you will save the money that you need over time and some more to enjoy yourself. But to do just that you will need to know a little bit more about your financial situation. How much money do you make and how much of that can you save for later use, how much is left when you have paid your bills, how much do you need when you actually quit working and retire. And you need to have some idea of the date you would like to retire.

Retirement planning software

When you start with retirement planning the best thing you can do, besides hiring a retirement consultant or an accountant, is to buy retirement software like a money management program. Most of these software programs are easy to use.and are worth the money. You need to type in your income and your bills and some other financial stuff and the program determines how much you have left over and can save. The program can make graphics and print reports and it makes it extremely easy to do some planning of your own without the use of accountants or consultants. These kind of programs help you to think of all the possibilities and don't make any errors.

When you receive a paycheck, you should always pay yourself first, every financial expert can tell you so, You need to treat your savings account in the same way that you would like any other bill, like your car payment, energy bill or mortgage. When you have planned a certain amount to save for your retirement you should put it aside when you get paid. There will always be reasons to think that you will do it next month or that it has to wait until the car is paid of. That way you will end up with no money at all when you retire. You also need to make a pact with yourself that you will never, in no circumstance, ever touch your savings unless it is absolutely necessary. When you do all of the above you will have a retirement planning fund pretty soon and that is really all it takes. Be firm with yourself.

When is the big year?

You need to pick a year when you would like to retire and use the software to calculate how much you would have saved by that date, if that is enough you probably will be able to retire at that date. When you calculate and become aware of the fact that you probably won't have enough saved at that date, you can do two things, save more in the coming years or retire a couple of years later. And as a last result you could think of mutual funds or CD's. But you should ask advise from an expert before you do so, you should not take any risk with your retirement savings.

These were the basics of retirement planning, it is going to take time and afford but you can do it!

John Chomsky worked as a consultant helping other people plan for their retirement. Almost forgetting his own. He helps people out at http://www.planning-a-retirement.com Article Source: http://EzineArticles.com/?expert=John_Chomsky