I hear this all the time from associates, coworkers, and even elders.
Why do fewer than half of Americans calculate how much they need to save for retirement?
Why in 2012, did 30 percent of workers with access to a defined contribution plan (such as a 401(k) plan) did not participate?
According to the latest National Retirement Risk Index from the Center for Retirement Research (CRR) at Boston College. That 53 percent of households risk falling more than 10 percent short of the retirement income to maintain their standard of living.
According to the Employee Benefit Research Institute (EBRI), 40 percent of retirees are at risk of running out of money for even their daily needs. To include out-of-pocket spending on health care or long-term care.
Then why are so many people saying “Retirement. Resmirement.”?
When so many people are not making ends meet when they get older.
It just doesn’t make any sense. And it definitely doesn’t make any sense for you either.
Which is why you need to start saving today with these 9 Ways to Come out Ahead in Retirement.
1. START SAVING. KEEP SAVING. AS IF YOU’RE LIFE DEPENDED ON IT.
Because it does. Your life when you’re older is on the line, and if you aren’t saving, you can see a considerable drop your quality of life.
Which is why you need to turn saving into a rewarding habit.
The best way to do it:
1. Start small – save a little bit each day, even if it is only the amount of a cup of coffee each day (3 dollars a day).
2. Increase the amount – every month put in more and as much as you’re comfortable with.
3. Save sooner rather than later – the more time your money has to grow, the much larger it becomes. Just think of exponential growth, as compound interest compounds. It very much becomes so much more than what you put in originally. As much as thousands and thousands.
2. Know how much you will need to retire on to maintain your lifestyle or even improve it
Most experts say that you will need at least 70 percent of your pre-retirement income – or if you make less, 90 percent or more – to live the way you do now when you stop working.
Which means take charge of your financial future, you’re the captain of your destiny.
Therefore Plan ahead by:
1. Establishing how you want to live when you retire
2. Seeing how much money you need to live that way
3. The best ways to invest your retirement to meet those needs such as real estate, stocks/bonds, and businesses
3. Contribute to your Employer’s Retirement Savings Plan
Employed with an employer who offers a retirement savings plan, such as a 401(k) plan?
Sign up immediately and contribute all you can. As it is one the best vehicles to retire through as it lowers your taxes, your employer might price match your contributions, and you can put your savings on autopilot as you can usually have a percent automatically deducted.This is important as the interest compounds and it usually is taxed considerable less than other alternatives.
2. Set-up how your 401(k) is invested
3. Find out how much your employer price matches
4. Find out if your Employer has a Pension Plan
Find out if your employer has a traditional pension plan. See how you qualify and how it works so you can find the best way to get the most out of it.
1. Seeing how much the benefit is worth
2. How does it affect the pension if you transfer jobs
3. See what other benefits your entitled to
5. Consider Basic Investment Principles
Learning to save is learning to invest. Because all your retirement accounts have to be invested into something once you contribute to them. This can include real estate, stocks/bonds, and businesses.
Which is why it’s important to know how to invest it or inflation and taxes will eat away your retirement and savings.
1. Know how your savings or pension plan is invested. Learn about your plan’s investment options and ask questions
2. Diversify your retirement by putting your savings in different types of investments
3. Continue to monitor your investment mix and change it over time depending on a number of factors such as your age, goals, and financial circumstances
6. No matter what happens. DON’T TOUCH your retirement savings
If you touch your retirement now, you will lose principal and interest, as well as tax benefits, and even have to pay withdrawal penalties. That means even if you change jobs. Leave your savings invested in your current retirement plan, or roll them over to an IRA or your new employer’s plan. Just don’t take them out.
7. Ask your employer to start a plan
If your employer doesn’t have a retirement plan, it may be time for them to start one. So suggest a number of the retirement saving plan options available. This can include even a simplified plan that can help both you and your employer.
1. Simplified Employee Pension Plan (SEP IRA)
2. Savings Incentive Match Plan for Employees (SIMPLE IRA)
3. Self-Employed 401(k) plan
4. 401(k) plan (better for larger companies given setup costs, administration, fiduciary responsibilities, etc.)
8. Put money into an Individual Retirement Account (IRA)
Once you have exhausted your 401(k) and other investment vehicles. It’s time to set up an IRA which you can put up to $5,500 a year into for even more tax advantages. If you are older than 50 you can contribute even more.
They work much like a 401(k) but have 2 different options. – A traditional IRA or a Roth IRA.
The major difference is in their tax treatment of your contributions and withdrawals.
Â· Anyone with earned income, who is younger than 70 Â½, can contribute to a traditional IRA
Â· Traditional IRA contributions are tax-deductible on all tax returns for the year you make the contribution, but withdrawals in retirement still taxed as ordinary income with the appropriate tax rate
Â· You are required to take minimum distributions at age 70 1/2
Â· Traditional IRAs lower your taxable income in the contribution year
o Meaning: your adjusted gross income is lowered to help qualify you for other tax incentives you wouldn’t normally get, such as child tax credits or the student loan interest deductions
Â· Roth IRAs have income-eligibility restrictions
Â· They provide no tax break for contributions, but earnings and withdrawals are generally tax-free
Â· There are no mandated withdrawals during the owner’s lifetime
Â· Roth contributions (but not earnings) can be withdrawn penalty- and tax-free any time, even before age 59 Â½
9. Ask Questions
Even though these 9 tips gives you a push in the right direction, it is time to get even more information. Because what is available to you, what types of risks you are comfortable, and you’re financial goals is different to everyone.
Â· Talk to your employer, your bank, your union, or a financial adviser
Â· Ask questions and make sure you understand the answers
Â· Get practical advice and act now
Â· Learn and make choices that fit your goals
The time is now to get your life in order.So figure out the ways to create wealth so you can become the 1%.
Article Source: EzineArticles.com/expert/Lucas_M_Thomas/2081765
For two years in a row, reports show that nearly half of all US physicians
and in private practice
are behind where they would like to be in retirement preparedness.
The question is what can they do about it?
Hi, I’m David Alemian and welcome another edition of The Alemian File.
Today I’m going to share with you an overview of a solution to the huge problem of funding your retirement.
But first let’s look at one of the big reasons why so many doctors are behind. After all, they make a good living right?
Many doctors get a late start to funding their retirement due to a late start in their careers and medical school debt.
Whatever the reason, nearly half of all doctors viewing this right now need help catching up, so let me get right to the point.
Today, I’m just going to talk concept but first I need you to
Open your mind and put yourself into learning mode,
you are about to learn something that is not only remarkable
it is absolutely amazing.
This is sophisticated,
but I’m going to make this very very simple,
You financed your medical education,….
you financed the purchase of your home….
You financed your car….
Most large financial undertakings are financed….
Why not finance your retirement?
Yes it’s true you can actually finance your retirement?
Let’s say we have a 50 year old doctor who is behind on his or her retirement savings.
This doctor does not have a lot of time to catch up, because the doctor want to retire at age 65.
The doctor decides to put fifty thousand dollars per year into this retirement plan.
A very large bank matches that contribution and loans the doctor another fifty thousand dollars per year to put into the retirement plan.
So now the doctor has one hundred thousand dollars per year going into this retirement plan.
There are no loan applications or loans for the doctor to sign, because the plan itself fully collateralizes the loan.
That is because, the savings vehicle for this plan is very special cash value life insurance policy from an “A” rated insurance company.
There is always enough cash value in the policy to cover the loan.
The doctor does this for five years and each year the bank matches the doctor’s contribution.
After the fifth year, the doctor stops… contributing to the plan.
Here is the amazing part…
In the second five years…. years six through ten, the bank puts the entire one hundred thousand dollars per year into the plan….
So that at the end of the 10 years… one million dollars has been put into the doctor’s retirement plan. That is four times what the doctor has put in.
Now the money grows and compounds for the next five years and in year fifteen, the bank gets their money back along with the accrued interest.
Here the best part…
In this conservative example, starting at age 65 the doctor would enjoy a tax-free income of about sixty thousand dollars per year for life.
Some of these plans yield lifetime six figure tax free retirement incomes. Imagine being able to maintain your current lifestyle through retirement and never run out of money.
This plan is so safe and secure that even during the banking crisis, these plans were still being approved.
This plan works for physicians in private practice and for physicians who are employed. It can be done for a single doctor or a group of doctors.
To qualify for this plan the doctor must be age 65 or younger,
earn at least one hundred thousand dollars per year….
and be able to qualify for standard life insurance rates. …
Oh and if it were a group of seventy or more doctors, everyone in the group is automatically approved for the insurance.
You could do an entire hospital full of doctors, a doctor group or even a hospital group and everyone who qualifies and wants to participate could.
In summary, this is a safe and secure way for doctors to use leverage to catch up on their retirement readiness.s
If you have questions send an email to Questions @ The Alemian File .com
I’m David Alemian and Thank you for watching.