AAA Information and Entertainment
Informative and Entertaining Articles
Planning For Your Future Should Start Early
Bookmark this page and share it with others! (Or press Ctrl/D on Firefox)Retirement planning is the process of determining a retirement income and/or savings goal, identifying the sources of retirement income - including military retired pay, state and federal government pensions, social security, individual retirement accounts, annuities, private sector pension plans and retirement accounts (401(k) and 403(b) plans), brokerage accounts, personal savings and home equity - and determining whether or not your resources will meet your goal. Most people don't start seriously planning their retirement until their mid-to-late 40s. This is a mistake. Saving $250 a month at age 25 will yield approximately $872,000 at age 65 with an eight percent return. Waiting until age 45 to start saving yields only $147,000 at age 65 - a $725,000 difference! How much will you need at retirement? When should you retire? And where? How much will you need? The oft-quoted rule is that you will need 75 percent to 80 percent of your pre-retirement income. But this amount might not be adequate for everyone. Factors such as travel, consumer debt, increased medical costs, and whether your home is paid off can affect your retirement income needs. You may know that you need to build your wealth as soon as possible. If you are currently in debt, you may also understand that you need to pay off the debts as quickly as you can. However, most of us will just know and understand all of these. We never put them into action. In fact, there is no way to build your wealth if you do not really work on it. You will need to try to spend less money. Spending less will certainly saving more. You may have read a lot of tips and articles on how you can spend less money. However, as mentioned, you should try to follow these tips and start saving more money. At the very beginning, you can try to do something simple. You can try to cut down the total expenditures on eating out. Of course you may also try to cut down your electric bills by switching off the air conditioners. If you are currently in credit card debts, you should try to cut the cards as soon as possible. Yes you should probably know this. But have you cut your credit cards yet? If not, you should do it now! You should call the credit card center and tell them you will now cut the cards. This is the most effective way to prevent your credit card debts from increasing. Unless you can be sure that you can really control yourself, you need to have the determination and cut your credit card now otherwise you will not be able to reduce your credit card debts. You will be force to pay by cash if you do not have a credit card. And this will make sure that the credit card debts will not increase. If it is possible, you should try to increase your income. Everyone knows that it is totally possible to increase the income if one can get a part-time job. Have you tried to find a part-time job yet? The answer is probably a NO. Remember, there is no way to build your wealth if you do not work. If you think you need to increase your income. You should go out and find a part-time job as soon as possible. Of course you may feel exhausted if you are working 15 hours a day. However, you have to do so if you want to make more money. When should you retire? Early retirement sounds great to most people until they examine the effect on retirement savings and the cost of replacing employer-provided health care. Military pensions and TRICARE health coverage provide military retirees with flexibility that most civilians don't have. Retiring before age 59 1/2 means you will pay early withdrawal penalties on qualified retirement money. Also, retiring before age 62 means you will not yet be eligible for Social Security benefits. Is it better to take benefits at age 62 or wait until full retirement age? It depends. Generally, it takes 14 to 15 years just to break even if you wait until full retirement age to draw benefits. Go to www.ssa.gov and use the benefits calculator to figure out your break-even age. And where should you retire? There is a reason Florida draws so many retirees: no state income tax. Choosing the right state can make a big difference in your retirement standard of living. Housing costs, state income tax, taxes on Social Security, and taxes on military pensions are key considerations. These states either partially or fully exempt military retired pay from income taxes: Alabama, Alaska, Florida, Hawaii, Illinois, Kansas, Kentucky*, Louisiana, Massachusetts, Michigan, Mississippi*, Missouri*, Nevada, New Hampshire, New Jersey, New York, North Carolina*, Oregon*, Pennsylvania, South Dakota, Tennessee, Texas, Washington, Wisconsin, and Wyoming (*with conditions).
Find It Now
Custom Search