Archive for retirees

By Anna D. Banks

The economy has most of us scared. We want to retire, but feel that we can’t. Housing prices are down. Tuition for your college aged children is rising faster than the surf at “Big Sur”, and even the “well-healed” baby boomer is feeling the economic pinch. Overall things may not feel full of promise, but take a look at the short video and be inspired.

To read more about Douglas Goodey – The 20 Million Dollar Man Click Here

Live Fearlessly,

Anna

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By Anna D. Banks, GCDF

Nothing in life is permanent. Everything is transient. That is why we must be secured, especially in financial terms, in case things go out of control. We must be always prepared for the future and that is why good retirement financial planning is most practical for a safe and secured future. Financial planning is very crucial like life planning and it requires lot of calculative and methodical moves, like choosing a home involves lots of tax factors like state and local taxes. Retirees should carefully study the tax matters before formulating the retirement financial strategies.

Retirees who wish to continue with their work during their golden years should be aware that the state taxation income varies widely for them and some states support their earned income and provide them extra privileges. Some states consider the retirees income like everyone else’s and some impose tax on all the earned income. Sometimes the taxation amount varies a lot between states. Retirees shifting to new domicile should watch out for the municipal income taxes.

Income from military, government, private pension and other retirement plans are increasingly important sources of income for some retirees. Some states exempt incomes generated from such sources, while some exempt only selected ones. Some place taxable limits on such sources. Some states even tax former residents on retirement plan withdrawals and create a possibility of tax in two states. Some states strictly adhere to the federal tax formulas under the social security benefits and others follow their own specified formulas, while some don’t provide any reimbursements at all.

Retirees should also consider the sales and property taxes, as some states offer tax deductions on properties purchased by retired seniors while others provide homestead benefits. Retired seniors should also study the tax exemptions provided on clothing, food, drugs and household goods. US tax code generally deems the retirement age and sometimes you might face the ugly tax brunt while tapping tax favored retirement benefits. It is very complex to avoid federal income tax, but it is possible to avoid the 10% penalty provided you plan way ahead.

Opt for the IRA withdrawals

If you use the Roth IRA withdrawals then when you withdraw your contributions, they are federal income tax free and penalty free, but sometimes this could be tricky if the source of income is from the following three sources:

• Money from annual tax contribution
• Money generated by converting tradition IRA into Roth IRA
• Earnings accumulated from your contribution

Tax deductions apply to only the first two sources and withdrawal before the retirement age from the third source is usually subjected to income tax.

Advantage of penalty free exemptions

If you have not opted for Roth IRA than the best option would be to opt for income tax withdrawal. Whenever you withdraw, you would owe some amount to the income tax. If you wish to break the rules, then switch to qualified retirement exemptions like 401(k).

Annuitize the Account

This is normally the surest and safest technique to legitimize for a penalty-free retirement account withdrawal, before the retirement age of 59 years and 6 months.

© 2008 Anna D. Banks, GCDF
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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? Email your questions to me at Anna@AnnaBanks.com.

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By Anna D. Banks, GCDF

About one third of the 45 million Americans that do volunteering work comprise of retirees. Besides providing a useful form of activity to occupy the free time that they now have after retiring, many retirees also discover that volunteering can be a very good outlet for the vast experience, knowledge and skill that they have acquired during a lifetime.

But making use of free time and using their skills and experience are not the only reasons why retirees are volunteering in increasing numbers, there are many other rewards that they derive from it. Retirees often find that it is also a way of learning new skills, such as developing people and communication skills. They also like the sense of belonging to a group of well meaning and giving people who go out of their way to be of service to others. In their volunteer work, they soon form new bonds with like minded individuals who share the same vision of bettering the community.

Some of the retirees also like the structured way of contributing meaningfully to the society, which they have been cut off from by retiring, such as being disciplined about time and being a part of an organized structure. However, others opt for volunteering as a means of providing a complete break from their previous working life.

For many older people, however, one of the most rewarding aspects of volunteering is the new sense of purpose they derive from ameliorating the lot of people who often have only them to depend upon. And for people who are new to it, it can also be a way of developing new understanding of people in distress, such as those afflicted with disabilities, bed ridden invalids, sick children, people with little financial means, and so on.

Volunteering, therefore, also helps older people feel that they are making a difference, that by the efforts they put into it, in whatever small way, they have the ability to make things better. This can be a source of great fulfillment.

Besides, when other people are dependent on you, it can often change your whole perspective about yourself and life. For many older people, retirement can often be a stressful time. The loss of a job entails a sense of worthlessness and redundancy. It can almost feel like life and the world has no more use for you. For many, post-retirement depression can set in. Volunteering can be a means focusing on other people and regaining the sense of contributing meaningfully to the community and the world.

Although most people feel that retirement will be the time when they will have all the free time in the world to pursue all the fun things in life that they missed because of the demands made on them by their job, they often discover that in reality boredom soon sets in with all that time on their hands. Volunteering provides a means of keeping busy in a meaningful manner.

People derive great joy from the ability of being of help to others who need it. By volunteering their time and efforts, they give a part of themselves. In return, they get the fulfillment of receiving the blessings and love from people who are usually complete strangers. Although by volunteering they do not expect to gain anything personally, but ultimately many retirees discover that they gain much more than they have given.

The experience often reveals that there is something special about being of service to less fortunate people. The thankful faces, the thought of the difference you make in their lives, to know that you were a part of offering succor to someone who probably had nowhere else to go, can be the most rewarding aspect of volunteering.

© 2008 Anna D. Banks, GCDF
________

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? Email your questions to me at Anna@AnnaBanks.com.

Categories : Lifestyle
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