Archive for savings


By Anna D. Banks, GCDF

Except for the wealthy, the basic goal for almost all retirement planning is to ensure that your assets last, and your cash flow remains steady, for as long as you live. At the end of a regularly earned salary, balancing your retirement income against your total household expenses must be the focus of all further financial planning. Due to an increasing life expectancy, keeping the cash flow going has become increasingly critical. The average American, retiring at 65, can expect to live for at least another 20 years. So, it is essential that you don’t let the cash flow stop, even after retirement. Although the details of the strategies to accomplish that would vary according to your income, your lifestyle, and state of health, there are some basic moves that will help you to live adjust your income and balance it against your expenses.

If you are about to retire, or have already taken the big leap, you must first gather and organize all of the pertinent information to help you to manage your cash flow during retirement. Gathering this information, will give you an overview of where your finances stand, as of now.

• Get the latest net-worth statement for a quick look at your total assets, debt, and cash reserves.
• Make itemized monthly and annual budgets, with details of your income as well as expenses.
• Make sure you include all expenses, including rare ones like insurance, and club membership fees, as well as what you pay for investment management.

This information should tell you if there are major problems you might have to deal with. This could be anything from lack of an emergency buffer to an income shortfall. This information may also throw up areas for improvement, like the possibility of finding additional cash by eliminating unnecessary expenses. One thing to keep in mind is that even if you make reasonable assumptions today about returns, inflation, and living costs during your retirement, all of these may change, affecting your cash flow. Monitoring your income and expenses on a regular basis can help you address these changes as they arise, preventing major glitches later. Look for developments with the potential to affect your cash flow. For example, interest rates may change, and stock markets vary, causing a change in your income from savings or investments. Adjustments may become necessary, like reducing your expenses or altering your investment mix to add alternate sources of income.

Relocation to another state may change federal, state, or local tax rates with a bearing on your cash flow. While changes in the benefits from or eligibility for Social Security and Medicare and private insurance coverage can have a huge impact on living costs, circumstances like marriage, and the increase or decrease in the number of dependents can also throw your cash flow out of whack.

Pay close attention to cash flow, make sure you budget and monitor your income and expenses, and take significant action. In addition, you need to find a way to make the most of your savings, and maximize the cash flow from your investments while maintaining your capital. Retirement should be a time of peace and contentment.

© 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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Anna D. Banks, EzineArticles.com Platinum Author

By Anna D. Banks, GCDF

Inflation is an important aspect of retirement planning and you simply cannot afford to overlook it. Failing to consider inflation during retirement planning can lead to a financial disaster. Most of us would love to believe that life is going to be great post-retirement with fewer worries, no major responsibilities, and all the time in the world to do what you like. Unfortunately, all this will be possible only if you have saved prudently for your golden years. Inflation is inevitable and only those who plan ahead can survive the increased costs of living due to inflation after their retirement. Let us assume that you retire at the age of sixty-five with an average annual income of $60,000. However, the purchasing power of this amount would go down by almost forty to fifty percent in about twenty years. Thus, in order to maintain the same standard of living that you could enjoy for $60,000, you need to have almost double this amount to sustain the increased costs of living. Such is the effect inflation can have on your daily lives if you fail to prepare yourself in advance. With inflation rising steadily with an average growth of three percent per year since 1626, you need to ensure that your income increases with the rate of three percent every year during retirement.

Well, the good news is that with the growing number of investment options readily available in the financial market, it’s not very difficult to plan for your future. You can count on the pension plans that will automatically shield you from increased cost of living however, you need to check with your employer to know the exact amount you will receive through these plans.

Saving for the future

Start saving as early as you can, as sooner you start, you are left with longer time to invest and multiply your money. Set small, realistic goals based on your current financial needs and the amount of money you can put aside to begin your financial retirement planning.

Have you considered a 401K plan?

It’s perhaps the easiest and the best way of saving your hard earned money for your life after retirement. Also popular are the IRA plans however, you need to understand what’s at stake and how such plans will benefit you before you go for any of these investment options.

Allocation of assets

How you divide your financial portfolio between bonds and stocks can have a huge impact on your financial gains in the long run. Financial experts strongly emphasize of stock investments due to the tremendous potential such investments have to render high returns over long periods of time.

Investing in a property

With remarkable tax benefits and easy finance options, property investments have emerged as an important investment vehicle. As you build equity and settle your mortgage loan, you may hardly have any monthly expenses except escrow payments on property taxes.

You may also consider consulting with a good financial expert or retirement expert who can suggest suitable investment options after assessing your income, assets, and financial liabilities. In addition, they are also the first to know about any new investment option that has newly come in the market and how it can benefit you. Having a good understanding of the financial market, they can also predict which financial companies will sustain the high fluctuations in the market and can be regarded as a safe bet.

© 2008 Anna D. Banks, GCDF

ANNA D. BANKS, GCDF, is a passionate advocate for baby boomers in exploring their priorities, planning and setting goals for the next stage of their lives. Assisting her clients to attract and build a professional and personal life consistent with their values is not just a goal of Anna’s, it’s her passion. Her diverse work experience in business, education and financial services enables her to help the diverse population of baby-boomers with their life, career, and personal finance coaching needs. Anna is currently Adjunct Faculty at Essex County College, where she teaches Career Development & Management. Please place a post on www.AnnaBanks.com or email your questions to me at Anna@AnnaBanks.com.
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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? Please place a post on www.AnnaBanks.com or email your questions to me at Anna@AnnaBanks.com.

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Anna D. Banks, EzineArticles.com Basic Author

By Anna D. Banks, GCDF

Retirement is entirely a different and new chapter of life; some accept it with a smile where as some handle it with lot of stress. A well-planned retirement could get back your smile, and also enable you to enjoy all that which you missed while slogging for your family. Retirement planning can be sometimes quite complicated and one should be very careful and patient while planning for it. Even if your retirement plans are clear set with all your visions and goals in place, it is your financial requirement that will determine the success of the plan. A large percentage of Americans recognize the retirement systems and its undergoing changes but they are not planning well enough to retire comfortably.

• A Retirement Confidence Survey finds that the government regularly changes pension plans and the workers have been experiencing a severe decline in the retirement benefits, but they are not working towards it constructively. Nearly 2 in every 5 workers have not done anything to tackle this issue.

• Some workers depend on the employer provided retirement benefits and they expect that their spouse will receive income from such retirement plans.

• Half of the workers save for retirement, excluding the value of the primary residence. Majority of workers put aside some money for retirement.

• Health care for future retirees will be a huge burden especially with post-retirement financial problems. Workers should understand the use of Medicare and accumulate enough money to even cover the insurance and health costs they would likely face after retirement.

Americans are confident about the way they would spend their post retirement years. A few simple and easy planning strategies could bring order in Uncle Sam’s post retirement years. So get started with some regular saving plan. Developing a savings plan is not very difficult.

Simple strategies can put Uncle Sam on a comfortable and financially secured track.

Goals- Start saving for either your children’s education, a comfortable retirement life or for financial emergencies. Figure out what life would be after 10, 20 or 30 years and then think of the costs and the number of years needed to save enough for it.

Investing- Figure out the right time to start investing and please don’t get distracted. The best way would be to put aside some amount on monthly saving basis, save right from reducing your monthly expense bill to your telephone bill. If you can then invest to reach your goals. Don’t ever abandon your pre-retirement planning.

Savings to match goals– This would depend on your needs and how much time you have to reach your goals, your ability to tolerate risk etc. Start by learning the key characteristics of each goal and then narrow your selection to savings as well as investment products. Selecting the right product can help you accomplish your goal.

However, if you decide what you want in life and how you wish to achieve it, it will sort out half your problem. This will help you in your planning and in choosing products to aid you.

© 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? Post a comment or email your questions to me at Anna@AnnaBanks.com.

May
09

Attaining Fiscal Fitness After Fifty

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By Anna Banks, GCDF

Body Fiscal fitness is crucial for a person´s survival due to the ever-increasing cost of living. Attaining fiscal fitness is extremely important for people in their fifties as they prepare themselves financially to spend their lives after retirement in comfort. Failing to develop saving habits right from the time you got your first paycheck may drain your finances. It is very obvious why you need to start saving from the very first day. Longevity is on the rise, thanks to advanced medical science and your retirement life may be a lot more than your work life. In addition, the cost of living grows by the day and chances are that the cost of living will double over the years. You need to therefore sock away every dollar you can so that you don´t have to compromise heavily post retirement.

If you are one of those many people who failed to save wisely in the early period of their work life, don´t panic. You may have spent most of your money due to job loss, death in the family, divorce, disability or any other reason. Now is the time to take action and raise the funds to head towards a comfy retirement. While it is expected logically to put aside ten percent of your income every month when you begin to work, those in their fifties and failed to save must start saving at least twenty percent or more. Then there are “catch-up contributions´ that enable fifty plus employees to contribute a lot more than their younger counterparts to 401(k) and IRA annually. Check with your financial advisor to see how you can these to your advantage.

Another way to beat retirement woes is to postpone retirement. Extended retirements not only help you to save more but also take care of your immediate financial retirements. Besides, companies need senior employees who can play a pivotal role in shaping their company with their experience and knowledge. Most baby boomers choose to work as long they as they are physically fit. As a result, many people continue to work and share their expertise until they hit late seventies. For many, this is the time to try a new career, something that they always wanted to pursue. Part time work opportunities are readily available today and if you are an expert in your chosen field, your previous company may love to have you in their organization as a part time consultant. Many people have also managed to transform their hobbies into a booming business post retirement. It´s the joy of reinventing yourself that keeps you going when you are in your golden years.

If you are presently living in a city that´s known for its high cost of living, you may consider affordable alternatives to relocate after retirement. This will automatically boost your financial position and ensure fiscal fitness during old age. Relocation is a great choice for people who have built sufficient equity in their home but lack the savings to sustain retirement costs.

Diligent planning takes away the financial burden and allows you to enjoy a truly fulfilling life in your golden years.

© 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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