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By John E Neal II
Simple investment options
1) Individual Retirement Arrangements (IRA’s)
- is a form of
"individual retirement plan"
] provided by many financial institutions, that provides
savings in the United States. An individual retirement account is a type of "individual retirement arrangement"
] as described in IRS Publication 590, Individual Retirement Arrangements (IRAs).
] The term IRA, used to describe both individual retirement accounts and the broader category of individual retirement arrangements, encompasses an individual retirement account; a trust or custodial account set up for the exclusive benefit of taxpayers or their beneficiaries; and an individual retirement
] by which the taxpayers purchase an annuity contract or an endowment contract from a life insurance company.
2) Roth IRA
- contributions are made with after-tax assets, all transactions within the IRA have no tax impact, and withdrawals are usually tax-free. Named for Senator
William V. Roth, Jr.
, the Roth IRA was introduced as part of the Taxpayer Relief Act of 1997
- is the common name in the USA for the tax-qualified,
account defined in subsection
Internal Revenue Code
. Under the plan, retirement savings contributions are provided (and sometimes proportionately matched) by an employer, deducted from the employee's paycheck before taxation (therefore
until withdrawn during retirement), and limited to a maximum pre-tax annual contribution of $17,500 (as of 2013).
- is a U.S.
savings plan available for
Internal Revenue Code
organizations), cooperative hospital service organizations, and
. It has tax treatment similar to a
plan, especially after the
Economic Growth and Tax Relief Reconciliation Act of 2001
Savings goals for retirement
"As much as you can" is the standard advice.
Many financial planners recommend that you save 10% to 15%
of your income for retirement, starting in your 20s. The best way to determine your savings target is to use an
online calculator like this one
. It will help you figure out how much you should accumulate and how much you must set aside in the meantime to reach that target. Be sure to update the calculation each year, so that you can see if you're on track.
Costs in retirement
In his ground-breaking book Work Less, Live More on early retirement, Bob Clyatt writes that “average budgets for generally well-heeled early-retired couples are around $40,000 to $45,000 [a year]” — about $3,750/month on the high end. And, according to bundle.com — a web site created by a former banker using aggregated spending transactions to find out how people handle their money — the average expenses (again not including mortgage or rent) for higher-income ($125K+) couples age 50-65, no kids, are about $4,675/month or about $56,000/year.
Costs for assisted living
The average cost for a private one-bedroom apartment in an assisted living residence is $3,022 per month, according to research compiled by several nonprofit senior living organizations, including the Assisted Living Federation of America (2009 Overview of Assisted Living). Assisted living is of often less expensive than home health or nursing home care in the same geographic area.
Some factors to consider:
1) An Ideal Retirement Includes Friends
Relationships are an incredibly important part of an enjoyable retirement, especially since you can't count on running into people at the water cooler for a debrief of the last big football game or political contest. Make sure you know who you're going to spend your time with--besides your life partner.
2) An Ideal Retirement Includes Health
Your health can't be overstated, of course. Furthermore, it's both a financial and non-financial issue since significant medical expenses can dent an otherwise solid financial plan. Not to mention, constant hospital and doctor visits aren't exactly the same as laying out at the beach or hitting the golf course. Be sure to take care of yourself - now and in retirement. Then hope to get lucky too.
3) An Ideal Retirement Includes the Right Geography-for You
Where will you live? You may desire to stay put. After all, it's probably where most of your friends are. Or you may choose to move to some place warm or to a location closer to your grandchildren. While there are no right answers, your choices could significantly impact your retirement lifestyle. Not only are certain areas of the country far more expensive (or less expensive) than others, but your chosen location may affect how much time you're spending traveling to visit those you care about most.
4) An Ideal Retirement Includes Hobbies
How are you going to spend your time? For decades, you've spent the lion's share of your waking hours at work. In an instant (more or less), that enormous time commitment will evaporate. How will you fill your days? Is it the golf course? Tennis? Volunteer work? Taking care of your grandchildren? Again, the vision you have for your retirement is an individual one, not one to be criticized.
1) Do you have life insurance?
A surviving spouse may face financial hardship in many ways: loss of one Social Security paycheck, reduction or elimination of employer-sponsored retiree medical benefits or pension, or increased expenses due to disability and poor health at an older age. According to 2013 LIMRA research, only a quarter of married couples consider the need to provide for one spouse if the other dies, a major concern when planning for retirement That same LIMRA analysis finds that for almost half of 65-year-old couples, one spouse will outlive the other by 10 or more years, and in 3 out of 4 couples, one spouse will outlive the other by at least five years. That’s why you should always consider life insurance.
2) Have you considered long-term care insurance?
Health insurance can cover a lot, but there can be situations that are not covered. At some point, we all may need some sort of long-term care. Will a spouse or other family members realistically be able to help? It may be difficult if you need help with everyday tasks, such as getting dressed. The costs associated with long-term care services may be expensive and prices can vary by region. Long-term care Insurance may be a possible answerable to help with some of the costs.
WHO CAN YOU TRUST TO HELP YOU ALONG THE WAY TO RETIREMENT?
DON’T TRUST THE "EXPERTS"!!
Suze Orman attended the
University of Illinois at Urbana-Champaign
and received a
This guy gives the best advice and has the credentials to do it!
Warren Edward Buffett is an American
, investor, and philanthropist. He is widely considered the most successful investor of the 20th century. Buffett is the chairman, CEO and largest shareholder of
and consistently ranked among the
__world's wealthiest people__
. He was ranked as the world's wealthiest person in 2008
and as the third wealthiest person in 2011.
In 2012, American magazine
named Buffett one of the most influential people in the world.
Buffett entered college as a freshman in 1947 at the
__University of Pennsylvania__
. He studied there for two years and joined the
__Alpha Sigma Phi__
He then transferred to the
__University of Nebraska–Lincoln__
where at the age of nineteen, he graduated with a
**Bachelor of Science**
. After being rejected by
__Harvard Business School__
Buffett enrolled at
__Columbia Business School__
after learning that
(author of "
__The Intelligent Investor__
" – one of his favorite books on investing) and
, two well-known
, taught there. He earned a
**Master of Science**
from Columbia in 1951.
This is an opportunity to teach your classmates about the importance of preparing for retirement and that it is never to early to start. Some areas to cover are how to save for retirement, different type of retirement plans, costs during retirement to consider.
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