Investing For Retirement At All Ages

Posted by: admin Post date: May 8th, 2009

Investing For Retirement At All Ages

Whether you?re twenty or fifty-five, investing for retirement is a good idea.

Many people believe they can depend on social security to take care of them after they retire, which is a mistake two reasons. First, social security pays only a portion of your current income, People trying to live on their social security checks alone often find themselves living an austere lifestyle indeed?no vacations, fancy restaurants, or expensive presents for grandchildren.

Second, as the Baby Boomers age, social security is facing a crisis of epic proportions. By the time you are of an age to retire, benefits will probably be reduced even more than they already are. Some cynics believe that the system may be eliminated entirely, which makes investing for retirement even more important.

Investing for retirement requires some strategic planning based on your current age.

Twenty-Something

If you are in your twenties, retirement is probably the furthest thing from your mind. You are probably just entering the work force and learning to enjoy having disposable income. But those forty or fifty years between now and retirement will pass faster than you think, and you certainly don?t want to be unprepared when the time comes. There are a few investing for retirement strategies you should start to follow now.

Opt into your company?s retirement plan, especially if your company offers benefits like matching or partially matching your contributions. Don?t worry if you can only afford to place a small amount into your retirement plan right now?it will have time to grow. Companies generally allow you to choose among several funds. Many advisors suggest that you put part of your money in a low-interest-rate-low-risk fund and part in a potentially higher-interest-rate-high-risk fund.

Thirty-Something

During this time, your money is probably wrapped up in raising a family, planning for college funds and worrying about what would happen to your kids if something happened to you. You are also probably making more money in your career than you did when you were in your twenties.

If you haven?t started planning for retirement yet, there?s still time. The most important thing you can do is pay yourself first. You can?t miss what you?ve never had, so have the company deduct the maximum allowable amount from your paycheck to put in your retirement fund.

Forty Or Fifty Something

If you are in your forties or fifties before you start thinking about investing for retirement, you have some catching up to do. First and foremost, immediately began contributing to your company?s retirement fund. The law will allow you to contribute up to 35% of your salary, if you can afford to do so. It?s best not to seek out aggressive/risky funds now, because you won?t have time to recoup your losses if their value takes a dip.

While you are working on investing for retirement, you might want to consider putting off retirement for a few years. This will help for two reasons. First, it will allow your retirement fund time to grow. Second, the longer you put off retiring, the greater the percentage of income you can collect from social security (assuming the current system doesn?t change).

Finally, you may want to consider taking a second job or doing some work from home to earn a little extra income, all of which should go into your retirement fund.

It doesn?t matter whether you?re twenty, thirty, or fifty. Investing for retirement should be an important part of your financial planning.

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Figuring Out Your Military Retirement Benefits

Posted by: admin Post date: May 5th, 2009

Figuring Out Your Military Retirement Benefits

Military retirement benefits can provide many valuable resources. Like most government programs, however, understanding the ins and outs of military retirement benefits is enough to make your head hurt.

The Three Systems Of Military Retirement

There are three basic systems of military retirement benefits. The type of system for which you are eligible depends upon the date on which you first entered the military.

The Final Pay System

If you entered the military before September 8, 1980, you are eligible for the Final Pay system. This system is relatively easy to figure out. Each year served translates into receiving 2.5% of your basic pay. Thus, if you retire after thirty years of service, you will receive 75% of your basic pay at the time of your retirement, not including allowances or special pay systems.

The High-Three Average System

The High-Three Average military retirement system applies to people who entered the military between September 8, 1980 and July 31, 1986. After fifteen years of service, this option is also offered to military personnel who joined the military after July 31, 1986. (The other option is called the REDUX option and is discussed in the following paragraph.) Unlike the Final Pay system which looks only at your base pay at retirement, the High-Three Average system looks at the average pay throughout the highest-paid 36 months of your career. Each year served earns you 2.5% of the highest 36-month average.

The REDUX System

Finally, the REDUX system is a system adopted by Congress as part of the National Defense Authorization Act of 1986 and amended in 2000. The REDUX system is for those who entered the military on or after August 1, 1986.

The REDUX system, like the High-Three Average, considers the average of the highest 36 months worth of wages. It is more complicated that the other two systems for several reasons.

First, the multiplier varies depending on time served. For instance, each year of the first 20 years is worth only 2% of the high average pay. Each year after the twentieth, however, is worth 3.5%. For instance, if an individual joined the army in 1987 at the age of twenty and retired in 2007 at the age of forty, his or her retirement pay would be 40% of the average of their 36 highest-paid months. If this same individual waited three more years and retired in 2010, he or she would receive 50.5%.

Additionally, REDUX offers a ?catch-up? benefit to bring it in line with the High-Three Average benefit you reach the age of 62. Take the individual in the previous paragraph who retired from the military after twenty years of service at the age of 40. When this individual reaches the age of 62, his or her retirement benefit will ?jump? to 50% of his or her highest 36-month average salary.

Finally after your fifteenth year of military service, you will be given a choice between the High-Three Average System and the REDUX system. If you select the REDUX system and agree to serve in the military for a minimum of thirty years total, you will receive a $30,000 bonus.

Still Confused?

To find answers to your questions or to learn more about military retirement benefits, check out Military Benefits at http://www.military.com/benefits/military-pay/questions-about-pay.

Your well-deserved military retirement benefits can bring you extra financial security as you plan to retire, but it is important to understand how much pay you can expect to receive and, when you have a choice, to choose the system that?s right for you.

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Taking Some Active Retirement Advice

Posted by: admin Post date: May 3rd, 2009

Taking Some Active Retirement Advice

We?re often advised to get some retirement advice when it?s time to give up work and start drawing our pension. But that advice is all too often confined to money matters.

Those are important of course, but there are many other types of retirement advice that can be of great benefit to us in our golden years. Perhaps one of the most helpful concerns the needs and benefits of staying active.

Many of us look forward to the time when we can stop working and start relaxing more. We will finally be free of the daily grind and able to do as we wish.

But if we have had an active job and been used to getting a good amount of daily exercise, it can be all too easy to let that slip once we finish work. Maintaining our good health is even more important as we get older, and if we want to enjoy our retirement years to the full, we should take the retirement advice that tells us to keep active.

A Change Of Circumstances

Giving up work means you will have a lot of extra time to fill. It?s nice to relax and enjoy it at first, but eventually the boredom will set in. Creating a regular routine which includes activities and exercise will help to keep a structure to your life, albeit a more relaxed one.

The retirement advice we often hear is to arrange activities with friends of a similar age. Not only is this good for your social life, it will also ensure you stick to whatever kind of exercise you decide on.

More Work?

Some people choose to carry on working past their retirement. Many older people continue in a part time position to top up their pensions. Others work a few hours a week in a voluntary capacity, while some take on a completely different job to the kind they had been used to.

A recent article reported a group of retirees who were working part time collecting lost golf balls on their local golf course. A strange job perhaps, but it is a job that gives you regular exercise, a social life and some extra cash to boot.

Many countries have organisations that can offer retirement advice on all manner of issues, including staying active and keeping fit. Find out where your local one is and contact them for free advice and information on making the most out of retirement.

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