Tips on planning your retirement

Do you want to start planning your retirement? Are you unsure on how to proceed? Then these tips will be helpful to you when setting up your retirement plan.

Have the proper mindset

It is crucial that you have set your mind to set aside a part of your salary for your retirement. This can be in the form of a bank savings account, a 401k plan, etc. It does not matter how small or how large an amount you will save as long as you set it aside. You can eventually increase the amount that you save whenever you have extra money, you get a salary raise, or you have finished your payments.

Know what you will need

Retirement will be expensive. According to estimates done by experts, you will need 70% of your income before retirement to sustain your standard of living after you have stopped working. You should look into the benefits that you will receive from Social Security. About 40% of your pre-retirement earnings are to be paid back by Social Security.

Your employer’s pension or retirement plan

If the company that you work for offers a retirement plan, you should determine what your benefits will be and what it is worth. Before you think of going into another company, you should find out what will happen to your benefits after you leave your current company.

Don’t use what you have set aside

Never touch what you have saved for your retirement. Dipping into it will mean a loss in principal as well as interest and this may also cause you to lose tax benefits.

On savings and investments

The kinds of investments as well as inflation are key factors on how much you will be able to save and use after you retire. It is vital that you know how your savings is invested since your financial security is what’s at stake. Remember, the way you save is as important as how much you set aside.

Know all facts

Always keep in mind, knowledge is power. With information from your employer, the union, the bank, or financial advisor, you will be able to make a decision that you will not regret making. Always ask questions and make it a point that you understand the answers.

It is never too early to plan your retirement. Prudence on your part will ensure that you live your retirement days in ease and comfort. Your financial security will require your time, commitment, and of course, money. Learn all you can and act on it immediately.

photo credit: Christopher Dick

Military Retirement: When Services Really Pay

When somebody has done something good, it is right to provide him or her some rewards. For all the hardships and continuous service to the community, a worker is entitled to all the required benefits in exchange for all the services that he or she has done.

It is for this reason that retirement benefits are extremely important. It is solely the best gratification one could ever have after so many years of working hard.

In the military, people who work for the government and for their respective community should likewise be entitled

to receive the benefits that are due for them.

Basically, military retirement is available in three remuneration plans. These plans were authorized by the Congress, which are entitled for every military personnel who have rendered the needed services to the government and to the whole country as well.

Military retirement plans are unique on its basic concept inclusive of the service dates, in which the amount of retirement benefits will be based from.

These military retirement benefits involve the “primary service dates” that provides the DIEMS or the “Date of Initial Entry into Military Service” and the service date as stipulated in the Title 10, Section 1405 of the United States Code.

For a complete understanding of the benefits in military retirement, here is a list of the three remuneration plans.

1. DIEMS before September 8, 1980

For military personnel whose DIEMS is before September 8, 1980, the military retirement benefit is based on the product of the military personnel’s monthly income and the 2 ½% of the concerned personnel’s years of service.

This plan is known as the present military retirement plan.

2. DIEMS between September 8, 1980 and July 31, 1986

Any military personnel whose service dates falls between September 8, 1980 and July 31, 1986, the expected retirement pay is the product of the 2 ½ % of the personnel’s years of service and the average of a personnel’s “highest 36 months” of the basic take-home pay based on the days of active duty.

This military retirement plan is known as the “High 36/50 Percent Plan.”

3. DIEMS on or after August 1, 1986

Any military personnel whose DIEMS is on or after August 1, 1986, the amount of the expected retirement benefit is the product of 2 ½% of the personnel’s years of service, but less than 1% for every year of service that is below 30 years, and the average of the personnel’s maximum income on a 36-month remuneration.

This plan is called “High 36/40 Percent Plan.”

Indeed, any of these three plans will definitely give the military people enough financial aid by the time they retired from service.

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The Ups and Downs of Retirement

Retirement is not the end. It is the beginning. It is a phase where an old chapter is closed and the person moves forward to face another.

There are many things people can do after retirement. A person can do new things, learn new skills, be more active with the community but most people feel that the identity of the person is with the job which makes it difficult to let go.

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Most people prefer to work after retirement and there are ups and downs for a person choosing do so.

One of the most important things people consider is money. By having a job, it gives revenue which can be used to pay bills and other expenses instead of using the money one has saved from the retirement plan.

Another benefit is that the new employer will give health insurance. By working full-time, the employee can enjoy this, which again saves the money earned from the retirement plan. Part time work in most cases is not given any health coverage.

By staying active, one’s mental development is still sharp making the person feel important in the community.

Social security benefits are also a factor because the benefit payments are based on the top 35 earning years which could be higher by working longer.

The downs of working after retirement are that in some places age discrimination does exist. Some people hire younger people since these people believe that older people are no longer that efficient.

Pension problems may happen if one retires and decides to get a new job. To avoid this, one must check with the former employer if there will be any problems in accessing the pension plans should one choose to work again. The best choice will be to get a lump-sum pension from the previous employer so the funds will not be affected.

By working again and increasing one’s income with the new job, there is a big chance that a large percentage will be deducted for tax.

If one chooses to work again, instead of spending the leisure time relaxing with friends and family, the new job will prevent this and other interests from happening.

Last con of working again after retirement is with IRA withdrawals. This will still require the person to give minimum contributions at 70% which means more of the social security benefits one has will be taxed.

Retirement is not the end rather the beginning. It is just a phase where an old chapter is closed and a new one opens.

One should just weigh what matters most.

Financial Planning for Retirement: For Worry-Free Retirement

Planning can be a tedious activity especially if you are planning for retirement. Many people realize how advantageous financial planning for retirement can be while others find it mysterious.

In fact, most experts say that for people who are only making enough money to make due payments in each month, then it means that they should start contemplating on how they can still make money even if they are already retired.

Surveys show that almost 75% of the American population is earning enough money to pay their monthly bills. This means that they do not have any extra money to put in a bank or in any financial institution that could provide them enough profit after their retirement.

What’s more Social Security is not enough guaranteed income for retired people to live on. Actually, it is still a big question if one’s Social Security will still exist when the retirement day comes.

Hence, it is extremely important to generate some methods that will provide an individual a reasonable amount of money in the future. This should be done regardless of how much an individual earns, the important thing is to start saving today.

1. Visualize and calculate

It is important for a person to visualize his or her own situation after retirement. Then, you can calculate how much money is needed to live on after retirement. Furthermore, people need earnings that compensate 75% of the present amount that he or she is expected to take home.

2. It is important to seek the help of a financial planner or any person competent in financial planning.

By asking for advice from the experts, you will be able to gain more knowledge know how to proceed for you situation. These people are proficient and knowledgeable in all kinds of financial planning and they can provide the most feasible and workable approach for your individual needs.

3. Get rid of loans, debts, and other financial obligations in as little time as possible.

By simply paying off all debts, loans, and other financial obligations in a shorter period of time, you can realize a substantial amount to invest for that retirement. A good financial planner will know exactly how to direct you so you can meet your retirement goals.

photo credit: iChaz

Health and Retirement

In planning for your retirement, buying disability, health or long-term care insurance is important. The insurance company would usually want to know a lot about you. You will be classified based on your habits, medical records and family history.

You have to have an understanding of your own health. The biggest factor in determining the insurance cost is your health.

Here is some advice from insiders to get the best health ranking possible at lowest possible rates:

1. Tell the truth

Hiding some facts on your health will not help you. First, the insuring company will eventually find out because they do have your records. They will presume that the problem is serious, since you did not mention it. Worse, withholding info the company regards as important could lead to the cancellation of your policy.

Give the insurance company your complete health history. But do it under your own terms. For example, don’t just say that you have high blood pressure. Inform them that you have been diagnosed with high blood pressure several years ago and have kept control of it.
Give them complete information and reduce the uncertainty, then eventually you would get a good deal.

Be careful on how you say things, a hesitant answer would seem that you are hiding something. Be as clear as possible with your replies.

Ask what the ranking is based on. There would generally be criteria in determining the health ranking and it varies from one company to another. Determine your ranking in a specific company and why. This helps you get a better picture and hopefully and decrease your premium. Canvass for the best rates possible but know that the rate is just one consideration.

2. Your doctor can help.

Inform your physician. Insurance companies would want to talk with your physician and look at your records. If not that, they would at least look at your records at the Medical Insurance Bureau.

Your best move is to inform your physician that you’re applying for insurance. A forewarning helps in ensuring that the insurance company gets noticed and gives you in return a favorable rating.

Ensure that the company gets a complete record, especially if you have moved from one doctor to another. The insurance company wants all of your health records to get a complete idea of your state of health.

Inquire discretely. Too much inquiry might raise a red flag on you. Try to get an agent to do the shopping for you. Choose your insurance broker carefully. Just like other professionals, they’re not created equal.

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