Hi Folks,
If you read both of my retirement blogs you will recognize the following article. I published it on March 13th on Woody’s Retirement Blog, but as it is such an insightful little article I felt I should post it on this blog for those who do not read Woody’s Retirement Blog.
Woody
Easing Into Retirement
By Liz Koh
Retirement is something to look forward but ensuring that the experience lives up to your expectations requires some forward planning.
It is common for people close to retirement to wonder if they can afford to retire or whether they are doomed to carry on in at least a part time capacity until their late sixties. Whether you can afford to retire will depend on two things – how much you need to live on and how much wealth you have accumulated. As a rule of thumb, for every $5000 of income you need over and above your pension and assuming a return of 4% after tax and inflation, you will need to have $125,000 invested. If you decide to use up your savings over your lifetime as well as the income from your savings, you will need roughly half as much, say $63,000 invested for each additional $5,000 of income you need. To make an easy transition into retirement, try and live on your planned retirement income for the last one or two years of your working life, and save the difference between that amount and what you earn. For example, if you have saved enough to produce an additional income of $10,000, then try and live on around $31,000 before you retire (you might want to add to this figure any work related expenses such as transport costs).
On your retirement, have a general tidy up of your affairs. Make sure your wills are up to date, take care of any other estate planning issues, and consider granting enduring powers of attorney to a relative or friend, so that they can sort out your affairs if you become mentally incapacitated. Your solicitor or trustee company will be able to assist with these matters. Once you’ve sorted out the paperwork and your budget, you’ll be free to enjoy the retirement you’ve been anticipating.
|
Liz Koh is a financial planner and the author of the best selling book – Your Money Personality: Unlock the Secret to a Rich and Happy Life, Awa Press, 2008, available from http://www.awapress.com For Liz’s best tips for financial security, visit her website http://www.moneymaxcoach.com to receive your free e-book “8 Steps to Financial Freedom”. Article Source: http://EzineArticles.com/?expert=Liz_Koh |
Popularity: 5% [?]
Hi Folks,
Most of us are concerned about maximizing our retirement savings. But how and where to start? The following article outlines five areas to focus on to get the most from your retirement savings.
Woody
By D. Victor
Your golden years will resemble copper years if you fail to plan for retirement. Unfortunately, many retirees face a situation where they do not have adequate retirement savings to sustain their pre-retirement lifestyle. There is no point in wishing that you saved more for retirement. It is incumbent on you to maximize your retirement savings in the following ways:
1) De-emphasize guaranteed lifetime income
2) Diversify your retirement savings portfolio
3) Use high-yield cash options
4) Limit your annual withdrawal rate to 4% and under
5) Continue saving after retirement
De-emphasize guaranteed lifetime income
Guaranteed lifetime income is a fine idea, but it has its place. It works by taking money that could have been your retirement savings and giving you the returns as guaranteed income! You want to avoid depleting your savings just for the sake of “guaranteed lifetime income”. This will actually put you in a better position once you save or invest your funds securely. Limiting your sacrifice of savings for income will not only help you to maximize your savings but empower you financially as well.
Diversify your retirement portfolio
It is important to continue to invest after you retire. Maintaining a diversified savings portfolio helps you to access the accumulation benefits of investing without adopting unnecessary risks. Apart from augmenting your retirement fund, diversification would also help you to combat inflation risk and longevity risk. Another benefit of investing after retirement is that you keep some of your retirement savings illiquid. This forces financially undisciplined retirees to conserve part of their savings.
Use high-yield cash options
While it is important to invest after retirement, you must save a portion of your fund in cash or cash equivalents. This is because unforeseen expenses can lead to an immediate demand for cash. However, you need to ensure that your cash options maintain the real value of your savings. Cash options (that are on par with headline inflation) help you to maximize the real value of your savings.
Limit your annual withdrawal rate to 4% and under
Maximizing your savings has much to do with cutting spending leaks. Retirees must pay attention to the withdrawal rate, particularly in the first few years of retirement. An unsustainable withdrawal rate puts you at risk of outliving your life savings.
Continue to save after retirement
If you are surviving on a fixed retirement income, saving in the initial stages is particularly important. Since the cost of living will rise in the future, you should help yourself by saving what little you can. Your fixed income will only lose value as the years proceed. In addition, your reliance on your retirement fund to sustain your standard of living will typically increase into retirement.
Maximizing your savings is not an end; it is merely a means to an end. The importance of it resides in allowing you to mitigate the financial risks associated with retirement.
|
While maximizing savings is important, it is a lot easier when you have sufficient retirement income. Now, you can read a clear instructional guide on how to calculate your retirement needs: http://retirement.helium.com/how-to/9181-how-to-calculate-your-retirement-income-needs Article Source: http://EzineArticles.com/?expert=D._Victor |
Popularity: 11% [?]
Hi Folks,
People living in industrialized countries have grown so accustomed to a plentiful supply of relatively cheap energy that we pretty much take it for granted. We seem to only pay attention to our use of energy when we find ourselves having to cut costs due to job loss, additional expenses, retirement, etc. Fortunately we are becoming more aware of the importance of conserving energy. We are learning that our resources are not unlimited and that their use is causing harm not only to our cities but to our world. So, whether you want to conserve energy to save money, help save our environment or both, the following are some areas where you can begin.
I hope you are having a nice day,
Woody
<> Replacing your old refrigerator with a new energy efficient model is a good first step and you will save as much as $80.00 a year. Of course you will save even more if the door seals in your old refrigerator are leaking, causing the refrigerator to run more often to keep cool.
<> One important point to remember is that you will not benefit as much from a new energy efficient refrigerator if you place it near heat radiating appliances such as your dishwasher, oven or stove. This is why interior designers and architects make it a point to have separate areas for cooling and heating appliances. If your frig is old or new you should examine its location to determine if there is a way to better insulate it from heat sources.
<> Maintaining the correct temperature of your refrigerator can save as much as 25% on energy consumption. Many people set the temperature much colder than necessary. It is also a very good idea to remind your family (and yourself) to not hold the refrigerator door open any longer than necessary
<> Allowing your dishes to air dry rather than using the dishwasher’s “heat dry” setting is an easy way to save energy and money.
<> Clothes dyers use a lot of electricity so to save money hang you clothes on a line outside in nice weather. Hanging you clothes on a line may be extra work but watch your electric bill for the reward.
<> Washing your clothes in cold water saves as much as 75% in energy use.
<> More than 50 degrees of heat is lost whenever you open the oven during cooking. Follow the cooking instructions and preheat the oven as required. Open the oven only when needed.
<> While shades and curtains are a good way to help maintain a room’s temperature, adding e-films to the windows will save even more in heating and air-conditioning costs.
<> Double paned windows are excellent energy savers. Storm windows are also good but not as efficient as double paned windows.
<> Your furnace and or air conditioner have to work harder when you have air leaks and drafts around your house. Sealing your home against air leaks and drafts is one of the cheapest ways to conserve energy.
<> Limiting the use of ventilating fans and closing the damper in the fireplace when its not in use helps maintain desired temperature inside your home.
<> Ceiling fans are a good investment. Ceiling fans circulate the air in the room allowing you furnace and air conditioner to run less often. In many parts of the country, ceiling fans are enough to cool a home that is well insulated.
<> Trellises, overhangs, shrubs and especially trees help in cooling your home during the summer months. They also serve as good wind breaks during the winter.
<> Unplug appliances when they are not being used. Keeping appliances plugged in and on standby mode may be convenient but adds a lot to your electric bill.
Popularity: 26% [?]
