Rethinking Retirement in Crisis Times
Take a look at these basic tips that may help to make your retirement years more enjoyable, less stressful, and with less financial burden.
Start Saving
Sure, it's obvious. Nevertheless, too few workers are setting aside money for their golden years. If you're fortunate enough to receive a raise or bonus in your job, perhaps you can set aside all or part of your extra earnings, or a regular portion of your paycheck. But even if you don't have extra cash to stow away, small changes in your daily life can reap big rewards.
Maximize 401(k) Contributions
In 2008, individuals can stash up to $15,500 of pretax earnings in a 401(k). For those 50 or older by year's end, the limit is $20,500. Experts say they're a good choice for employees with lower salaries or anyone else who expects to pay higher taxes in the future.
Make IRA Contributions
With a traditional IRA, earnings grow tax-deferred, meaning you pay the folks at the IRS only when they're taken out, usually at retirement. Plus, depending on your income, you may also qualify to claim tax deductions for any contributions you made to the plan.
Don't Forget a Nonworking Spouse
A nonworking spouse is also eligible for an IRA and can add to your retirement bundle. Opening an IRA for a nonworking spouse is good tax planning as well as retirement planning.
Do Your Financial Housekeeping
Reallocating your assets to stay on track may seem daunting. But if you don't tend to this financial housekeeping at least once a year, retirement funds may inevitably grow out of whack. You'll want to make sure that you own the right mix of stocks, bonds, mutual funds, cash and other assets to help meet your retirement goals
Consider Target-Date Funds
Target-date funds also help employees maintain a diversified mix of assets because they automatically shuffle and remix their holdings to reflect age and retirement target date.
Get Professional Advice
Seek help carefully. You want to hire someone who's trained in various retirement issues, not just a salesperson who's going to try to sell you a certain product, be it investments, life insurance or other assets.
Make a Withdrawal Plan
If you're hovering near that magic retirement age, it's time to start planning how you'll withdraw retirement assets. There are a variety of methods to help you retain as much as possible and a trained professional can guide you.
Update Retirement Plan Documents
Spouses and nonspouse heirs who inherit a 401(k) plan can roll them into their own IRA without paying income tax. These transfers allow nonspouse heirs to stretch out distributions of assets they inherit over their lifetimes. Keep your beneficiary forms and other estate-planning documents.
Get Healthy
You may not realize it, but your physical well-being may be one of the most significant factors affecting your financial status in later years. Health and health care-related expenses are going to play an increasingly important role in retirement savings.
I hope these tips will of of use to many......
Regards
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