A Secretive Policy to Grow Rich after Retirement

Are you on verge of retirement? Or, you are planning to retire early? Have you ever realized that if you keep on withdrawing from 5 – 7 percent of your savings every month, then you may fell short of funds even before your retirement? Well, this concern may have compelled to raise your eyebrows, but remember to become wealthy at the time of your retirement, what matters the most is how wisely you have optimized your investment portfolio and to what extent benefits you have estimated out of your investments.

Are you worried of outliving your income? Relax, that won’t happen unless you opt for any investment scheme haphazardly and focusing only on short term gains! It’s about the financial security of your old age, so investment should be absolutely worthwhile. Have you ever thought of investing in an annuity?

Grow Rich after Retirement

Indeed, Annuity can truly be a smart investment plan, provided you are purchasing the annuity from an insurance company who has proven track record of many satisfied clients. It’s always wise to approach an annuity providing company itself rather than opting for a scheme through an agent.

You can invest in accordance with your financial plan and current savings. If you have saved quite a huge amount over a quite a long time, it’s the time to earn some real value out of it. So, you can invest lump sum and start receiving returns almost immediately! Or, if you want to invest to over a certain period of time and opt for a fixed scale of return. Well, let’s delve a bit deeper into the types of annuity and you yourself can choose the right one for you:

Variable Annuity:

It is a type of annuity contract in which you choose the investment scheme and earn based on the performance of your investment. Not satisfactory? Well, before planning to invest, be sure that the company is providing you the prospectus with clarified scenario of risk factors and potential growth opportunities of the scheme. If you yourself find it to be bit undecipherable, then please consult some of your known investment consultants or discuss with your colleagues who have already been benefited from that scheme. Well, know let’s look at the pros and cons of variable annuity:

Pros: One of the most advantageous aspects of variable annuity over mutual funds is the guaranteed death benefit.  Irrespective of the performance of subaccounts, death benefit ensures that annuity owners’ beneficiaries are no less than the initial investment. Some variable annuity offers minimum rate guarantee return even if the subaccount suffers loss for a year.

Cons: Before deciding to invest in a variable annuity, think of it as a long term investment. Opt for this scheme, when your retirement year is still ample time away.  It has limitation of withdrawal; majority of the companies offers one time withdrawal in every year. There is a surrender period of contract, which may approximately last for 15 years. If you decide to withdraw some amount within that period, then surrender charge is applicable. Variable annuities are tax deferred investments, so withdrawals are taxed as ordinary income (earnings of a salaried person). Any amount of withdrawal prior to the age of 59 is subjected to 10% tax penalty.

Immediate Annuity:

An annuity scheme which begins with a bulk investment and earning starts almost immediately. This is perhaps most suitable for retired individuals who are afraid of outliving their savings! This scheme of annuity ensures a guaranteed return within almost no time of investment. Well, that seems to be an advantageous aspect, right? Okay, and then let’s look at the pros and cons of this annuity scheme:

Pros: Your investment gets converted into a guaranteed streamline of income and you really don’t have to wait! If you have enough of savings with matured policies along with provident fund and gratuity, then invest a smart proportion of it into this scheme and never ever you have to worry about outliving your savings.

Cons: This investment scheme is irrevocable, once you have invested. So, if an annuitant needs a lump sum amount to deal with an emergency, he/she may run short of fund.

Fixed Annuity:

This is the best investment scheme for those who are just about to retire or have already retired. In lieu of a bulk capital, the insurance companies offer a guaranteed fixed rate of interest guarantying the principal investment.

Let’s focus on the key features of fixed annuity:

  • Guaranteed Minimum Rates: No sooner the initial guarantee period expires, the rate is calculated on a specific formula (depends on the company) or the amount which is earned in the insurer’s account.
  • Tax Deferred Growth: Tax deferred accumulation of earnings.
  • Withdrawal: 1 withdrawal every year up to 10 percent of total account value.
  • Guaranteed Income: Fixed annuities can be converted into immediate annuity at anytime to generate a guaranteed income for a specified time span or lifetime.
  • Safety of Principal: The capital invested is guaranteed by the life insurance company.

Fixed Indexed:

This scheme offers returns on investment based on specified equity based index. It also provides a specified minimum, which the value mentioned in the contract will not fall below, irrespective of index performance. It’s not a stock market investment and does not participate in any stock or equity investment.

Do you need an annuity? Ask yourself few questions

  • What’s the crisis that’s troubling you and what amount you need to breathe easy
  • Do any of the annuity actually provides a solution to what you need
  • Is there any alternative to annuity
  • Consider the capital differences, time span , and what-if scenarios seriously

Retirement is worth of cherishing after tedious years of hustle and bustle, woes and worries! Take the right stride at right time and be ensured of a rejuvenating retired life.

What to Do if You Reached the Retirement Age?

All adult people work day by day, earn their income to spend it on basic needs and different luxuries of life but inevitably there comes a point when they are not able to work anymore. Under the law once you turn 65 you have a chance to retire and to get pension from the government. But there are many strong elderly persons who still feel like working and consider numerous advantages of staying at a working place.

Here are some points highlighting the particular features of retirement which will help you to take a decision if to do it or not. Of course the issue depends on life circumstances of each individual but here are some common points which could be considered by everyone.

1. Fist what you need to think about when going to retire is that your income source will significantly decline. You will become dependent on governmental maintenance and in any case of money shortage you will have to spend the money which you saved as a retirement fund. But you also need to remember that money should be turned back with a certain amount of interest. Of course if you have a family able to help you with any cash issues there is nothing to worry about.

2. Preparing to the retirement age financially is an important issue and you need to think about it from the young age. Note that the size of Social Security payments is near $1300 and it may increase not more than $2500 depending on your length of work. So if the term ‘fund for the retirement’ is not unfamiliar to you then you will have all conditions for comfortable life.

3. If you are 65 and still have a job which is not like pain in the throat, if you still have forces to perform your job in a good way then it is the best idea not to drop it. Working just few more years will not just bring you income but you will have a chance to get more money as soon as you are approved for Social Security payments. You will also have an opportunity to benefit with health insurance coverage which is provided by the employer. It is true that you will have to pay 100% of your health care after retirement.

4. What you need to think of is what you are going to do on your pension. Without the necessity to wake up early each morning and to spend most part of the day while performing your duties you will find much free time. Here is very important to think of what you are going to do, to create goals and a plan in order to avoid mental disorder. Or it may be better to stay for some time at work unless the issue is solved.

5. Many people are simply tired from work and from daily duties which are referred to it. Working for let’s say 30 years is a lot so an opportunity to have rest, to think of personal development issues or just to pay more time to your family may be worth retiring.

You may also counsel with your family members, spouse or financial advisor but remember that this is your life and you need to take pleasure of it. So ask yourself what you want and don’t hesitate doing it.

How You Can Save Money For Your Retirement

It is a real nightmare to reach the retirement age and find that you have not saved much enough to get financial support. Most people get into such a predicament due to their unwise or untimely planning. This article makes an effort to educate you on making prudent retirement planning and avoid such disastrous possibility. Here are some simple ways to save money for your retirement.

It is not a magic but logic how you can save a huge sum for your retirement days

save money for your retirement
save money for your retirement

Start early when it comes to do retirement planning. If you start planning at the ripe age of 50, you can’t save much for your twilight days which are drawing nearer. If you start at the age of 30, you can definitely save more. Every year, section a part of your monthly earning. It is better if the saving sums up to $2,000 at the end of each year. However, with increment in your pay-scale, try to push this target further.

Saving for retirement days requires a little bit sacrifice at present. This sacrifice is justified considering the fact that you will get a financial peace of mind. Make a little adjustment with your monthly expenses so that you can save a good part of your disposable income for this retirement purpose. Several investment vehicles are there but ensure a safe ride with government bond, IRA, 401K planning etc.

The riskier investments are more tempting on the ground of promising rewards. Investing into them will not be very bad unless you invest a lot. Diversify your retirement investment and consider investing into less riskier schemes. After all, you definitely hate the idea of losing your hard-earned money, is not it?

Have you taken a mortgage loan? Do you have any outstanding loan? If yes, think about paying them off. Being saddled with mortgage burden while you are approaching the retirement age is not a good idea at all. Through mortgage payment, you retain the equities and also have some assurance to live in your own house. And with passing of days, your equities become more valuable.

If possible, invest in a second property. Real estate makes a good return on investment. And having a second home earns you an excellent equity to make good use of in times financial instability.

Retirement planning is not an easy thing to do. Extensive market research, proper planning, appropriate approach and right vision are some of the components to outline a workable retirement plan. Following some simple steps like those stated above will ensure a peaceful post-retirement sailing as you have always dreamt of. .

The Future of Saving for Retirement

Saving for RetirementHow much should a worker save for retirement? The dollar amount can vary based upon standard of living. Regardless, current workers will likely have to face a much different climate than their parents and grandparents did.
In the post-World War II era, many, if not most major companies provided their employees with a company-paid pension plan. These pension plans were usually defined-benefit plans. These plans differed a great deal from much of what is offered to employees today.
Benefit Plans

Defined-benefit plans required the company to pay so much per hour that an employee worked into a pension fund, frequently handled by a labor union. These funds added up over time and were invested to earn interest. When the employee retired, they would then receive a monthly payment from the pension fund that supposedly would not differ. The amount that a worker can get from these defined-benefit plans (called defined-benefit because there is a guaranteed payout at retirement) is based upon their years of service and the amount that the company put in each year.
In addition to a guaranteed pension, workers for much of the twentieth century could count on payments from social security. The average social security payment for 2012 is about $1,200, and retired couples draw nearly $2,000 per month on average. While this may not seem like an extravagant income, when added with company pensions, retirees can at times live comfortably in certain parts of the country, especially when considering that there are expenses associated with working, such as transportation, lunches and clothing costs that can be greatly curtailed when a person does not have to go into an office every day.
Defined Contribution Plans
Defined-benefit plans are going the way of the dinosaurs, however. Today, rather than offering defined-benefit pension plans, employers are frequently turning to defined-contribution plans. These retirement plans are better known as 401k’s or 403b’s. There are a couple of major differences between the earlier defined-benefit plans and the current crop of 401k plans. First, defined-benefits promised to pay a retiree or their beneficiary a steady income for the rest of the retiree’s (or beneficiary’s) life. Secondly, employees were not generally expected to contribute to these accounts.
There is little likelihood that the older defined-benefit plans will return in the near future, if ever. Also, while the social security fund has enough to pay out its benefits for several years, there is the looming possibility that benefits will outpace contributions in the relatively near future. This gap, combined with the animosity that many politicians have for any social programs, requires that people entering the workforce today prepare for the distinct possibility that social security will go the way of the defined-benefit pension.
Therefore, it is imperative that current workers begin now preparing for their retirement, because it is quite possible that they will not be able to rely on their employer or the government for any funds. The 401k (or 403b for non-profit workers) is the leading avenue for retirement funding today. The maximum a person under 50 can contribute to their company’s 401k program is set at $17,000 for 2012. Older workers can contribute up to $22,500. 401k contributions are tax-deferred, which means that workers pay no taxes on their contributions until they are withdrawn, generally after age 59 1/2.
An employee can frequently increase their retirement contributions merely by contributing in the first place. Many companies will match employee contributions at a stated rate. For example, a company may offer to match an employee’s contribution up to 3% of their annual salary. By maxing out his or her contribution to the matching limit, the employee’s contribution, in effect, becomes 6% without having any additional money coming out of his or her paycheck. Not all companies match contributions, but it is worth at least contributing enough to get the full benefit of the match.
Individual Retirement Accounts

Another option that people have for planning their retirement income is the IRA, or Individual Retirement Account. There are two types of IRAs available to people investing in their retirement. The traditional IRA has a contribution limit of $5,000 per year for workers under 50 ($6,000 for those who are older) and any interest or capital gains are tax-deferred, much like a 401k. The newer type of IRA is the Roth IRA, which has the same contribution limits. However, this type of IRA is paid into with after-tax dollars. Any interest that a Roth IRA earns is then tax-free when withdrawn after retirement.
Current workers should begin planning their retirement by using one or both of these tools, although not all employers will offer a 401k option. A savings calculator with a retirement tool can inform individuals how much they can expect to earn on their contributions. After looking at the numbers from the savings calculator, workers can then increase or decrease their savings to insure they are able to have a reasonable standard of living in retirement.
Jennifer Anderson is a retirement specialist who works with such companies as Discover.com to educate consumers about the importance of personal finance and saving for the future.

Plan Your Retirement to Live Your Retired Days in Peace

retirement planRetirement is the time of your life when you should stop worrying about everything else and just enjoy your life. Do the things you have always wished to do but have been unable to do the same due to work responsibilities. Some of you would like to take up gardening while others would like to travel the world and so on. But these things would only be possible if you have enough saving and if your pension amount is good such that you would not need to worry about money to sustain yourself as well as your family. If your saving is not good and your pension amount is meagre or if you do not receive pension at all, your retirement life can be worse than your work life and the reason is apparent.

Hence to avoid getting into this stressful situation and spend your retired life in peace, you should plan much ahead of your retirement if your company does not have any pension policies or if the pension amount given is very small. The very first thing you should do is save. A little saving from your salary every month can do wonders after all those years of hard work and you will be surprised at how much you have saved after your retirement, if you start saving from the very beginning of your career. Just consider this, how much do 100 multiplied by 12 months multiplied by 30 years minimum make? 36000 and if you invest this amount on some policy, you would accumulate interest on this amount too. That makes it around 40000 approximate. Just 100 each month can make this difference to your life.
The second thing you should do is opt for a pension plan like annuity. There are numerous pension plans offered by various companies, annuity is just one of them. these pensions plans are nothing but arranging for your own pensions after retirement. Take for example an annuity policy. You pay an annuity offering company a certain amount of money for a certain period of time, say till your retirement. After that time period is over the company would start paying you back with your own money along with the interest accumulated on it. It is much like saving mentioned above with the only difference that your saved money you can withdraw at any point of time in an emergency but by opting for a retirement plan you will be paid in instalments or as a lump sum amount, as per the contract, only after the stipulated time period is over. Hence getting a policy done over and above your monthly saving is a very smart move in planning for your retirement.

Enjoy the Best Days of your Life after Retirement

It’s quite natural for every retiree to think of his daily living after retirement since he will be taking a permanent break from work. So, if you are one of them, you must have made plans to ensure financial security after retirement. Well, pension has always been treated as a priority for retired individuals. However, the fruits have not been tastier enough and have rather made retirees suffer. So, why not break this traditional shackle of depending on these typical monetary policies and instead think a bit different. Do you know that equity release has changed lives of countless retirees till date?

You always wanted to buy a car and purchase a property of your own, right? For some reason, you simply couldn’t meet your purpose. Equity release can be your lifetime companion and can help you meet all these purposes in almost no time. So, how it’s possible?

If you are homeowner, you must be aware of the value of your property. You must also be knowledgeable regarding the rising property values on the UK soils. Therefore, your first and foremost job is to get an equity release calculator to calculate your property value. Once done, calculate the exact amount of equity you can be able to release against your property. If you get confused, get in touch with an equity release provider online. He will help you understand the schemes in simple terms. In fact, he will be the right person to make you aware of the advantages you can enjoy in comparison to other schemes.

When you will start paying a certain portion of your equity to a home reversion agent, he will keep paying you amounts in return. Now, you can take the money either on a monthly or weekly or annual basis. Consult your equity release agent and accordingly choose the right scheme that can support you till your final day on earth.