If You Are Planning to Retire Soon

If you are planning to retire soon, you may want to think about whether or not you’d like to work full or part time during retirement and, if so, what you’d like to do. There are actually many benefits to working during retirement, including mental stimulation, structure, and of course, income. Even if you’ve saved well for retirement, it definitely doesn’t hurt to have a little extra money coming in. Plus, there are lots of fun things that you can try your hand at during retirement; we’ve shared a few ideas below!

Idea #1: Keep Doing What You’re Doing, But Cut Your Time   

If you enjoy your current career, then why not consider continuing it but just dropping down to part-time? You could spend around 15 to 20 hours a week at your job and still bring home a little extra spending money. Plus, you’d have time to explore your own interests while still doing a job you love and enjoy, making this option a true win-win situation all around.

Idea #2: Try Something New

For those who are maybe feeling a little “burnt out” at their current jobs or who just want the excitement of something new and different, it’s not a bad idea to retire early and then try your hand at something brand new. You could go back to school for the career of your dreams, start your own business, or just do something fun and low-stress, like working at a grocery store. The possibilities are truly endless; retirement doesn’t have to be an ending- it can easily be a beautiful new beginning!

Idea #3: Try Something Simple

If you don’t want to commit to a part-time or full-time job, then you might try earning some extra cash through simple gigs. You could do a little online writing, for example, or you could become a driver for a service like Uber, or even a dog-walker or pet-sitter if you like animals. You could make and sell crafts. There are so many options in today’s world for making extra money in fun, no-stress ways, so just use your imagination, and you should be able to come up with something.

As you can see, retirement doesn’t have to mean an end to bringing in money. You can often bring in as much or as little money as you like in retirement if you’re willing to continue working in some way and to some degree. Explore your options, and you can easily find a way to make some post-retirement cash without stressing yourself out.

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Are You Saving Enough Toward Retirement?

When it comes to retirement savings, the unfortunate truth is that about half of Americans are totally unprepared for retirement, meaning that they have absolutely no retirement accounts to speak of. A large chunk of these people don’t even have pensions working for them, which is scary. If you are one of those Americans who isn’t saving for retirement or who isn’t saving enough, it’s time to get on your game! Otherwise, you’ll find that retirement, for you, isn’t a happy, relaxing time as it should be, but instead, a frightening, stressful one.   

Don’t Rely on Social Security

Americans give all kinds of reasons and excuses for not saving for retirement as they should. Many say that they’re not all that worried about it since they have equity built up in their homes. However, you should never bank on your home’s equity to carry you through retirement; things can and do go wrong with that strategy.

Other Americans expect that they’ll be able to live off of their social security income, but honestly, for most Americans, social security will not provide enough money to live on. It was never intended to anyway, so if you’re banking on social security to get you through your golden years, think again. These days, it takes a sizable chunk of retirement savings to retire comfortably.

Working Longer Isn’t Always an Option

While those who make higher incomes tend to save more toward retirement, which makes sense, those with lower incomes often don’t save at all or save very little. In many cases, they don’t concern themselves too much with this fact; instead, they just think that they’ll work a little longer to save as the time gets closer.

In truth, though, lower income individuals are less likely to be able to work longer than their higher-income peers. Those on the lower end of the pay scale more frequently have physically demanding jobs that result in career-ending injuries or just general wear and tear. They are also less likely to have employers willing to keep them around in their advanced age. Therefore, it’s really not smart to count on working longer to retire comfortably; it’s just plain not going to work for most people.

Saving is the Only Solution

As you can see, people try to find all kinds of “workarounds” to saving for retirement, but there really aren’t any. The only way to make sure you retire comfortably is to save. Save as much as you can starting as early as you can. Find savings plans that work for you and your current budget, and do whatever you can to sock money away for your later years. It may be hard, but it’s the only guarantee of a comfortable retirement.

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The 4% Myth

Retirement isn’t something most people like to think about, but it’s an important thing to think about regardless. Americans today need to have enough assets at the time of retirement to live comfortably, and that can be hard to do if they have poor returns in the early years of retirement. The vast majority of Americans really need to be more conservative in terms of how much they withdraw during

 retirement because that fabled 4% that’s always been quoted as the annual withdrawal rate is really not a safe bet anymore. Now, the average person can really only live comfortably at a withdrawal rate of 2% or under each year.

 

You have to understand that the oft-quoted 4% rate is really just an estimate, a guess. It doesn’t take into account things like investment fees or longer-than-average lifespans, which, by the way, more and more Americans are enjoying these days.

It’s also important to understand that, while that 4% rate has been around a very long time, that’s precisely the problem with it. It’s old and outdated, and in many ways, that makes it irrelevant to today’s modern and rapidly changing world. Don’t let some old, practically arbitrary figure tell you what to do or dictate your life; base your decisions on what’s happening in the world now, today!

 For help determining just how much you should actually withdraw and at what points in your retirement, your best bet isn’t just to go with what you’ve always heard or been told. Instead, it’s to sit down with your financial advisor, look over your finances and personal situation, and then make smart, informed decisions based on that information. That is what is truly going to help you and benefit you the most both now and in the long run as well.

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How to Protect Your Retirement Funds

It’s extremely important to tread carefully when it comes to all matters related to your retirement. There are so many scams and cons out there that, if you aren’t careful, you can fall victim to and end up losing everything you’ve worked so hard for in the process.

One of the best things you can do to protect yourself and your funds is to choose a trustworthy financial advisor. Look for someone experienced and well-educated who will always put your best interests first. By reading online reviews, researching any potential candidates, and always making decisions carefully, you can find the perfect person to help you to make the most of your retirement funds and to avoid scams.

And, believe it or not, scams are increasingly common. Not only are there “investment advisors” who don’t know what they’re doing, who charge too-high fees, and/or who will sometimes outright steal your money, there are also investments that are scams from the start. Generally, anything that

promises huge benefits with very small investments is worth checking out a little further, as is anything that sounds too good to be true.

It doesn’t help matters that most people who retire are considered “elderly,” making them favorite targets of scam artists. The good news is, though, that if you do find the right help, you can make wonderful investment choices that will benefit you both now and in the future. So, don’t take any chances; be serious about finding the right retirement help, and, if you ever have questions or concerns, voice them. You can never be too careful when it comes to protecting the retirement funds that you have worked so hard for.  #InvestmentAdvisors

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Retirees and Renting

It used to be that practically no one would advise any person, of any age, to rent if they could help it. Renting has long been looked at as kind of a “money sinkhole;” you pay your rent, but in return, you get nothing except a place to stay for a month.

In recent years, however, people have started thinking differently, and it’s now becoming more and more common for financial advisors to tell retirees and seniors to rent if they can.     

One of the reasons for this is that home ownership is not nearly as secure as it once was. Many people are finding themselves in debt and losing their homes to foreclosure or losing out as a result of short sales. 

That’s not to say that buying is always a bad idea. Some people, seniors especially, really value living in the privacy of their own home and being able to do whatever they want with it. Others, however, prefer the freedom that comes with renting; they can pick up and move at any time, and they’re not bound by upkeep responsibilities.

Despite the fact that there are some good things about home ownership, the trend these days is for seniors to rent. A lot of them are doing it just for the freedom while others honestly need the money from the sale of their home in order to retire more comfortably.

When seniors do choose apartment living, especially in a community geared toward them specifically, they often enjoy more social interaction. Plus, since apartments tend to be more urban than homes, they also have access to more forms of recreation. Also, they can avoid contractor fraud, a rampant problem affecting the elderly. No home that needs work means no risk for fraud.

For those seniors who want these benefits and who are considering renting, it’s important to choose a place that’s affordably priced and likely to remain that way. A senior citizen will often be on a fixed income, meaning he or she won’t be able to handle a sudden spike in rental rates.

For this reason, apartment communities just for seniors or that offer rent control are the perfect choice.

In the end, there are positives and negatives to both renting and owning a home, and it’s up to seniors and their families to choose the best option for them.

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Early Retirement Distributions

A taxpayer may choose, or be forced into choosing, early retirement. A retirement before age 59½ creates income challenges for the retiree. The retiree is not yet eligible to receive retirement benefits from Social Security. The retiree may or may not have a monthly pension to generate income.

In many situations, the retiree will need to generate income from his or her assets. Often, the retiree has most of his or her assets in a retirement plan through a 401(k) plan at his or her employer or in an individual retirement arrangement (IRA). Withdrawals of earnings and pre-tax contributions are subject to ordinary

income tax. In addition, taxpayers may be subject to the 10% early withdrawal penalty tax on distributions taken before the taxpayer reaches age 59½.

Tax Summary

•    Withdrawals of earnings and pre-tax contributions from an IRA are subject to ordinary income tax.

•    Unless an exception applies, taxable withdrawals from an IRA prior to age 59½ are subject to a 10% early withdrawal penalty.

•    Taxpayers who take a series of substantially equal pe-riodic payments from an IRA are not subject to the 10% additional tax.

Tax Planning Strategy

One strategy to generate income from retirement accounts for taxpayers under age 59½ is to take periodic distributions from those accounts. If structured properly, the 10% additional tax will not be assessed on the distributions. Taxpayers can take distributions from various retirement accounts such as 401(k) plans, 403(b) plans, and IRAs.

Possible Risks

•    The rules for distributions using the Internal Revenue Code provide very little flexibility. Once the distribution begins, taxpayers need to exert extreme caution in making any changes to the distribution amount and frequency.

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Save While You Eat

Dasani (Photo credit: Wikipedia)

In today’s troubled economic times, absolutely everyone, regardless of age, needs to be focused on retirement planning and saving for the future. While there’s definitely something to be said for having a savings account and a retirement fund, making small changes in your daily habits can also have a major impact.  

One of the biggest money-wasters for today’s people is dining out at restaurants, and while you could give up eating out altogether, where’s the fun in that? To save money without giving up delicious food, just follow a few simple tips.

To start with, never order soda. A simple soda can cost anywhere from 1 to 3 (or more!) dollars at the average restaurant. By opting for non-bottled water, you can save money and get healthier.

Also, if you must eat out, try going out for lunch instead of dinner. Lunch prices tend to be a lot lower than dinner prices, and the portions are usually only slightly smaller than what you’d get in the later hours.

As you can see, there are many ways to (quite literally!) have your cake and eat it too. Don’t give up something you love. Just do it smarter and keep the big picture- your future- in mind each time you make a decision about where to go or what to order.

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Best Places to Retire

Are you planning to retire soon? If so, then you’ve probably been looking into cities that would make great locales for your retirement. While most people think of places like Florida when they think of retiring, the truth is that it’s always best to retire somewhere where the cost of living is low. That way, your money can go further, and you can save money to pass on to your children or grandchildren.  

One great place to retire, for example, is big, bustling Dallas. Though Dallas might not seem like a “cheap city,” reports show that the average income is around $50,106 while the average expenditure is only about $40,843. That means that residents have the potential to save as much as $9,264 per year.

If you play your cards right when it comes to retirement planning, you could earn just as much as the average “working person” in your golden years. Of course, if you’ve truly done a good job planning and saving for retirement, it won’t really matter where you live. Definitely look into cheaper options though. And, if you haven’t yet started planning for retirement, it’s not too late to start! Get help with retirement planning and saving today from Platinum Financial Associates, Inc. of Naperville.

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Get Retirement Ready

When you’re young and healthy, your focus is likely on your career, not on what happens once that career is over. Everything does come to an end, however, and if you’re smart, the end to your career can be a happy and relaxing retirement. A good retirement experience doesn’t just materialize out of thin air, however; no, a happy retirement takes planning and forethought on your part.

One of the most important things you can do is to develop a plan for your retirement. There are many companies that specialize in retirement planning, and the sooner you can start taking advantage of their

services the better. In addition to general retirement planning, you should also focus on creating goals related to savings and understanding and preparing for what your retirement needs are likely to be. Don’t go it alone, however; contact the friendly retirement experts at Platinum Financial Associates of Naperville.

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