Some people are so eager to retire that they are willing to invest their money in almost any market, no matter how volatile this market might be. If you want to establish a strong and sure plan for retirement, however, you best bet is low-risk investing. This will limit the potential for losses and help you to generously pad any other savings programs that you currently have in place.
Low-risk investments do not generally entail a lot of profits over the short-term. Risk and profit potential are directly related to one another. The more risk that you take on, the more money that you are likely to generate from your investments. It is important to note, however, that high-risk investing can also lead to tremendous loss.
Certain financial instruments are designed to produce nominal returns. As a result of this fact, they are not likely to subject investors to major losses. Over the course of several decades, nominal returns will add up. These are monies that can be used to supplement the funds that employers have matched.
Another benefit of using this strategy to ensure financial health throughout the golden years is the fact that it can help consumers to stay ahead of rising inflation rates. Their monies will continue to hold value even when inflation has diminished the spending power of the dollar significantly. This is not something that more conventional savings plans are always capable of accomplishing.
With less risk and the ability to stay ahead of inflation, you can look forward to stress-free living after you retire. This strategy can additionally allow you to avoid steep tax charges and other issues that can diminish your worth. Consulting with a tax professional or financial advisor will help you to identify the best investment opportunities for your current spending abilities and your long-term goals.
Posted in Retirement and tagged Investment, Retirementwith no comments yet.
I have been asked many times, how was it possible for my wife and I to retire at the young age of 44? I am here to tell you, it’s much easier than you think, even in these trying economic times, if you have a realistic goal of what you want to do in retirement.
The first and foremost important thing to consider is the kind of lifestyle you want to live and what it is you want to do in your retirement years. Now my wife and I’s life style may not be for everyone, especially since we went from both having full time jobs and living in a 2500 square foot home to a 400 square foot motorhome, but some of this stuff can be applied to living any kind of lifestyle you wish in retirement if you plan and think it all through completely.
Travel: Traveling this country and seeing the wonderful sights it has to offer was our foremost thought when we decided to retire. You don’t have to get on a plane and travel over the oceans to see all the fascinating things right in your own back yard. Many people spend their whole life working and never travel more than a couple hundred miles from where they live. That means no matter what country you live in, you have most likely not even scratched the surface of all the wonderful things to see. If you don’t go see it soon some of it may be gone before you know it, especially with the way the world is growing and changing daily.
Work Kamping: Work Kamping is one great way of killing two birds with one stone. It allows you to stay at various locations throughout the country for free in exchange for an average of 20 hours of work a week doing odd jobs around the area. You can work camp in locations such as State and Federal Parks, Even some amusement parks offer work campers jobs in exchange for rent. I bet even your local camp ground down the street has work camping jobs if you give them a call. I have stayed in many parks and camp grounds around the country and I can’t remember even one that didn’t offer some kind of work camping duties. The 20 hours a week is also just enough for us to both save money but have something to do to help pass the time. Going from full time jobs to nothing is a lot harder than one would think.
State or Residence: One of the most critical things to consider when retiring, besides if you have enough money is what state or area to call home. Many people want to stay where they grew up or near their children. There is nothing wrong with any of this but doing this may mean you have to work longer and there is nothing wrong with that either. My wife and I decided to change states but just travel back to see our children. Since we are retired there is nothing stopping us from going back home during the summer months and just work camping around our children. However, this still leaves us the winter months when I want to be down south, out of the snow, to travel. Many states offer different tax breaks to people. Some have no state income tax and some just don’t tax pensions or capital gains. Depending on your situation you will need to sit down and give this one a long thought. Might be wise to talk to an accountant to assist you with your personal situation and help you make a wise choice. Just keep in mind that having to pay state income tax in any area just means more of a burden on your retirement savings that you will need to account for in the decision Its quit a feeling to just let go of everything and feel free and not tied down anymore.
Selling your home and possessions: If you decided to move into a smaller place or just get up and do what my wife and I did and that is travel. The hardest decisions to make are what possessions you own are important to you. My wife as an example kept all the photo albums and such but got rid of everything else. If nothing else, our daughter sure has a nice looking apartment and is completely furnished now. We decided to get rid of our home because of the taxes and upkeep was more than we wanted to deal with. At the most if we are going to stay somewhere we will rent. This allows us to still continue to travel and not have to worry about someone taking care of the lawn or shoveling the snow. No Painting and upkeep needed. Also in an apartment our utility bills would be much less than in a home.
Money and Budget: As you can see the life style my wife I have chosen for us is not for everyone. However, it is what we wanted and because of that we were able to retire with a lot less money than you may think. If you look at just the money side of retirement, at the basic interest rate of 7% on say, $500,000 that comes out to $35,000 a year in interest and that is before you touch any principal. You tie that to living in a state with no income tax, low sales tax, and work camping when we travel to reduce rent costs, you can live very comfortable with very little. Another thing we do to allow us to take cruises periodically is we use our credit cards for all daily expenses. Then just take our money and pay it off at the end of each month. This allows us to generate points or rewards that by the end of the year can put my wife and I on a very nice cruise for very little cost.
Expenses: Some of the most common expenses you will have in retirement that many don’t always think about are; Taxes, Food, Gas, Medical Premium, Prescriptions, Cellular Phone Bill, Rent/Utilities, Insurance, Dining Out, Clothes, and gifts for your children. There are others but this is some of the most common that every retired person will have. All of retirement planning is trying to find ways to minimize this list and what items you do have on it keeping their costs down as much as possible.
In closing, there are many other ways to reduce you costs that will allow you to retire young and with a lot less than you think. Whatever your plans are the most important thing to do is the plan early and when the time comes to enjoy it to its fullest.
Posted in Retirement and tagged American Dream, Individual retirement account, Retirementwith no comments yet.