The Biggest Financial Mistakes Made By The Modern Generation

Everyone makes mistakes in life, but financial matters are an area where nobody wants to fall victim. In reality, though, most people are guilty of some very preventable issues.

Here are five of the most common among today’s generation, along with some advice to avoid them.

Buying A Property Too Soon

Becoming a homeowner is an important goal both financially and personally. However, the pressure to buy a home shouldn’t encourage you to swoop too soon. In truth, the price paid for the house isn’t the only cost you’ll encounter. As such, being prepared for agency costs, surveys and the other items is crucial. If you cannot afford them right now, renting a little longer is fine. Apart from saving a bigger down payment, it’s often less stressful.

Relying On Standard Retirement Pensions

Retirement is slowly creeping up on you, even if you’re in your twenties. Your standard pension plan will give you a basis, but it won’t be enough to help you live a comfortable life. Investments such as gold IRA funds can increase your wealth significantly. Given that life will inevitably get a lot tougher once you’ve reached retirement age, this extra safety net can make a world of difference. Frankly, assuming that things will be OK without it would be very naïve indeed.

Overlooking The Small Costs

Overheads and expenses are just as pivotal to your financial situation as revenue. Most people appreciate this and will actively make the right moves to save money on major purchases like cars. In truth, though, the savings made on daily transactions is where you can reap the biggest rewards. Whether it’s using coupons for cheaper groceries or tailoring a home TV package to suit your genuine usage doesn’t matter. Wasting money by needlessly overspending will take its toll on finances for many years to come. Prevent this from being an issue, and it’ll pay dividends.

Forgetting Credit Scores

Many people assume financial wealth is solely about bank balances and assets. However, leaving doors open is an equally important factor, which is why your credit history is so vital. A lot of people allow their credit scores to stay low before inevitably falling into greater debt. Repairing yours isn’t an easy job, but it will enhance your future for many years to come. Given that we live in a world where borrowing money is a regular feature, ignoring this is a financial sin.

Not Appreciating Their Worth

Perhaps the worst thing anyone can do, however, is let others take advantage. You’ve invested time to develop skills, earn qualifications and gain experience. As such, you deserve to be paid a suitable salary. Online job boards make it easy to check what people in similar roles command. Talking your way to increased pay is achievable while you may also want to look for opportunities elsewhere. Even if you love your job, payment is the main incentive. Do not forget it.

Avoid those mistakes at all costs, and your financial future will look better than ever. Quite frankly, that’s something that can be appreciated by all.

Do you think you are ready for your retirement?

A few decades ago, retirement planning was quite straightforward. People got well-paying government jobs and stayed on in the same company until retirement. After that, the company’s pension plan supported them financially. But times have changed. It is rare to find someone in the same job for more than a few years. As a result, the onus of retirement planning has fallen directly on the individual. But the fact is, many people do not think about retirement planning until it is too late.

Importance of retirement planning

Imagine the following situation. You are in your early 30s. One day, you bounce into your old college friends. You go out and have a blast. The bill is huge. But that’s not a big problem because you can afford it. You know exactly when your next pay cheque will arrive.

Fast-forward thirty years or so. You are retired. In other words, you don’t have a regular source of income anymore. What would you do in case you have to foot a huge expense all of a sudden? If you have access to a good corpus of money, great! But otherwise, you may be in trouble.

Financial independence during your golden years is the main reason why you should start thinking about retirement planning today.

• Rising expenses

Twenty years ago, a cup of coffee didn’t cost more than a few rupees. Today, the same cup could cost you at least Rs 50 in a good restaurant. If you are wondering how it is possible, the answer is quite simple: inflation. In other words, your daily expenses are only going to rise over the years. So even your daily goods such as rice, sugar, coffee and tea would cost a lot more thirty years later. And if you are not prepared for the rise in expenses, you may be forced to change your regular lifestyle to accommodate these changes.

• Rising cost of medical expenses

The other major problem during retirement is the cost of medical expenses. Increase in health problems during old age is a natural phenomenon.Bad knees, poor eyesight, diabetes and arthritis are a few problems that you commonly find among older people. And if you haven’t planned well for your retirement, a substantial chunk of your savings can be spent on medical expenses.

To make matters worse, healthcare costs are spiralling out of control. Some studies show that hospitalisation costs are increasing by 10% every year.

Therefore, the only way to ensure you enjoy a happy and peaceful retirement is through an efficient long-term investment planning.

Create a retirement plan

The journey of a thousand miles starts with a single step. Same is the case with your retirement plan. And the best time to take that step is today.The first step is to identify how much you would like to save for your retirement. This would be based on your current income level and lifestyle. For instance, if your monthly expenses are Rs 40,000, it can be difficult to drastically cut them down after retirement. You might also want to travel or pursue other hobbies. All this can be expensive. Identify your potential expenses and take inflation into account. When you have a rough estimate, you can start your investment plan to achieve your goals.

How investment helps in securing a healthy retired life

One of the main goals of retirement planning is to create a large corpus for your sunset years. You can do this through long-term investments.There are many retirement and pension plans in the market that you can consider. In addition, investing in equities is one of the best ways to do achieve your long-term goals. This is because they have the potential to offer high returns for the long term.

But if you are hesitant to invest in the stock market, equity mutual funds are ideal for you. They are less risky than directly investing in the stock market. Besides, the long-time horizon ahead of you can balance out any hiccups you may encounter on your investment journey.

It is also bestto consider taking out a long-term health insurance to finance any health problems you may encounter in your retired life.

To sum up

In the end, the important thing is to be financially independent in your retirement years. You shouldn’t depend on your children for financial help. On the other hand, it might be a better idea to leave them something from your own side. You can ensure that a part of your retirement savings contributes towards your family’s future.

Cozy And Bespoke Affordable Home Options For Retirement

Going out to a certain part of the world when you’re booking a holiday is the joy of what relaxation is all about. You simply want to shed away all your fears and the troubles that life routinely plants at your feet, and just run away. Whats gathering steam these days are the holiday homes, especially around coastal parts of the world. No more so than in Europe because Greece, Spain and Italy are the kings of the Mediterranean. As such this craze had gone wild and many more people want the chance to live in a luxury home. However even if you’re staying just for a short while, the prices are always going to be up in the higher echelon of the bracket. So what could possibly be the more affordable alternatives to a personal retirement home, that would be perhaps more permanent as well? When you’re retiring, there are in fact quite a few options that can feel as if they are hidden gems.

Coastal cottage

Many coastal communities were born out of the industrial revolution. This was the time where seaports were the main way by which trade could leave and enter the country. As such small, warm and cosy cottages were built as a result, for families that had fathers and husbands that worked down at the docks and ports. A great alternative to a holiday mansion would be a far more affordable but just as enjoyable. The key when you’re retiring is to actually spend money on other things, that are not involved with your home. Such as holidays and cruises, food and travelling. No one really wants to be stuck at home, no matter how welcoming and comfortable it is. This is why a cheap and cheerful cottage by the coast is a brilliant option.

Custom built

The only way for retirees to design a home totally to their liking for a truly bespoke living space, and still have it be affordable is to look into mobile homes. The ability to choose which rooms are going to go where, and completely decide the interior design of your home, even before you get it delivered, can be what many choosy people want. It's also a bungalow so as you get older and the joints start to wear out, rather than putting in an expensive stair lift, the toilets and bedrooms will never be too far out of reach. As the prices for a full home are in the tens of thousands, it's perhaps one of the most affordable options which won’t take a giant chunk out of your savings. On the inside, it's just like a regular home, with proper high-quality building standards adhered to giving the home a rock-steady feel.

Choosing a home that is affordable and still providing enough space to make life in retirement enjoyable, is often a decision so many people leave too late. Living in a big house where perhaps you raised children, can seem too large and hollow as you grow older. Suddenly these two options will start to look refreshing and cosy.

Retirement Planning 101: Where Will You Live?

Speak to any financial expert about retirement, and they’ll pinpoint a few key things to consider. At the top of their list will be your real estate. Or, to be more specific, where are you going to live when you retire?

This is a question because your circumstances have dramatically changed, and this may affect where you choose to live for both personal and financial reasons. Here are some of the most popular/common ideas people have when they retire:

Downsizing

I think this is the most common route to go down when entering retirement. Downsizing involves selling your old family home and moving into a much smaller place. A smaller home means you should find it easier to maintain in your older years, and the bills could be cheaper too. Plus, you raise capital for your retirement by selling your original house and buying a cheaper one. This money can help you when you don’t have a job anymore. Some people will even downsize to an apartment instead of an actual home - the choice is yours. Along with this, there is the idea of downsizing by selling your home and moving in with one of your children. You could have a son or daughter that has extra space in their house and wants to take you in because you can help with the kids, etc. This benefits both of you as you get to downsize and keep all the money from the sale of your house, and your child gets a permanent babysitter!

Community Living

This is a very popular idea amongst retirees as it helps you in many ways. For one, you have this concept of selling your home to raise capital for your retirement. Then, you have the idea of living within a community of people similar to you. Normally, you find plenty of retirement communities in very nice and relaxing locations. Condos by the beach are popular, and there are also plenty of lake homes for sale out in the middle of nowhere for people wanting to break free from busy life. Living in a community environment means you don’t have to worry about being alone and you can make friends and interact with others. This is something that worries many people when they retire as they won’t have any work friends anymore.

Staying Put

Of course, you always have the option to stay put and not sell your home. There are plenty of retirees that choose to do this as they have the future in mind. They want their old family home to be passed down to their kids when they eventually pass away. Furthermore, if they can handle the bills and maintenance, there might not be a reason to sell it. This does depend on how well you’ve planned for your retirement and how much money you’ve got in your bank.

In summary; you can sell your home and downsize to something smaller, you can sell it and go into community living to start a new chapter in your life, or you can simply stay put. There may be other options out there too, but these are the most popular when planning where you’ll live after retiring.

4 Questions You Need To Ask Yourself Before You Turn 60

For the first forty or so years of your life, you will no doubt come into contact with the term “retirement” a lot. However, for the most part, it will go in one ear and out of the other. It will affect you in the same way news of climate change will affect you - it enough to make you raise your eyebrows and start putting cardboard in the recycling bin, but it isn’t pressing enough to make you change your ways entirely.

Well, that fabled thing called retirement is now knocking and your door and so it is time accept the financial decisions you have made up to this point. We’re not saying you can’t change certain things and make a little bit more of a difference to your circumstance, of course you can. However, it is time to start planning your retirement lifestyle based on your current financial situation. It is time to face the music, not live on a hope and a prayer.

You see, most people retire in their sixties. You don’t have to, but most do. That is why we have pulled together a list of factors that you need to consider. So, without further ado, here are the things you need the financial considerations you need to make before you hit the big six-oh.

How Long Are You Going To Work For?

This is the single biggest decision you need to make for the simple fact choosing when to quit work is going to affect your financial security more than anything else. This is when you will wave goodbye to your income and start relying on your savings. Of course, it isn’t just when to quit that you need to consider. It is what sort of retirement lifestyle you are going to lead? How much more could you save if you stayed working until 70? The health benefits of staying connected to the people you work with. And will you quit totally, or will your retirement involve some work?

What Help Are You Going To Have?

This may seem like an odd question, but retirement is expensive and retirement can be, well, unsafe for a few reasons, not least of all your health. That is why you need to know what level of help there is going to be. According to CaregiverConnection.org, you need to consider hiring a financial power of attorney while you are still mentally sound, someone that can make the right financial decision should you become unable. You need to know what help you will have should you become unable to live independently and whether you will receive help from your children in some way or have to pay for care yourself. This part of the debate should also include seeking help from a financial planner, someone that can talk you through your current financial situation and how to make the most out of your finances in retirement. We called it help, but a lot of it could be labeled advice, which gives it the positive spin it deserves.

When Will You Take Social Security?

The importance of this benefit cannot be stressed enough. In fact, choosing when to take your Social Security benefits is only second to deciding on when to retire because it will have one of the biggest financial implications during your retirement. To stress how important this source of income is, for one in four recipients it is their only form of income after retirement. That is why it so important you squeeze the most you can out of it, which is why timing is so crucial as you will see from this article on schwab.com/resource-center. What we mean is, for every year you delay triggering this benefit after turning 62, your monthly income rises from 6% to 8%. Of course, you have to start collecting it when you turn 70, meaning you will get the best deal possible should you manage to hold on until then. This may not be possible or ideal, but it is worth knowing when it comes to making a decision. 

How Much Income Will You Be Guaranteed?

This is an immensely important question to ask yourself. If Social Security is your only source of income then the math won’t take long. However, if you have multiple sources of income then a) count yourself lucky and b) make sure you know exactly how much you will be receiving each month. The same goes for your spouse - the final sum should be your total household’s monthly income. To do this, register with the Social Security Administration so that you can be sure you know what you are getting, speak to the HR department at your current employment - as well as the HR department at any former employers - and ask for a statement relating to your pension benefits. Once you know what you are getting each month you will be able to make an informed decision on whether you want or need to work longer, what sort of lifestyle you could lead with what you have and whether or not you need to scale back.

Stepping Stones To Security: Things To Do Now To Improve Your Financial Future

If you’re in your 20’s or 30’s, you may not be thinking as far ahead as the next five or ten years, let alone planning for retirement. There’s probably no need to have rigorous saving plans in place for when you give up work, but it’s always beneficial to look to the future when it comes to your finances. Even if you’re young and carefree, there are lots of things you can do now to improve your financial future.

Learn to budget

You may assume that budgeting is for world leaders and treasurers, but it can actually be incredibly beneficial for everyone. It’s very easy to lose track of what you’ve spent over the course of a week or a month, and this can lead you to think that you’ve got more money than you actually have. Budgeting is a simple means of noting down what you spend. It can help to prevent overspending and enable you to save more. You can use traditional techniques or go for something more modern like a spreadsheet or a budgeting app. Once you’ve done your budget for the month, don’t forget to adjust it as you go, so that it’s always accurate.

Improve your credit rating

Everybody has a credit rating. Your rating, also known as a credit score, is a number, which is used to assess the level of risk you present to a lender. If you have a high score, you’ll be more likely to be able to borrow money, and you may also benefit from lower rates. You can often take advantage of lower interest rates on car loans with good credit, for example. If your score is low, this makes it harder to borrow money. Even if you are offered a loan or a mortgage, the interest rates are likely to be higher. If you don’t know your credit score, you can find it out online. If your rating is low, don’t panic. You can improve it by using your account more frequently, paying off loans and credit cards and making sure you don’t miss any rent or mortgage payments. 

Put money aside

You may think that you don’t need savings at the moment, but life has a habit of throwing us curveballs, and it’s always useful to have a nest-egg. Would you able to manage if you had to take a long time off work or you lost your job out of the blue? Even if you don’t have to break into your emergency fund, you could use the money to buy a house, pay for renovations, car repairs or luxury items like holidays. 

When you’re young, it can seem like the days when you need substantial savings pots are far away, but time flies. Weeks turn into months and before you know it, years have gone by, and you still haven’t put anything in that pension pot or set up that direct debit to your savings account. By all means, have fun, but try and plan ahead too.

Steps Worth Taking Towards Financial Confidence

When it comes to your money, it can seem like there’s a constant stream of outgoings. There’s always bills to pay, things that need fixing, and unexpected life events that can be a costly dent in your finances, and make it difficult to gain cash security. However, there are always steps you can take throughout life, that will help to ensure that you’re happy and confident when it comes to your bank balance.

Invest Wisely

Whether it’s a home or a car, the larger purchases in life can be a route to financial security when you’ve considered your decision and invested wisely. When it comes to real estate, the best thing you can do is look at the building and the location to see if your investment will pay off in the years ahead. Ask yourself if your property has the potential to rise in value in a competitive market. Secondly; ensure your monthly repayments are affordable for your income. It’s all very well having the house of your dreams; however, if you’re left struggling to pay your bills at the end of each month, it will quickly turn into a financial nightmare.

When it comes to buying a car, or any large purchase for your everyday life; bear in mind the regular expenses you will need to pay to run and maintain the item. Work out what it will cost to run, and add in a contingency for potential breakdowns and services before you make any large purchases. If money looks like it might be too tight, reconsider you buying choices. For tips on buying your first home, take a look here: http://www.yourfinanceformulas.com/2017/05/found-your-perfect-home-consider-your.html.

Call In The Professionals

Investing and putting your money into the right places can be baffling for those who are not a financial expert, so don’t shy away from asking for help and advice from somebody who knows what they’re talking about. Long term financial plans can seem daunting, so it’s worth checking out financial professionals like www.BrettPittsenbargar.com who can help steer you and your money in the right direction. 

The word retirement might sound scary, especially if you’ve only just settled into your career; however, these eventualities are exactly the sort of things that an expert can assist you with. Once you’ve made contact with a financial company, and got the ball rolling, you’ll feel confident that your money is heading to all the correct places, which should give your financial peace of mind.

Save Save Save!

Saving your money might sound like an obvious choice; however, putting extra time and thought into saving your cash where you can, will pay off in the long run. Setting yourself monthly savings targets, and yearly goals will help towards paying for life’s pleasures, like vacations and home improvements. By making the process of saving a challenge; you’ll keep trying to better your last result, which will have a snowball effect on your earnings.

Knowing you’ve been wise with your income, and having enough money in the pot when you need it, will ensure you’ll gain financial confidence and assurance, which will lead to a happier, stress-free life.

Are You Prepared For Old Age?

The last thing anyone wants is to run out of money during their retirement. For that reason, we wanted to release a post that offered some tips and tricks. With a bit of luck, you will leave this page with a better idea of what you need to do to prepare for old age. If you’re under the age of forty at the moment, you still have lots of time to put this advice into action. It’s important that you leave no stone unturned if you want to live the good life during your twilight years. Considering all that, read this post carefully before it’s too late.

Creating a retirement plan 

Before you do anything else, you need to create a retirement plan. You can do that alone or pay for professional assistance. The latter option is preferable as it should mean you don’t forget anything important. There are lots of experts out there who focus their efforts on early retirement planning. So, you just need to find someone with a good track record. Read reviews online to ensure you’re not wasting your time. If previous clients were unhappy with the specialist, you can bet they’ve written something negative on the internet. Once you have your plan, it should become much easier to ensure you have enough cash.

Selling your home to raise capital

Selling your home when you retire is an excellent way to boost your capital. Of course, it means you won’t pass on the property to your kids when you die. However, you’ve worked your whole life to pay for that house. So, it makes sense that you should benefit from the fruits of your labor. With that in mind, now is the time to take a look at your home’s market value. If you think it makes sense to sell the property when you hit retirement age, you should do it without hesitation. At the end of the day, that money could pay for trips around the world. You’ll just have to rent some accommodation for your last few years on this planet.

Making smart investments

Another fantastic way to boost capital involves making smart investments. If you have some savings right now, you can get started today. Precious metals are a safe bet because they always increase in price over a long enough period. However, if you want to make the most profit, you’ll have to get involved with the stock market. Don’t stress if you have no idea how it works at the moment. There are plenty of brokers out there who can assist you in making the right decisions. Again, you just need to read reviews and testimonials to ensure you’re dealing with a reputable professional. 

Now you know how to prepare for old age, we hope you will make the best choices in the future. When all’s said and done, you’re going to feel pretty miserable if you don’t have enough money. You’ve worked your entire life, and so you deserve to enjoy yourself when you finally retire. Whatever happens, we hope you’re satisfied with the outcome of your plan.

It's Time To Get Serious About Retirement

Your retirement might seem like an age away to you. You may think you have all the time in the world to knuckle down, stop spending on unnecessary things, and start saving for the days when you no longer can/want to work. However, it’s never too early to get serious about retirement.

How do you picture your retirement? Do you take plenty of holidays, spend your time doing fun things with loved ones? Do you treat your grandchildren? Do you continue living much the same life that you’re used to now? Picture it in your head.

Once you have an idea of your ideal retirement lifestyle, you should be able to figure out a good idea of what you need to make it reality. Your ideal retirement isn’t going to happen if you don’t start to take it seriously! 

Figuring Out How Much You Need

Figuring out how much you really need for retirement can be tricky. One point to remember is that it’s always better to have more than you think you’ll need, than less. Many people like to look at how much they are earning pre retirement, and then aim to have 70-90% of that per year during their retirement. There are things like the 403b calculator that can help you to figure it out too. Once you’ve figured out how much you need, you can move on to the next step.

Coming Up With A Savings Plan

Now you need to come up with a savings plan. Make sure you take into account anything you’ll get from your employer/the government, and go from there. There are so many ways you can save money and put it towards your retirement fund, and in most cases you’ll barely realize that things have changed. Here are some suggestions to help you:

• Pay yourself first. Work out how much you need to live on and maybe allow a small amount for luxuries.
• With the money you have left over, divide equally into savings accounts (it helps to have money for a rainy day too). 
• Make sure the amount you are putting into your retirement fund will help you to reach your goal.
• Cut back on luxuries like coffee from Starbucks - it’s much cheaper to make your own at home. You can even put it in a takeaway cup!
• Think about the things you buy more carefully. Do you really need new clothes? Eventually things like this will fade, and you’ll wish you had more money in your savings instead.
• Use cashback sites like Quidco whenever you make a purchase. You will make a very small percentage back on whatever it is you bought, depending on the terms. This won’t earn you much in the short term, but it can add up in the long term. Helpful if you were planning on purchasing something regardless!
• Shop around before buying. Go for supermarket own brands over big names, as many are the same. 

You really don’t have to change your lifestyle much to enjoy an amazing retirement. Use the ideas here to get started!

The Financial Spring Clean

Getting your life in order is never easy. When you throw finances into the equation, things get even more complicated. But, it’s worth reassessing your financial situation once every year. It’s the only real way to get an idea of what footing you’re on. Plus, you never know what’s around the corner. If your finances aren’t in order, a major financial setback could cause disruptions. If you keep order, you’ll be prepared for every eventuality. Think of it as a financial spring clean. Here are a few areas worth your attention.

GET A GRIP ON THINGS

To start, you need to get a general grip on things. You want to know how much you’re worth, so to speak. Accumulate your earnings, the cost of your belongings, and any savings you have set back. It won’t be an easy task, but it’s important. An excellent way to get started is to draft a will. It can seem like a bleak task, but it’s a sure way to consider everything you own. Nothing works so well for finance and estate planning. Plus, it gives you and your family an easy go to should you need to reassess. And, despite what we like to think, it’s never too early to get started on this!

INSURANCE WHERE YOU NEED IT

Over time, we accumulate homes and belongings. We take great pride in these high-end purchases. But, it’s easy to forget the paperwork as you trundle along. Use this time to get insurance where you need it. Set aside a day in which to work out what you need and how to get it. Home insurance is a must. Chances are, your house is your most expensive commodity. So, make sure you take steps to protect it. It’s also important to insure your expensive belongings. If you spent a lot of money on it, it’s worth paying to protect it. And, don’t forget the most important thing - your life. It’s never too soon to get life insurance quotes. It’s another one of those things we hold back doing. But, the sooner you start to pay into a plan, the more money your family will receive if anything happens. So, get started! You can return to these policies with each cleanup, and reconsider whether you have the best deals. 

LOOK TO THE FUTURE

Of course, getting your finances in order now is well and good, but that’s not all you need to consider. It’s also important to think about your financial future. You’ve already done that in part if you followed the last two steps - life insurance and a will are a big part of this. But, it’s also worth considering your pension. Take this as a time to get a grip on your pension, too. Contact your pension company to find out how much you have, and how your retirement will look if you continue with the plan. If you’re not happy with it, use your new financial knowledge to make a change.

Planning for Retirement

When you’ve worked for the majority of your life, retirement can be a massive change if you’re not prepared for it. The idea of waking up one morning and having nothing to do and no-where to go may seem appealing for a while. Who doesn’t need a holiday? But, after the initial ‘holiday’ period, it can feel like you’re unwanted or unable to achieve anything. Here are some tips on how to emotionally prepare for retirement.

Take Charge

Unless you find ways of keeping yourself active and continuing to develop your skills, you could easily fall into the trap of sitting in the same place every day, doing the same things. Just because you’ve spent your life working in one career, it doesn’t mean you don’t have other things to offer. Now is the time to explore and be creative.

Don’t Hide Away

There may be an initial period where you want to just rest and the make the most of not having to get up in the morning. However, after a certain time it’s important to see people and get involved with things that you enjoy. If you do find that you’re feeling low or you’re getting anxious about going out, you may want to read some tips on battling anxiety and depression.

Start Saving

Do you know how much you’ll be entitled to when it comes to your pension? It’s always a good idea to find these things out, perhaps by using a financial advisor. You may want to start an additional savings account so you can put money away for the luxuries you may not have with your current pension pot. If you’ve been in the military you may want to look into buying back your time.

Join an Exercise Class

Joining an exercise class isn’t something you do for exercise alone. Although the exercise will improve your health and general well-being, it can also be the perfect way to meet friends. It’s something you can carry on with during your retirement if you feel fit enough, and if you don’t you’ve made friends that you can still meet up with when you have more times on your hands.

Plan Things in Advance

If you know there are going to be particular days when you have nothing to do, get things planned in advance. There are plenty of things to do that don’t cost much. Now, more than ever, there are groups for retirees that get together weekly to chat, go on trips or just tuck into some free cake.

Don’t Shy Away from Technology

Technology is advancing every day, and sadly, many retirees don’t take the opportunity to keep abreast of what’s going on. The internet can open entirely new worlds and the latest gadgets can mean you have music, contacts, books and much more at the tip of your fingers. Make sure you have the same access as everyone else, even if you have to learn something new.

With these tips, slipping into retirement should be a breeze.

Your 401(k): Things To Think About

Preparing for retirement is an issue that we need to think about, no matter what our age. Aside from the emotional aspects of no longer going to work all day, there are plenty of financial. Whether you decide to go to college or go straight into building a career, saving for after you finish work is essential. You need to be aware that while the money you make is providing for your current lifestyle, it also needs to provide for you later lifestyle also. Here are some ways to get the best out of your retirement plan.

Remember to look at the 401(k) benefits as part of your job offer

The primary first point is that when you get offered a job, to look at the 401(k) plan as well as other benefits. It can be easy to get lured into what sounds like a lucrative offer with an attractive salary and good healthcare, but bear in mind there is more to the overall package than that. Employers are increasingly upping their benefits plans to stay competitive in the job market and to attract the best employees. For example, your employer may offer to match your contribution up to a certain percentage; this will vary from company to company.

Once you have secured a job with a good plan - take it out!

Once you have secured a job with a good plan - take it out! A point that may resonate with the employees in their 20s and 30s - retirement is a long way off! Retirement age is increasing; you have plenty of time to take out a 401(k) and get financially secure. Right? Right?! No. It is never too early to start planning for your future. It may seem like a long way off when you are 25, but there are a lot of expenses to think about when you are older. As stated, a lot of companies are increasing their healthcare benefits and retirement plans for current employees, but conversely, you will struggle to find a business that includes post-retirement healthcare. You can expect costs of over $245,000 for premiums that come with Medicare, even with Medigap insurance. Also, there is the added benefit of decreasing your state and federal taxes when participating in a plan.

Check the in-depth features

You will probably only get the basic overview of the 401(k) functions before starting at a company. Once you start and commit to the plan, you will get a better idea of what in entails. It’s important to know the basics, so you are aware of what you are dealing with. There has been a lot of legislation, some of it recent, to help safeguard you as an employee when participating in a retirement plan. In light of this legislation, your employer is likely to have consulted a third party, an example being the Carnegie Team, to ensure they do not fall foul of the law. This gives an added layer of protection to you when you sign up.

Overall, it is essential to make sure you have a fund for when you no longer have a steady income. Alongside your retirement plan, you could consider ways to have an emergency fund also, to help on a rainy day.

How to Use a Trust to Reduce Inheritance Tax

After over 40 years of workingyou’re looking forward to your retirement. And why not? You’ve paid your taxes and saved diligently to make sure you’ll live comfortably when you retire. But you’re worried that the taxman may take more than his fair share of your estate when you die. What can you do to prevent this?

One of the best ways to reduce Inheritance Tax (IHT) is to set up a Trust and put some of your cash, investments and property into it. The value of a Trust is deemed to be no longer part of your estate for IHT purposes. But be careful because setting up a Trust can be quite tricky. It’s best to take advice from yourchartered accountant, estate planner or inheritance tax specialists.

If you think your estate might have to pay inheritance tax in due course, then here are a few reasons why setting up a Trust makes good financial sense.

How a Trustcan benefit your IHT exposure

A Trust could be set up to pay for a grandchild’s education, or for the support of a family member who may have a disability, or to help reduce the effects of Inheritance Tax. A Trust is a useful IHT planning tool for the next generation. To understand how a Trust works, let’s look at a typical example.

Here, we have a family where the husband has considerable assets. If he places these assets in trust prior to his death it won’t affect his own IHT liability but it can substantially reduce the amount of tax his widow will have to pay when she dies. The husband can also keep control of his assets while he’s alive.

When the husband’s widow eventually dies, only those assets that have been transferred out of the Trust into her direct ownership are counted as part of her estate and liable for Inheritance Tax. By transferring assets if and only when necessary, it’s possible to keep the widow’s estate below the IHT threshold, even though the Trust may hold a much larger sum.

One of the rules of a Trust states that no potential beneficiary can have an ‘absolute entitlement’ to any of the assets. Instead, all transfers out of a Trust have to be made at the discretion of the trustees and they must all be in agreement.So, when setting up a Trust be very careful who you appoint as trustees. It only takes one person – a stepson or daughter who has a gripe with the widow – to vote against a transfer of funds. It’s recommend that at least two people are appointed as trustees. One of these could be a family member and the other a professional such as a solicitor.

The husband can write a ‘letter of wishes’ to the trustees setting out how he’d like the Trust‘s assets to be dealt with, but because beneficiaries have no absolute entitlement to any assets, the trustees do not have to follow the wishes contained in the letter.Trusts are normally wound up either after two years of the first spouse’s death or when the surviving spouse dies. When this happens, the remaining assets are dealt with according to the wishes letter.

Protect yourself with expert advice

As the rules around IHT exemptions are complicated, it’s best to consult your accountant or solicitor to see how much tax you could save by setting up a Trust. One of the strange things about a Trustis that the Trustitself may, in certain circumstances, have to pay Inheritance Tax, and the trustees, whoever they may be, might be liable to pay income tax at a rate of 45%.

Suffice to say that the rules around Trustareextremely complicated and not to be taken lightly, so don’t be foolish, take advice from a professional in these matters.

Capital Gains Tax (CGT)

If you transfer property into a Trust, be careful because there may be CGT implications. However, CGT does not apply if you establish the Trustin your Will. Speak to your accountant about this.

Life Insurance

One of the best things you can do is take out an insurance policy on your life. This won’t lessen the amount of IHTyour estate may have to pay, but your insurance settlement will definitely make it much easier for your surviving family to pay the Inheritance Tax bill.

The lumpsum amount from the insurance policy could prevent the family home from having to be sold to cover the IHT bill. But if you do take out a policy, make sure the proceeds are paid directly into trust – if you don’t it will increase the size of your estateand as a result more tax will become payable!

This article was written by Dakota Murphey, an independent content writer who specialises in family law.

Becoming Financially Independent From Your Parents

It’s happening later and later than ever before, but at some stage we must all become financially independent from our parents. It’s not fair on them, for a start, but it also holds you back from your own hopes and dreams. If you’ve left it later than you’d have liked to remove yourself financially from them, then go easy on yourself: things have been stacked against you, with bountiful jobs, cheap housing, and all the other benefits your parents enjoyed not being handed down to you. Now’s the time to move forward and become your own person.

Step One: Make the Decision

Nobody can become financially independent over night, but they can begin the journey towards being so. This means making the decision and sticking to it. Talk to your parents about the direction you’d like to go; they’ll feel relief, most probably, but also a determination to help you. From now on, you’ve moving towards being responsible for your own finances. Congratulations, you no longer need to fear what might happen should they lose their job, take a trip to their wills lawyer, or decide to cut you off!

Step Two: Make a Plan

Financial independence is a long game. Make a plan, a realistic one. What is your current financial position? What does the endgame of your road to independence look like? And how long are you going to give yourself to get there? It might be that you’re not yet able to even move out of your parents home, never mind not rely on them for money. But with a clear plan of where you’re going, you’ll be taking a significant and positive step.

Step Three: Budget and Save

Part of becoming an adult is to understand that you have responsibilities: you can’t just spend whatever you like, do whatever you like, and hope to come out on the other side with everything neatly in place. Make a budget for your money: what are your outgoings? Then take a pen and strike a line through anything that can be cut, which should include the luxuries like trips to the pub and eating out at restaurants. You don’t have to be hermit, but you’ll need to think more about where your money is going. Then SAVE the money you’re not spending. We don’t mean for a holiday - we mean for your life! You should aim to put around 15% of your wages into a savings account. Even if that doesn’t seem like much, it’ll soon build up.

Step Four: Long Term Income

The first three steps will set you up to become financially independent, but to make it stick you’ll need to have a reliable source of income, one with which you’ll be able to maintain the standard of life you want for yourself. If you’re already in a career, think about where it might take you in the future: is it secure and well paying enough to set you up? If not, investing some of your savings in further training might be a solution.

How Small Investments in NPS Can Help in Retirement Planning

Improvement in medical aid, health and sanitation facilities has increased the life span of an average Indian, thereby enhancing the number of post-retirement years. A smart investment plan is essential in order to continue to live an independent, comfortable and stress-free life after retirement.

While there are a number of retirement investment options in the market, an attractive scheme is the National Pension System (NPS). Initially, the scheme was mandatory for government employees. However, on May 01, 2009it was made available to the private sector. NPS is a low-cost, tax-efficient, flexible and portable retirement savings plan. Some of the benefits include NPS deduction for tax of INR 1.5 lacs under section 80CCD(1), an additional tax deduction of up to INR 50,000 under section 80CCD(1B) and flexibility to choose asset allocation between equity, fixed income instruments, and government securities.

Pension calculator

Investors may use a pension plan calculator to determine the amount of investment they would have to make. One such calculator is available on the Kotak Mahindra website. This will help individuals understand the amount they would need after retirement to sustain their current standard of living.

NPS for post-retirement corpus

Investing small amounts in NPS at regular intervals helps investors to have access to a substantial corpus after retirement. Starting at an early age has dual benefits. Firstly, investors will have to invest smaller amounts to achieve their desired corpus. In addition, they can enjoy the compounding effect for accumulating moreamounts in their NPS accounts.

NPS Investment rules

Subscribers may contribute a minimum of INR 6,000 to their Tier I accounts with no maximum limit to the annual contribution. They may allow a maximum of 50% in equities and balance must be invested in debt or government securities. On maturity, investors may withdraw 60% of their accumulated sum as a lump sum and convert the balance to an annuity. The NPS tax benefit is not available for the lump sum withdrawal on maturity. Premature withdrawal up to 25% of the contribution (except employer’s contribution) is allowed after 10 yearsand may be used only for certain defined purposes like children education or purchase of a first home.

The highlights of the National Pension System are the tax savings and tax deduction benefits offered to the investors. Each investor is issued a Permanent Retirement Account Number (PRAN), upon successful registration to NPS. Investors are informed of their PRAN number status via email and SMS. Subscribers may also know their status by contacting the issuing bank.

Indian investors look for flexibility, simplicity and robust performance in investment options. The National Pension System (NPS), is one of the few investment options available today, that provides all these features with added advantages of tax saving and additional tax deduction under section 80CCD (1B) of the IT Act.

Retirement Planning: 5 Online Tools You Should Know About

There’s a lot to think about when it comes to retirement planning. Along the way, you’ll need plenty of help from expert sources, and the internet has made this easy for us. It’s filled with plenty of tools (mostly free!) that can help to educate us further. We’ve scoured the internet for some great tools that will come in useful for many retirement planners. Let’s take a look at some of the best ones.

Personal Capital

If you haven’t heard of anything else on this list, you’ve probably heard of Personal Capital. It’s one of the most popular software packages on the market, and it’ll give you a variety of retirement planning tools. Luckily for you, it comes as a free package. It’s also available on mobile devices if you want to manage your retirement plans on the go.

Blueprint Wealth SMSF Quiz

If you haven’t heard of SMSF’s yet, it’s time you started learning about them! Blueprint Wealth offer expert SMSF advice via their online quiz tool. It will analyse whether you’re suitable for getting involved with SMSF’s or not. It takes about thirty seconds to complete, and you can seek additional support if you find that you’re interested.

Military Retirement

This is an iOS app that will come in incredibly handy for anyone that has been involved in the military. It works to inform personnel of their benefits upon their retirement from military service. It’s a comprehensive tool that should provide you with everything you need to know about your retirement plans. It’s also getting fantastic reviews on the App Store, currently holding a 4.5-star rating. If you’ve been involved in military service in the past, this is an app that is definitely worth a download.

The Flexible Retirement Planner

This is a free retirement calculator that comes with a whole host of powerful features. Ultimately, there are plenty of retirement calculators out there, but this one stands out for its depth and intuitive UI. It’s a downloadable application that works on Windows as well as Mac & Linux operating systems. Alternatively, you can launch it via an online browser using a Java interface if you’d prefer. Give it a try and get your hands on one of the best retirement calculators on the web.

Retirement Countdown

OK, so this is a more light-hearted one than the rest of our suggestions. If you’re planning for your retirement, you always want to know how far away you are from that magic date, right?! That’s what Retirement Countdown can do for you on Android devices. Ultimately, it’s an incredibly simple countdown clock. There are plenty of alternative options on the market too, and most of them do the same basic task. Despite their useful nature, if your retirement date is fifty years away, they might be a bit too demoralising!

Of course, we’ve only scratched the surface of what’s out there. You’ll find tools for anything you need when it comes to saving for the future. Who said retirement planning had to be difficult?!

Employers: Never Underestimate the Importance of Retirement Plans

As a business owner, you have a lot of things to worry about. But you shouldn’t let various stresses and tasks allow you to forget about the wellbeing of your employees.

Even the most loyal of your workers won’t be with you forever. At some point, people are going to start retiring. It’s important that you make sure they’re duly compensated for all their time. The threat of retirement isn’t the only reason you should focus on retirement planning, though...

The edge over the competition

A lot of businesses out there don’t really put a lot of focus on retirement plans. This can give you an automatic edge over them if you are engaging with retirement plans. However, you shouldn’t allow yourself to become overconfident because of this. You need to remember that larger companies have entire departments dedicated to retirement planning. Smaller businesses need to pull out all the stops to compete!

Retirement plans as perks

A good retirement plan is often seen as a great “perk” of a company. This is prevalent in the US, where it’s considered up there with health care and dental plans. (Of course, most of the world isn’t as primitive as to force taxpayers to rely on their jobs for such things!) Elsewhere, they’re considered an essential part of any good employment package. Retirement plans shouldn’t be treated as rare benefits, like extra days off or gym memberships.

Your contribution

Where you are in the world will often determine how much you need to contribute to an employee’s retirement fund. It will also determine how you do it. Wherever you are, it’s vital to understand this information. If you don’t get to grips with the contributions you need to make, then your employees may suffer for it. It’s essential that you’re making correct contributions. Many employers work with companies who can help them manage this sort of thing. Such companies include NSF Super.

Helping employees understand

Of course, if it’s only you who understands how the retirement plans work, then that’s a little unfair! In many companies, the retirement planning is actually incredibly one-sided. Employees may be left in the dark about the whole thing unless they actively seek information. You need to ensure that your workers know exactly how these plans will affect their future finances. Because that’s what we’re dealing with here, after all: their future safety and comfort! If possible, you should be allowing them access to retirement planning tools.

The golden handcuffs

Retirement plans are often seen as a great way of seducing people towards working for you. But they’re also a way to encourage employees to stay on at your company. Financial allurements such as this are often referred to using the phrase golden handcuffs. They reduce turnover, helping prevent employees from jumping ship to another company. However, the implication with the word handcuff is that these things are the only things keeping an employee at your company. Reducing turnover should be a priority, and retirement plans help do that. But an employee should want to stay because they feel valued and enjoy their job. Don’t just rely on these sorts of benefits to keep employees put!

5 Ways to Boost Your Retirement Savings

It’s never too early to save for retirement. In fact, the earlier you start saving, the better as current information regarding US Social Security raises multiple questions regarding the program’s solvency for future retirees. Thus, it’s up to you to take responsibility for your future and start saving now.

Here are 5 Ways to Boost Your Retirement Savings:

1. Create a Budget and Set a Goal

There’s more to retirement than mindlessly stashing money away in a savings account to which you pay little attention. Create a plan for your retirement by creating a monthly budget and settinggoals. Start by asking yourself where you want to be financially when you reach retirement age, and then educate yourself on the best way to achieve those goals.

2. Start an IRA

Individual retirement accounts are perfect for any individual looking to start their retirement savings, and you have the option of either a traditional IRA or a Roth IRA to choose from. Each have their benefits, and a certified financial advisor can help you decide which one is right for you. What’s more, you can roll over any retirement savings you have from old jobs into these retirement accounts so that your money continues performing for you.

3. Participate in Your Employer’s 401K

If you aren’t participating in your employer’s 401K plan for retirement, you should be. Many employers offer these plans with matching contributions. Every pay period, you put a percentage of you paycheck into the savings plan and your employer matches your contribution. Keep in mind, however, that employers typically require a minimum amount with regards to your contribution in order for them to start matching, so find out what that is and take advantage of it.

4. Cut Needless Costs to Your Lifestyle

If you are sufferingcrushing debt from multiple bills, this can severely disrupt your ability to cut costs in the long run. As such, there are ways you can consolidate you debt and eliminate needless expenses. In fact, some loan institutions offer you the ability to receive a 2000 cash loan to help you combine you debt so that you only need to focus on one bill a month. Remember, however, this is a loan. The faster you are able to pay it off the better so you can free up cash for retirement.You don’t want to wind up in an endless cycle of debt. Find where to cut expenses in your budget, and start cutting. 

5. Apply for a Better Paying Job

Applying for a better paying job offers you the chance of more cash to stash away in retirement savings. If you have years of experience in a field that can transfer over into a better paying job, take advantage of the opportunity.

Overall, remember: be resourceful when it comes to saving money. There are many ways to boost your retirement fund, and the above list is just a small sample of what you can do.

Other Options That Are Available to get finances

Annuities: These are insurance policies that offer payments at fixed intervals or lump sum at the time of retirement.

Stocks & Mutual Funds: You can choose to invest in many company stocks, however this needs skills as the high probability of great returns is accompanied by high risks too. When one is not very confident about able to manage the trading it is best to enter the market through borrowers funds. These are managed by professionals and the risk associated is lower too.

Bonds: These debt instruments are securities in which the investor lends to a corporation or the government for a certain interest payment and there is a guarantee of the repayment of the bond’s face value.

Cash Instruments: There are many low-risk and relatively short-term options like CDs, that offer fixed rates of interests.

DRIPs: These Direct Reinvestment Plans involve reinvesting the returns or dividends to buy more shares of that corporation.

Exchange Traded Funds - ETFs are traded on stock exchanges and offer unique investment options. 

Whatever instrument you may choose to plan out your retirement benefits as early as possible. This is because you’ll have more time to achieve your savings goal and hence can explore a greater variety of investment tools and more time to recover losses, if any and of course, you can compound your saving by reinvesting your returns. This is most useful when you have a good amount of time available at your end.

Calculate & Save

Most people do not pay attention to their expenditure or their cash flows or do not have any understanding of where they are headed to. One can start by making an assessment of your net worth. This can be found out by deducting your liabilities (what you owe) from your assets (valuables that you own). The difference amount between your liabilities and assets gives a clear indication of your net worth and give you a clarity of goals after factoring in your net worth.

Therefore it’s best to set yourself a specific goal or you’ll never be able to meet the same. When this is missing neither will your efforts remain directed or measurable nor will you find enough motivation to keep up your savings and make the right decisions. You may even think of writing down a SMART (specific, measurable, attainable, realistic and time bound) retirement goal for yourself. You may want to define your retirement age, your financial aspirations like where you’d like to live, how much you’d like to spend, post your retirement. This will all add up to a figure which you’ll be chasing to achieve.

Don’t Let Emotions Guide Your Financial Decisions

You may not even realize the extent to which emotions can guide your decisions even when investments are concerned. When your investments are doing well you tend to be overconfident and often overlook the risk factors and end up making bad decisions. And when the investments aren’t performing, you’ll probably be risk averse and avoid even attractive and may not make enough money over a period of time.

Therefore, as far as your investments go, it’s best to keep your emotions in check and take a very realistic and dispassionate look at the opportunity and remember that there will be a risk element and not all will be performing at the same level. Keep your portfolio balanced to mitigate the risk.

The other important factor to look out for is the fees that you pay. These are the charges attached to the investment options and often eat away your profits, reducing your investment’s attractiveness. These may come in the form of Administrative charges, transaction fees, loads etc.

Start Now, if Still Unsure, Ask an Expert

Think about it truthfully, are you postponing your retirement savings just because you are not too sure of the ways and options? Then it is best to contact a professional and get the necessary help at the soonest. You may even decide to do some research or pursue an educational course to get your knowledge and skills updated.

Whatever way you may choose, as has been reiterated, the essence is to start as early as possible. This will give you enough time to plan for a comfortable after retirement life for your family and even give you some cushioning against life’s unpredictable twists and turns!