Are you already on your 30s? Have you ever thought about early retirement planning? Well, many people find early retirement planning as not a very much important factor to consider in life. They tend to overlook everything that is related to it thinking that they are still young and retirement is still a long way to go. But the truth of the matter is, early retirement planning plays a very critical role in someone’s life. It’s not a good idea to work until you age and die, after all. Aside from that, planning for your early retirement allows you to enjoy everything that life has to offer even after you leave from the work force. It prepares you for everything that will happen in your life after retirement.
However, early retirement planning is not an easy process. As the word “planning” implies, there are a lot of things to be considered, including your savings, your assets, your family, and everything that can be affected. It is basically here where the importance of planning properly comes in.
So, how to plan properly for early retirement?
As far as I know, the most important move to take when thinking about early retirement is to consider first whether you are already financially stable or not. Yes, money greatly counts and this is due to the fact that when you retire, you are leaving one of your best sources for living – your work. So in early retirement planning, it is necessary to think how much you need to save for your life after retirement, how to invest, how much money the retirement plan you want will require, and what changes in terms of financial matters you need to make in your preparation.
This is simply about financial planning.
But there is more to early retirement planning than focusing on the financial aspects. Money is not the whole story, after all. In fact, there are some retirees out there who have retired with enough money on their pockets, but they don’t have a better health. They find themselves immobile and incapable of doing something great for their families at all. It is so sad, but true and I find it a result of not having proper early retirement planning.
So when considering retirement, it is important also to look at how you want to live after retirement. Look at your future condition. What are you goals? Do you find yourself enjoying a second career after your early retirement? In what way you’d like to spend your time after retirement? Consider all of these things and make sure that you’ve maintained a healthy lifestyle even after you retire. There are a lot of options for you to do, after all. So make use of your choices and enjoy what life has to offer. Consider this as part of your early retirement planning and you’ll surely obtain a good life after you leave the work force.
Milos Pesic is a successful webmaster and owner of popular and comprehensive Retirement information site. For more articles and resources on Retirement related topics, Retirement Plans, Retirement Communities, Individual Retirement Accounts and more visit his site at:
=>http://retirement.need-to-know.com
Article Source: http://EzineArticles.com/?expert=Milos_Pesic
Thursday, April 30, 2009
Saturday, April 25, 2009
Early Retirement - What About Your 401k?
So, why the push for early retirement? It is most common in the auto industry. Many American manufacturing companies are barely able to stay afloat. They need to trim costs. One of the easiest ways is with layoffs. Unfortunately, the workers costing these financially strapped companies the most money are those who have been with the company the longest. Most are in their 50s. If you are one of those individuals, your employer may suggest early retirement or push for it. Yes, early retirement does sound nice, but is it right for you? What happens to and how does this influence your 401k plan?
First, take your age into consideration. Most individuals wait until they are between the ages of 60 and 65 to retire. This is when most can dip into their 401k plans, Individual Retirement Accounts (IRAs), and collect Social Security. If you are 52 years old, you may have planned to work at least 8 more years. 8 years is a long time. Your plan was to work these years. You anticipated having steady income and more additions to your retirement accounts, like your 401k.
One of your options is to take an early withdrawal from your 401k plan. Unfortunately, you will be charged penalties. There is 10% charge for early withdrawals. The money in a 401k is tax sheltered, until used. For that reason, you will not only be charged an early withdrawal fee, but you must pay taxes on that money. How much does that leave you? A 10% early withdrawal fee may not seem like much, but it is money you are losing. Most importantly, since you are considering early retirement, you need to account for those added years. Remember, your plan was to work until 60 years of age. That leaves 8 years of life financially unaccounted for. How will you survive? You better know before accepting an offer of early retirement.
An employer can suggest early retirement, but you have the option to deny that request. However, the offer was made for a reason. As an older, long term worker, you are costing your company money. You are paid more than recently hired employees. If you do not accept early retirement, you may still find yourself in the unemployment line. This does however give you the opportunity to find a new job. If your new employer offers 401k and has a solid program, you can do a rollover. Your funds and investments will switch hands. Continue working until you reach your planned retirement age and live off your retirement without the added risks and penalties.
If you find yourself faced with unemployment or early retirement, take a step back and look at the situation as a whole. Learn more about self directed IRA LLC and self directed 401k at mywayira.com
Article Source: http://EzineArticles.com/?expert=Kurt_Naulaerts
First, take your age into consideration. Most individuals wait until they are between the ages of 60 and 65 to retire. This is when most can dip into their 401k plans, Individual Retirement Accounts (IRAs), and collect Social Security. If you are 52 years old, you may have planned to work at least 8 more years. 8 years is a long time. Your plan was to work these years. You anticipated having steady income and more additions to your retirement accounts, like your 401k.
One of your options is to take an early withdrawal from your 401k plan. Unfortunately, you will be charged penalties. There is 10% charge for early withdrawals. The money in a 401k is tax sheltered, until used. For that reason, you will not only be charged an early withdrawal fee, but you must pay taxes on that money. How much does that leave you? A 10% early withdrawal fee may not seem like much, but it is money you are losing. Most importantly, since you are considering early retirement, you need to account for those added years. Remember, your plan was to work until 60 years of age. That leaves 8 years of life financially unaccounted for. How will you survive? You better know before accepting an offer of early retirement.
An employer can suggest early retirement, but you have the option to deny that request. However, the offer was made for a reason. As an older, long term worker, you are costing your company money. You are paid more than recently hired employees. If you do not accept early retirement, you may still find yourself in the unemployment line. This does however give you the opportunity to find a new job. If your new employer offers 401k and has a solid program, you can do a rollover. Your funds and investments will switch hands. Continue working until you reach your planned retirement age and live off your retirement without the added risks and penalties.
If you find yourself faced with unemployment or early retirement, take a step back and look at the situation as a whole. Learn more about self directed IRA LLC and self directed 401k at mywayira.com
Article Source: http://EzineArticles.com/?expert=Kurt_Naulaerts
Tuesday, April 21, 2009
Early Investor Earns Early Retirement
Time is the greatest ally that an investor could ever have. As an investor, you will make most of your money through compounded interest and the earlier you start, the more compound interest you can earn.
Let's look at an example. For this example we are going to assume that two different people can both start investing at 12% interest for a continuous period of time. The first person, Charles, is going to start investing $2,000 per year at the age of nineteen until he is 27, at which point he will stop adding to his investment. The second person, William, is going to wait until he is 27-years old before he starts investing his $2,000 per year. Although, William will be continuously adding $2,000 per year to his investment until he is the age of 65.
So, Charles has a total investment of $16,000 (2,000 per year for 8 years) and William has a total investment of $78,000 (2,000 per year for 39 years). However, by the time both investors reach the age of 65, Charles will have $2,288,996 and William will only have $1,532,166. This is a difference of $756,830!
However there is a tradeoff. $2,000 per year is a lot more money to a 19-year-old than it is to a 27-year-old. But if you can afford to invest $2,000 per year, you should. Even if $2,000 per year is outside of your budget, investing any amount you is better than investing nothing.
The reason that Charles made so much more money from his investment is solely because he started investing eight years before William. Charles earned eight years more compounded interest with his investment. Furthermore, it would take more than a lifetime for William's investment to catch-up. This is just a simple example explaining the overwhelming benefits that an investor can utilize by starting early.
Nick Tart is the editor of four main sites for Worldwide Marketing Solutions. One of which is Home Income News. HomeIncomeNews.com is a one-stop resource to will help you accomplish your personal, financial goals. Please check out HomeIncomeNews.com if you enjoyed reading this article.
Article Source: http://EzineArticles.com/?expert=Nick_Tart
Let's look at an example. For this example we are going to assume that two different people can both start investing at 12% interest for a continuous period of time. The first person, Charles, is going to start investing $2,000 per year at the age of nineteen until he is 27, at which point he will stop adding to his investment. The second person, William, is going to wait until he is 27-years old before he starts investing his $2,000 per year. Although, William will be continuously adding $2,000 per year to his investment until he is the age of 65.
So, Charles has a total investment of $16,000 (2,000 per year for 8 years) and William has a total investment of $78,000 (2,000 per year for 39 years). However, by the time both investors reach the age of 65, Charles will have $2,288,996 and William will only have $1,532,166. This is a difference of $756,830!
However there is a tradeoff. $2,000 per year is a lot more money to a 19-year-old than it is to a 27-year-old. But if you can afford to invest $2,000 per year, you should. Even if $2,000 per year is outside of your budget, investing any amount you is better than investing nothing.
The reason that Charles made so much more money from his investment is solely because he started investing eight years before William. Charles earned eight years more compounded interest with his investment. Furthermore, it would take more than a lifetime for William's investment to catch-up. This is just a simple example explaining the overwhelming benefits that an investor can utilize by starting early.
Nick Tart is the editor of four main sites for Worldwide Marketing Solutions. One of which is Home Income News. HomeIncomeNews.com is a one-stop resource to will help you accomplish your personal, financial goals. Please check out HomeIncomeNews.com if you enjoyed reading this article.
Article Source: http://EzineArticles.com/?expert=Nick_Tart
Sunday, April 5, 2009
Small Business Retirement Plans
Small business retirement plans are an ideal way for employers to retain employees and also set up a retirement account for themselves. The simplest retirement plan is the Simplified Employee Pension (SEP) plan. Though it is designed for self-employed individuals, partnerships, sole proprietors and independent contractors, other businesses are also eligible for the plan. A SEP plan requires the least amount of paperwork. Employers can establish a SEP plan only if they do not have any other qualified retirement plan in effect.
An employer is required to open an individual retirement account (IRA) for each eligible employee and make contributions to their accounts. The employer is responsible for funding the entire contribution. The employer may make a contribution of up to or lesser than 15% or $30,000 of compensation to the IRAs established in each employee's name. This arrangement is also known as a SEP-IRA.
Contributions to this account may be withdrawn or transferred by the employee at any time. These accounts are subject to all applicable IRA rules regarding transfer, withdrawal and taxation.
The Savings Incentive Match Plan for Employees (SIMPLE) was established by the Small Business Owners Protection Act of 1996. Employers that do not have any other retirement plan and have 100 or fewer employees, with at least $5,000 in compensation for the previous year, are eligible to set up a SIMPLE.
SIMPLE may be structured as an Individual Retirement Account (IRA) or a 401(k) plan.
Contributions are vested with the employee, and deposits and earnings in the account, accumulate tax free until withdrawn. Distributions from SIMPLE are taxed just as those from an IRA. SIMPLE plans are not eligible for transfer to other qualified retirement plans.
A Keogh or HR 10 plan is a tax-deferred retirement savings plan for sole proprietors or partnerships. Under this plan, all contributions are deducted from the gross income of an employee. In case of a net loss due to self-employment, no contribution for oneself can be made for the year. All taxes are deferred until the funds are withdrawn. The contribution limits as stipulated in a HR 10 plan are more liberal than Individual Retirement Accounts.
Small business retirement plans have been designed to enable employees of smaller organizations to save for their retirement.
Retirement Plans provides detailed information on Retirement Plans, 401K Retirement Plans, Small Business Retirement Plans, Retirement Plan Services and more. Retirement Plans is affiliated with Individual Retirement Account Withdrawals
Article Source: http://EzineArticles.com/?expert=Peter_Emerson
An employer is required to open an individual retirement account (IRA) for each eligible employee and make contributions to their accounts. The employer is responsible for funding the entire contribution. The employer may make a contribution of up to or lesser than 15% or $30,000 of compensation to the IRAs established in each employee's name. This arrangement is also known as a SEP-IRA.
Contributions to this account may be withdrawn or transferred by the employee at any time. These accounts are subject to all applicable IRA rules regarding transfer, withdrawal and taxation.
The Savings Incentive Match Plan for Employees (SIMPLE) was established by the Small Business Owners Protection Act of 1996. Employers that do not have any other retirement plan and have 100 or fewer employees, with at least $5,000 in compensation for the previous year, are eligible to set up a SIMPLE.
SIMPLE may be structured as an Individual Retirement Account (IRA) or a 401(k) plan.
Contributions are vested with the employee, and deposits and earnings in the account, accumulate tax free until withdrawn. Distributions from SIMPLE are taxed just as those from an IRA. SIMPLE plans are not eligible for transfer to other qualified retirement plans.
A Keogh or HR 10 plan is a tax-deferred retirement savings plan for sole proprietors or partnerships. Under this plan, all contributions are deducted from the gross income of an employee. In case of a net loss due to self-employment, no contribution for oneself can be made for the year. All taxes are deferred until the funds are withdrawn. The contribution limits as stipulated in a HR 10 plan are more liberal than Individual Retirement Accounts.
Small business retirement plans have been designed to enable employees of smaller organizations to save for their retirement.
Retirement Plans provides detailed information on Retirement Plans, 401K Retirement Plans, Small Business Retirement Plans, Retirement Plan Services and more. Retirement Plans is affiliated with Individual Retirement Account Withdrawals
Article Source: http://EzineArticles.com/?expert=Peter_Emerson
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