Financial Planning, Retirement Plan, 401k, Investment Blog

Financial Planning, Retirement Plan, 401k, Investment Blog

Retirement Planning

3 Benefits of a Roth IRA

Posted October 14, 2008 by Bernz

What’s a Roth IRA? It’s an individual retirement arrangement (aka retirement savings account) you fund with after-tax dollars. The money you contribute goes into your account and continues to grow without you having to pay any tax related costs. In other words, when the time comes for you to make a withdrawal, every cent you take out goes back into your wallet.

Part of what makes Roth IRAs so appealing is its tax-friendly quality. But there are 3 major benefits of a Roth IRA:

• You can contribute money regardless of your age and for as long as you like

• You can leave the money in the account without having to make minimum monthly withdrawals (something you must do with traditional IRAS)

• You can withdraw money whenever you want for any reason (but if you’re younger than 59½ you’ll face early withdrawal penalties unless you can prove you have a qualifying reason such as college tuition, medical expenses, or a first-time home purchase).

Thinking of starting a Roth IRA? If so you’ll need to make sure you meet these taxable income guidelines:

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With total stock market indexing your investment goes a long way

Posted October 13, 2008 by Bernz

Want an easy investment approach? By easy I mean the cut-to-the-chase, one-stop-shopping approach, where you get a heavy mix of all stock styles and size categories.

I’m referring to total stock market indexing. It’s a single-product approach to investing that allows you to invest in the entire stock market all at once. If owning a sizeable chunk of the market and having the opportunity to achieve long-term sustainability excite you then you’ll also appreciate these other 4 advantages of total stock market indexing give you right from the start.

1. Effortless and broad diversification. This helps protect your portfolio from risks because your “investment eggs” are placed in more than one basket.
2. You save time. The simplistic structure eliminates monitoring and managing complex portfolios that contain many stocks from various sectors. You get a clear, understandable view of your portfolio at any time.

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3 Step Retirement Planning

Posted October 11, 2008 by Bernz

Better retirement planning begins with understanding the basics. Now that you’re aware of a few things you can do to start saving and generating more income. Here are 3 easy steps to determine how big your retirement fund will need to be.

1. Determine how much money you will need to maintain your current lifestyle. It helps to also consider what luxury items and activities you will be willing to part with in case your nest egg comes up short.

2. Project your income. Include social security, pensions, annuities, other personal investments as well as any potential earnings from a part time job, consultant fees, or other miscellaneous income streams. Find out the amount you can expect to receive in Social Security income here.

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Are you a late saver? Try these 4 tips to rev up your retirement fund

Posted October 10, 2008 by Bernz

1) Sum it all up.

Calculate your spending for all of your major monthly expenses. The easiest way to do this is through online banking. Just go through the past 3 months of your online statements and total expenses for food, medications, mortgage and housing expenses, transportation, and credit card payments. Estimate how much “walking around money” you can get by on and then cut that amount 25%.

If you don’t bank online consider doing so—even if you use a credit union—this way you have a quick and easy way to track and calculate spending.

2) Create additional income sources.

If you already work full-time, find out if over-time pay is an option. Also think about what skills in your current job you can use to start an online business. Jobs like virtual assistants, editing, and tutoring have very little overhead and are easy to start up.

Perhaps you have a hobby that can bring in additional earnings. Are there books, tools, or vintage clothing that you can sell online through eBay, Amazon, or other online auctions? You could also make anywhere from $50 to $200 just by participating in focus groups. Find these opportunities on Craigslist or a keyword search “focus group companies”.

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