how to-plan-your-retirement-successfully

How to Plan Your Retirement Successfully

How to Plan Your Retirement

Successfully!

Brought To You By Master Trader

http://mastertrader.online/tms_harmonics_ph/

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Table of Contents

Chapter 1 – What is Retirement Planning? ....................................................... 4

Chapter 2 – How to Start Your Retirement Plan .............................................. 6

Setting Goals ................................................................................................. 7

Creating a Budget ......................................................................................... 7

Members of your Family .............................................................................. 7

Keep to the Plan ............................................................................................ 8

Chapter 3 – How to Choose Your Retirement Investments .............................. 9

Choices for the Short Term ........................................................................... 9

Choices for the long term ............................................................................ 10

Chapter 4 – Comparing Roth and Traditional IRAs ....................................... 12

Yearly Limits for Individuals...................................................................... 12

Roth vs Traditional ..................................................................................... 12

Chapter 5 – About The 401K .......................................................................... 14

What the 401K is ........................................................................................ 14

How to Balance a 401K .............................................................................. 16

Chapter 6 – Making The Most Of Your 401K Plan........................................ 18

Chapter 7 – The History Of Annuities ............................................................ 21

Chapter 8 – Take time to Review Your Retirement Plan ............................... 23

Chapter 9 – Is Retirement What You really Want? ........................................ 25

Chapter 10 – Whether to Work Full Time, Part Time, or Retire .................... 27

Chapter 11 – How Will Having A Job Affect My Retirement Income? ........ 28

Chapter 12 – Ways to Help You Prepare for Retirement ............................... 30

Chapter 13 – Your Retirement And Debt ....................................................... 35

1. Your Budget ........................................................................................ 35

2. Your Credit Cards ............................................................................... 35

3. Contribute Extra .................................................................................. 36

4. Bonuses from work ............................................................................. 36

5. Keep to the plan .................................................................................. 36

Chapter 14 – About Early Retirement ............................................................ 38

The early retirement package ...................................................................... 38

Should you take an early retirement package? ........................................... 38

Health Insurance ......................................................................................... 38

Life Insurance ............................................................................................. 39

Your Pension ............................................................................................... 39

Your Bottom Line ....................................................................................... 39

Chapter 15 – Full Retirement Age According to Social Security ................... 40


Chapter 16 – Retiring With Only A Social Security Income.......................... 41

Chapter 17 – What To Do Just Before You Retire ......................................... 43

Chapter 18 – Is Retirement Coaching For You? ............................................. 44

What is a retirement coach? ........................................................................ 44

What a retirement coach does not do .......................................................... 44

How to choose a retirement coach .............................................................. 45

Chapter 19 – Retirement Plans For Self Employed and Small Business

Owners ............................................................................................................ 46

The simple IRA ........................................................................................... 46

Payroll Deduction IRA ............................................................................... 47

Chapter 20 – How to make the change from work to retirement.................... 48

Chapter 21 – How To Be Happy After Retirement ........................................ 51

1. Do your planning early ....................................................................... 51

2. Consider your options ......................................................................... 51

3. Include your spouse ............................................................................ 51

4. Retirement and your health ................................................................. 52

5. Keep up the good work ....................................................................... 52

6. Don’t let yourself get depressed ......................................................... 53


Chapter 1 – What is Retirement

Planning?

Retirement planning is a way to insure that you will have enough

income to live comfortably when you retire. Most people will be retired

25 years or more, and careful planning is the key to successful

retirement. Why would you want to have bill pressures and mortgages

when all you really want to do is relax, or follow that dream of traveling

the country in an RV?

There is always Social Security, and you may have a pension, but will

this be enough for you to retire comfortably? Do you plan on staying in

your present home, or will you be moving? Do you plan to travel?

These are only a few of the questions you will need to ponder when

you prepare for your eventual retirement.

You will need to begin retirement planning as soon as you can. When

you are young and taken by raising a family, it is difficult to think ahead

toward retirement at first. However, this is the time to look into a 401K

or a pension plan where you work and put as much as possible into

these from every pay check. You need to start investing something

toward your retirement. The investment can also be in IRAs, stocks,

bonds, mutual funds, money markets, or other investments of your

choice. Set aside an amount every week that is strictly for investment.

Make this a habit and not be tempted into spending it.


If you have just started thinking about a retirement plan, and you are

an older individual, there are ways to make up for the years gone by.

While it is always better to start when you are young, making good

investments now, may gain enough money for you to retire

comfortably. Find a reputable broker and discuss what you will need to

reach your goals. When the plan is finalized you will need to stick to it

faithfully.

The amount of retirement income you end up with will be the amount of

money you will need to live with during your retirement. If it is not

enough, you may not be able to do much traveling or make any of your

retirement dreams come true. You really need to plan wisely for

retirement.


Chapter 2 – How to Start Your Retirement Plan

There is more to retire planning than putting money into a 401K,

having a pension plan, or opening an IRA. This is a great place to start,

but you need to plan for all of the years you will not be working. You

may be retired for more than 30 years and the effort you put into

planning your retirement, the better off you will be.

You can begin retirement planning at an early stage of your life, or you

may need to start a bit later in your work career. Whatever your age

may be, you will need to put together a plan for your retirement.

Starting at an early age will give you more time to build investment

portfolio for your retirement.

After you have your investments set, you will need to monitor the

investments with your financial advisor or broker. You will also need to

set up tax shelters so that you are not swamped with taxes when you

retire.

Starting a retirement plan is the hardest part. It becomes easy for us to

think about retirement as an event that is far away, and put off planning

for it. It is good to remember that the years will pass by quickly and you

will find you are faced with retirement just around the corner. This

could cause a loss of thousands of dollars for you. This amount could

be the difference barely getting by and being comfortable when you

retire. When you are between the age of 20 and the age of 40, you are

very busy buying your first house, furniture, a car, and thinking about

sending your kids to college. You may feel as if you are not able to put

any money into a retirement plan during this time. Know that even a

small amount of money, invested wisely, could make a big difference.


Setting Goals

Now that you have decided to plan for retirement, where will you

begin? Whatever goals you set, you will need a certain amount of

money to accomplish them. You actually need a plan that will cover

your retirement for 30 or more years. You need to figure how much

money you will need when you retire.

Creating a Budget

If you don’t already have a budget, you will need to create one. To do

this you will need to keep track of your monthly spending. Begin by

keeping a journal of every penny you spend for three months in a row.

When you look back at this, you will see how you have been spending

and where you can cut expenses. Then you will be able to manage

your budget in a better fashion. When you make out a budget you will

need to include a payment to your retirement plan, even if it is just a

few dollars.

Members of your Family

Talk about your plan for retirement with your spouse and other family

members. Both you and your spouse will probably retire around the

same time, so you will need to make your plan together. When both

partners have a career, they will both probably be putting money into a

retirement plan. Sit down together and develop a plan that you both

agree on.


Keep to the Plan

You may be tempted to take money out of your retirement funds. If this

happens you will not have enough money for your retirement. The

budget you have put together should cover all of your expenses, if not

maybe you should figure your budget again. You may be confusing a

need with a want. You may be spending money on things that you do

not really need. Before you take anything out of your retirement fund,

decide whether it is necessary to purchase this item. You do not need

to go without everything, just judge how much you really need

something and spend wisely.


Chapter 3 – How to Choose Your Retirement Investments

When you begin to put a retirement plan together, you will be faced

with many investment choices. The age you begin your retirement plan

will be the key to what these choices will be. If you are between 20 and

35, you have a bit more time to look over options. Between the ages of

35 and 50, you still have time to build a retirement fund that will allow

you to live comfortably, but you will need to choose your investments

very carefully.

Choices for the Short Term

When looking at short term investments, you will be looking at several

choices. Savings accounts, checking accounts, certificates of deposit,

and money market funds, are short term investments.

With a checking account you will be able to deposit and withdraw

money. A checking account you also have access to ATMs and can

arrange to have your bills paid automatically. Money markets accounts

can be checking accounts, and will pay a small interest rate as long as

a set balance is kept in the account. These funds are insured by the

FDIC.

A savings account will pay a small interest rate on your funds, and your

money is available when you need it. You can also set up a plan where

your bills can be paid automatically and taken from your account. This

money is also insured by the FDIC.


When you open a money market account, you will realize a higher

return than with a savings or money market checking account. Money

market accounts are usually managed by a broker as a way to store

money until it is invested. These funds are not usually insured by the

FDIC.

A certificate of deposit is a way to invest money for a set period of time

until they mature. The longer the time money stays in the account, the

higher percentage of interest it will earn. A penalty is enforced if money

is withdrawn before the certificate matures. These funds are insured by

the FDIC.

Choices for the long term

Long term investments are for those who have money to save that they

will not need to use. This is a good choice for a retirement plan.

Stocks, bonds, and mutual funds, are all long term investments.

Investing in a stock will give you a partial ownership in the company

you choose. When the company is successful, you will make money

when you decide to sell the stock. Some companies pay dividends on

investments at regular intervals. You will usually need to consult a

broker to purchase company shares. It is always important to research

the company you are thinking of investing in thoroughly. It is best to

hold onto stocks for a long time as there are fees when buying or

selling, and the tax implications that will apply. Bonds are usually safe

investments and are often backed by the federal government.


Mutual funds will let small investors have more choices than they

would have when investing on an individual level. The money from

several investors is invested in different companies so that the risk is

minimized. The strategy in this type of investment is to assure that a

profit is made from some of the businesses so that if one should fail,

others will still do well. You should really research where your money

will be going and what kind of track record the businesses have had in

terms of gains before investing.


Chapter 4 – Comparing Roth and Traditional IRAs

An Individual Retirement Account or IRA, is a retirement plan that will

allow you to save a part of your earned income every year. Those over

50 can contribute a bit more. Anyone can open an IRA as long as they

have earned income for the year that is at least the amount they will

contribute. There is a limit to the maximum amount you can put into the

IRA, and those over 50 can put in additional funds. This is so they can

catch up with the money they want for retirement, in the case that they

waited until they were older to start a retirement plan.

Yearly Limits for Individuals

For the 2006– 2007 tax years, the maximum amount for those under

50 was $4000, and for those over 50 the maximum amount was

$6000. The 2008 tax year will see these amounts go up by $1000 for

each age group. Married couples can both contribute to an IRA even

though one of them had no earned income for the year as long as the

working partner makes enough to cover the IRA contributions for both

of them.

Roth vs. Traditional

The two most common types of IRAs are the traditional IRA and the

Roth IRA. All earned interest, capital gains, and dividends are tax

deferred until the money is withdrawn with the traditional IRA. With the

Roth IRA the same is true, only if you meet certain requirements.


A traditional IRA is an individual savings plan. Money invested in the

traditional IRA, and the interest earned, are subject to income taxes at

the time of withdrawal. Money can be withdrawn without penalty once

you are 59 1/2 years of age. You must begin withdrawing from your

account when you are 70 1/2 years of age.

The Roth IRA is also an individual savings plan, for the most part.

Individuals are able to contribute up to the limit, but this money will not

be tax deductible as it is on a traditional IRA. You can begin

withdrawing funds at the age of 59 1/2, as long as the funds have been

in the IRA for at least 5 years. This IRA differs from the traditional IRA

in that you can continue contributing even after you are 70 1/2 years of

age.


Chapter 5 – About The 401K

There are many people contributing to a 401K retirement plan who do

not understand how the plan works or exactly what a 401K is. Many

companies offer a 401K retirement plan, which gives you an

opportunity to select investments available for your investment and

what percentage of your wages you wish to invest. This investment will

be deducted form your paycheck before taxes.

Each employee is allowed to contribute up to a set percentage of their

wages to a 401K and many times an employer will match your

contribution, or a percentage of what you put in. These funds cannot

be touched until you reach the age of 59 1/2. With each withdrawal you

will need to pay any income tax on the amount. You will be exempt

from taxes while the money is in the 401K. You can withdraw money

from the 401K at a younger age, but you will need to pay a penalty with

each amount you withdraw and pay the taxes.

What the 401K is

A 401K is a retirement plan that is sponsored by an employer and falls

into two categories, defined benefit and undefined benefit. The defined

benefit 401K, is a plan where the employer makes a commitment to

pay a predetermined amount to those who meet certain requirements.

This plan defines the amount of contribution an employer may make

and does not define the benefit amount the employee will receive at

the time of retirement.


A defined benefit plan uses the benefit amount and the amount of

service, and is based on average salary. It is easier to figure out the

amount of monthly income the employee will receive when they retire.

There may be a choice of taking a lump-sum instead of monthly

payments.

The defined contribution plan is not defined. A monthly benefit cannot

be predicted at retirement. If an employee decides to leave the

company, they will usually receive the amount in the plan in a deferred

or current annuity or lump sum.

The company can not touch the money in the 401K. If the company

should file bankruptcy, and you have money in a 401K that is invested

in their stocks, You will probably loose that money.

How Can I Fix My 401K Balance?

If the balance on your 401K doesn’t seem to be going anywhere, you

may need to take a closer look at how your money is being invested. If

most of your contributions are in the stock of the company you work

for, you may need to change this and move some of the money to

other available investments. You may also want to change the amount

of your contribution to make the most of contribution limits. It may be

wise to contribute the maximum amount to your 401K every year, as

these limits usually raise yearly. How old you are and the policy of your

company will be the deciding factor in the amount you should be

contributing to your 401K. Those who are over 50 will have less time to

fix their retirement plan than a person of 30.


How to Balance a 401K

There are three life cycles or stages that dictate how you will contribute

to a retirement plan.

1. Aggressive: For people with more than 35 years before

retirement.

50% – Large Cap Stocks

15% – Bonds

15% – Mid Cap Stocks

10% – International Stocks

10% – Small Cap Stocks

2. Moderate: For people with about 20 years until they retire.

35% – Bonds


10% – International Stocks


10% – Small Cap Stocks

3. Conservative: For those with only ten years until

retirement.

40% – Bonds


10% – Cash




401K plans are an excellent choice when you plan for your retirement.

You will need to keep a close eye on your investment portfolio and

make sure your investment choices are wise.


Chapter 6 – Making The Most Of Your 401K Plan

When preparing to make a retirement plan, you will need to find out

when you will be eligible to begin participating in a 401K plan where

you work by talking to your benefits coordinator. When you become

eligible to sign up, you will be furnished a list of funds in which you are

able to invest. The maximum you were able to invest in 2005 was

$14,000, and a maximum of $15,000 in 2006. The maximum amount

goes up around $1,000 every year. If you are over 50, there is an extra

amount you can invest each year to ensure you will have the proper

amount to live on when you retire.

The contributions will be taken from you wages before withholding

taxes. This money is then invested into the funds you have selected

from the sponsors list, any employer contributions are put in at the

same time.

Fund sponsors will usually have a web page to access your account,

change your investments, and keep your account information up-to-

date. You will receive a statement of your account at intervals during

each year. This will tell you how well your investments are doing, and

how much your plan is worth. Keep an eye on these statistics to make

sure your investments are making a profit.

The first step in making the most of your 401K is to start participating in

a plan. Once you have enrolled, you should contribute the maximum

affordable amount up to the limitations set by the government, or at the

minimum contribute an amount that will get matching funds from the

company. Consider these payments as your future and the matching

funds as a bonus. Of course, the earlier you start a retirement plan, the


more money you will have when you retire. You should learn

everything you can about the investment funds before you choose one,

and keep up the research to make sure you are making a profit. If you

find that one of the investments is not making a profit you should

change to another.

Each company has their own process for investment, and you need to

know just what you are invested in. The vesting schedule will tell you

how much you have invested, how much the company has contributed,

and how much your earnings are, any time you wish to view them. You

already know that if you leave the company before you are fully vested,

that you will lose some of the earnings in your plan.

Some 401K plans allow you to make withdrawals when you have a

hardship. When you have a hardship that is qualified and withdraw

funds from your 401K, the withdrawal is taxable and you will be

suspended from contributing to the fund for six months. If your age at

the time of withdrawal is under 59 1/2, you will also need to pay a

penalty of 10%, unless you are using the money because of medical

emergencies or disability.

There are 401K plans that allow you to borrow against your retirement

plan. You are usually allowed to borrow up to half of your invested

assets up to $50,000. The loan must be paid within a 5 year period and

will be taken out of your earnings. You may repay the loan in full at any

time. Discover the loan policy of your 401K plan by talking to the

benefits coordinator.


Make sure you balance your investments regularly. Companies usually

offer a yearly period for open enrollment. This is the time to talk to your

plan sponsor about any goals you have. Once the goals and the risks

are defined, you can make sure you have the correct balance of your

investments.

A 401K retirement plan is very important. You should gather as much

information as possible on investments, matching funds, and

contribution limits. Research all available information so that you know

what type of investments you have and how they are making money

for you. You can also ask for assistance if you want to change your

options and are not sure how.


Chapter 7 – The History Of Annuities

Annuities have been in existence since Roman Times. These were

known as annua, meaning annual stripends in latin. Roman Citizens

would pay a one-time payment and received lifetime payments every

year.

In 17th century Europe, government was always looking for ways of

funding battles with other countries. A tontine was created, and any

who purchased shares would be paid back over an extended time

period. Participants would purchase a share for £ 100 from the UK

government, and receive an annuity during the lifetime of the person

nominated. This was usually a child so that the annuities would last a

longer period of time. As each nominee passed away, the remaining

nominees would get a larger share of the annuity. This would continue

until there were no nominees left.

The 18th century saw the beginning of annuities in America. In 1759 a

group of ministers and their families formed a company in

Pennsylvania. The ministers contributed to the fund and would realize

lifetime payments. In 1912 annuities were offered to the public. The

Pennsylvania Company for Insurance on Lives and Granting Annuities

was the first American company.

From then on, annuities grew at a steady rate, and they became quite

popular in the late 30s. Insurance companies were seen as stable

institutions that could make payouts promised during the Great

Depression. During this trying time many changes came about and the

focus was on saving for a rainy day. The New Deal program introduced

by FDR contained many programs encouraging each individual to save


for their retirement. Group annuities for corporate pension plans were

first developed.

The first modern annuities were quite simple then. The investor was

guaranteed a return of the principal, and a fixed rate of return during

the period of accumulation. When the annuity matured, there was a

choice whether to take fixed income for a lifetime, or receive payments

over a set number of years. The most attractive fact, when it came to

annuities, was their tax deferred status. Because insurance companies

issued the annuities, they could accumulate without the money being

taxed every year.

The variable annuity was created in 1952. Variable annuities assigned

interest based on several accounts inside the annuity. Owners of these

annuities were able to choose what type of accounts they wished to

use.

Other features were added to annuities, as the years went by. Some

accounts allowed funds to be accessed by checkbook. Other annuities

offered higher bonus rates, shorter periods of maturity, and guaranteed

death benefits if the owner died. Variable accounts caused a boost in

the popularity of annuities. Over the past 20 years, mutual funds have

seen a surge in popularity. There are now nearly twice as many mutual

funds than there are stocks.

Annuities are as popular as they ever were, with annual annuity sales

over $200 billion. Annuity contracts usually have higher commissions

and fees than other investments. Millions have been able to use the

structure of the annuity to their advantage.


Chapter 8 – Take time to Review Your Retirement Plan

It is very important to completely review at intervals throughout the

years. Your retirement plan is a top priority because it will take care of

you when you are no longer working, and is one of the most important

financial choices you will make in your lifetime.

1. Your Personal Finances: Has your income increased since

you started your retirement plan? Is there a source of extra

income from a second income or from the wages your spouse

earns? Have you had financial problems or had to make major

purchases in the past few years that affected your retirement

plans? Have you withdrawn money from your retirement plan for

personal or emergency use? The financial outlook of your life

will definitely affect the amount you will be able to put into your

retirement account.

2. Your Life Changes: Have your original plans for your

retirement goals changed? Do you still plan on retiring at the

same age as when you first started your retirement plan? Are

your investments the right ones to assure you have enough

money for your retirement? It is a good idea to look over your

retirement plan, and even set new financial goals now and then.

Your life is constantly in a state of flux and there are bound to

be changes.

3. Your Spending: Maybe the way your money is spent has

changed since you set up your retirement plan. You may have

gotten married or divorced, changed jobs, purchased a home,


had a child, made high ticket purchases, or had other

circumstances that have kept you from saving money for your

retirement. It may be wise to look at your budget and see if you

may have any extra money to put in your retirement fund. There

is also a chance that you could be putting too much into your

retirement plan and you may want to

4. Your Portfolio: It is important that you look closely at how your

portfolio is balanced so that your investments will earn enough

so that your retirement is comfortable. The amount you should

be investing is dictated by your age, how close you are to

retirement and what your current income is. Any time there is a

change in your circumstances, you need to reevaluate your

retirement plan to make sure it is adequate.


Chapter 9 – Is Retirement What You really Want?

While we are in the workforce, many of us are dreaming of the day we

are able to retire and live a life of leisure. The closer we get to

retirement the more our thoughts turn toward what we want to do when

that day comes. Will retirement be all that you want it to be, or will you

feel unfulfilled when you are not working.

There have been times when your job has gotten under your skin, but

are you really ready to leave it all behind? Many people retire from one

job and start a new career because they were not happy with

retirement life. Some people think of others they work with as a part of

their family, and find that they miss them when they are no longer

working.

With the day of retirement close at hand, you may want to ask yourself

a few questions.

What is my definition of retirement?

This is a question that you will need to answer with honesty.

You should really ponder this carefully before you answer.

Will I have enough money to retire?

Your retirement could last for up to 40 years, you need to keep

this in mind when figuring out your needs after retirement.


What will I do with my retirement plan?

Once you retire or leave your job’ and have full access to your

retirement plan, you need to decide what you want to do with this

money.

What can I expect from social security?

Most people work all of their life and want to be comfortable

when they retire. You should really have a retirement plan as well as

social security, but social security can be a good addition to your

retirement income.

What if I want to work after retirement?

Some people feel the need to keep working beyond the age of

retirement. You will need to decide what is right for you and your

lifestyle. Weigh the pros and cons before you make a decision.

Where will you live?

Do you plan to stay where you are living now, or will you retire

to some exotic tropical island in the south pacific? You will need to

determine how much it will cost to live where you desire, and how

much you will need in your retirement account.


Chapter 10 – Whether to Work Full Time, Part Time, or Retire

Many working people look forward to retirement. Some of them are so

close they are counting down the days. These people are looking

forward to retirement. Others see retirement as an endless parade of

empty days where boredom will be the most exciting thing happening.

These people enjoy working and interacting with others on a daily

basis.

Many people today are trying something new. One spouse will retire

and the other, though at retirement age, has chosen to stay in the work

force for the time being. When you reach retirement age you will be

faced with whether to continue working, retire and work part time, or

give it all up and retire.

You need to look at what you have to lose. Going from full time to part

time may affect your benefits in the workplace. Many companies do not

offer health insurance so you may need to activate your Medicare and

sign up for your social security benefits. If you don’t feel you can

completely leave the working world.

Your decision to retire fully, work part time, or full time, will be

dependant upon your previous plans for retirement. Will you be

traveling or relocating, and will you have enough money to live on

when you decide to retire? These are a couple of the questions that

you may want to ponder when making this decision.


Chapter 11 – How Will Having A Job Affect My Retirement Income?

Now that you have reached retirement age, you may want to work part

time. You will need to review the rules of social security and your

retirement plan to make sure you will get your full amount of both even

though you are still working on a part time basis.

If you retire at the age social security says is your full retirement age,

you will be able to work part time while retired, and still draw your full

social security benefits. If you retire before the full retirement age, your

benefits could be lessened or cut completely dependant on how much

you make.

If you retire before full retirement age, you will have $1 deducted for

every $2 you earn over the annual limit set by social security. If you are

working in the year you will be of full retirement age, $1 will be

deducted for every $3 you earn over other limit. It is a good idea to go

to the Social Security website to gain more information.

The Railroad Retirement has very similar rules, but there are two

differences. Any month you work for the railroad or any other railroad

labor organization, you will not be able to draw on your pension. If you

work for the job you held that is not a railroad job, your benefits may be

less even if you are of full retirement age.

If you take a job after you retire you will certainly more money, and will

keep you socially active. Your employer may offer health insurance

and there may be a chance that you will be able to open a new 401K

and start saving all over again. Basically there is no problem with


working after retirement. After careful consideration you are free to

choose full retirement, or working as much as you desire.

You will also need to consider that your pension could be affected by

your wages after retirement. You will want to check with your company

to see just how your retirement will be affected as each company has

its own policy.

You should also be aware that working after retirement may put you in

a higher tax bracket. This would mean that when you withdraw money

from your IRA or 401K you would be paying more taxes than you

figured. If you are bringing in too much money a bigger chunk of your

social security benefits will be subject to taxes.


Chapter 12 – Ways to Help You Prepare for Retirement

As the years go by, you are increasingly looking forward to relax and

get away from the working world. Like countless others, you probably

know exactly the life you want to lead after retirement. You are very

serious about your goals and will need to begin planning your

retirement right now and not put it off, if you want to enjoy a carefree

retirement.

Review your goals for retirement

Take a pause to ask yourself what your retirement goals really

are. Will you continue to live in your present home, or move to a

retirement community? Do you plan to pack up and move to a warmer

climate, or is frequent travel part of your plan? Of course you are

always free to change your plans in the future, but you should definitely

have a place to start so that you will know about how much money you

will need to get you through the retirement years.

Take a good look at your finances

As long as you know where you stand, you can figure out where

you will be at retirement age. It is not too late to start socking money

away in a retirement plan. If you are in debt up to your hairline, there is

a good chance that you will need to take care of this if you want to

have a happy retirement. By the time you intend to retire, you will need

70% to 90% of what you are making now to maintain the standard of

living you enjoy now.


Taking care of yourself

By the time you retire, you will still want to be active and

healthy. Start working on a health program to keep you fit and ready to

go. As we age we are prone to health problems and unless you do

something to combat them now, you may be spending your retirement

being unable to get around. A healthy lifestyle will assure that you are

going to enjoy every minute of your retirement.

Your spouse and retirement

Those who are married should talk to their spouse about the

retirement plan they participate in. You both need to understand the

particulars of the plan and figure what part the plan will play in your

retirement. Both of you should understand what legal papers you will

need to sign before your spouse retires.

Keep track of what you own

When you are participating in an employer sponsored retirement

plan or pension, ask for a summary of what your plan offers. If you are

confused, ask your plan coordinator to explain it to you. You need to

know how much you are able to contribute, and how much your

employer will contribute in matching funds. You should also ask about

what type of investments your plan is involved in.


Open an IRA

Almost anyone is able to open an IRA as long as they or their

spouse have earned income. You can either open a Roth or traditional

IRA. Your financial institution will be able to explain how an IRA works

and whether you are eligible to open one. After you open the IRA you

should try to contribute the maximum allowed each year, whenever

possible.

Keep an eye on your benefits

Your employer will most likely provide an Individual Benefit

Statement at intervals throughout each year. This statement will show

how the plan is working for you and the amount you own. You need to

review your plan completely review each statement, and if you find

details that you don’t understand or do not agree with, you need to see

your plan coordinator right away.

Talk about retirement plans with your family

When you are close to the age you will retire, you will need to sit

down with your spouse and discuss your goals after retirement. Each

of you might have different ideas about what you want when you retire.

You will need sort out the differences and come to a compromise.

Other members should be in the loop about your plans if these plans

may affect them in any way.


Check out your social security statement

Every year you should be receiving a social security statement a

few months before your birthday. This is a statement of what you have

earned and what you have paid in social security taxes. It also contains

an estimate of the amount you may receive from social security.

What you will do after retirement

You definitely do not want to be bored after retirement. There

are plenty of activities you can become involved in to keep yourself

busy and productive. You can choose to take another job, travel,

pursue a hobby, volunteer, or any number of activities. It is important to

know that you will still lead a fulfilling life and making a tentative plan

will make you feel better about retirement.

Your life insurance

You should determine whether you have enough life insurance

before you retire. You may not need life insurance but you should at

least look into the benefits of having a policy. This is especially true for

younger people who have a family who would be left without a source

of support should you no longer be there. It is up to you whether you

want to be insured or you think you can do without.

Long term care insurance

It is difficult to think about a time when we may need to be taken

care of by others. We need to admit that it could be a possibility in the


future. Long term care is very expensive and it would be wise to have a

policy that will assure you will be taken care of if the need arises. This

should simply be a part of your retirement planning.


Chapter 13 – Your Retirement and Debt

You are thinking of retirement but have quite a few outstanding debts.

Many people are finding themselves in the same situation, especially

when it comes to credit card debt. You don’t want to carry that debt

over into retirement. You will need to use careful planning to bring this

about.

There are several steps you can take to assure that your debts will be

paid before you retire. The sooner you start clearing up your debt, the

sooner you will be able to retire completely or nearly debt free.

1. Your Budget

You will need to go over your budget and see where you will be

able to shuffle enough money to pay these debts off as soon as

possible. Try to keep from buying things that are not a necessity when

possible.

2. Your Credit Cards

It is very easy to accumulate debt when you are using credit

cards. It is so convenient to use a card when shopping, there are times

we don’t realize just how much is being spent until the bill comes. If

you really want to get out of debt it may be wise to get rid of the cards

and borrow money to pay them off. A mortgage to pay off your debts

will give you a lower interest rate and make it a bit easier on the


budget. If you must keep one credit card do so in case of emergency

only.

3. Contribute Extra

When you find you have extra money in your hands that does

not need to be spent on something else, pay all or part of in on a debt.

This way you have paid ahead and lower interest rates, depending on

the debt.

4. Bonuses from work

Don’t count your bonuses as a way to pay debt. Until you

actually have the money it should not be counted in the budget. While

this money is great, it might be a good idea to earmark a portion of this

money to pay off debts. Don’t ever count on this money to pay

everyday expenses.

5. Keep to the plan

Once you have figured out your budget and a plan for paying off

your outstanding debts, stick to the plan faithfully. Even at times when

you are feeling a bit of a crunch, you need to stick to the plan you have

made or your debts will not be cleared by the time you want to retire.

There will always be rough times in your life, but the ability to see them

through without steering away from your plan. This is not to say that

you should have some of the things you want in life, just try not to go

too far overboard with your spending. If you keep track of everything


you purchase by writing it down you will soon see that saving to pay

your debts will become as automatic as wearing a seatbelt while riding

in the car.


Chapter 14 – About Early Retirement

Since nearly every company is prone to downsizing in today’s business

world, there are times when an employer will offer some of the older

workers an early retirement package. This may seem to be quite an

attractive offer, you will need to look it over completely before you

accept the terms.

The early retirement package

An early retirement package is an offer of money to take retirement a

bit earlier than you normally would. Most businesses will include

severance pay that is based on your current wages and how many

years you have been with the company. Life insurance and health care

may or may not be included.

Should you take an early retirement package?

Before you accept the early retirement package, take a long look at

your financial situation, the needs of your family, and if this amount of

money is enough to support all of this for the next few years. If you

were going to retire at age 65, and you are now 55, will you have

enough to see you through the next 10 years?

Health Insurance

Most employees do not offer health insurance that will continue after

your retirement. You may be able to pay for COBRA for 18 months


after you leave the job. There may also be a possibility that you will be

covered under your spouse’s health insurance.

Life Insurance

You may be offered life insurance in your early retirement package but

it is usually limited and you may need to keep up the premiums

yourself. If you find you need life insurance and your company doesn’t

offer it to you, you will want to shop around to find a policy to fit your

needs.

Your Pension

If you have a 401K or other pension plan through your company, you

can’t usually draw from it until you reach a certain age. The longer you

can leave the money in the 401K, the more money you will realize in a

monthly check after your retire. In the case of early retirement, you

may be able to start receiving payments at age 55 without penalty. You

will need to check and see what your company’s policy to find out.

Your Bottom Line

If you decide to take an early retirement you can make a smoother

transition if you have a definite plan before you retire, pay off large

debts, and replace any money borrowed for emergencies. You should

also keep credit card use very low and live within your means.


Chapter 15 – Full Retirement Age According to Social Security

The policy used to be, the full retirement age for everyone was 65. The

criteria has changed, full retirement age is now dependant upon the

year you were born. You may retire at 62, but the benefits will be

reduced according to how long you have until you are of the full

retirement age.

The chart below shows when you can expect to retire at full retirement

age according you your year of birth.

Full Retirement Age at Year of Birth

1937 or before 65

1938 65 and two months

1939 65 and four months

1940 65 and six months

1941 65 and eight months

1942 65 and ten months

1943 – 1954 66

1955 66 and two months

1956 66 and four months

1957 66 and six months

1958 66 and eight months

1959 66 and ten months

1960 and later 67


Chapter 16 – Retiring With Only a Social Security Income

It hasn’t been that long that we have been able to retire from working.

Social security was created during the depression. It was designed to

pay the breadwinner of the family with a retirement amount to afford

them to quit working when they reached the age of 65. At that time,

benefits were given to retirees in a lump sum, until 1940 when it was

changed to a monthly benefit amount.

Social security has been a great savior for those who will not have any

other income after they retire. At the beginning of the 19th century the

head of the family worked until they became too old or ill to go on. If

the breadwinner died the family would usually move in with other family

members. If this was out of the question, the remaining family lived in

poverty. There were places called poor farms where poverty stricken

families where people went to live when they could no longer make a

living.

While the majority believed it was, social security was not designed to

take the place of a paycheck. It was brought about to be an additional

amount to add to whatever they had saved for the time they were able

to retire. Over the years social security has become the only source of

income for many retirees.

Today, retirement life has changed, and the definition of retirement is

more than stopping work and sitting around. Now retirement is looked

at as a time to relax and enjoy all of the things you didn’t have the time

to do when you were in the workforce. Now that we demand a more

exciting and active retirement, we must find a way to pay it.


The cost of living is ever on the rise and the only way you will be able

to enjoy the type of retirement you desire, is to invest your money in a

retirement plan. Social security is not nearly enough for you to retire on

by itself. Those who retire on only social security live a very sparse life

with far less money than they had while working. There will also be a

possibility that they will need to supplement their healthcare as

Medicare does not pay the full amount of certain medical procedures

and medications. When you are on only social security, you will be

unable to afford to pay for more insurance. There are those in this

country who cannot pay for life saving medications, and many put off

seeing a doctor because they really can’t afford the co-pays.

It is vitally important for each individual to begin putting money away

for the day they plan to retire. Otherwise they will find that what once

was a comfortable way to live has turned into a life lived beneath the

poverty level. This is the biggest reason everyone needs to pay

attention to a retirement fund and start contributing to it at as young

age as possible.

I know it is very easy to put off starting a pension fund when you are

young and vital, with no aches, pains or ailments. If you get nothing

else out of this ebook, burn this into your brain: IT IS VITAL THAT

YOU START A RETIREMENT FUND, AND START IT AS SOON AS

YOU READ THIS!


Chapter 17 – What to Do Just Before You Retire

Even if you have been contributing to a retirement fund for many years,

there will be more to accomplish once you get close to retirement age.

This is the time to make your final decisions and tie up any loose ends

when it comes to actually retiring. If you feel you do not understand

some of the aspects of your retirement, you may want to consult a

retirement coach. They can tell you how everything works, and help

you to decide whether you want to continue working part time, full time,

or completely retire. The closer you get to retirement age, the less time

you will have to save for your retirement. Get excited you are almost

there.


Chapter 18 – Is Retirement Coaching For You?

With so many baby boomers on the verge of retirement, there will be

many people retiring almost at once. Baby boomers have made huge

changes in the way we do things today. This generation is responsible

for fast food, credit cards, rock and roll, and equality, to name a few.

These people want a better retirement than their parents, many are

deciding to take the advice of retirement coaches to make the most of

their retirement investments.

What is a retirement coach?

A retirement coach is one who helps you to search for the perfect

retirement solution for each individual, according to their needs.

Retirement coaches will also help you through the process of

discovering all of the aspects of your retirement from start to finish.

They will also help you to plan the retirement of your dreams from start

to finish. They can also coach you on how to make the transition from

working to retirement a less painful experience. A retirement coach can

a may also assist you in preparing and maintaining a budget that you

can live with.

What a retirement coach does not do

A retirement coach does not usually advise you when it comes to

investments, or offer legal services of any sort. You should speak to

someone who provides these services if you have any questions in

that area.


How to choose a retirement coach

When choosing a retirement coach, you will need to act as you would

when choosing any other professional. Retirement coaches have no

formal credentials so you will need to ask for references and what

experience they have. You may want to ask friends and family for

referrals of coaches they have used and had good experience working

with. You should also find out exactly what services are offered, how

much you will be charged, and how long it will take to learn to manage

your own retirement fund, and if there is an opt out clause. Many times

this

coaching can be conducted over the phone so you are able to work

with a coach who lives across the country if need be. Some retirement

coaches will offer their advice by conducting a seminar so they may

reach more people at one time.


Chapter 19 – Retirement Plans For Self Employed and Small Business Owners

Retirement plans are not only available through corporations, but they

are also available for those who are self employed, or owners and

employees of small business ventures. You are able to set up tax–

advantaged retirement plan for yourself, and your employees. There

are many retirement plan options for any type of business and for the

self employed.

A SEP – IRA is one retirement plan available to small businesses and

individuals who are self employed. When this plan is set up for a small

business, the owner will need to furnish a written agreement to provide

benefits to eligible employees. The SEP – IRA must be set up for each

employee and each must receive full information on the plan.

A SEP – IRA is quite easy to set up and maintain, and offers a very

lucrative way to save for retirement. This plan is controlled and owned

by the worker and the business owner will make contributions to each

plan.

The simple IRA

This is an employer sponsored plan that allows the employer to set up

individual employee. The IRS form 5304–SIMPLE – or 5305–SIMPLE

is used to set up a SIMPLE IRA. The form used is dependant upon

whether the plan is set up by the employee, or the financial institution.

The contributions are tax-deferred and are higher than a traditional or

Roth IRA. Simple IRAs are usually available for companies with less


than 100 employees and want to provide a qualified profit sharing plan.

The SIMPLE IRA can be set up between January first and October first

of any year. A SIMPLE 401K plan can also be set up in a manner that

is very similar, but the employer has to meet a certain criteria for the

SIMPLE 401K.

Payroll Deduction IRA

Created in 1997, the payroll deduction IRA is another option for

employers to offer their workers a way to save for retirement. Once the

employer sets up the plan, there is nothing further to do but forward the

amounts are deducted from the payroll to the financial institution. The

employee decides how much will be deducted from his wages, and the

employer is responsible for making payments to the IRA on time.

There are many retirement plans available so that small business and

the self employed will no need to worry about the future of their

finances. With a bit of research, small business owners and those who

are self employed will be able to find the right retirement savings plan

that is right for them.


Chapter 20 – How to make the change from work to retirement

How you feel about retirement will play the biggest part in how easily

you will make the transition from being in the work force to living a life

without having to be at that 9 to 5 every day. When one retires their life

should be a life of relaxation, enjoyment, and freedom. Retirement is a

time in your life when you should look forward to taking charge of your

life and doing the things you have put off for years.

You have worked your entire life socking away money so that you

could have a comfortable retirement. Your retirement will not be all it

should be if your feelings about retirement are not positive. If you are

not ready for retirement, you may find you are quite bored in a very

short time. Take time to examine your feelings about your retirement,

and make a plan for the things you want to do when you are free from

the chains of a job.

A huge consideration is the way your spouse feels about your

retirement. They may have been home all day alone for years, and

suddenly they will need to adjust to having you with them almost

constantly. Both of you need to sit down and discuss what each of you

do and don’t like about how life will change after your retirement. There

should be plans made collectively about how you will spend your

retirement together. There may be a bit of comprise involved, but a

collective decision is possible if you both work on it together.

Circumstances may be that your spouse will be still be working after

you retire. You will need to come to a decision whether it would be

okay for you to make travel plans or engage in other activities without


them. You will be home all day, every day and if you do not have a

plan to keep you active, boredom will soon set in.

Once you have worked out the big issues with your spouse it is time to

look at things you would like to do to keep boredom at bay. Think

about the things you always wanted to do or the things you had only

limited time to do when you were working. Look for other hobbies and

activities that you had not thought about before but would like to try. It

is up to you to fill up the void that not working has made in your life and

make your days an exciting continuation of your early life.

If your retirement fund is adequate to keep you and yours comfortable,

and you don’t need to bring in anything more, you may want to

volunteer your time at the local hospital, nursing home, or a worthwhile

charity. If you find you need a bit more money you may want to think

about a part time job. If you find you are miserable because you just

can’t find anything to that is as fulfilling as working was, you may even

want to consider a new career.

Another option after retirement is to start your own business. If you

have always wanted to own your own business you now have the time

for you to look into the many business opportunities that you can start.

You can also start a business doing something you are good at, like

woodworking, sculpting, or sewing, to name a few. You could make

furniture and open a little showroom to sell your items, or maybe you

could make and sell hand sewn quilts or sew custom made clothing.

Anything you love to do as a hobby, you can turn into a fulfilling

business venture. If you can dream it, you can do it.


Thousands of retirees plan to travel after their working life is a thing of

the past. If this is what you and yours have planned to do, you may

want to sit down with everyone concerned and make plans on where

and when you will travel. You can choose to travel the US or around

the world, you can make plans to go anywhere you wish and use any

form of transportation you want. Happy trails!

The transition from the working world to a life of leisure can be smooth

or bumpy, the choice will be up to you. Retirement is a major life

change and change is never as easy as we think. People who have

worked all of their lives have spent many waking hours at a job.

Someone who has worked for twenty or thirty years at the same job,

will find that they feel a bit sad when they are not taking part in this

activity anymore. They may even feel depressed after retirement and

have a harder time adjusting.

It is for this reason, if for no other, retirees will need to make sure they

keep busy so that they are not bored. Many people will take a bit of

time just to relax, as if being on a vacation from work. This is fine, but

you should not be idle for too long of a time, get out and do something

even if it’s wrong. Remember, your life is your own now and you are

making the choices of how you will spend your day. Whatever you do,

enjoy your retirement to the full extent.


Chapter 21 – How To Be Happy After Retirement

Here are some tips on how you can be happy in your retirement years.

Happy is merely a state of mind, and we have the power to be happy in

our lives. As I mentioned before it can be tough to make the transition,

but I would like to add (or restate) a few tips that can help you have a

happy retirement.

1. Do your planning early

You should start planning early, not only for your finances after

retirement, but also for the things you will do after retirement. In

addition, you should make a second set of plans in case there is a

problem with carrying out the first. This strategy will assure that you

are not confused about what to do next.

2. Consider your options

Think of everything you love to do, and those things that you have

always wanted to try but did not have the time in the past. Make a list

of all of these things and figure out how you can incorporate them into

your retirement plans. This will give you something to look forward to

and keep you focused on the day you retire.

3. Include your spouse

Since your spouse will be beside you throughout your retirement years,

all plans should be discussed together. There may be some options


that you will disagree on. When this happens you will both need to

reach a compromise to make your retirement a happy one. Another

thing to remember is the fact that the best laid plans can go awry. Any

number of things may happen during the years you are waiting for your

retirement to roll around. Divorce, death of a spouse, or even a change

in goals can come up. It is wise for you and everyone involved in your

retirement, to sit down periodically and compare notes on whether

there has been a change in how anyone feels about the plans for

retirement.

4. Retirement and your health

It would be useless to make plans for an active retirement if you are

not healthy enough to enjoy it when the time rolls around. Watching

what you eat and getting moderate, regular exercise, will help you

remain healthy throughout your life. You should also see your doctor

for regular medical check-ups to catch any unforeseen health problems

before they become a major concern.

5. Keep up the good work

After retirement, you should keep active to fight off disease and keep

you young. Exercise can be as simple as taking a walk, playing golf, or

shopping with friends. Don’t lead a sedentary life if you want to stay a

happy, healthy retiree.


6. Don’t let yourself get depressed

If you just sit around without anything to occupy yourself, you will surely start

feeling sorry for your situation, no matter how well off you are. Our happiness

does not hinge on someone or something else, we are responsible for the

happiness in our lives. Get out of the house and meet new people, join a club,

start a hobby or a business. The bottom line is to keep active and don’t allow

yourself to get into a depressing, unproductive route.

You should take advantage of this time in your life as it should be the best part

of your life. You should also try to do some of the things you always wanted to

and never had the time to do, enjoy every day to it’s fullest extent, and last of

all, take time to get to know the real you now that you do not have to work and

perform for someone else. Why not try to meet a new person every day.

All The Best,

Master Trader Team




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