There are at least two schools of thought with regard to the basic principles involved in planning for retirement spending. The first, and most common, approach poses the problem as a seemingly simple determination of the retirement income needs of a retiree relative to pre retirement income. This is typically expressed as a “replacement rate,” in which a retiree targets a given fraction of his or her pre retirement income level as an amount adequate to sustain a desired lifestyle without working. Often, a particular level of income is given as a rule of thumb (e.g., 80% of pre retirement income). (more…)

Periodic additions to income payments that enable recipients to purchase the same amount and quality of goods and services over time despite inflation. As experienced by older Americans, Cost of Living Adjustments are annual increases to Social Security benefits and other income payments that reflect the previous year’s inflation rate in urban areas. Although a common perception is that older persons dependent on Social Security are protected from losing purchasing power, in actuality, after a few years they often cannot maintain the level of retirement standard of living they had upon retirement and experience increases in their cost of living greater than increases in their retirement income. (more…)

Losing a job—at any age—is traumatic, even when a worker receives some severance pay. In addition to loss of income and/or employee benefits, there is a feeling of insecurity as one’s way of life is disrupted. Workers faced with involuntary retirement in later life must take stock of their financial resources, marketable job skills, and emotional readiness—or not—for retirement.

The federal COBRA (Consolidated Omnibus Budget Reconciliation Act) law provides an opportunity for continuation of health insurance for up to 18 months, at group rates plus a 2% administrative fee, until an individual policy (or new group coverage) is obtained or a worker is eligible for Medicare. (more…)

With changes in lifestyle after you retire, you could be spending more money related to health, recreation, your home, and your hobbies after retirement. Your cost of living after retirement may increase as well.

Medical

As previously mentioned, your medical costs will increase post retirement, and you’ll need to budget for this expense accordingly. (more…)

Having retirement expenses in notebook or spreadsheets may help a good way to monitor on your daily spending in retirement. But most people do not know the benefit to monitor the income and their daily expenditure. This will make sure that they will never taking more money than their income. (more…)

How much money to retire do you need? How much do you already have? How much time do you have to save? These are the questions that lead you to a retirement saving plan. A well-thought out and diligently followed plan leads you to your goal. This section walks you through the major steps in planning for your post-retirement financial needs. (more…)

Almost all people don’t really know what excessive spending may hurt them in the long run. When they are closer to retirement, they get much smarter about what things really cost them. For this “born again” financial savvy person, cost is not just the some amount of money being paid for buying things, or even any associated interest costs. The cost is really in lost of potential savings that could have been compounded into very meaningful numbers needed in retirement (more…)

The last ten to fifteen years have been financially very good for most of us. With a little effort and a lot of market tailwind, our retirement accounts have grown at an amazing rate. With annual stock returns as high as 20% or more, most of us who have private retirement investment accounts (401K, IRA, etc.) were feeling pretty good. In most areas of the U.S. real estate values spiraled up and up. The combination made many of us who owned homes and stock/bond investments paper millionaires. Then along comes 2008. Our stock investment portfolio values dropped 35-40% and our once fat equity position in real estate rapidly shrunk. Your retirement account doesn’t look so secure anymore. (more…)

The US Federal Government is in its death throes. It is thrashing around, writhing on the floor, like a person suffering a grand mal seizure.

The Obama Administration, The Federal Reserve and Congress are completely clueless on the methods necessary to bring America back from the financial precipice. (more…)

Successful retirement savings plan is something that anyone can give a try, even if you think your budget is left you behind, don’t be despair. Regardless of the amount of money you are currently have by the end of the month, a retirement savings plan is something that is essential to every person and really needs to be developed. You can be successful in accumulation your retirement saving by treating it as a regular monthly expense. (more…)