These strategies can help recover lost income and/or assets following one or more of the life events described above. These strategies can also be used by late savers to make up for lost time and to prepare for a comfortable retirement.

Increase Contributions to Tax-Deferred Retirement Savings Plans. The 2001 tax law increased annual contribution limits for IRAs and employer 401(k), 403(b), and Section 457 plans, at least through 2010. Just a 1% increase in the amount of pay diverted to savings can result in thousands of additional dollars at retirement. Americans contributed an average of $3,514 to 401(k) plans in 2001 (Opdyke and Higgins 2002). The maximum plan contribution limits are $12,000 in 2003, $13,000 in 2004, $14,000 in 2005, $15,000 in 2006, and higher amounts adjusted for inflation thereafter. (more…)

As I said earlier, the amount you receive from Social Security varies based on how much you put into the system and when you start taking social security benefits. You have limited control over what you put into the system because it’s dictated by the FICA taxes that serve to allocate a portion of your earnings into the system. You do, however, have control over when you and your spouse take money retirement from the system. (more…)

Approximately one-fifth (20 percent) of post retirement income sources today comes from qualified retirement plan assets. Within 20 years, that number will increase to just under one-third (30 percent) of post retirement income. These are broadly defined as assets on which you have not yet paid retirement income taxes, though there is one exception in the Roth IRA. (more…)

Today in this country there are about 2 million people who are retirement at 65 and still need money for paying their daily nessesity. This includes some people who don’t retire and have never retired. For example, some automobile workers stay on the job until they are 68 years old. The 2 million also includes people who after they retired from their regular job decided they wanted to go back to work. Why do retired people decide to work? (more…)

If we look at defined benefit plans, it has a slumped down popularity among business owner in recent years. It is more like traditional pension plans where the plans are altogether financed by the employer. Annual contributions founded on actuarial computations involving employer’s years of service and salary are set aside for employees. (more…)

As you consider your retirement income needs, don’t overlook the equity in your home as a source of income. There are four options for tapping the equity in your home. The first two require a move. The other two allow you to remain in your present home. (more…)

How much 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 successful 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…)

The maximum 401k contribution per year to a 401(k) plan in 1998 is not to exceed 25% of compensation. Although there is no legal minimum contribution requirement, in order to reduce the plan’s administrative costs, some plans establish a minimum amount that must be contributed.

There is also a limit on total 401 k contributions that employee and employer together can (more…)

Retirement plans come in all shapes and sizes, but most plans fall into a few broad types. The following is a list of the major categories. I discuss the individual plans in detail later in the book.

Defined Benefit Plans

A defined benefit plan is a retirement arrangement in which your employer guarantees the benefit. (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…)