RETIREMENT PLANNING » IRA & ROTH Accounts

Individuals with money in 401(k)s saw an increase in savings of 32 percent last year, according to a study released by the Employee Benefit Research Institute and the Investment Company Institute. This is good news for Americans who lost a reported 27 percent or more in their accounts after the financial crisis in 2008. The findings show there’s hope that money can be regained after the loss in time for retirement.

Accounts Averaged Nearly $110k in 2009

Two of the biggest financial goals in most people’s lives is purchasing a home and saving for retirement. So why not kill two birds with one stone by using your home equity to double as your retirement fund? Saving for a house or a comfortable retirement can be hard enough as it is, let alone having to do both, but if you’re willing to incorporate a little home downsizing in your retirement plan, you can have your cake and then sell it to fund your golden years too. However, just because you could do it, doesn’t necessarily mean you should do it.

Using Home Equity to Fund Retirement

Financial emergencies can strike at any time, and unfortunately, they usually come with little to no warning. Job loss, vehicle or home repairs, medical expenses and other major events can quickly consume your emergency fund and leave you looking for a way to get by. But you don’t have to panic. Here are some tips for dealing with a financial crisis, starting with preparation:

Prepare Before Disaster Strikes

What do Woody Allen and personal finance have to do with each other, you ask? Maybe not a whole lot, but if we dissect his films closely, there are definitely lessons to be learned.

The over opinionated Woody Allen is constantly placing social criticisms, personal quips, and when examined closely, financial advice into his movies. By extracting these gems from across the span of his films and bringing them together, we can gain insight into some valuable tips on spending, saving and more.

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Saving for retirement can be complicated if you don’t know how much you actually need to save. Use our retirement calculator to figure out how much you’ll actually need to have stored away in your nest egg to support your lifestyle.

Include how much retirement income you’d want per withdrawal, the rate of return you think your money will grow at when you start collecting retirement, how long you expect to live off your retirement fund for and how many times you’d like to make a withdrawal per year.

• Desired Retirement Income: The amount you’d like to have per withdrawal from your retirement fund.
• Expected Rate of Return: Put in the rate of return you expect your retirement fund to earn while you are retired.
• Retirement Period: This is how many years you expect to live off your retirement for.
• Withdrawals Per Year: The number of withdrawals you will make each year you are retired.

Determining whether a living trust versus a will is more suitable for you and your beneficiaries is vital to estate and retirement planning, not to mention essential to the bigger picture of your finances. After all, you wouldn’t want the remainder of the assets you worked so hard to accumulate for a comfortable retirement to fall into the wrong hands once you’re gone. Though discussing details regarding your eventual absence from your beneficiaries’ lives may be hard, neglecting the arrangements could have disastrous results.

Living Trust vs. Will

If you are one of the millions of people who are eligible to participate in an employer-sponsored 401(k) plan, do it! There are numerous benefits–both present and future–that are available to you for contributing to this type of retirement plan.

First Step: Contribute

Creating a mandatory retirement age is something an overwhelming number of U.S. retirees are opposed to, according to a new survey released by Extend Health, Inc. In fact, out of those surveyed who were asked if the U.S. should set a mandatory age, a whopping 85 percent said “No.”

Retirement Age Survey Results

Retirement planning is important–there’s no debating that. Saving and investing in your 401(k) or IRA accounts is something all financial planners advise. However, for many people, allocating money to a retirement fund takes up a big chunk of a paycheck. If you’re maxing out your annual 401(k) and IRA contributions as you’re advised to do when possible, you might not have much money left over to fund other major milestones in life, like, for example, buying a home.

The 2010 limit for 401(k) contributions is $16,500 and the limit on IRAs is $5,000. That’s $1,350 and about $415 a month, respectively, of your gross income set aside just for retirement. As daunting as it may seem, financial planning for retirement shouldn’t be delayed or pushed aside unless there are very valid reasons.

Saving for retirement is never an easy task, but after many workers lost their savings during the recession, they’re having a more difficult time than ever trying to recoup their losses. A new survey released by Sun Life Financial found that a whopping 80 percent of workers need at least three years to rebuild their retirement savings as a result of the recession. This is a 16 percent increase over the previous year’s survey results.

The Recession Has Had a Lasting Effect