June 6, 2013
10 essentials for your retirement plan
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Retirement
• 15 ways to live well in a cheapskate retirement
• 10 best states to retire in
• The 10 worst states for retirees
• The 10 best U.S. cities for retirees
Jesse Varner/Wikimedia
REal Estate
• The 10 best places to live in the U.S.
• 10 best U.S. cities for real-estate investors
• 10 most unhappy states in the U.S.
• The world’s 10 most expensive cities
Leisure
• The 10 best U.S. cities for pizza
• Nine beers America has quit drinking
• Top 10 cities to live in if you like bars
• The 10 best U.S. cities if you like restaurants
WORKPLACE
• 13 companies everyone wants to work for
• 7 office gadgets headed for the graveyard
• 10 companies with the worst reputations
• 10 U.S. companies with the best reputations
• 15 ways to live well in a cheapskate retirement
• 10 best states to retire in
• The 10 worst states for retirees
• The 10 best U.S. cities for retirees
Jesse Varner/Wikimedia
• The 10 best places to live in the U.S.
• 10 best U.S. cities for real-estate investors
• 10 most unhappy states in the U.S.
• The world’s 10 most expensive cities
Leisure
• The 10 best U.S. cities for pizza
• Nine beers America has quit drinking
• Top 10 cities to live in if you like bars
• The 10 best U.S. cities if you like restaurants
WORKPLACE
• 13 companies everyone wants to work for
• 7 office gadgets headed for the graveyard
• 10 companies with the worst reputations
• 10 U.S. companies with the best reputations
Cars
• 9 cars Americans drive the longest
• 6 top cars for fuel efficiency, and 2 guzzlers
• 10 most versatile cars under $20,000
• 10 of the fastest super cars in the world
Entertainment
• Andy Griffith’s most popular roles
• Liz Taylor’s life and movies
• The 10 best rock-and-roll movies ever made
TRAVEL
• 10 best travel spots — if money’s no object
• Tourists flock to Kyrgyzstan and Qatar — really
• Most popular international travel spots for 2013
Technology
• The 8 biggest product flops of 2012
• CEOs who think like Steve Jobs
Bloomberg
CONSUMER
• 9 retailers with the worst customer service
• 5 things you can’t resell
• 9 cars Americans drive the longest
• 6 top cars for fuel efficiency, and 2 guzzlers
• 10 most versatile cars under $20,000
• 10 of the fastest super cars in the world
Entertainment
• Andy Griffith’s most popular roles
• Liz Taylor’s life and movies
• The 10 best rock-and-roll movies ever made
TRAVEL
• 10 best travel spots — if money’s no object
• Tourists flock to Kyrgyzstan and Qatar — really
• Most popular international travel spots for 2013
Technology
• The 8 biggest product flops of 2012
• CEOs who think like Steve Jobs
Bloomberg • 9 retailers with the worst customer service
• 5 things you can’t resell
By MarketWatch
Financial security in retirement doesn’t just happen. It takes
planning and commitment and, yes, money. According to the U.S. Dept. of Labor,
the average American spends 20 years in retirement and fewer than half of
Americans have calculated how much they need to save for retirement. In 2010,
30% of private industry workers with access to a defined contribution plan (such
as a 401(k) plan) didn't participate, according to the DOL. The agency puts out
a number of publications to support Americans in planning for their retirement,
and offers these 10 ways to prepare:
1. Start saving, keep saving and stick to your goals
If you are already saving, whether for retirement or another goal, keep
going. You know that saving is a rewarding habit. If you’re not saving, it’s
time to get started. Start small if you have to and try to increase the amount
you save each month. The sooner you start saving, the more time your money has
to grow. See a chart
showing the potential growth of your savings. Make saving for retirement a
priority. Devise a plan, stick to it, and set goals.
2. Know your retirement needs
Retirement is expensive. Experts estimate that you will need about 70% of
your preretirement income or more to maintain your standard of living when you
stop working. Take charge of your financial future. The key to a secure
retirement is to plan ahead. Start by requesting Savings Fitness: A Guide
to Your Financial Future and, for those near retirement, Taking the
Mystery Out of Retirement Planning.
3. Contribute to your employer’s retirement savings plan
If your employer offers a retirement savings plan, such as a 401(k) plan,
sign up and contribute all you can. Your taxes will be lower, your company may
kick in more, and automatic deductions make it easy. Over time, compound
interest and tax deferrals make a big difference in the amount you will
accumulate. Find out about your plan. For example, how much would you need to
contribute to get the full employer contribution and how long would you need to
stay in the plan to get that money?
4. Learn about your employer’s pension plan
If your employer has a traditional pension plan, check to see if you are
covered by the plan and understand how it works. Ask for an individual benefit
statement to see what your benefit is worth. Before you change jobs, find out
what will happen to your pension benefit. Learn what benefits you may have from
a previous employer. Find out if you will be entitled to benefits from your
spouse’s plan.
5. Consider basic investment principles
How you save can be as important as how much you save. Inflation and the type
of investments you make play important roles in how much you’ll have saved at
retirement. Know how your savings or pension plan is invested. Learn about your
plan’s investment options and ask questions. Put your savings in different types
of investments. By diversifying this way, you are more likely to reduce risk and
improve return. Your investment mix may change over time depending on a number
of factors such as your age, goals, and financial circumstances.
6. Don’t touch your retirement savings
If you withdraw your retirement savings now, you’ll lose principal and
interest and you may lose tax benefits or have to pay withdrawal penalties. If
you change jobs, leave your savings invested in your current retirement plan, or
roll them over to an IRA or your new employer’s plan.
7. Ask your employer to start a plan
If your employer doesn’t offer a retirement plan, suggest that it start one.
There are a number of retirement saving plan options available. Your employer
may be able to set up a simplified plan that can help both you and your
employer. For more information, request a copy of Choosing a Retirement
Solution for Your Small Business.
8. Put money into an individual retirement account
You can put up to $5,000 a year into an IRA; you can contribute even more if
you are 50 or older. You can also start with much less. IRAs also provide tax
advantages.
When you open an IRA, you have two options: a traditional IRA or a Roth IRA.
The tax treatment of your contributions and withdrawals will depend on which
option you select. Also, the after-tax value of your withdrawal will depend on
inflation and the type of IRA you choose. IRAs can provide an easy way to save.
You can set it up so that an amount is automatically deducted from your checking
or savings account and deposited in the IRA.
9. Find out about your Social Security benefits
Social Security pays benefits that are on average equal to about 40% of what
you earned before retirement. You may be able to estimate your benefit by using
the retirement estimator
on the Social Security Administration’s website.
10. Ask questions
Talk to your employer, your bank, your union, or a financial adviser. Ask
questions and make sure you understand the answers. Get practical advice and act
now. Read
more at the Department of Labor website.
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