| Retirement Planning Tips |
| By Credit Federal |
Published
03/19/2009
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Financial Tips
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New Ways of Thinking about Your Money and Your Retirement
With all the news about consumers losing jobs, stocks, bonds, and their life savings, a new money management plan must be considered. The old thinking is that you could depend on getting a lot of money during retirement age and if there was a good mix of investments life was safe. Not so now as millions have been scammed out of money that they worked hard for and invested with people they thought of as a trusted source. Now consumers must take an active part in knowing who they are giving their savings to and what they are getting in return.
If you are near retirement age, consider taking courses to help you become more knowledgeable and to help keep you ahead of the game in the work force. This could give you the edge you need if your employer starts reducing employees. Plan ahead just in case you get the pink slip and make sure there is an emergency fund to help cover your living expenses. Six months of cash use to be the plan but consider saving enough for a couple of years to really prepare in the event of hard times.
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If you are a homeowner resist the temptation to tap into your home equity to get money for needless expenses or desires. Unless it is a dire emergency, don’t go for a home equity loan and get into debt. Consider down - sizing if you have a huge home with high utility bills and a lot of expenses to maintain the yard.
If you have a mix of investments, monitor them closely as you may have to make changes. No longer can you create a portfolio then forget it. Target a blend of large and small cap stocks, foreign shares, and a variety of fixed-income investments. Don’t expect enormous gains in stocks and real estate but expect the ups and downs to continue. Investing the bare amount into a 401(K) or IRA when your company will match it is not the best idea, instead work harder and shoot for the highest amount possible to invest.
If you are paying college expenses for your kids, consider that saving for retirement may need to be a priority expense. Check out all options for college, use some of your salary and seek out available scholarships and grants. Your offspring may need to get a part time job to help with college expenses – this can instill ethics of working hard toward a goal and be a valuable life lesson.
Consider not retiring early if you are active and healthy. Use every good day to keep working full time and saving toward your retirement years. Being healthy and able to work as long as possible is one of the best assets you have. Set a goal of working until you are at least age 66 or 67 or longer. If this is not an option, work part time.
If you are already retired, make sure you are planning on making your hard earned money last your life time. People are living longer and you need to make sure your money will last as long as you do. Don’t withdraw too much every month, set a budget and stick to a good plan of making it last as long as possible. Become a penny pincher and don’t spend retirement money hastily.
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