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Contents
Introduction
Expert´s Bio
Questions and Answers
Before You Start
8 Steps to a Healthier Plan
Retirement Planning v. Investment Planning
A Simple Strategy for Successful Retirement
| | A Simple Strategy for Successful Retirement | |
- Take control of your finances. Know where you stand from both Income/Expense and from Financial worth standpoints. http://www.good-info.com/yra/yrasmpl.htm a) Set-up a budget. If you don’t know the “where got / where gone” of your money, you can’t even think about controlling it. Our software, Your Retirement Architect provides easy-to-use templates for this step. Segregate your expenses into 4 categories:
(1) Continuing essential expenses. Examples: mortgage or rent, utilities, food, clothes.
(2) Interim essential expenses. Examples: car loan, credit card payments, school loans, child support/alimony, etc.
(3) Optional expenses. Big vacations, dining out, entertainment.
(4) Retirement building payments.
This will help you define your “discretionary expenditures”. b) Do a financial statement. Essentially a “snap shot” of how you look financially. This is actually very easy to do. What you own - What you owe = Your worth.
(1) Go to your bank. Ask them for a Personal Financial Statement form. Fill it out. Completely.
c) Review your discretionary spending and your “unsecured” debt (student loans, credit cards, etc.). Can you put half of your current discretionary spending toward paying-off the debt? Whatever you can do in this area will save you money and start you on the road to successful retirement.
- Develop a plan to become “non-essential” debt–free. Get rid of the credit cards. Payoff the student loans. Don’t be fooled by “low interest rates”! Remember, if you’re paying interest to someone, that’s less money available to “pay yourself”.
- Borrow Smart. Some debt may be necessary in order to live a reasonable lifestyle. The key here is to properly identify “necessary” debt before you incur it. Do you need as much house as you are buying, or can you reduce the price range by $10 or $15 thousand? Not borrowing the extra $10,000 will save about $75 a month. Invest that same $75 over the same 30 years, and you could have almost $170,000 in your tax-deferred investment account.
- Start building retirement - NOW. Don’t wait. The value of compounding is enormous. The longer you put off your investments, the less time they have to grow. And over a long investment period, time can be more valuable than the return you earn on your investments.
- Invest Smart. Be sure you take advantage of these 2 major opportunities:
- “Free money”. If your employer offers a retirement plan like a 401(k) and “matches” any portion of your contribution – do it! Would you say no to someone handing you a $100 bill?
- “Free growth”. If you can, participate in as many of these types of accounts as you can: employer-sponsored plans, IRA’s, SEP’s, and Profit Sharing. In each case, you pay no taxes on the money you earn until you withdraw it. Beats losing your money to Uncle Sam.
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