- Personal Finance
Closing in on Retirement for Working Men and Women
Retirement is becoming closer and excitement is becoming anxiety. Some people just choose not to face retirement issues by not retiring. Health issues and forced retirement should not be anyone’s reasons to retire. Companies are becoming more demanding in the current economy. People who have more than paid the companies bills for years are pushed just as hard as the younger, newer employees. Working more than spending time with family is not a desirable way to spend years of life that cannot be taken back.
Retirement should be a plan from both the perspective of saving, obtaining income while in retirement status, and maintaining lifestyle through retirement. This means paying bills, buying new items of necessity, and maintenance costs. Staying mobile is important in life and cars, trucks, and other forms of transportation diminish over their use. One part of retirement planning that may be overlooked is a new car or new car payment. This is also true for homes or domestic habitation, nothing material will last forever. Income from rental properties, part-time employment, or income generating tasks can help to keep up with inflation.
Many people who have planned for retirement have a tax-free savings plan they will want to cash in on during retirement. What do you do, can one have better access to their money, or how does one turn this money into a monthly paycheck? If cashing out on the full amount, one might want to consider what is called a CD ladder. A CD ladder is simply dividing the larger amount into 12 smaller amounts; the smaller amounts will be invested into a CD account each month for one year. What this does is maximizes interest, maximizes the effective use (creates a situation in which a monthly budget plan is needed), creates a monthly withdrawal window, and minimizes the risk for this asset. Money Market accounts are similar but have its limitations as well, for example some Money Market accounts only allow three transactions per month without penalty and may have a lower earned interest for ones money.
Close but not quite there, then be sure to minimize the effects of the economy on retirement accounts. Trying to make this easy and understandable, smaller company investments are well paying but have a high risk, common or larger company investments are moderate paying and have a moderate risk, simple bonds and government investments low risk and low paying. These are the basic investments; the closer one is the more low risk investments should be included in the investing plan. One can move through stages of investment beginning with high risk, moving to moderate risk at the halfway point, and then moving to low to no risk for the last third of the investment life.
One last thought to removing debt besides paying a little extra each month is a different version of the “government savings plan.” Claiming a zero dependants through the taxpaying year on income tax forms can stretch people financially through the year but has its benefits. One it forces people to save money that will be returned at the end of the year. The amount received at the end of the year can be directly applied to pay down loans or pay them off for good. Most of the best selling debt free books can be summed up with by this statement, “sacrificing unnecessary purchases to pay off existing debt,” by doing this anyone who chooses can pay down any of the debts acquired and paying less of the interest.
This is a personal note and I hope it helps. Thanks