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How To Retire

Updated on February 24, 2013

Retirement and retirement planning are two subjects that most people don't think about until they absolutely have to. My aim with this Hub is to help you by sharing some tools that make planning for retirement less complicated. One tip that I could give you before we dig deeper is to learn something about money everyday: equity research, forex, financial markets, etc.

The Rule of 72

This is a great tool to have when planning for retirement. If you want to see how long it would take to double your retirement savings you would basically divide 72 by the rate of return you are earning on your retirement fund. So if this return is 6%, you would end up with 12 years as the result and this is how long it will take for the fund to double in value.

Consider Annuities

Asset protection is key in saving for retirement. This is why an annuity can be such an integral part of retirement planning. Annuities offer no downside risk as the principal can never be lost. If you invest $50K and then make 5% on the principal and are now at $52.5K, you will not lose the money even if the market hit rock bottom the next day.

The other good thing about annuities is that they are liquid and 10% can be withdrawn without suffering any penalties. It appears like a risk-free way to invest for retirement given the erratic movement of the stock market. Annuities work almost like a savings account!

Estate Planning

Investing for retirement isn't exactly hot on people's lists, but one thing I want to highlight here is the importance of having a will. Wills and trusts take away a lot of the costs associated with leaving money to heirs like probate and expensive court fees.

The first thing you want to do when estate planning is to take inventory of the assets that you already have: stock market investments, business interests, insurance policies, real estate retirement savings, etc.

Invest in Assets that Produce Income with Minimal Market Risk

I talked about annuities a little earlier in this Hub and there is a very special type of annuity - the Equity Index Annuity with an Income Rider - that really does the job for you. We're talking about something with no downside risk at all as the principal will never be lost and the same goes for the credited gains.

You could also withdraw 10% of the annuity without facing any penalties! It's also a great way to negate probate and any annual fees.

Multi-Generational IRAs

These multi-generational IRAs also known as stretch IRAs are a wonderful way to preserve your assets and ensure that your grand kids have a sizable inheritance when they reach retirement age.

For example, if your beneficiary happens to be your 6-year-old grandson and the value of the retirement fund is $300,000 when you die, the savings will grow to $19.8 million when he reaches the age of 66 assuming a rate of return of 7 percent.

PREtirement tips from Retirement Expert Kris Miller


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      Mahendran 5 years ago

      Great stuff to get me thinking about retirement. I definitely know 'how to retire' now.