401k Plan: What is a 401k?

Do you already have future plans for your retirement? Aside from pension plans are you aware that you can also avail yourself for a retirement savings account called a 401k plan? Today, many Americans are enjoying the benefits of their 401k retirement plan as part of their future savings and to be financially secure once they have reached their retirement age. This tax-deferred retirement plan was based on the law passed by the US Congress in the early 1980’s, the Tax Reform Act, which reflected on the Internal Revenue Code section 401k (where the name was derived from), to encourage American workers to save some part of their earnings with the support of their employers through a 401k account.

The 401k retirement plan has tax benefits for the employee as dictated by the provisions of the law, thus providing unique tax treatments as the interest gained in the account is not taxed until the time it is withdrawn by the retired employee. This is a big help for employees in reducing their income taxes, and this can be possible with the initiative of their respective employers, which means that you can get the chance to enjoy this tax advantage if your current employer allows you to enroll in the retirement program. Nevertheless, you should not worry about since most companies now days are offering the 401k plan as part of an employee’s benefits, and most of them are matching the contribution of the employees which adds more to the savings amount. For example, if 10% of your earnings go to the 401k plan, this will be matched by your employer. You can compute your total earnings with a 401k contribution calculator.

Moreover, it is a big question if the employee can set-up his own account for this type of retirement plan (as an alternate option from the conventional pension plans available), and the answer is “no”. For you to be eligible you must be working under a company and your employer must initiate to offer the 401k plan then have you fill out some forms. While you are required to complete the forms, you are also given the chance to choose some options like placing your savings for an investment such as in the form of “mutual funds” (stocks or bonds). This option is also called a participant-directed plan, and the dividends or capital gains are also not subject to tax unless they are withdrawn by the account owner. There are other options you can select and you should choose the right one that you think is the best for your retirement plan. A professional financial planner can help with with this.

The 401k retirement plan is a great solution for the retirement needs of any employee and to lower your taxable income. With a 401k withdrawal calculator, you can compute of how much money you can get from the 401k retirement fund for every month you are retired. According to the law, you can start withdrawing from the fund after you reach the age of 59 ½ years. So, while you are still young you should begin planning for your retirement with a 401k plan.


Retirement Planners – Personal Retirement Planning To Secure Your Future

In order to ensure that seniors can enjoy a lifestyle similar to the one they had when they were younger, it is essential that they undertake some kind of retirement planning. It is wise to start this planning while one is still working. However, not everyone is good at pre-retirement planning, so it may be smart to avail oneself of the services of a retirement or pension planner.

Many people who love their job don’t think about preparing for retirement, despite the fact that it can provide them with various advantages and secure their future financially. As life expectancy all across the world has risen and many are retired at the age of 60 – 65, it has become highly essential to develop a plan and stick with it. A lot of folks don’t consider hiring a retirement planner as technology has provided them with other ways of developing their own scheme to create a retirement fund. One commonly used method for planning for your own retirement is the retirement savings calculator.

A retirement calculator is designed to help individuals in finding out the annuity payments, in the form of regular contributions, which the need to be made. Based on the results of this calculator, one can develop a personal retirement plan or pension scheme. However, the individual will also have to comprehend the assumptions and limitations of the calculator in order to understand the results accurately. These calculators are not difficult to find. They can be easily obtained from a retirement planner or online from retirement websites, such as this one. It is a very good idea to utilize multiple retirement calculators, and form an opinion based on all of the results, as they do tend to vary. Unless you are really good with money management, relying soley on retirement calculators might not be the wisest choice.

People who have difficulty managing money, or understanding concepts such as an IRA (Individual Retirement Account) or compound interest might do well to hire a retirement planner or pension planner to do the planning for them. These professionals have mastered the fields of accounting and investing and have gained accreditation as a Certified Financial Planner (CFP) or Chartered Financial Analyst (CFA). As these experts possess all the required knowledge, they can easily and quickly solve all the problems related to issues such as asset allocation, tax reduction, investments, and others. A good retirement planner tries to ensure that no mistakes are made and that the money is managed properly and efficiently.

Retirement planners offer advice and provide help to people of all ages. Their services are not limited by how old or young a person is. Anyone, irrespective of their age, who is willing to invest money and wants to take financial advice, can go to a retirement planner. They help the individual to decide on which index funds, bonds, mutual funds, income funds, and other financial instruments he or she should invest.

Saving for retirement is a usually a long process, which should be started as early as possible. The earlier you start saving and contributing, the longer your retirement fund has to accumulate, and the better off you’ll be when it’s time for you to retire. Considering all of your retirement options, including consulting a retirement planner, will help to secure your future.


Military Retirement Calculator | Estimating Military Retirement Pay

If you are a member of the armed forces, planning your retirement is quite different than in the civilian world. Naturally, there are similarities as well, such as the very important rule that even if you make a plan, that plan will be pointless if you don’t follow it! Also, just as in the civilian workforce, the earlier you start planning your retirement, the better off you’ll be in the long run.

There are different military retirement plans to choose from, and thus different retirement calculators to use. The Center for Naval Analyses Retirement Choice Calculator is the first tool you’ll want to use.
Military personnel who became active after July 31, 1986, must make a choice of either the Department of Defense’s High-3 plan, which establishes retirement payout on the highest average basic pay for three years of service, or the REDUX retirement plan, that allows for a $30K immediate bonus with smaller benefit checks over remaing years.
Which plan is best for your particular situation? While the bonus paid upfront is tempting, the resulting decreased retirement payments over time can be a definite drawback. The CNA retirement calculator allows for service members to more accurately make a decision between the plans.

The CSB/REDUX retirement calculator is for service members who have chosen the CSB/REDUX plan after evaluating the Retirement Choice calculator. This calculator takes in to account the $30,000 upfront bonus payment. It allows for variables including retirement pay grade, years of military service, and your age, as well as other factors like projected inflation.
If you have chosen the High-3 plan, you’ll want to make use of the Final Pay Calculator. The Final Pay retirement system is for service personnel who became active before September 8th, 1980. This calculator gives an estimate of retirement pay based on variables such as pay grade at retirement age, number of service years, and current age. You can access the Final Pay/High 3 calculator here.

What’s great about any of these military retirement calculators, whichever plan you decide on, is that they provide visual information in the form of charts and graphs that are personalized by you according to your own situation. This information is invaluble for you to plan now for your retirement so you can live a comfortable retired lifestyle.


Retirement Calculators: Can They Really Help?

Retirement Calculators: Are they really useful in helping you to achieve your goals for retirement living? Well, yes and no.
The truth is, even a fairly simple retirement planning calculator like the one on this site can be useful, if you follow the plan and make regular contributions to your retirement fund. But of course, even if you calculate how much you need to save each month, the information is pretty much useless if don’t put it into action. This may seem obvious, but planning and “doing” are definitely two different things!

The key is to first make a realisic plan. Nobody knows what the future holds, so you have to make your savings plan based on what your current situation is, and be ready to change as times and circumstances change. If your income fluctuates a lot, it might be best to plan on putting away a percentage rather than a set monthly dollar amount. There will be times when you may not be able to afford to put away anything. Just be sure to come back to the plan when the situation improves. If you have a 401k plan, your contributions can be automatically deducted from your paycheck, and your employer contributes to your fund as well.

Retirement planning and investing can be made easier with the help of a professional. While a financial calculator can give you a broad idea of how much you need to save today for retirement, a certified financial planner can better tailor a plan to your specific needs and situation. It might be worth having a consultation about your finances and savings plan with someone who’s business is all about planning for retirement. Some financial advisors will offer free initial consultations.

So a retirement savings calculator is a good place to start. In fact, it is a good idea to use several different retirement calculators. But for them to work, you have to put the plan into action. Not a lot different than any plan in life, really. Set a goal, make a plan, and follow it to achieve success.


How Much Do I Need to Save for Retirement?

How much retirement savings will be enough when it’s time for you to retire?  This is an age old question and should be answered with a question like “Are you flying or driving?” or “What does your situation look like now?”  The reason for this is the amount of savings you will need at retirement will be directly related to your lifestyle.  When talking about retirement living and how much savings is needed, there are many considerations that need to be evaluated before you can contemplate retirement.  This can be done with or without a financial planner.  Listed below are some key points that must be taken under consideration.

1.)    How would you like to live when retired?  This is something that most people do not think about.  Do you want to live in your current home, will you be living with children, or do you plan on living in Florida and playing golf for the rest of your days.  Have you thought about senior living centers? There are so many things to consider and this will have an impact on how you make your retirement financial plan.

2.)    How much do you make right now?  How much you make right now can determine what your retirement plan may look like.  If you make a lot of money today and live an expensive lifestyle,  in order to continue you may want to consider this.  If you make a modest living and want to live modest when retired this should be looked at as well.  If you are thinking that you could make a nice living and then when retired you will cut down and live modest you might want to rethink this.  It is important to be realistic about retirement and make the adjustments today, so you can live maintain your lifestyle later.

3.)    Will you be eligible for social security or a pension?  Social security benefits don’t amount to much, but it is a regular income supplement.  On the other hand a pension can be a good income addition and getting the information on these can help you in the decision of how much will need to be saved for your retirement.

4.)    How soon before you retire?  The longer you wait to save the harder it becomes.  If you are young, planning for retirement may seem a long way off, but this is not true.  Time really does fly and before you know it, retirement age is around the corner.  The other thing about starting a retirement fund at an early age, it will allow the money saved to grow in compund interest and investment.  Because $10 today is not worth what it was 30 years ago.  As we get older, we have less time to save which means it is most important to get with a retirement financial planner as soon as you can to discuss your needs for retirement living.

5.)    Investing: When you’re young you can take advantage of investing aggressively, this will give you higher rates of return and ensure a large retirement fund.  As you get older you can change your investment strategy.  Using this method will also put you ahead of the person keeping their savings in a bank with little or no interest.

The key to retirement savings is to find out where you are now and build on it.  If you are young, starting early is the best thing you could possibly do, if you are older and have not thought about retirement, you may want to revisit this area.  The rule of thumb is you need to have at least $500,000 at your retirement date.  This means that at the age of 21 you would need to save a minimum of $11,363 annually until you turned 65.  Keeping this in mind the older you get and don’t start saving, the larger the annual amount becomes.

A retirement calculator can help you in planning a retirement, but of course you have to actually folllow the plan for it to be effective. Try out the calculator on this site, and consider getting the advice of a retirement planner to further help you in investing for your future retirement. And do it sooner rather than later.