Nest Egg: How to Finance Your Golden Years with a Golden Goose

It’s never too soon to plan for retirement. In fact, the more time you spend getting ready for that stage of life, the better prepared you will be. Here are several ways to finance your senior years to ensure a comfortable quality of life.

Job Pension

If you work for a company that offers a pension plan, especially one that matches employee contributions, with each paycheck from which funds are deducted for this purpose you are building a financial future for the golden year. 

Pensions come in many types, sizes, and designs. If your company offers an optional plan that you have not yet enrolled in, you should schedule some time with the Benefits Administrator to discuss your pension options. 

If you are able to withdraw funds at various times, try to avoid doing so, as this will reduce your pension savings, leaving you with smaller monthly payments during retirement.

Financial Investments

Stock and bond investments, along with other types, can be established as conservative or aggressive portfolios. The sooner you open an investment account, the quicker it will begin to gain value and compound earnings. 

Gold and silver are also collected to earn profit over time, as are the current digital currencies like bitcoin, among others. Some people collect things that they expect to increase in value over many years, such as sports cards, valuable coins, and limited editions of collector items like dolls, antiques, etc. 

As some items increase in value over time, they can be sold to generate income for the senior years.

Social Security

When planning to retire, contact the Social Security Administration for information about your full retirement age, which can vary among different groups of people. Although you can retire at any age, for example at age 62, your full retirement age may actually be 66. 

You should also find out how many years of your employment have had Social Security deductions. You can also talk to a social security lawyer for additional help and tips. If you work in an industry that features a pension contribution plan, you might not have Social Security funds withheld. 

If you have changed jobs, your Social Security status may likewise have changed. Contact the SSA for details.

Home Equity

Paying off a primary residence or building significant equity over time can be a valuable asset in retirement. 

Not only will you be free of a monthly mortgage payment if you pay off the home, but you also may be able to use the accumulated home equity of the property as a source of borrowed funds, if needed.

Everyone needs a secure source of income when retirement rolls around. Start feathering your golden goose nest with assets like these.

Saving for Retirement with a Health Savings Account

Health Savings Accounts, or an HSA, are quickly becoming more and more popular in the United States. Not only are they a useful vehicle for saving for health care costs and expenses, but they can be a valuable tool for retirement savings as well. 

If you have a high-deductible insurance plan, you are eligible for an HSA account. Many plans and companies offer an HSA account to accompany your insurance, or you may open your own account at a financial institution. 

Health Savings accounts can be rolled over year after year and the money in your account can be invested. Often, Health Savings Accounts are often confused with Flexible Savings Accounts, which do not roll over each year.

An HSA is a great way to get and use the tax-free money for medical expenses that you may incur over your lifetime. Health Savings Accounts save you money on taxes in three different ways:

1. Your money goes into your account before it is taxed and is not counted toward your taxable income. 
2. You can invest the money in your Health Savings Account and it grows tax deferred. Any interest, dividends, or capital gains you earn are not taxed, as long as they are spent on medical expenses. 
3. When you withdraw the funds for qualified medical purposes, they are withdrawn tax-free as well - which includes all deductible and health care costs that are not covered by your insurance plan. 

Tax Implications

Since Health Savings Accounts can be rolled over year after year and the money within the account can be invested, it is another great way to save money for retirement. 

Once you turn sixty-five, the money in your health savings account can be withdrawn without a tax penalty and can be spent on non-medical expenses. The money is taxed as income, like with a traditional IRA, but there are no other tax penalties associated with using the money for things other than medical expenses. 

However, once you turn sixty-five, you are no longer able to contribute to your account, so be sure to start saving early. Saving early will help give you a good nest egg for any medical issues that may arise at any time in your life and prevent you from having to make or use a bad credit loan.

Limits and Deductibles

There are limits on who can contribute to a health savings account. You cannot be enrolled in Medicare or claimed as a dependent by another person. Your health insurance plan also must qualify as a high deductible plan. 

The qualifications for that may change, but currently, your deductible must at least $1300 for an individual and $2600 for families. The amount of money that can be placed into an account is also variable between individuals and age. 

For those under the age of fifty-five, you currently can place up to $3400 into an account per year for an individual and as much as $6750 for families in 2017. If you are over the age of fifty-five, you may add an additional one thousand dollars per year into the account as a catch-up contribution until the age of sixty-five. 

These limits are set by the IRS each year and will increase over time, as they are adjusted for inflation.

Planning for Retirement

Funds from a 401K or traditional IRA are taxed regardless of how the money is spent. With an HSA, as long as the money is spent on medical expenses, the money and your earnings will not be taxed. 

If you are over sixty-five and need the money for expenses other than medical, you can simply use the money as regular income and taxed as a 401K or traditional IRA would be, without additional tax penalties. 

The HSA also does not require account holders to withdraw funds at a certain age, as with some IRA’s and 401k’s. They can remain in the HSA for as long as the account holder wants.

5 Mistakes to Avoid When Saving for Retirement

Saving for your retirement is not getting any easier. We are in a slow-growth economy, many asset classes are overpriced, and costs keep going up. 

As such, you need to choose every month how to make ends meet while putting enough away for a comfortable retirement. This is even more important as we are living even longer. 

So you probably need to plan for 30-years, or more, or retired life. This is a big challenge and here are some mistakes which you should avoid when saving for retirement.

1. Not Starting Until it is too Late

Unfortunately, this has become a common problem. Many baby boomers lost their life’s savings during the dot-com bust and the housing bubble. What could be worse? How about not saving anything at all. 

Either spending your entire working life splurging on a luxurious lifestyle or never being able to make ends meet. Both paths lead to the same place – a retirement with little or no savings. So, stop thinking about it and start setting aside a bit of your income for retirement.

2. Poor Planning

As mentioned many baby boomers lost everything in the dot-com bust or the housing bubble. This is a symptom of poor planning and even worse asset allocation. You know the saying about putting your eggs in one basket. 

Well, a lot of people have done this whilst planning for their retirement. For some people is was relying on their pension, but then losing their job. For others, it was their 401K or their stock options. While others were just unlucky. 

Maybe they bought into the market near the top, or the held on for too long. Either way, they ended up losing close to everything.

3. We are Living Longer, More Active Lives

Don’t underestimate the impact of living to 90 or longer. 70 is the new 50, and people in their 80’s are regularly running marathons. 

Heck, my 80-year-old father-in-law still goes to work every day. Granted, he is not working like he did when he was 40, but he is remaining active.

What is the lesson in all of this? People are living longer, more active lives. As such, you need to plan for this. If you retire at 62 or 65, you need be ready for up to 30-years of retirement. 

This include being active and then the cost of assisted living and medical care later in life. One way to cover these costs is a reverse mortgage and this Q & A Series - How Does a Reverse Mortgage Work is a good start to see how it could help you.

So follow a cue from the Boy Scouts. Be Prepared. Know that it is highly likely that you will live into your 70’s, 80’s or beyond and have a plan to ensure that you can maintain your standard of living.

4. Working to Long

One of the best ways to save a little extra money is to continue working past retirement age. However, working too long can be a problem. 

Depending on the type of work you are doing it could the physical stress or mental stress. When you get older it is just harder to recover. As such, you want to look at your work plan and make sure you are not overdoing it.

It’s not just continuing to go full bore past retirement age. Working too much, such as getting as much overtime as possible, can be bad for you. 

Yes, you make more money, but you also risk working yourself to the point of exhaustion or worse. When this happens you not only end up losing out on potential income but you will also incur medical expenses.

The key is to find the right balance. If you need to keep working past retirement age, then find the right role to fit your needs. 

In most cases, it’s finding a position which will allow you to work 20 to 30 hours per week without all of the stresses associated with being a full-time employee or a manager.

5. Leaving Money on the Table

Let’s face it, almost no one works for the same company for 30-years anymore. Companies get bought, they downsize, they relocate. 

As you can imagine, this is bad for your retirement planning. Not only do you need to find a new job, but many people also withdraw funds from their retirement account to cover expenses.

This is not a good idea, especially if you can roll the fund over when you get a new job. Not only does this help you to minimize penalties. 

But you will also save on taxes and your retirement fund will continue to grow.

4 Ways to Jump Start Your Investing for Retirement

Planning for your retirement is a fundamental part of life. This type of financial planning ensures that you have enough money to live off of in your golden years. 

Retirement planning is a key part of wealth management in London, as well as nearly everywhere around the world. There are a few money managements principles that can help you get and keep the money you need for you retirement.

Start As Soon As Possible

Starting early is a necessary evil. Nearly every financial institution recommends it. No one wants to spend their life thinking about their finances, so getting them taken care of soon takes a huge load off of your shoulders. 

You should consider how much it will take for you to live comfortably during retirement. When you start early, it gives you a chance to build your savings without taking too much away from your day-to-day expenses. Even if you start saving in your 50’s, you will still be able to pad your investments and savings with a little dedication.

IRAs and 401(k)s

IRAs and 401(k)s are a great way to build up your savings for retirement if you live in the United States. A 401(k) allows you to save your own money, with additional contributions from your employer. These contributions can be in small increments or large, one-time payments, depending on how you best like to save. 

Funding an IRA, or Individual Retirement Account, allows you to set your own money aside for later use. Someone who is 50 or older can contribute up to $6,500 annually, which can come in the form of stocks, bonds, investments or cash. 

Reduce Spending

Reducing your spending little by little frees up more money to be saved for later. If you eliminate small, unnecessary things, like coffee or name brand goods, you can save money very quickly. 

This is money that can be filtered into investment programs or your savings account. Where you put the money isn’t the most important thing, just knowing that it is there is helpful. By eliminating or reducing these small indulgences, you are allowing yourself the possibility to enjoy your life more fully in the future.

Hire a Wealth Management Firm

If investment and saving isn’t your strong suite, it is always good to hire a wealth manager. These firms can show you exactly how and when to save for retirement. 

They know the ins and outs of investment strategies so that you don’t have to worry about them. Having a great money manager on your side can save you time and headaches in a way that nothing else can. 

Financial planning is a crucial part of life, especially in your later years. These few, simple to follow tips can lead you where you need to be where retirement is concerned. 

The understanding that you have what you need to thrive in your retirement years can be a huge relief. Knowing that you will be taken care of and that your loved ones won’t have to worry about you makes the decision to retire easier in so many ways.

Top 8 Tips to Boost Your Investment Insight

You may not have lots of money, but you still wish that the little you have should be multiplied. Once you have budgeted, saved some money and have your debts under control, it is time to consider investments. 

Most people feel overwhelmed when they start out on investment, but it is not as difficult as it seems. Here is what you can do to increase your investment insight.

1. Know your goal

You must figure out your goals in life, and then create a financial plan for how to achieve them. Goals that have not been well-defined are difficult to obtain because humans have a goal-setting mechanism that cannot help you to achieve unclear goals. 

Don't make the mistake of financing what you should have invested for. For example, you would rather let your investment yield rather than paying a rate on a loan.

2. Save, insure and invest

The first step for providing for you and your family is insuring, not investing. The first step to take is to secure your life, health, disability, auto, home, and liability insurance before saving and investing in your future. 

When saving money, protecting the principal is more vital than increasing your purchasing power. While in investing, the goal is to build wealth and increase your purchasing power.

3. Keep an emergency fund

Lots of people live from hand to mouth and are therefore unable to handle their financial setbacks. Some people depend on credit cards to help them through tough financial crises, only to realize that mounting credit card debts cover them. 

So, start by building wealth in an investment portfolio which will act as a backup for money that will be available during emergencies. 

Save between three to six months worth of savings in a high-yield account or any other form of liquid investment for use in unexpected financial emergencies.

4. Mark your income and outflow

You need to keep track of your spending (Whether through a forensic financial accounting or using a Smartphone financial app) of how you spend what you earn. Create a spending plan, not a budget, because no one likes to be on a budget. 

Doing this puts a definite turn to your allocation of funds for consumption, investment, and savings.

5. Invest in your health

Your health is your wealth. Money cannot buy you good health. Thus, invest in your health and you will be surprised on the return on investment.

6. Remember your retirement income

Don't think that the IRA and the 401(k) contribution limits were set by the government to ensure that you can have a comfortable retirement. You may not be saving enough. A look at Peter Briger profile, an investments expert, and you'll learn that you should put together a stream of retirement income for pension benefits, retirement savings and Social Security. 

Retirement benefits are becoming rare in the private sector. So, estimate your retirement needs and then create a plan on how to meet your needs. If this task seems too overwhelming for you, seek the help of a financial professional.

7. Capitalize on your employer's contributions to your retirement

If your employer matches your contributions to a 403(b) or 401(k) plan, ensure that you contribute to your maximum ability. A typical program matches 50 cents on each dollar you contribute up to 6 percent of your earnings. 

Thus, your employer contributes 3 percent of your salary. This gives you 50 percent on your money even before you decide on how to use your money.

Investing in your health, having clear investment goals, and a creating a good retirement plan are necessary steps to take in life. These will ensure that you gain financial independence and security for your future.