Simply Junior

One of the best possible things you can do to provide for your retirement years is to set up a small business. Between the tax benefits you can receive, to the fact that you can often make a tidy sum of money, owning a small part time home based business is without a doubt one of the best things you could ever do. But this letter isn’t about that specifically; we’ll get into that as the year goes on. What I do however want to suggest is a “plan” that you can set up for your retirement goals.

If you are a sole proprietor of a small business and you make less than 200K dollars a year, you can qualify for a retirement plan called a ” combo Sole owner / 401K profit sharing plan”. I know that’s a mouthful, but it’s important to realize that this thing exists. Why? Because you can dump a ton of money in it.

Although you can indeed search the web and find enough information to set one of these up yourself, any financial advisor, or even the officers at your bank should be able to set one up for you quite easily and the going rate appears to be between three and four hundred dollars. I wholeheartedly
believe you should explore this.

Right off the bat you are allowed to put up to 12K dollars in your 401K plan. That’s a very healthy chunk right there, but wait it gets better. You are also allowed to donate up to 20% of your income into this thing under the profit sharing side of the equation. So as you can see, if you claimed say 60K dollars worth of income, you could put the upwards of 24K dollars a year into this plan. That’s right off the top, dollar for dollar donations folks.

For those of you who own your own small business, this is one of the most aggressive plans I’ve ever seen, and if you need a good vehicle to shelter some tax money, I can’t think of much better.

If you are serious about enjoying retirement, you must begin planning for retirement now. The retirement plan should keep the following in mind.

First, make a review of your finances. You must know where you are as well as where you want to be and how you are going to get there. If deep in debt chances are you are not prepared for retirement. Your retirement plan must keep in mind that you will need 70% to 90% of your current income to maintain your present standard of living.

First think of what your retirement goals are. What does retirement mean to you? For some retirement is just sitting on the porch and watching the grandkids play. Their retirement plan will then be based on this factor. For some retirement means traveling to see the world. This involves considerable expenses. For some retirement comes somewhere in between these two extremes. Knowing what you want from retirement will give you an idea to make a retirement plan.

Live a healthy lifestyle now to enjoy retirement in the future. It may be the right time now to lose those extra pounds or to quit smoking. If you are not healthy and energetic when you retire, frugal spending and living habits won’t mean a thing. If your employer provides a retirement plan ask for an explanation of this plan. Find out if you can contribute something and if your employer provides matching funds.

Speak with your spouse about his/her retirement plan. See what benefits you might be entitled to receive. Thoroughly understand any consent forms or waivers you might be required to sign. The employer must regularly provide an individual benefit statement. This should show the amount that is owned by you. Thoroughly review this statement.

Opening an IRA might be a good idea. Almost all Americans can open an IRA if they have earned income. An IRA can be a Roth or a traditional IRA. Your bank can tell you how to open an IRA. Once opened contribute the maximum amount every year to the IRA.

Each year about 3 months before your birthday you should receive a social security statement. In making a retirement plan, review this each year.

If you are near retirement age, you will need to discuss retirement plans with your spouse. You might have different plans and need to make some sort of compromise. Your family must know your retirement plan as well as other long-term goals that affect them.

It is frustrating to have time and nothing to do with it. Think about what you want to do with your retirement. Whether you need life insurance or not in your retirement plan, it is a good idea to determine its benefits. This is true especially if your family would be left with huge debts or no source of income if you were to die.

See if you need long term care insurance. Though nobody likes to think about being with a major illness that can wipe out all savings, this is a possibility as you get older. So evaluate your need for long-term care insurance.

The above suggestions may not be able to prepare you for retirement fully. However, they are meant to help you make a retirement plan and retire peacefully.

Changes in the economy can affect your retirement plans. When you start to plan for your retirement, you will need to list your goals and how you plan to achieve them.

Do you know how much money you will need when you retire? Do you know at what age you want to retire?

Most people want to be able to live comfortably when they retire. You get used to a certain standard of living and it is difficult to drop below it. The only way you can be assured that you will have enough money to live comfortably is to start planning at an early age. You should take into account the Social Security benefits you will receive but the important thing here is the age you will be able to receive full benefits. This means that your retirement plan should consist of other investments and savings plans.

One way to determine how much you will need is to use a retirement calculator. It can help you plan properly for your retirement goals. They are designed to assist you in determining a realistic amount you will need once you retire. The calculations you make are a ballpark figure because you have to determine what your life expectancy will be. It also depends on how well you budget your income.

Budgeting for your income for your retirement plan is very important. There are many different types of plans to choose from including 401(k) and IRA plans. Both of these can be set up through your employer. Most companies allow you to pay into the plan and they match what you pay. You should also consider having a plan outside of your employer. You can invest in stocks, bonds, and have a regular savings account you contribute to each month.

If you own a home and it is paid for by the time you retire, you will feel more comfortable not having to make those monthly payments.

You can start planning for your retirement by:

Looking carefully at the pension plan offered by your employer. Creating a budget for your monthly expenses. Using an online retirement calculator to determine how much money you will need when you retire. Looking at your budget again to determine how much you can set aside each week or each month to pay you. Researching stocks, bonds, or funds in which you can invest. Researching financial advisors in your area and meeting with one to help you with your retirement plans. If you take these steps, you can start planning for your retirement now. The last thing you probably want is to have to work when you feel you should retire.