Evan Vitale

Evan Vitale – Planning For Retirement

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By Evan Vitale

No matter your age, you should never put off thinking about – and planning for – your retirement. For many, the idea can become too overwhelming that many people put it off until a later time.

However, instead of a delay, now is definitely the time to make some decisions that will help ensure that you have a nice nest egg so you’ll be able to live comfortably down the road.

When you retire will have an impact on how long you’ll need to plan on living on your savings. In addition, how much you’ll spend has a greater impact on how much money you will need to save. For example, will you have your mortgage paid off by the time you retire? If you don’t have to worry about a mortgage payment, that will be a huge financial weight off your shoulders. If you won’t have your mortgage paid off, then you may have to consider selling your house for more income.

Of course, many people decide to sell their home because they want to move to a warmer environment (i.e. Florida) or live closer to children and grandchildren. If that’s the case, you’ll need to consider the cost of living at your new location.

In addition, some people like to travel when they retire. If that’s the case, you’ll need to factor in vacations; hotels and meals away from home.

Other considerations include gifts for the grandchildren, eating out, club memberships – all of these are things we would probably enjoy when we reach retirement age, but can we afford them? Are we currently good at setting up a budget and sticking to it?

In order to reach your retirement goals, you’ll definitely need a strong financial plan. Talk to your banker and meet with a financial planner to begin investigating what needs to happen in order for you to plan for your retirement and reach your retirement financial goals.

How to Properly Manage Your Money

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Some people grow up never knowing how to properly manage their money. They’re always broke and live paycheck to paycheck and are always wondering why they have no money. Yet they are out there living way beyond their means and still struggle each month to pay their bills. The way you manage, invest and manage your money can really impact your life and future and it’s sad that many schools fail to adequately teach students how to properly manage their money. For those having a hard time managing their money, here are some golden rules of personal finance:

Spend Less

At the heart of personal finance is spending less than you earn. Just because you bring home a certain amount of money each month, doesn’t mean you have to blow it all. This includes using credit cards to act as cash that you don’t have. You don’t want to live beyond your means, so spending less will help you figure out what’s important in your life, while also helping you save for the future. Create an expense sheet for your cash flow for a month and see what’s necessary and what’s not so that you can cut things out that you don’t need.

Save for the Future

A big part of your financial life should be saving for the future. This could be for when you’re old or for a rainy day when an emergency hits and you need funds fast. You should always factor in your savings when coming out with a monthly expense plan. And it should be listed as a necessity.

Invest Your Money

Make your money work for you by investing it. Properly investing your money will help your financial future. Invest in things that will earn you money over time and don’t always stash your money away in a low-interest savings account.

Get Out Of Debt

Debt can really weight you down, so make it a point to get out of debt over time. Focus on certain credit cards with high-interest rates and pay those off first.

Why You Should Never Raid Your 401(k)

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Your 401(k) is supposed to be used in retirement and not one day before, thus making it a bad choice for those looking for a loan. You should never take out of your 401(k) unless it’s your last resort and you have nowhere else to turn for cash. Although your 401(k) might look like a good alternative for funds when you’re strapped for cash, face long-term unemployment or have an unforeseen emergency and need cash right away, it’s not and will hurt you in the long-term. Here are a few reasons why you should never raid your 401(k):

Quick repayment

If you leave your job after you’ve taken out money from your 401(k), you only have 60 days to repay that loan – whatever the amount is. That can be quite hard if you’ve taken out a large amount and don’t have the savings to replace it. And if you stay at your job and still take out money from your 401(k), you have to repay it in five years, so these aren’t great for really large ticket items since you’ll still have a high monthly payment.

Early withdraw penalty

If you’re under the age of 59.5 year and take out any money, you will be hit with a 10% early withdrawal penalty on your outstanding loan amount. And that’s not even factoring in any federal and state income tax on that money. (There are some exceptions to this, which include people who are disabled or pay for medical expenses that are over 10% of your adjusted gross income.

Employer-sponsored rules

All of employer-sponsored 401(k)s have their own set of rules that you must follow. Although some of them allow you to take out loans from your retirement fund, other companies do not. Usually, the rules are you can take out a loan on your 401(k) if you are in some type of financial hardship or are a first-time homebuyer.

Can’t get that money back

If you make a withdrawal instead of taking out a loan on your 401(k), you can’t get that money back. And that means less money for your retirement.

 

Evan Vitale – How to Retire When You Want

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By Evan Vitale

Most people in America are hard workers. We are a nation of workaholics, according to citizens from other nations around the world. We work on average over 40 hour weeks and more than 20 percent of Americans work 49 hour weeks; 11 million Americans say they regularly work 59 hour weeks. But what are we working towards? Yes, many are truly passionate about the jobs they have or the businesses they run and the work is its own reward. Even the people who say that must, however, look forward to the peace and professional freedom that accompanies retirement.

Retirement doesn’t mean being trapped in an armchair watching TV. It can mean having the money and freedom to start a new adventure! So, in the interest of helping Americans reach retirement when they want, here are three easy tips to get there:

Set Goals for Savings

Retirement doesn’t have to be scary. These tips will help you plan a retirement at a time that works for you.

There is no real way to know how much you might eventually make no matter what job you have. But, you can, with a little thought and a few rows in a spreadsheet, decide exactly how much you would like to have to get by for the last 20, or even 30 years of your life. So, how do you get there? A solid rule to follow is to save 10 to 15 percent of your salary every year.

If you can do this – especially if you are able to invest it a safe, slow growing fund or retirement account – and start early, it is amazing how the money can add up. Compound interest will make that money really grow over the years!

Balance your Portfolio

Everyone knows there are risks that come along with investing. No one, not the top investors at big hedge funds nor the small private investor in his home in Middle America is safe from the unpredictable nature of the market if they only have one investment. That is why diversified accounts are recommended at every level to every investor.

By having your wealth distributed between many types of investments, stocks and bonds included, and many different industries and companies, you will have a solid cushion if one of those investments fail. You might grow a little more slowly, but you will also be much more safe should anything unexpected happen.

Make One Big Account!

Having diversification is key when it comes to investments but that doesn’t mean you need to have a ton of different accounts. It turns out that having all of your money in one large account is better because it makes it easier for whomever is managing your money to keep track of all the funds available. Also, having everything in one place allows for better chance for diversification. Two well managed but separate accounts might share similar investments, for example both might invest in the same mutual fund, and therefore the diversification of the portfolio as a whole is compromised. So, when you are getting ready to retire, you might consider rolling all of your funds into one, easily managed, well diversified account.

Follow these tips and you will be able to have a much better shot at retiring when you want!

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You can read other blogs by Evan Vitale at http://evanvitale.net and http://evanvitale.com.