Whether your retirement is a few decades or a few months away, now is the time to prepare for your postcareer years. While you’re daydreaming of one day surfing the coast of Florida, why not surf the Net for some tips to help you save for retirement?
One of the first steps toward a successful and stress-free retirement is to understand your options for saving money (and how to avoid unnecessary tax penalties). Although the Social Security system has helped provide for retired Americans for over 70 years, the system's uncertain future is putting more pressure on younger generations to prepare for retirement independently. In this section we’ll provide sites that give you an outline of your saving options, so you can be confident about choosing a retirement strategy that's right for you.
- This guide, like many of the sites recommended here, includes some terminology that you might not be familiar with; Investopedia, published by Forbes, provides an extensive list of retirement terms that should help you understand retirement lingo (and pick up some retirement tips along the way).
- Many banks provide information about saving for retirement online and offer retirement savings services such as IRAs or other investments. Some you'll be able to sign up for online, whereas others require a bank branch visit to set up. Your own bank might waive fees or provide better rates if you open accounts there, or it might be able to provide you with more information, such as access to a financial advisor, that could help you make a decision about what sort of account to open (and even where to open it).
- To begin your search for retirement plans, try checking your company’s intranet (internal Web site) for information about plans such as a 401(k) that might be available to you. If your company doesn’t have such a Web site, ask someone in your HR department.
- Any type of saving can be considered "retirement planning." Investing in real estate, buying stocks, or contributing to a savings account are all ways of preparing for the future. In this guide we'll focus on tax advantaged plans, such as IRAs and 401(k)s.
- Whether you're a seasoned investor or new to financial planning, you'll benefit by having a glossary of retirement terms handy to refer to when unfamiliar words crop up. The Washington Post has a short glossary with definitions for common retirement terms, such as 401(k), Keogh Plan, and Roth IRA. The Motley Fool's "All About IRAs" section has an IRA glossary with definitions for nearly 20 key IRA terms and concepts. For something slightly more comprehensive, explore TD Ameritrade's "Planning & Retirement" glossary.
- “Tax deferral” means postponing the payment of taxes on an investment until a future date. With a 401(k) a percentage of a worker's wage is added to the plan pretax, and payment of those taxes is deferred until the worker decides to withdraw funds in the future, making the plan tax-deferred. A tax deductible expense, such as the funds added yearly to certain types of IRAs, is subtracted from a worker's gross income, reducing his or her taxable income at the end of the year.
Types of tax-advantaged retirement plans …
The Internal Revenue Service
offers information about the different types of tax-advantaged retirement plans, such as IRA-based plans, 401(k) plans, and IRC 403(b) Tax Sheltered Annuity Plans. Click on a retirement plan of your choice to get a definition of the type of plan as a whole (for example, an explanation of what IRAs are) and then examples and definitions of specific types of accounts or investments that fall into each plan.
at CNNMoney.com has a retirement planning lesson in its “Money 101” section that provides an outline of things to know about retirement planning as well as the basics of 401(k) plans and IRAs, which are the most commonly utilized retirement vehicles. This section also has a quiz that you can take after you’ve finished reading to see how much information you’ve retained.
401(k) plans …
The Motley Fool
publishes “Is Your 401(k) Foolish?” provides an extensive (and quirky) explanation of 401(k)s and 403(b)s. This guide begins with a 101 course to 401(k)s, gives advice about how to choose your investments wisely, and much more.
presents this article "Max out your 401(k)." It's a guide to understanding 401(k)s, and more importantly, getting the most out of them. It offers tips on forming a plan, padding your 401(k), and understanding the myriad rules that govern how money goes into and comes out of them.
Individual Retirement Accounts (IRAs) …
has a simple and concise explanation of IRA-based accounts. Here you'll find definitions of traditional, Roth, SARSEP, SEP, and SIMPLE IRA plans. The IRS also offers "check-ups
" to help business owners and employers understand the different IRA plans and which plan is best suited for their company.
The Motley Fool
presemts “All About IRAs,” a comprehensive guide to the IRA. This guide covers the 11 types of IRAs; discusses contributions, conversion, and distributions of your IRA funds; gives answers to common IRA questions; and even provides a short IRA glossary
. Read this guide from start to finish or navigate to a section of interest using the list of sections on the right side of the page.
presents “Which IRA Is Best?,” explaining the three major types of IRAs (Roth, deductible, and nondeductible) and provides a chart to let you know who is eligible for each type, the maximum yearly contributions allowed for each, and the regulations regarding withdrawals. This article should help you determine which IRA is right for you.
publishes this article with the "10 myths of IRA investing." Sponsored content alert: content for the article is provided by Fidelity Investments, so the article is peppered with “How Fidelity can help” links.
For information about social security …
The U.S. Social Security Administration
site has a retirement planner that helps you understand your social security retirement benefits, provides benefit calculators, explains retirement options, and more.
“Social Security 101” gives a quick overview of what social security is and who is eligible to collect it. The main social security section of the AARP site has articles and opinion pieces
from the AARP about current social security laws and potential changes to the social security system.
For information about plans for the self-employed …
“Tax-Free Retirement Accounts for the Self-Employed” provides a chart of the different types of retirement accounts you can set up as a self-employed individual and the yearly contribution limits of each. Not sure what the difference is between a Roth IRA and an SEP? No problem; this page also explains in further detail what each account is and how it might benefit you.
has information to help the small business owner choose between SEP-IRAs, SIMPLE-IRAs, investment-only plans, 401(k)s, and self-employed 401(k)s. The information is pretty straightforward and credible, but keep in mind that Fidelity is also pitching their products and services, and there are alternatives.
published this article in 2006, entitled, "'Dilbert' deserves the economics Nobel," describes how the nine-step financial formula devised by the "Dilbert" cartoon's creator, Scott Adams, is not only brilliant but, in a parallel universe, worthy of the Nobel prize.
There's no better time to start planning for retirement than right now. The earlier you start saving, the more time your money has to grow, and the better off you'll be come retirement. In this section we recommend sites full of tips and tools to help you not only start saving early, but also to help you make smart investing choices to maximize your future benefit.
- Several sites help you estimate how much money, as a percentage of your current income, you’ll need during each year of your retirement. These estimates should not be used as an absolute measure of what you’ll need; consider that you might be making a lot more money as you near the end of your career (and thus have acclimated to a more expensive standard of living), and the potential for the inflation rate to rise or fall (and affect how much money you’ll actually need).
- If your company has a 401(k) plan, check the Web site of the plan’s provider to get information about the different ways you can allocate funds within your account, including past performance and how much risk is associated with each.
- Many blogs offer good financial advice and practical money-saving tips. You’ll find links to specific blog entries in this section, but consider using a blog search engine (such as Technorati or Blogpulse) to find some more useful articles of your own.
- You can find a lot of free advice online, but to plan for your retirement, consider hiring an expert financial planner to help you make the best decisions for your specific financial situation. You’ll find ways to locate a financial planner below.
- High volatility investments produce larger gains over time, making them good choices for young investors who have plenty of time to recoup savings following any down drafts.
- If you are worried that putting money away for retirement might make it more difficult for you to put together cash for large investments such as the purchase of your first home, think again. Some retirement plans allow for penalty-free early withdrawal in special circumstances such as purchasing your first home, paying for college, or paying for a large medical bill.
- The findingDulcinea Investing Guide provides a lot of great Insights and Picks to help you invest wisely (for retirement or otherwise).
For tools to help you take a do-it-yourself approach to retirement planning …
has "Retirement Tips for Individuals" that outlines some simple steps you can take to prepare for retirement. This page provides advice such as "Review Your Social Security Statement" and "Learn About Your Spouse's Retirement Plan."
on MSN.com's “Retirement and Wills” planning section provides some useful articles as well as "retirement decision centers" that offer insight on issues such as "The right way to retire early" and "How to live well in retirement."
For blog entries with tips and tricks for saving …
I Will Teach You to Be Rich
has an aptly named entry called "The World's Easiest Guide to Understanding Retirement Accounts" that is perfect if you are in the early stages of your career. This blog entry provides a straightforward overview of 401(k)s and Roth IRAs, plus charts and examples to support the author's opinion that investing early is the best way to ensure financial security during retirement.
My Retirement Blog
has a post, “7 Retirement Tax Haven States” that might make you reconsider where you live to get better mileage on your retirement savings.
To find a financial planner …
The Certified Financial Planner Board of Standards Inc.
site guides you through all aspects of financial planning including how to do research for yourself and how to find a trusted financial adviser. In addition to having a sidebar for basic information, the site also posts featured articles.
The Financial Planning Association
hosts PlannerSearch, a tool that gives you access to a nationwide database of financial planners. Enter your zip code or city, and then refine your search by selecting the type of service you need. The service asks that you register an account, but you can also elect to search anonymously.
For tips from different investment firms …
provides a chart to help you understand the benefits of saving early. Click on a question of interest on the left of the screen to get tips about figuring inflation and other risks into your retirement planning, healthcare options during retirement, a preretirement checklist, as well as ways to make your money last during retirement. Know that Fidelity.com is ultimately trying to get you to invest in their products, but that the advice (taken with a grain of salt) can prove helpful to any investor.
has a “Retirement Center” that breaks down your retirement concerns into three sections: “I’m already saving or just starting to save for retirement,” “I’m preparing to retire,” and “I’m already retired” so that you can get the information most relevant to your situation. Like Fidelity.com, Vanguard is trying to get you to invest with them, but the site nonetheless provides some great advice for any retirement questions and provides tips about where to allocate your assets, which IRA is best for you, and how much you should withdraw in retirement.
Retirement is really a numbers game: are you putting enough in the bank now so that you can live comfortably later? On the Web you can find an array of calculators to help you understand how what you put away now will work for you come retirement.
- Online financial calculators can be handy tools, but only if you use the information you get from them wisely. Find out if the calculators have adjustable settings (such as for inflation, poor stock performance, or variable levels of contribution on your part) so you can understand how changing factors might affect your savings.
on MSN.com has a useful retirement planner calculator. Enter a few details including your age, expected retirement age, life expectancy, current income, and current annual savings, and this calculator will give you an idea of how realistic your retirement expectations are.
Financial Planning Toolkit calls itself "your personal financial adviser" and offers a planning guide, financial calculators, and tools for planning your future. It also highlights top financial news stories and allows you to search for help by topic with a clear table of contents.
has a savings calculator that lets you enter information about your taxable accounts, your tax-deferred accounts, what your state and federal tax rates are, and even the expected rate of return on those accounts. In case you aren’t sure what numbers to fill in for some of the tax or return rates, CNNMoney.com provides helpful hints alongside the calculator.
The U.S. Social Security Administration
site has three different calculators to help you determine what your social security benefits will be. Choose a calculator depending on whether you want a very rough estimate of your benefits or a very detailed estimate. You’ll need to download the most detailed calculator this site offers, but other calculators can be used online.
has an education center with a retirement section that links to other retirement planning resources and calculators to help you plan.
For a 401(k) calculator...
has a 401(k) calculator that predicts the amount in your plan at retirement, by factoring in amount already saved, monthly salary, percent of salary contributed, percent of employer contribution, rate or return, and years left working.
The nearer you are to the end of your career, the more pressing the issue of retirement becomes. Plenty of Web sites offer tips and tricks to help you make the most out of your last years of full-time work so that you can enjoy retirement without the burden of finances.
- You can be taxed heavily for withdrawing funds from your retirement accounts too soon. Check the IRS Web site for the latest information about retirement and tax law to make sure that you don’t unnecessarily incur penalties on your retirement savings.
- Keep yourself organized as you near retirement to make sure you have everything in order; this checklist from Eons should help.
- As you get closer to retirement, you may be able to start contributing more money to your retirement savings without incurring any tax penalties. Check the IRS Web site for rules about catch-up contributions and other tax information about your specific account.
“Financial Planning and Retirement” section has a great deal of financial-planning resources as well as good overviews of retirement-planning strategies. The "Retirement Roadmap Tool" helps you determine how your expectations of retirement match your finances. Or start with the “Retirement Planning Calculator” and then research the various elements of planning. For an overview, watch the "Mission Retirement"
“Retirement” section has investing strategies, (such as "Last-Minute Retirement Planning
") and a few "Now That You're Retiring" ideas and tips, as well as resources specific to certain types of retirement plans. Be sure to scroll down the Retirement page to see all of the archived stories, worksheets, and resources for retirement.
has a Fidelity Retirement Quiz that reveals some surprising figures about how inflation rates and your own withdrawal rates can affect your retirement savings in the long run. Eons also has quite a few useful articles to help you plan as you get closer to retirement: try the "When Can I Retire?" article
to get some basic guidelines for how much money you'll need, as well as some practical things to consider before selling your home and moving to warmer environs to loaf around on the beach.
After you’ve spent decades planning for your retirement, it’d be devastating to find yourself in financial trouble simply because you mismanaged your money during the first few years of your retirement. Depending on how much you save, you might not have to worry much about your spending during your golden years, but a few tips and online tools can give you an idea of how your finances compare to your retirement spending habits and how to make sure you end up with enough in the bank to live comfortably.
- If you are worried that your funds are running short, consider taking a look at our findingDulcinea Mortgage Guide to see if perhaps a home equity loan or reverse mortgage is an appropriate option for getting additional money during retirement.
- See our findingDulcinea Estate Planning Guide for additional estate planning resources.
- Want to keep busy during retirement? Take a look at our findingDulcinea Part-time Jobs, Freelancing, or Philanthropy Guides to find ways (other than lying on a beach) to spend your postcareer days.
"How Long Will My Money Last?" worksheet can help you figure out if you need to live frugally during retirement, or if you can start living in luxury.
has an article called "How can I estimate my Retirement Lifestyle Cost?" that helps you do just that. You'll even find a sample budget to help you make estimates for certain costs (or to remind you of expenses you might forget to factor into your cost of living).
has a "Managing Money in Retirement" article that provides advice about how to spend (and manage) your money after you've retired. This article also provides links to other Web resources about annuities and charitable gift annuities.
has resources for the legal questions that we face as we enter retirement: estate planning, caregiving, income and financial-need calculators, and more. This site also has adjustable text size for easier reading (found on the top right of the homepage).
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