Retirement savings options

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Retirement Planning

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?

Retirement savings options

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.

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  • 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.

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Types of tax-advantaged retirement plans …
401(k) plans …
Individual Retirement Accounts (IRAs) …
For information about social security …
For information about plans for the self-employed …
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Saving for retirement during your career

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.

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  • 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).

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For tools to help you take a do-it-yourself approach to retirement planning …
For blog entries with tips and tricks for saving …
To find a financial planner …
For tips from different investment firms …
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Retirement calculators

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.

Dulcinea's Insight

  • 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.

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For a 401(k) calculator...
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Last-minute retirement planning tips

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.

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  • 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.

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Money management during retirement

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.

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  • 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.

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