Tag Archive | "saving for retirement"

Your 2013 Retirement Gift From The IRS


Don’t get too excited, it’s actually a very small gift — and it won’t put your retirement savings ahead of the game in any way. But it is better than nothing — I suppose — so here’s your 2013 retirement gift from the IRS.

Your 2013 retirement gift from the IRS. It won’t make your retirement much better.

Your 2013 retirement gift from the IRS

On Oct. 18, the IRS announced that the contribution limits for the most commonly used retirement accounts — IRAs and 401(k) plans — would be going up. For 2012, you can put as much as $5,000 into an IRA and up to $17,000 in a 401(k) account. In 2013 those amounts increase $500 for both types of accounts. The additional amounts that those age 50 or older are allowed to put in will remain the same – an extra $1,000 for IRAs and $5,500 for 401(k)s.

It baffles me that you can still contribute more to a 401(k) — with all their problems — than you can to an IRA which gives you much more flexibility in planning and saving for your retirement. But that’s the government for you….

The reason for the changes? Inflation. Inflation adjustments are designed to let your retirement savings keep pace with rising costs of living.

You’re being thrown a bone so that at least — hopefully — your retirement savings can keep up with inflation; assuming you can afford to plunk down all that cash and still make ends meet.

The real problem is that so many Americans have been beaten down by the poor judgment and misguided policies of big business and the government, that we can barely save anything at all. So, happy new year and here’s your 2013 retirement “gift” from the IRS.

Click here to read more about your 2013 retirement gift from the IRS.

Posted in Creating a Personalized Retirement Plan, Planning for Your Retirement, The EconomyComments (0)

Expenses You Can Live Without


Life is like a balance sheet — you have money coming in and money going out. When the going out side is greater than the coming in side — well, you’re in trouble. Cutting back on expenses can be painful — after all, it’s easy to get used to all those little luxuries that make life bearable — but to get ahead and plan for retirement, you may have to. Here are some expenses you can live without.

Expenses you can live without

Cable Television

Now, now. Stop screaming. Do you really need 200+ channels? We all know how little really good programming is out there.

With most users facing $100-plus monthly cable bills, eliminating this luxury is a quick way to shore up a substantial amount of money without sacrificing staying up to date with your favorite shows.

There are a variety of cheaper Internet alternatives like Amazon Prime and Netflix that stream TV shows and movies for a year-long subscription that typically cost less than a month’s cable bill.

If you can’t live without local programming, an HD antenna is another option. Remember when we went through the digital switch? Your local stations still broadcast “over the air,” you just need to get an antenna.

Text Messaging

If you’re under thirty, this may be a hard habit to give up — it really is convenient — so if you must text…

…opt for a text messaging plan to save money and consumer savings expert Andrea Woroch says there are free texting apps for both the iPhone and Android phones that allows you to keep in touch for free.

Smart Phone Data

Data can also beef up a cell phone bill. Gone are the days of unlimited data, which means consumers are paying more to have surf the web on their phones. To lower the cost, consumer savings experts recommend turning off your data connections when not in use and to take advantage of free Wi-Fi whenever possible.

Cell Phone

I know. Getting rid of your cell phone may be even more painful than getting rid of your cable or satellite TV. But do you really need it? And if you do, do you really need all the extra features on your plan? If you spend most of your time at home and at work, it may be that all you really need is a land line in your home.

Gym Membership

Seriously. When was the last time you went? Some people love it, but for the rest of us, “…there are other options that will work you out for a lot less, or even free.”

Consumers can purchase exercise DVDs or stream them online for the fraction of the cost of a gym membership. If you crave companionship, there are a lot of local parks and recreation centers that offer free classes, and more and more churches are building gyms that are open to the local community.

Bottled Water

Buying a bottle of water when on the go doesn’t seem that budget busting and is convenient, but that everyday expense can quickly add up.  “That’s $1.50 every day,” says consumer savings expert Andrea Woroch. “That’s a $75 savings in just 10 weeks.” Make the initial investment in a reusable water bottle and then fill it up at the water cooler at work.

If you travel, you don’t have to pick up a water bottle in the airport. Just take your empty reusable water bottle and fill it after you clear security.

Coffee, Tea and Other Beverages

It’s great to stop at Starbuck’s — or your favorite Java shop — on the way to work. Your barista knows you, gives you a warm, friendly smile and charges you six bucks for a grande cup of sweet, caffeinated goodness. Or the soda you have every afternoon. No problem, it’s just a dollar. Except you could make coffee at home that’s almost as good for just pennies and buy your soda at the market for a fraction of what you put into the machine.

I don’t want to come off as a scrooge, but there’s a lot we can do to save a few dollars here and there — and those dollars do add up. Invest that money wisely for your retirement and you may find there are many expenses you can live without.

Click here to read more about expenses you can live without.

Posted in Planning for Your Retirement, Saving for Retirement, The EconomyComments (0)

Americans Are Teetering on Their Own Fiscal Cliff


As our Federal government totters uncertainly toward what has been called a “fiscal cliff,” many Americans find themselves in the same precarious situation with little hope in sight. Americans are teetering on their own fiscal cliff and many could find themselves retiring in poverty.

Americans are teetering on their own fiscal cliff

Laurie Nordquist, co-head of Wells’ Institutional Retirement and Trust unit reported:

…the number of middle class investors who said their biggest financial worry was paying the bills jumped to 52% this year, up from 37% last year. The phone survey canvassed 1,000 middle class Americans, aged 25 to 75, from July to September. Fifty-three percent of middle class investors surveyed said they are not confident they will have saved enough to fund the life they want in retirement, up from 42% in 2011.

More and more of us are having to deal with hard economic realities that leave little or no money to save for retirement. To make matters worse, we are underestimating how well we’re doing in saving for retirement.

They still underestimate how far behind they are on the path toward meeting their retirement goals. One-third of those surveyed believe they’ll need less than half of their pre-retirement income to live on after leaving the workforce. With the median household income just over $50,000 last year, that works out to $25,000 – close to the poverty line for a family of four.

Conventional wisdom suggests cutting back wherever possible and saving more. There’s nothing wrong with that, but conventional wisdom also suggests:

Advisors who work with 401(k) plan sponsors can help design plans to boost worker participation, using methods like automatic enrollment, and choose good investments. Nordquist and Ready said they see 401(k) plans as a real growth area for advisors.

And that’s not a good idea.

Even if many of us work until we’re 80, that only postpones the potential collapse of stock prices as millions of boomers are forced to start taking 401(k) disbursements at age 70 1/2. Remember, all those retirement funds are invested in stocks and mutual funds which have to be sold to fund payouts to retirees and buyers are essential to that transaction.

More sellers than buyers will drive the price of the stocks — and the value of the retirement accounts — down, perhaps dramatically. Americans are teetering on their own fiscal cliff, some of it of our own making, but much of it foisted upon us by employers and the government.

Click here to read more about how Americans are teetering on their own fiscal cliff.

Posted in Planning for Your Retirement, Retirement Plan Challenges, The EconomyComments (0)


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