One of the biggest risks to a comfortable retirement is running out of money too soon. This calculator helps you determine your projected shortfall or surplus at retirement. You can also see just how long your current retirement savings will last. If your results project a shortfall, you might need to save more, earn a better rate of return, or possibly delay your retirement. Here are current HELOC rates and current Beverly Hills mortgage rates.
Our rate table lists current home equity offers in your area, which you can use to find a local lender or compare against other loan options. From the [loan type] select box you can choose between HELOCs and home equity loans of a 5, 10, 15, 20 or 30 year duration.
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The romantic notion of retirement displayed on popular movies and television programs is what a lot of us want for our own lives. Rounds of golf, trips around the world, plenty of time to spend stress-free with the grandchildren. These are the dreams and goals of so many. One must do a great deal of retirement planning in order to reach those ideals.
In many cases we don't mind being called average. Many of us find the term comforting. We think of ourselves as average and we feel that we are part of a larger group of people. It is rewarding and satisfying. However, when it comes to retirement you certainly do not want to be the average American.
The amount saved obviously increases as an average with age. According to The Motley Fool The breakdown is as follows:
That may sound like a lot of money to most of us. $100,000 or more is more than most of us have ever seen in our lifetime. Even so, that is not nearly enough to live the type of retirement life that you really want to in most cases. What a lot of Americans think is that they can rely on Social Security to bail them out. What we are starting to see though is that this may not be the case at all.
August 14, 1935 was the day that the Social Security Administration was founded. It was a Great Depression era program that still exists to this day. In fact, it is among the most popular government programs in America (along with the likes of Medicare and Medicaid). While it is a system that has worked for a very long time, there are some who question just how long the program can remain solvent.
At issue is the fact that when Social Security was created their were many more workers and fewer retirees. The retirees got to benefit from the money they put into the system via the taxes paid by the workers of the day. When those workers got to retirement age they expected to enjoy the same benefits for themselves from the workers of tomorrow. The program was designed to work this way forever.
Problems arose when the number of retirees continued to climb. Baby Boomers began to retire and the economic situation has been somewhat bleak in terms of job growth until recent days. More jobs are being outsourced or taken over by technology. As a result, there are not as many workers to retirees as a ratio as there were when Social Security first came into being. That can cause the whole thing to fall apart in a lot of ways, and that is what has many retirement planners so worried.
CNBC.com, the leading business news website, has published an article that projects that Social Security will remain solvent only until 2033. That doesn't mean that the program completely goes away in 2033, but it's financial future becomes that much more in doubt.
Those who have relied on the idea that Social Security will back them up in retirement better prepare for a rude awakening. The only person who can really prepare for your retirement in a financial sense is you. The government may still have programs when you reach that age, or they may not. Unless you are a really big gambler, you should probably not roll the dice on this for your retirement planning.
Pensions were once a very big thing in the working world. Most everyone had them as part of a stable job package that they also had going for them. Things have changed dramatically as most employers have moved to a 401(k) system under which the individual is responsible for his or her own retirement planning. That being said, there are some who are coming into retirement soon who still have pensions from years gone by.
What those doing their retirement planning should know is that pension rates of return forecast are being lowered from where they used to stand. Some areas are lowering their rates to around 6.5% annual returns compared to the 8% standard that is used in a lot of other places. This reflects the belief that rates are not going to be nearly as high in the future as they were in the past. There is good reason to believe that given market volatility.
In decades past it was not unreasonable for a pension fund to expect a 10 or even 11 percent return annually as a standard year. There were years when those funds might even jump as much as 20 or 30 percent. Those days seem to be long gone and a more conservative estimate of returns is called for.
What this means for those doing retirement planning is that they must brace for lower returns. They should get out a calculator or use one online to see just how much some of these lower projections will impact the total value of their nest egg. It is a good idea to give this a look over because lifestyle adjustments may be called for.
In order to live the good life it may be necessary to cut back on some of the expenses holding you back from that. The fewer things that you are spending on unnecessarily equal more things you can spend on that you actually care about.
There are probably more than a few things that you are spending on that you do not need to be worried about as much. We take a look at a few of these to give you some ideas of where you may be wasting your money.
Insurance
Insurance is a good idea for most people to carry, but there are some exceptions. If you have a big life insurance policy that is meant to go to your children but they are already grown, you might want to eliminate it. Premiums can eat away at your savings very quickly, and you might not really need to provide this coverage to them since they are now older and can take care of themselves.
College
Perhaps you are still hoping to pay for the college tuition of a child. That is a perfectly acceptable and very generous thing to do. At the same time, you should carefully consider which college to pay for and what options are available via scholarships and the like. Some states are even making community college much less expensive or even free in some cases. That can be a great stepping stone towards a 4-year degree in the future.
Get Rid Of The Extras
If their are services you no longer use consider getting rid of them. Some of these might include things like cable or Netflix. You may enjoy these things and want to keep them for yourself, but a lot of people nearing retirement find that they have much better things to do with their time than sit around in front of a television screen. If you do not feel that you are getting much value out of having these subscription services you ought to nix them right away.
Cheaper Vacations
If you are not working anymore you have time to look into getting the best deals on vacations. What this means in practice is that you can schedule your vacations around the best times to go and book a flight or something like that. It is easy to compare prices and times online, and you ought to do this in order to find deals that you can really appreciate and save money on.
We have already looked at how so many programs from the past cannot be relied on to provide you with your retirement future, so what can be counted on to get the job done? The answer to that has everything to do with you personally boosting your retirement savings.
The easiest thing for you to do is start paying yourself first. When your paychecks come in, make sure to take a portion of them right off the top and give it to yourself. You want to do this because you deserve to have something for all of the hard work that you put in. At the same time, if you pay yourself first you are encouraging savings behavior.
Take a certain portion from each check and just throw it into a savings account. You don't even have to think about it, you just do it. Once you have done this, you can start to see the money stack up over time, and the next thing you know you really have something going for you.
If the company that you work for offers matching funds into a 401(k) program, take advantage of it! This is free money that the company is offering you just for you doing the right thing and saving some of your money. If you are not taking advantage of this, you are doing yourself a big disservice. You can build up your retirement nest egg a lot quicker if you use the power of your own money along with the free money that the company is offering to you.
Take a look at what you are investing in and notice the fees charged as well. You are supposed to be investing for yourself, so there is no reason why you should be enriching the person who manages your money. Fees are a great way for the manager of a fund to make him or herself wealthy, but you don't want to be the one paying them. While most funds have some fees associated with them, you should try to make sure that you are only putting your money in ones that keep fees as low as possible.
Most of us feel that we are pretty smart people and are not likely to fall victim to any kind of scheme or trickery. That is the thought process of everyone who does fall for a scam though. Sometimes our ego can get in the way and not let us admit that we too are potential victims in a fraud if we don't take action to prevent something like this from happening. Given this stark reality, we should be aware of the potential pitfalls that so many others have fallen for in the past.
Hot stocks are one of the things that a lot of people get lured in by. This is the idea that someone has a great tip on a stock that is just about to take off in value. That person may even say that they have some inside information about the company that the rest of the public knows. Not only may this be illegal in the form of insider trading, but it is also rarely true.
There are plenty of people who think that they know something about a stock before everyone else. The thing is, if this were true then why wouldn't they just invest the money in the stock for themselves and make the profits? Why would they come over and share this information with you? You might think that they are only doing so in order to be a friend, but more likely it is because they have another motive. They want as many people to buy into something that they already own in order to increase its value. Do not risk your retirement savings on something like this.
Other types of schemes that people sometimes fall for are things like timeshares, multi-level marketing, and the like. These are great ways to send all of that time you used retirement planning down the drain. You could take your retirement money and put it into one of these types of programs, but you are only going to be disappointed when it doesn't work out.
Multi-level marketing in particular is something that gets a lot of people caught up. The individuals who promote these types of companies try to sell people on a dream. They will tell them that they can be their own boss and make huge amounts of money. They will say that it is just as easy as selling products and recruiting others to do the same. After that they convince a person to buy a "starter kit" or something similar for a certain price, and that is where the multi-level marketing company really makes its money.
Every time someone does work with one of these companies they are working with a company where only a very small percentage of people even make any real money. Most are left out to dry with nothing to show for their efforts aside from a smaller bank account. It is the opposite of retirement planning to do something like this.
One of the nice things about being at retirement age is that a lot of companies want to cut you a break on their prices. There are all kinds of outlets that offer senior discounts or pricing. They may even have some freebies just for those over a certain age. It is a system that rewards those who are in retirement and may be on a fixed budget.
There is no shame in taking advantage of these types of benefits. You might find a senior day at your local bowling alley or enjoy a deeply discounted coffee from your favorite fast food restaurant. Whatever the case may be, these are little perks worth taking advantage of in order to save yourself a little more money.
Remember, at the end of the day the way you get to enjoy your retirement depends entirely upon how much you have saved already and how you spend those savings. It is possible to live on less than the average person and be content, but you may not want to. You just have to decide what kind of retirement you would like to have and how much money that will cost you in order to make it happen.
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