Friday, November 13, 2009

10 Tips on How to Prepare for Retirement

10 Tips on How to Prepare for Retirement

By THE ASSOCIATED PRESS

The average American spends 20 years in retirement -- and far too little time preparing for it financially.

Here are some basic tips on retirement planning, as compiled by the U.S. Department of Labor:

1. KNOW YOUR RETIREMENT NEEDS. Experts estimate you'll need about 70 percent of your pre-retirement income -- lower earners, 90 percent or more -- to maintain your standard of living when you stop working. Calculate what you'll need. Check the Labor Department guide to savings fitness on its Web site at http://www.dol.gov/ebsa/pdf/savingsfitness.pdf.

2. FIND OUT ABOUT YOUR SOCIAL SECURITY BENEFITS. Social Security pays the average retiree about 40 percent of pre-retirement earnings. Call the Social Security Administration at 1-800-772-1213 for a free Social Security statement and find out more about your benefits at www.socialsecurity.gov.

3. LEARN ABOUT YOUR EMPLOYER'S PENSION OR PROFIT-SHARING PLAN. If your employer offers a plan, check to see what your benefit is worth. Before you change jobs, find out what will happen to your pension. Learn what benefits you may have from previous employment. Find out if you will be entitled to benefits from your spouse's plan.

4. CONTRIBUTE TO A TAX-SHELTERED SAVINGS PLAN. If your employer offers a tax-sheltered savings plan such as a 401(k), sign up and contribute all you can. Your taxes will be lower, your company may kick in more and automatic deductions make it easy.

5. ASK YOUR EMPLOYER TO START A PLAN. If your employer doesn't offer a retirement plan, suggest that it start one.

6. PUT YOUR MONEY INTO AN INDIVIDUAL RETIREMENT ACCOUNT. You can put up to $5,000 a year into an Individual Retirement Account (IRA) and gain tax advantages. If you're over 50, you put an extra $1,000 into your account in what's known as a catch-up contribution.

7. DON'T TOUCH YOUR SAVINGS. Don't dip into your retirement savings. You'll lose principal and interest, and you may lose tax benefits. If you change jobs, roll over your savings directly into an IRA or your new employer's retirement plan.

8. START NOW, SET GOALS, AND STICK TO THEM. Make retirement savings a high priority. The sooner you start saving, the more time your money has to grow. Devise a plan, stick to it, and set goals for yourself.

9. CONSIDER BASIC INVESTMENT PRINCIPLES. How you save can be as important as how much you save. Inflation and the type of investments you make play important roles in how much you'll have saved at retirement. Know how your pension or savings plan is invested. Financial security and knowledge go hand in hand.

10. ASK QUESTIONS. Talk to your employer, your bank, your union or a financial adviser to get more information about retirement planning. Get practical advice and act now.

Thursday, November 12, 2009

Make Sure Your Health Insurance Plan is Grandfathered

Hello all. Well, this a.m. I was in a very interesting Anthem Blue Cross meeting. Please make sure that the health insurance plan you are currently enrolled in is one that will be grandfathered for 2013. It seems that will be one of the parts of the new reform that will occur. When the new reform happens in 2013, some plans will be grandfathered, the ones with Anthem specifically. They will still be in "the game". Many insurance companies are expected to leave the market once the govt plan is put in place. The government plans will of course be much more expensive than the private plans we have today. If you do decide to move to a government run plan you will NOT be able to move back to a private plan if you so choose so please be careful and keep an eye on this reform as it happens these next few years. Thanks! Have a wonderful day!