Retirement Investing

March 8, 2010 at 11:51 am · Filed under Home & Family

When getting near the retirement age many people start analyzing their options for spending their lifelong savings. There is hardly any room for retirement investments, because few people really care to continue doing business after a certain age. There is the risk of inflation and the uncertainty of how long you are going to live that reduce the options of retirement investing. Therefore, it is only normal to find a reasonable way to lead a comfortable life spending what you have so far accumulated.

retirement investment

Another form of retirement investing is the purchase of a life annuity. This eliminates one major risk: that you spend all the saved money and have zero in the bank account towards the end of your life. Thus, if you entrust your savings with an insurance company, they will pay you a fixed amount monthly, for the rest of your life. Companies that sell annuities as a form of retirement investing also provide life insurance, so that they win in a double sense. Yet, inflation makes annuity a tricky choice.

The right retirement investing option would be to join a program that guarantees an unchanged purchasing power every year. This means that the amount in the annuity should increase yearly with what is known as the Consumer Price Index. Check with the company and see whether they provide inflation adjustments for the annuity, and if they don’t, shop elsewhere. The inflation adjustment is thus operated by means of the Treasury Inflation-Protected Securities. And finally, keep a close watch on the fees charged for annuity services.

retirement investments

Experts claim that annuity should be a retirement investing option when you have exhausted the money from the retirement funds. And here you have a clear example. When you are in your 40s you can make the retirement plans expecting to live to the age of 95. By then, all the money from the savings will be used. The remaining solution to cover for living and health care costs at that age is to use whatever real estate you’ve got and convert it into an annuity.

retirement investing

Other ideas for smart retirement investing that protects one against inflation is stock ownership. Maybe $1 million will not mean the same thing in 50 years from now, but if you have a small ownership percentage in General Electric for instance, you will still be a rich person despite of the inflation. Consider such elements carefully while you are still an active worker because this is the time to make the right decisions.

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How to Choose a Retirement Financial Planner

December 9, 2009 at 12:10 pm · Filed under Home & Family

Regrettably, some people don’t begin planning their retirements soon enough, nor do they fully grasp the principles of growing retirement income. This is due in part to the fact that most people don’t have access to reputable asset allocation advice. There’s actually plenty of good free investment advice out there, but you usually have to pay if you want the information customized to your needs. As a result, some people try to fend for themselves, only to find out later that they’re not where they want to be financially. This is why experts recommend using  financial pros to develop retirement plans. And because it’s your hard-earned money, you owe it to yourself to do your homework first so you can ask intelligent questions questions of the financial advisor and understand the answers. Learning the financial ropes a bit in advance can also lower the financial consultant’s bill.

Here are some of the subjects you should investigate before you hire a professional financial advisor:

How insurance impacts your financial future
Not everyone needs life insurance basics because they don’t have dependents that make life insurance necessary. But those who do should make sure they understand what they’re buying. Knowing the difference between whole life, term life and variable universal life (VUL) will help you choose the right option for your circumstances. And I’ll clue you into one fact right from the start: cash value policies can usually be counted on to produce a bad return on investment and will probably cause your family to have inadequate coverage. So you should keep that in mind when you speak to a financial consultant.

The difference between load and no-load mutual funds
Some financial consultants get commissions on sales instead of an hourly rate, so they only make money if they steer you toward “loaded” funds (funds with service fees). This is why it’s sometimes better to pay by the hour for financial consulting, so you can get objective advice. If you study the difference between load and no-load funds, you’ll see why this distinction is important.

Have an idea when you want to retire and how much you’ll need to save
Before you meet with a financial planner, it would be prudent to know approximately when you want to retire and how much money you think it will take to maintain your lifestyle. That will help him or her to work with you to create a plan to get you where you need to go.

Once you’ve done the homework above, there’s just one more thing to do: make some inquiries of your friends and family if they have any recommendations before you pick a financial consultant to work with. Once you have that information, see if the candidates have built wealth in their own lives. If they haven’t been able to do it for themselves, they won’t be able to do it for you!

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Wealth-Building: Tips for Picking a Financial Consultant

December 3, 2009 at 5:14 am · Filed under Money and Finance

Unfortunately, some people don’t begin planning their retirements soon enough, nor do they fully grasp the principles of growing retirement income. I attribute this to the fact that most people don’t have access to dependable mutual funds investing advice. It’s not that there isn’t good financial advice out there, but payment to a consultant is usually involved if you want custom information. So, many people opt to go it alone, only to discover too late that they won’t have what they need to retire. This is why experts recommend using financial pros to develop retirement plans. And since it is your hard-earned money, you owe it to yourself to do some research first so you can ask informed questions of the financial advisor. Getting the lay of the land, financially speaking, will also save you money if your advisor charges an hourly rate.

Here are some of topics you should know before you pay someone for financial advice:

How life insurance affects your financial bottom line
Some people don’t need information on term life insurance and other forms of insurance protection because they don’t have dependents that make life insurance necessary. But those who do need it should choose wisely. Understanding the difference between cash value, term life and variable universal life (VUL) will allow you to pick the option best for you. And I’ll clue you into one fact right from the start: cash value policies, such as whole life and universal life can usually be counted on to produce a bad return on investment and will often leave your loved ones with inadequate coverage. So you should keep that in mind when you talk to a consultant.

The differences between no-load and load mutual funds
Some financial consultants get commissions on sales instead of an hourly rate, so they only make money if they steer you toward “loaded” funds (funds with service fees). This is why it’s sometimes better to pay by the hour for financial consulting, so you can get objective advice. If you study the difference between load and no-load funds, you’ll see why this distinction is important.

Have an idea when you will retire and how much money you’ll need
It’s a good idea to know about when you’ll retire and how much money it will take to maintain your lifestyle before you meet with a financial planner. That will help her form a plan.

Once you’ve done your homework, you’ll want to to do just a little bit more: ask your friends or family if they can recommend someone before you pick a financial consultant to work with. Once you have that information, see how well that person has done with his own finances. If you don’t see evidence of that they did it for themselves, they won’t be able to do it for you!

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