Why women need retirement planning more than men do?

Here’s the whys:

Women live longer, thus with a longer life span, they’ve more years to spend in retirement (Note: In the US, the life expectancy for women, in 2007, is 83.2 years and for men, 78.5 years) Because women live longer, they need a bigger pile of money to support their retirement Women tend to outlive their husbands. On average women will survive their husbands by 15 years The combo – being on their own and living longer means that women need a bigger retirement income than men

The bad news is that women’s retirement planning just doesn’t measure up due to several factors: that they depend on their husbands to do the planning; that they’re limited in their retirement savings; that some are single mothers who can’t afford to save for something so far in the future; that some don’t understand the process of retirement planning so delay about starting a plan and that some others mistakenly think they can get along fine without any plan or savings.

Here are 6 crucial steps to guide you in your retirement planning, to let you enjoy financial security in your golden years.

1. Start to save now, no matter what

In fact, the earlier and sooner you do this, the better. The compounding power of interests on your money’s money is ….tremendous…..

Don’t delay or procrastinate your plan to save, anymore.

Stash away a portion of your income by contributing it to a good retirement plan, like the 401k or the Individual Retirement Account (IRA).

Get an employer who will match part or all of your savings in a contributory plan.

2. Work as long as you can at the highest salary you can get

The longer you work, the more you can stash away for retirement. And the older you’re when you retire, the fewer years of retirement you’ll have to fund.

3. Understand the effect of divorce and marriage on Social Security benefits

If you divorce, you’re entitled to Social Security payments equal to 50% of your ex-husband’s benefits, if you were married for at least 10 years. You’ll lose that benefit if you remarry, though you’ll be entitled to collect payments based on your new husband’s benefits. A widow is entitled to her late husband’s benefits as long as she doesn’t remarry before age 60.

4. Get out of debts

Get a good grasp on your financial position: assets and debts, and start to save for your future by paying down debts and do budgeting.

If you’ve credit card debts, get out of them fast because the interests charged on overdue payments are terribly high and the debts drain away your ability to save.

5. Learn about your finances

If you’re married, make sure that you and your husband each understand what you own and what you owe, and use insurance to plan for the possibility of death or disability.

6. Invest smartly and wisely

Don’t just let your money lay idle. Invest in a portfolio mix of stocks and bonds that’ll give you long-term growths with reasonably lucrative returns.

If you’re young, invest more of your portfolio in stocks as they generate higher returns though you’ve to brace for higher risks.

As you become older, switch more toward bonds for they’re relatively less risky and definitely would yield concrete returns for you (though not as high a return as in stocks).

Well, like it or not, retirement planning for women is important.

Don’t have this idea that there will be a Prince Charming who will take care of you……

Start to plan for your retirement. You’ll be financially secured in your golden years.

The one thing that is likely to be important, but overlooked, during the entire process of your pre-retirement planning, is tax-planning for a financially secure retirement. It is easy to save on the taxes and to enhance your total retirement income, simply by keeping informed, doing a little judicious research, and taking the right steps.

Consider a rollover of retirement funds from an IRA to a Roth IRA Defer income or accelerate deductions to qualify for the Roth IRA conversion Consider a rollover employer stocks and bonds to IRA Calculate the tax payable on lump sum distribution from the retirement plan Maximize tax deferral through various distribution methods for your IRA and annuities Take the required minimum distributions from your IRA in lowest tax years Avoid penalty tax on the distributions from your IRAs Use disability insurance premiums to maximize the non-taxable part of disability benefits Create separate IRA accounts for beneficiaries to maximize tax deferrals Reduces or eliminate federal estate taxes on IRA benefits Use charitable beneficiary designations to eliminate taxes on IRA benefits

The various strategies for tax-planning for a financially secure retirement, some of which are explored below, are fairly simple, and can make a substantial difference to your finances in your retirement. For example:

You can avail quite a solid long-term tax saving if you transfer funds from a traditional IRA to a Roth IRA. You can save on taxes because you are in a lower tax bracket while making the transfer than the point where you would withdraw the funds. You can also transfer high-income assets to the Roth IRA, or pass your IRA funds to your heirs if there is a lot remaining after you die.In addition, you can gain long-term tax savings due to tax rate differential.

Consider making the transfer from IRA to Roth IRA in the particular year when you have a tax loss or fit into a low tax bracket, for some reason. Although the amount transferred, or a part of it, is taxable income, it can be offset against your tax losses. Alternatively, you may have to pay taxes on the funds you transfer at lower tax rates than those that will apply to future distributions from the IRA, giving you substantial long-term tax savings using the tax rate differential and the tax-free distribution of earnings from the Roth IRA.

Long-term tax savings can also be accumulated by transferring high income assets. Regular IRAs generally have assets that may have a high income potential. Transfer those assets to the Roth IRAs. Even if you have to borrow money to pay the tax on the transfer, the rate of earnings from the transferred assets is higher, than the interest rate on your loan, so there will be a substantial long-term tax saving.

Don’t borrow from a home equity line of credit can to add to your savings, even though it qualifies for deductions on the interest you pay on the loan. You can also use low-yielding liquid funds for paying the tax on the transfer to the Roth IRA.

If you don’t use your IRA funds during retirement, transfer them to a Roth IRA, before your heirs inherit it. The advantage would come from the fact that Roth IRAs do not have to make distributions during your lifetime, while traditional IRAs make minimum distributions when you reach the age of 70

Life in post retirement phase is never the same. After years of active, busy and disciplined working life style, what a person wants is a life of comfort and peace. A comprehensive retirement insurance planning insurance policy takes complete care of your financial needs during the post-retirement phase of life.

Benefits

Retirement insurance planning insurance comes with a number of benefits.  You get ample income during your post-retirement years and thus you don’t have to depend on anyone for your requirements.  The contrary, you can still provide financial back up to your kids and their families.

Some of the benefits of retirement insurance policy are as follows;

1. Tax benefits galore

Investing in retirement policy is the best way to avail of tax benefits.

According to government law in most of the countries, premiums paid for life insurance policies are exempted from tax deduction.
2. Protection to family

The main purpose of having a life insurance policy is to provide protection to your near and dear ones in case something happens to you. A comprehensive retirement planning insurance policy ensures that your spouses and children do not have to face economic constraints even during your absence.

3. Ample retirement income

Retirement insurance policy boosts your retirement income and thus gives you to live a life of luxury and comfort even when you are not earning.

4. Most reliable

Investing in retirement insurance policy is the most trusted and reliable form of investment.

It is hundred times better than falling prey to other market-driven investment plans. While value of money invested in share market may rise and fall depending upon the market trends, money invested in life insurance provides you stability as it always comes back to you without any loss.

Click on the following link to contact us for highly affordable and comprehensive Retirement Insurance Planning Insurance.

Retirement Planning! (Canada)

What is retirement planning?
A simple definition is: The setting aside of enough money during one’s income earning years to provide an income during retirement.

Seems simple enough, doesn’t it?
In years gone by it was possible for the money set aside in this manner and supplemented by Government assistance such as the Canada Pension Plan and Old Age Security, to provide for a comfortable and dignified retirement lifestyle.

Canadians have a Registered Education Savings Plan (RESP) for their child’s higher education; however, I believe we also need a Retirement Education Savings Plan, for everyone else.
Neither age nor income level should prevent us from taking an active and proactive interest in our retirement planning.

We have been alerted to the possibility that those of us newly retired or soon to retire will not be able to count on the Government support that our parents did.
We are on our own!
If we are to achieve and maintain a financially secure retirement we must become knowledgeable, informed and involved in creating the income that will support our retirement financial needs.
Fortunately, technology has made it increasingly easy for anyone with the desire and initiative to get as much information as is needed to begin to take an active role in their own financial planning and welfare.

Because we are living such longer and more active lives many of us will need almost as much income as we needed before we retired.
Then too, health issues can place a bigger financial strain on our retirement income.
So, if we do not want to live a limiting and financially restricted lifestyle when we retire, we must take steps today that will ensure we have the financial means to enjoy a secure retirement.

So, how will you handle retirement?
Burying your head in the sand is not an effective plan. If you plan to retire, you can and should learn about the many effective and efficient financial strategies and vehicles that will ensure that your “golden” years really are “golden”.

There are those in the financial industry who present a doom and gloom attitude about what they perceive will be the lack of sufficient retirement funds for a majority of future retirees.
I do not agree with this outcome as a foregone conclusion.

Achieving your retirement financial goals means understanding what you have today and how to use it to effectively create the security you will need in the future!

When people think about their overall retirement strategy, they often include plans such as 401(k)s and IRAs. Many overlook the possibility of using a defined benefit plan as an additional tool for reaching their retirement goals. Defined benefit plans are often misunderstood, considered a thing of the past or erroneously thought to be appropriate only for large corporations. Defined benefit plans can provide a very rich retirement planning tool for small business owners, allowing them to maximize their contribution up to $200,000 or more.

What is a Defined Benefit Plan?
Defined benefit plans are retirement plans in which the employer promises to make specified benefit payments to qualifying employees at retirement.

There are Two Types of Defined Benefits Plans:
Pension Plans: A pension plan is a retirement plan in which participants are given a pre-determined monthly benefit amount provided they meet certain requirements. Monthly benefits are calculated based on age, years of service and income. An employer must maintain the plan at an adequate funding level to meet future benefit obligations.

Cash Balance Plans: A cash balance plan is a hybrid of defined benefit and defined contribution plans. An employer credits a participant’s account with a set percentage of his or her yearly compensation plus interest, and guarantees a contribution level and minimum rate of return.

Advantages of Offering a Defined Benefit Plan:
o Owners can contribute more than the 401(k) limits of $15,500/$46,000
o Owners have the option to overfund contributions (150%) in a good year
o Provides a powerful tool to retain high quality employees
o Allows for larger tax deductions compared to a defined contribution plan
o Employer contributions can be taken as a business expense deduction
o Allows an excellent way to provide retirement income to employees who have a short window before retiring (owners and mid-or late-career new hires)
o ERISA protects qualified plan assets from more creditors in the event of bankruptcy or lawsuit