Retirement Tool » retirement plan

Women are more likely to work in part-time jobs that don’t qualify for a retirement plan

admin — Thu, 12 Aug 2010 21:04:47 +0000

Because women are more likely than men to interrupt their careers to start a family and to take care of aging family members, they are often more likely to work in part-time jobs. As a result, these part-time jobs don’t qualify for a retirement plan. Thus many women work fewer years and contribute less towards their employer sponsored retirement plans such as 401K.

Regardless the working status, women need to plan ahead. Even if you’re a stay-at-home mom, you can contribute to an IRA. The limit now is $5,000 a year. If you work full time and qualify, join a retirement plan now. The earlier you start, the less you will have to contribute. Waiting until children are off college or your 50s is not a good plan in retirement planning.

Retirement planning sounds so far ahead, but you need to start as soon as possible

admin — Sat, 07 Aug 2010 00:45:26 +0000

For most people, retirement seems so far ahead. Every few women start thinking about their retirement planning until children are out of the house. Mostly in their late 40s and 50s. But keep one thing in mind, the earlier you start, the easier it is. It’s a simple number game. The longer you save and invest, the less you have save every month. Because you have all the years for growth and compounding.

Retirement planning should start early and continue throughout your lifetime. Here are four reasons why saving matters to women – and especially to you!

Women are more likely to work in part-time jobs that don’t qualify for a retirement plan. And working women are more likely than men to interrupt their careers to take care of family members. Therefore, they work fewer years and contribute less toward their retirement, resulting in lower lifetime savings.
Of the 62 million wage and salaried women (age 21 to 64) working in the United States, just 45 percent participated in a retirement plan. Remember, even small amounts can earn interest and add up over time.
On average, a female retiring at age 65 can expect to live another 19 years, 3 years longer than a man retiring at the same age. Savings can increase a woman’s chances of having enough money to last during her retirement.
By and large, women invest more conservatively than men. Choose carefully where you put your money and learn how to make your investments grow.

Source: U.S. Department of Labor

Every women should have an IRA or Roth IRA

admin — Tue, 18 Aug 2009 01:34:11 +0000

Every women should always have an IRA or Roth IRA, even if they are a stay-at-home mom. If a divorce was to happen to a women, her separate retirement fund would still be intact and will come in handy when she reaches the age of 65.

She should invest in mostly stocks when she is younger and slowly put it in more conservative things as she grows older such as bonds. If a women has children she should put more money in a retirement fund such as an IRA than a college savings account until the IRA is fully funded. College can be funded with things like scholarships and student loans, but retirement must come from a woman’s own pocket.

If the workplace has a retirement fund that can be matched, this is not to be passed up. The match is essentially free money that the company is giving her. Fund the retirement fund up until the match, then place the rest of money that is going towards retirement into an after-tax fund.

Self Directed IRA Account – The Best Retirement Plan For Business Savvy People

admin — Thu, 18 Jun 2009 19:44:59 +0000

By Ricky Devel

It was in 1975, when an investment option was introduced and grouped in the lists of the individual retirement accounts, which is now commonly known as the Self directed IRA account. Many people who begin to study all the possible retirement investing selections, most of the time don’t take a good look on Self directed IRA accounts. But if you thoroughly examine the whole feature of this IRA, you may deem it as the best and the most effective retirement account for you especially if you prefer an account that provides you the right to take full control of your assets.

When you open a Self directed IRA account, you’ll be delighted to know about the wonderful opportunities it can give you as a contributor. As its name denotes it, you can build and establish all your investments through your direction and management. You can in real fact house your funds in assets that include real estate market, partnerships, franchises, mortgages and other kinds of investments.

If you are already decided that you want to invest your money in a particular business, the first thing that you should accomplish is to consult a custodian or an administrator, who will facilitate your paperwork needs and will buy the investments and assets that you want to take control of. Remember, that this doesn’t in any way reduce your power over your Self directed IRA because the management of your assets is ultimately your task.

One of the best investments for a Self directed IRA is the real estate market. You can also grab hold of the chance to lend funds in your retirement plan, so you can invest in some mortgages. Other types of assets that you can obtain through your Self directed account are franchises, companies and partnerships.

The other types of IRAs more often than not are not allowed to invest in industries that are high-risks; this somehow lessens the generation of high profits and gains. But when you have a Self directed IRA account, you can put your funds in non-conventional assets or high-risk businesses as long as they fall under the guidelines of the IRS.

There are numerous kinds of self directed IRA investment options that you can get hold of, especially if you have the comprehensive understanding on how you can run the business you chose to put your money in. Investing in high risks assets can be dangerous, though the gains and profits can be huge, particularly if the assets you’ve got perform very well in the market.

Many people are afraid to go for self directed account because they find it to be quite complex, but if you are a business savvy individual and you like taking risks then this may be the best individual retirement account for you. Another significant factor that you should have when you open this account is an all-inclusive and comprehensive business plan, so you can manage your investments well.

Always keep in mind that the success and profit generation of the Self directed IRA account relies on you solely. Learn the self directed investments basics before starting on any IRA or investment plan.

Article Source: EzineArticles.com

A 401(k) Plan is a defined contribution plan

megdilts — Thu, 14 May 2009 20:47:50 +0000

A 401(k) Plan is a defined contribution plan that is a cash or deferred arrangement. Employees can elect to defer receiving a portion of their salary which is instead contributed on their behalf, before taxes, to the 401(k) plan. Sometimes the employer may match these contributions. There are special rules governing the operation of a 401(k) plan. For example, there is a dollar limit on the amount an employee may elect to defer each year. An employer must advise employees of any limits that may apply. Employees who participate in 401(k) plans assume responsibility for their retirement income by contributing part of their salary and, in many instances, by directing their own investments.

Source: U.S. Department of Labor

What is a cash balance pension plan?

megdilts — Tue, 12 May 2009 15:49:50 +0000

There are two general types of pension plans-Defined Benefit Plans and Defined Contribution Plans. In general, defined benefit plans provide a specific benefit at retirement for each eligible employee, while defined contribution plans specify the amount of contributions to be made by the employer toward an employee’s retirement account. In a defined contribution plan, the actual amount of retirement benefits provided to an employee depends on the amount of the contributions as well as the gains or losses of the account.

A cash balance plan is a defined benefit plan that defines the benefit in terms that are more characteristic of a defined contribution plan. In other words, a cash balance plan defines the promised benefit in terms of a stated account balance.

Source: U.S. Department of Labor

How to prepare for retirement?

megdilts — Tue, 12 May 2009 15:48:08 +0000

The three major elements of your retirement portfolio are benefits from pensions, savings and investments, and Social Security benefits.

Each year the Social Security Administration sends you your personal Social Security Statement, which gives you an estimate of the monthly benefit amounts you and your family may qualify for now and in the future.

Once you’ve reviewed your Statement, you may want to explore a variety of retirement scenarios using a range of assumptions about your future earnings or when you stop working.

Source: the Social Security Administration

Simplified Employee Pension Plan (SEP)

megdilts — Fri, 08 May 2009 19:29:03 +0000

Simplified Employee Pension Plan (SEP) is a plan in which the employer makes contributions on a tax-favored basis to individual retirement accounts (IRAs) owned by the employees. If certain conditions are met, the employer is not subject to the reporting and disclosure requirements of most retirement plans. Under a SEP, an IRA is set up by or for an employee to accept the employer’s contributions.

Source: U.S. Department of Labor

What is Employee Stock Ownership Plan (ESOP)?

megdilts — Fri, 01 May 2009 16:58:18 +0000

Employee Stock Ownership Plan (ESOP) is a type of defined contribution plan that is invested primarily in employer stock.

Source: U.S. Department of Labor

Employee Retirement Income Security Act of 1974 (ERISA)

megdilts — Fri, 01 May 2009 16:57:12 +0000

A Federal law that sets standards of protection for individuals in most voluntarily established, private-sector retirement plans. ERISA requires plans to provide participants with plan information, including important facts about plan features and funding; sets minimum standards for participation, vesting, benefit accrual, and funding; provides fiduciary responsibilities for those who manage and control plan assets; requires plans to establish a claims and appeals process for participants to get benefits from their plans; gives participants the right to sue for benefits and breaches of fiduciary duty; and, if a defined benefit plan is terminated, guarantees payment of certain benefits through a federally chartered corporation, known as the Pension Benefit Guaranty Corporation (PBGC).

Source: U.S. Department of Labor