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Im Too Young, Im Too Old, Im Almost Old Enough, Should I Have A Retirement Plan?

Yes retirement planning is important for all of us. This is not an easy subject for any of us to talk about, but, we must discuss it sooner rather later!

We want to be able to enjoy our golden years comfortably without having to worry about our finances. Planning your retirement is a crucial key to making this happen.

So, what do I need to do to plan for my retirement? You can start by asking and answering some or all of these questions: How long will it be before I retire? Do I have money already saved for retirement and if so, will it be enough for me to retire on? How much money should I put away for my retirement? How should I invest my money in order to achieve the amount of money I want to retire on? How much money will I need to live on to maintain my present and future lifestyle?

All of these retirement planning questions are important for you to think about in order to have solid retirement planning. Once you have answers to these questions, then proceed to start your retirement savings now!

What are some of the areas I can invest my money in for retirement? Stocks, bonds, certificate of deposits, mutual funds, 401K, IRA, Roth IRA, annuities and many other miscellaneous investment vehicles.

Where can I expect to withdraw money for my retirement? Social Security, savings, pension plans, and your investments from 401K plans, certificate of deposits and other investments.

How much money will I need for retirement? It is estimated that you will need approximately 60-80% of your current income at the time of your retirement. This will allow you to live the lifestyle you are accustomed to having by the time you retire.

When should I start saving for retirement? Now! It’s never too early or late to start saving for your retirement. The sooner you start the more money you will have for your golden years to live on.

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Juggling may be entertaining, but the average person may not have the concentration to keep the balls in the air. Yet half of Americans in their prime savings years juggle their retirement money in three or more accounts, according to Fidelity Investments estimates.

Whether they are 401(k)s from previous jobs or forgotten IRAs, these multiple accounts can burden investors with several statements and potentially more account fees. Most importantly, scattered accounts may make it more difficult to keep a diversified investing strategy on track.

“It’s natural to think that multiple accounts may automatically diversify a portfolio, but that’s not necessarily true,” says Cynthia Egan of Fidelity. “In fact, managing a mix of stocks, bonds and cash across numerous accounts can be confusing and may make it harder to detect risks to your portfolio.”

For example, some investors unknowingly hold the same security in several accounts, which could result in a big hit to the portfolio if that stock price falls. Identifying how much is “too much” is simple with one view of all your retirement money.

Merging multiple accounts into a single Rollover IRA can make it easier to manage your savings, allowing you to easily review your holdings and quickly make adjustments. Here are three more tips to help simplify your portfolio:

1. Find them all. Even if you have to spread your statements across the kitchen table, identify all of your accounts that can be consolidated, including forgotten IRAs and old 401(k)s.

2. Mix it up. We’ve all heard that while diversification doesn’t ensure a profit or guarantee against loss, an age-appropriate mix of stocks, bonds and cash is the key to potentially better long-term performance. Make it easy with a lifecycle fund that is automatically rebalanced by a professional as your target retirement date approaches.

3. Keep it moving. Just like your regular trip to the dentist for a preventive checkup, be sure to review your portfolio annually to make sure your overall retirement strategy stays on track.

Fortunately, there are many resources available to help you manage your retirement savings. At the end of the day, however, consolidating retirement accounts into a single IRA account can help you more easily evaluate your retirement assets, develop a more thoughtful retirement strategy and monitor your investments to build your portfolio – making it easier to keep your eye on the retirement ball.

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In the next 10 years, the first wave of America’s 76 million baby boomers will be retiring. Since today’s retirees are generally healthier and more active than their parents, they are looking forward to living longer and spending more time playing with grandchildren, pursuing hobbies or even trying new careers.

Investors enter retirement with more confidence if they have a thoughtful retirement strategy. Planning ahead helps those nearing retirement prepare for when company paychecks stop coming and the goal of accumulating assets gives way to generating income from those assets for retirement expenses.

While planning for and managing income in retirement may not sound like fun, it is the most effective way to be confident in your future. Consider the following.

* Calculate how long retirement will last. Since retirement doesn’t have a preset time limit, this first step can be particularly challenging. Many of our customers are surprised to learn that they are likely to live in retirement just as long as they worked. A 65-year-old couple retiring today, for example, should plan to have enough money to last at least 20 or 30 more years, according to a 2003 Fidelity study. When determining how long your money will need to last, realistically estimate the expenses that are likely in your own retirement and consider that you may live longer than you think – possibly into your 90s.

* Preserve and grow assets. Fear of a down market can cause some retirees to be too cautious, so they sell virtually all of their stock holdings. While they should protect their assets, retirees should recognize that they may also benefit from growth that can come from investing in the markets. In fact, long-term success may lie in a portfolio that includes an appropriate mix of stocks, bonds and cash. The key is to find an asset mix that is age-appropriate and generates enough income to help offset withdrawal requirements and the effects of inflation over time.

* Simplify to stay on track. Pre-retirees expect to manage an average of nine sources of income, including Social Security, multiple 401(k)s, annuities and personal savings, according to a 2004 Fidelity study. These assets are often held in multiple accounts at different financial institutions, making it difficult to develop and maintain a comprehensive investing strategy. For example, mutual funds from different firms may hold similar investments, potentially increasing risk to your portfolio through greater exposure to volatile markets or sectors.

To prevent this from happening, anyone five to seven years from retirement may want to consider consolidating various 401(k)s and other retirement accounts in one place, or finding a tool that easily provides a look at your entire financial picture in a single view.

Creating a thoughtful retirement strategy involves sharp focus and detailed calculations, and can force couples approaching retirement to face difficult considerations for the first time. Luckily, there are many resources available to help investors prepare their retirement strategy. Planning for the future is the key, however, and helps build financial confidence so that you can enjoy the retirement you have worked so hard to achieve.

Cynthia Egan is executive vice president, Fidelity Investments.

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Retirement may be a long way off for you or it might be right around the corner. No matter how near or far it is, youve absolutely got to start saving for it now. However, saving for retirement isnt what it used to be with the increase in cost of living and the instability of social security. You have to invest for your retirement, as opposed to saving for it!

Lets start by taking a look at the retirement plan offered by your company. Once upon a time, these plans were quite sound. However, after the Enron upset and all that followed, people arent as secure in their company retirement plans anymore. If you choose not to invest in your companys retirement plan, you do have other options.

First, you can invest in stocks, bonds, mutual funds, certificates of deposit, and money market accounts. You do not have to state to anybody that the returns on these investments are to be used for retirement. Just simply let your money grow overtime, and when certain investments reach their maturity, reinvest them and continue to let your money grow.

You can also open an Individual Retirement Account (IRA). IRAs are quite popular because the money is not taxed until you withdraw the funds. You may also be able to deduct your IRA contributions from the taxes that you owe. An IRA can be opened at most banks. A ROTH IRA is a newer type of retirement account. With a Roth, you pay taxes on the money that you are investing in your account, but when you cash out, no federal taxes are owed. Roth IRAs can also be opened at a financial institution.

Another popular type of retirement account is the 401(k). 401(ks) are typically offered through employers, but you may be able to open a 401(k) on your own. You should speak with a financial planner or accountant to help you with this. The Keogh plan is another type of IRA that is suitable for self employed people. Self-employed small business owners may also be interested in Simplified Employee Pension Plans (SEP). This is another type of Keogh plan that people typically find easier to administer than a regular Keogh plan.

Whichever retirement investment you choose, just make sure you choose one! Again, do not depend on social security, company retirement plans, or even an inheritance that may or may not come through! Take care of your financial future by investing in it today.

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