Wednesday, October 31, 2007

Retirement and Health

In planning for your retirement, buying disability, health or long-term care insurance is important. The insurance company would usually want to know a lot about you. You will be classified based on your habits, medical records and family history.

You have to have an understanding of your own health. The biggest factor in determining the insurance cost is your health.

Here is some advice from insiders to get the best health ranking possible at lowest possible rates:

1. Tell the truth

Hiding some facts on your health will not help you. First, the insuring company will eventually find out because they do have your records. They will presume that the problem is serious, since you did not mention it. Worse, withholding info the company regards as important could lead to the cancellation of your policy.

Give the insurance company your complete health history. But do it under your own terms. For example, don’t just say that you have high blood pressure. Inform them that you have been diagnosed with high blood pressure several years ago and have kept control of it.

Give them complete information and reduce the uncertainty, then eventually you would get a good deal.

Be careful on how you say things, a hesitant answer would seem that you are hiding something. Be as clear as possible with your replies.

Ask what the ranking is based on. There would generally be criteria in determining the health ranking and it varies from one company to another. Determine your ranking in a specific company and why. This helps you get a better picture and hopefully and decrease your premium. Canvass for the best rates possible but know that the rate is just one consideration.

2. Your doctor can help.

Inform your physician. Insurance companies would want to talk with your physician and look at your records. If not that, they would at least look at your records at the Medical Insurance Bureau.

Your best move is to inform your physician that you’re applying for insurance. A forewarning helps in ensuring that the insurance company gets noticed and gives you in return a favorable rating.

Ensure that the company gets a complete record, especially if you have moved from one doctor to another. The insurance company wants all of your health records to get a complete idea of your state of health.

Inquire discretely. Too much inquiry might raise a red flag on you. Try to get an agent to do the shopping for you. Choose your insurance broker carefully. Just like other professionals, they’re not created equal.

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Friday, September 28, 2007

Financial Planning for Retirement

Planning can be a tedious activity especially if you are planning for retirement. Many people realize how advantageous financial planning for retirement can be while others find it mysterious.

Most experts say that for people who are only making enough money to make due payments in each month, then it means that they should start contemplating on how they can still make money even if they are already retired.

Surveys show that almost 75% of the American population is earning enough money to pay their monthly bills. This means that they do not have any extra money to put in a bank or in any financial institution that could provide them enough profit after their retirement.

What's more Social Security is not enough guaranteed income for retired people to live on. Actually, it is still a big question if one’s Social Security will still exist when the retirement day comes.

Hence, it is extremely important to generate some methods that will provide an individual a reasonable amount of money in the future. This should be done regardless of how much an individual earns, the important thing is to start saving today.

1. Visualize and calculate

It is important for a person to visualize his or her own situation after retirement. Then, you can calculate how much money is needed to live on after retirement. Furthermore, people need earnings that compensate 75% of the present amount that he or she is expected to take home.

2. It is important to seek the help of a financial planner or any person competent in financial planning.

By asking for advice from the experts, you will be able to gain more knowledge know how to proceed for you situation. These people are proficient and knowledgeable in all kinds of financial planning and they can provide the most feasible and workable approach for your individual needs.

3. Get rid of loans, debts, and other financial obligations in as little time as possible.

By simply paying off all debts, loans, and other financial obligations in a shorter period of time, you can realize a substantial amount to invest for that retirement. A good financial planner will know exactly how to direct you so you can meet your retirement goals.

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Friday, September 21, 2007

What you should know about Early Retirement

For many reasons, more and more people are opting to retire at an early age. The growing trend for the retirement is based on the fact that people are enticed to retire early than continue working and wait until they reach their retirement age of 65.

Most of the surveys conducted in the United States asserted that 60% of the respondents would love to retire at an early age.

In reality, there are many benefits that people can derive when they retire early. However, there are also many consequences that result from early retirement. What they do not know is that early retirement has the potential of bringing more problems than reaping in benefits and advantages.

Here is a list of some of the reasons why retiring early can be a pretty risky activity.

1. Not in accordance with the regulations of Social Security

When people will retire at an early age, there is a great possibility that they cannot immediately obtain their Social Security benefits. This is because according to the rules and regulations of Social Security, anyone who is born after 1938 will have to wait longer than their retirement age of 65 before they can get their benefits.

Hence, early retirement may only contribute to a negative upshot if the older people’s finances where not managed properly and the only thing they expect to help them are the Social Security benefits they can get.

2. If people who took early retirement get sick, they cannot acquire some Medicare benefits.

This is because the age when people can get their Medicare benefits is when they already turn 65. Hence, if they are hospitalized and they have already filed for their early retirement, they have to obtain the necessary amount of money in order to cover the expenses in the hospital without Medicare.

3. Penalty charges apply to those who retired early and had withdrawn their IRAs early.

For people who would like to retire at an early age and wish to obtain their IRAs, they have to face a hefty 10% penalty charge.

Moreover, experts contend that the nest egg of people who wish to retire early is only 80% of what they should be getting when they retire at the age of 65.

The bottom line is that early retirement is, indeed, a personal choice and preference of an individual but one must consider the factors that may affect their life in the end.

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Saturday, September 15, 2007

Benefits of Continuing Care Retirement Community

People nowadays have already realized the importance of saving for the future, especially for their retirement. This is because when they reach their retirement age, all they have to do is to relax and enjoy life together with the financial benefits that they themselves have tried to save little by little.

Because of the growing trend in retirement issues and programs, one area of retirement is gradually taking the limelight. This is known as the continuing care retirement community or the CCRCs.

Continuing Care Retirement Communities are consistently gaining some recognition because of the features and benefits that retirees get from them.

To know more of the CCRC, here is a list of the benefits that a retiree can derive from them:

1. Continuing Care Retirement Community provides various housing projects and selection for their members. With a wide variety of choices, people are opting to choose a house that will correspond to their lifestyle and personality.

These housing privileges are not just mere housing projects, in which likes of them are usually made from low-quality materials. However, those that were provided by CCRC, the houses are surely apt for the family. In addition, these are, indeed, low cost houses.

2. The CCRC also offers optimum security, specialized services, and support to their residents. In this way, people who live in the area have peace of mind because they are surrounded by tranquil setting.

Moreover, in CCRC, people are entitled to enjoy three stages of care made available within the context of the Continuing Care Retirement Community.

3. The CCRC have programs that are always available (round-the-clock) to their customers. This means that the residents or their customers can readily avail the services that they need, in which all of the services are all focused on the well-being and health of the people.

No wonder why more and more retirees are aiming to obtain their new homes from the CCRC. Surveys show that approximately 625,000 elderly people are planning to have their own houses through this program.

4. The agreements stipulated therein are all stated in the contract. That is why retirees are more than secure because they will know that the things that they have worked for will not just go to waste.

CCRC is another way of enjoying life’s simple pleasures after working so hard all their lives.

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Saturday, September 8, 2007

What is a 401K plan?

The 401K retirement plan is funded by employee contribution and a matching employer contribution. The major feature of the plan is that the contributions are taken from pre-taxed salary. The fund accumulates tax-free until it is withdrawn. Most businesses and tax-exempt organizations can create these retirement plans.

The 401K takes its name from the IRC (Internal Revenue Code) of 1978. The operation of the 401K is administered by the EBSA (Employee Benefits Security Administration) of the Department of Labor.

The 401K plan has a lot of advantages. First and foremost is that the employee can contribute pre-tax money that reduces the tax paid in each paycheck. Also, the company contribution and any growth in the fund is free of tax until withdrawn.

The compounding of the fund during a 20 to 30 year period is quite amazing. The employee has a lot of control in the direction of the future contributions. When the company matches your contributions, it adds something extra on top of your own money. All money in the plan can be moved from one company to another unlike pension.

The 401K plan is protected by pension laws since it is a personal investment plan. It includes protection from garnishment by creditors but not from domestic cases that include child support.

There are some disadvantages in the 401K plan, it is hard to get your 401K contributions before age 60 (59 1/2 to be exact). The 401K is not insured by the PBGC (Pension Benefit Guaranty Corp). Also, the company contributions do not kick in until a certain number of years of service have been given. The rules state that company matching contributions must either be a 3 year 'cliff' plan (100 percent after 3 years) or a 6-year 'graded' plan.

Employees participating in a 401K plan have many options for investment. In most cases a listing of mutual funds. The mutual funds usually include money market fund, treasuries, stock funds and bond funds. Some plans may include investing in company stock and US Savings Bonds. The employee gets to choose how the savings is invested. The employee can also choose at any time to stop contributions.

Financial advisers usually say that the average 401K contributor is non-aggressive in terms of their investment options. Stocks have historically outperformed other types of investment, since the 401K is a long term investment it should be able to minimize the stock fluctuations.

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Sunday, September 2, 2007

Preparation for Your retirement Plan

Planning for your retirement is obviously a good idea. The phrase "the earlier, the better" describes what your policy should be for handling your transition from a harried work life to your relaxed golden years. At best, take twenty four to eighteen months to prepare for this significant change in your life.

Here are the preparation you should make for your retirement plan

* Cleaning Up - Try to pay off any outstanding debts or fiscal responsibilities before moving on, especially those that are hedged against your retirement plan. If you don't, you'll probably be paying them out of your pension/savings and that is an incredibly bad idea for a retired individual.

* Doing the Paperwork - A year before you retire would be a good time for you to start doing the necessary paperwork for your retirement. Birth certificates, passports and other identity papers should help smooth your transition to a senior citizen.

* Health Care - Always check with the employee benefits department six months to a year before retirement. Ask them how your health insurance will change once you're not a member of the company. Depending on the answer, you may have to look around for new or additional insurance for yourself. Also, take into consideration any continuing ailments that you may have. Covering them with health insurance is a good idea, since they may take out a significant part of your retirement income.

* Budgeting For Yourself - Check what your income sources will be after retirement. This can be from your employer - with the company's own pension plan, Social Security and your own personal savings. After that, make a budget that would fit your approaching financial situation. You really need to do this well in advance, so that you may be able to change it for any required adjustments such as paying for new medical insurance and other expenses that may pop up. A year should give you a large enough margin to prepare. If you're having trouble balancing it all, a financial advisor is a good investment. Try to find one that has a good solid reputation so as to avoid any problems.

* Making a New Tax Payment Plan - Switching from your salary to your retirement income is a big change but you still have to pay taxes for that change. After retiring, contact your tax advisor on what forms you'll have to submit and how to set up a good payment plan so that you'll be able to maximize what you can out of your payout from retiring.

Retirement Plan
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