Key Investing And Retirement Definitions
401: This is a plan for retirement savings that companies offer employees. A 401 plan gives employees a tax break on money they contribute. Contributions are automatically withdrawn from employee paychecks and invested in funds of the employees choosing .
Compound interest: The interest you earn on both your original deposit and on the interest that original deposit earns. For example, a $1,000 investment earning 6% compounded annually could become roughly $4,300 in 25 years.
Contribution limits: The IRS puts limits on the amount of money that can be contributed to 401s and IRAs each year. These limits sometimes change from year to year.
Financial advisor: A financial advisor offers consumers help with managing money. Financial advisors can advise clients on making investments, saving for retirement, and monitoring spending, among other things. A financial advisor can be a professional, or a digital investment management service called a robo-advisor.
IRA: An individual retirement account is a tax-advantaged investment account individuals use for retirement savings.
Income: The money you get from working, investing, or providing goods or services.Inflation: This happens when the price of goods and services increases as time passes. The result is a decrease in purchasing power, or the value of money.
Nest egg: A sum of money you have set aside for the future in this case, retirement.
Returns: The money you earn or lose on an investment.
Tip #: Go Back To School
There are numerous educational classes, both in-person and online, that can help you expand your mind, meet new people, and help you reach your life goals. Being an eternal student can help you improve your skillset, stay relevant and contribute to your lifes purpose.
Needless to say, there are so many benefits to lifelong learning, so its definitely worth the effort.
According to The ABA Journal, five habits of the eternal student that learns a new language:
If you want to check out some online lifelong learning opportunities, try these on for size:
The Retirement Problem: What Will You Do With All That Time
You’ve anticipated and planned your retirement for years. What if it’s not as you pictured? The question isnt only about money, experts say planning how to stay happily occupied is equally critical.
Knowledge at Wharton Staff
Youre excited about retirement, right? Youve worked hard for, what, four or five decades now? Youre due. No more early alarm. No more meetings. No more deadlines. No more office politics. Can you believe it? Its just you out on the links puttering in the garden taking care of your grand kids. Its going to be great.
Except, what if its not as you pictured? What if those things youve looked forward to all these years more time for your hobbies, more time to travel and more time to relax arent enough to sustain you? What then?
Even soon-to-be retirees with big plans for the next chapter of their lives often harbor big doubts about what comes next, according Stewart Friedman, practice professor of management at Wharton and founding director of the Wharton Work/Life Integration Project. The questions people ask at earlier stages of life become more profound at these later stages, he says. Am I living the life I want to live? What is most important to me? Who is most important to me? You see the end, and so you think about what you want to do with the time that you have remaining. There is the question of: now what?
Money Is Not the Panacea
Its Useful to Know Yourself
New Challenges, New Domains
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Discover What Foreign Service Workers Know
The 48 FSI Languages Courses have been used to train U.S. government embassy, Peace Corps, or military workers in languages ranging from Amharic to Yoruba . But they’re not just about language the modules also provide basic information for getting along in any country you might want to visit.
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What Do You Want To Do When You Retire
People are often under the misconception that retirement planning is all about the numbers, but you really need to start with your goal what do you want your retirement lifestyle to consist of?
If there was a sliding scale between a modest lifestyle, perhaps pottering in the garden and spending more time with family, or a lifestyle that needs significant funding, such as exploring more of the world or indulging in hobbies and some luxuries, you need to identify where you sit.
This will then form the foundation of your retirement planning.
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Can I Retire In England
Its also possible to take early retirement in the UK but you cant claim your state pension until retirement age. To retire early, UK residents may have the option to withdraw private or occupational pensions as early as 55 years old. This depends on the pension scheme restrictions and personal circumstances.
Tip #1: Focus On Your Health
It goes without saying that taking care of your health should be a priority in retirement. Yet many retirees wont take better care of themselves.
According to a 7 Misconceptions About Retired Life article, most retirees dont take care of themselves like they say they will.
Exercise, join a gym, replace inactive time for active time, eat nutritiously and keep up with your health adherence. Be sure to include in your weekly goal planning designated health-related activities and topics.
Orly Lazarov, PhD, found from her Alzheimers Association New Investigator Research Grant that physical and mental stimulation appear to decrease hallmark Alzheimers pathologies and support new nerve cell growth and better cell-to-cell communication.
Physical and mental stimulation can mean many things to different people. And, of course, customization is key to making what works best for you. In retirement, you should also come to terms with your limitations. Remember to listen to your body as well as your mind and pay close attention so you dont overexert yourself.
Bonus Tip: Heres a list of 22 activities to improve your health in retirement.
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Plan To Lead An Interesting And Rewarding Life After Retirement
For most people, the key to a happy and fulfilling retirement is simple: staying busy. Unfortunately, when planning for retirement, a lot of folks focus only on finances, and fail to think about, or plan for, how they will spend their time.
Why worry about retirement activities now, when retirement is years, or even decades, away? Because, put bluntly, people who count on developing new interests and involvements after 65 often don’t. And that makes for a bored, depressed old age.
Common Challenges Of Retirement Include:
- Struggling to switch off from work mode and relax, especially in the early weeks or months of retirement.
- Feeling anxious at having more time on your hands, but less money to spend.
- Finding it difficult to fill the extra hours you now have with meaningful activity.
- Losing your identity. If youre no longer a doctor, teacher, designer, sales person, electrician, or driver, for example, who are you?
- Feeling isolated without the social interaction of being around your coworkers.
- Experiencing a decline in how useful, important, or self-confident you feel.
- Adjusting your routine or maintaining your independence now youre at home with your spouse during the day.
- Some retirees even feel guilty about receiving money from a pension without directly working for it.
Whatever challenges you face as you prepare for this new chapter in life, the following tips can help you ease the transition, reduce stress and anxiety, and find new meaning and purpose in life.
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Organize A Charity Drive
Make a real difference in your community by leading a project to help others. Enlist family, friends, club members, former colleagues, and anyone else who can contribute to your efforts. Talk to local charities to see what’s needed most. You might consider collecting clothing for disaster victims, raising money for a special needs group, or gathering toys for sick children.
Is Bob Seger Retiring
After 50 years on the road, Bob Seger retires. In a recent interview, an emotional Bob Seger said the he couldnt imagine touring again following the loss of his close friend and saxophonist, Alto Reed. It has been said that Bob Segers most recent tour was his last.
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What Are The Best Retirement Plans As Per Your Age
Saving or investing for the purpose of retirement should start right from the time one starts working. But one need not worry if they havent started that early in life. Different age groups see life differently. People in their 20s are more inclined to spending or saving for short-term goals rather than long-term ones. In the 30s, people tend to be busy with loan repayments and kids. Its in their 40s that people start investing/saving for their retirement. Even though they have 15 odd years in their hand until retirement, most of their savings have to be channelized towards their retirement. But its never too late to start investing for retirement. Agree that starting early has its benefits but better late than never right! Heres a guide for people of different age groups that they can refer to for saving and investing.
In the 20s
If starting in the 20s, investing or saving 5% of ones salary towards retirement is enough. They can gradually increase it to 10% in their 30s. It is because the investment horizon is around 30 plus years, and compounding will do its magic in the long-term. The success of compounding lies not with starting early but sticking to it till the age of 60. It doesnt matter if one starts investing at the age of 20 if he discontinues the investment soon. In the 20s, one has to look at investing more in equity than in any other asset class. Close to 90% of the investments can be in equity.
In the 30s
Grow Your Friend Base
Too often, retirees stick progressively closer and closer to home as time moves on. What might have been a rich circle of friends could dwindle more and more until only a few remain in your life. While theres nothing wrong with enjoying being alone, friends help you stay connected to the world and give you a greater sense of purpose.
Its also a good idea to find some younger friends. Spending time with someone in a different age bracket exposes you to new experiences, and it works the same for them.
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Join A Dragon Boat Club
Dragon boating involves a long, canoe-like boat with 20 paddlers, a drummer, and a steerperson. Races vary in length. You could join a recreational crew and, if you like it, try out for a competitive team. There are teams for all age groups. There are also teams solely for breast cancer survivors.
Read more about dragon boating in the summer 2020 issue of Renaissance magazine.
Take The Right Steps To Your Retirement Dream
Knowing how to retire is just as important as when you retire. Completing these tasks will save you a lot of heartacheand potentially a lot of money. Play it smart, do your homework, and take the steps to put yourself in the best position as you enter these years. After all, you want to live the retirement of your dreams! A qualified investment professional like those in our SmartVestor program can help you whether you’re 10 years out or 10 months out.
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Volunteer For As Long As Possible
There are diverse groups of organizations that need volunteers to help with their cause and program activities. You could select a cause that is important to you or go to one of many sites on the internet that will match your skills to organizations needing volunteers, like Volunteer Vacations for example.
Trips range from one to three weeks, and you choose where you want to go and how you want to volunteer. This is a rewarding experience that you can do anywhere in the world, so lets get out there and make a difference!
You can stay close to home and volunteer in animal shelters if you love the company of furry friends. Also, look for volunteer opportunities in food outreach/kitchens or similar groups to help out in your community.
How Much Money Do You Need To Retire
A common guideline is that you should aim to replace 70% of your annual pre-retirement income. This is what the calculator uses as a default. You can replace your pre-retirement income using a combination of savings, investments, Social Security and any other income sources . The Social Security Administration website has a number of calculators to help you estimate your benefits.
It’s important to consider how your expenses will change in retirement. Some, like health care and travel, are likely to increase. But many recurring expenditures could go down: You no longer need to dedicate a portion of your income to saving for retirement. You may have paid off your mortgage and other loans. And your taxes are likely to be lower payroll taxes, which are taken out of each paycheck, will be eliminated completely.
Be sure to adjust based on your retirement plans. If you know you wont have a mortgage, for instance, maybe you plan to replace only 60%. If you want to travel every year, you might aim to replace 100% or even 110% of pre-retirement income.
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How To Retire At : Is It Really Possible
The FIRE movement, short for financial independence, retire early, has many people dreaming of an early retirement. But while some people think early retirement means calling it a career at 55, some have far more ambitious retirement goals, aiming to retire as young as 40. But could you really have enough retirement savings to retire at 40? And what would it take to make that happen? If youre salivating at the thought of exiting the workforce at 40, heres what you need to know.
Invest In Old Friendships
Sometimes life gets in the way and you havent seen or spoken to some old friends in years. Not that you wanted the end the relationship. Its just how things go. But retirement is a great time to get back in touch and invest in these old friendships. Perhaps theyre in the same position as you and you can rekindle the flame. You can organize a nice reunion, send them an email, or give them a call and see how things work out.
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Have A Happy Hour Every Day
In retirement, every hour is happy hour as what they would say.
Well, not that I want to encourage you to start day drinking, but enjoying a nice glass of wine or a cold beer at the end of the day is what retirement can be all about.
Youve worked hard to retire early, so why not enjoy it to the fullest with a delicious drink. It will definitely taste a lot better when you dont have to work the next day. And creating this moment to unwind and relax every day helps you to enjoy and appreciate your retirement even more.
You can get creative by inventing new cocktails and invite a couple of friends over to enjoy together. Or gift yourself a monthly subscription to The Original Craft Beer Club and get top awarded beers that are produced by small-production, independent, artisan, craft brewers from across the country send to your home.
When youre a wine lover you can get a subscription to The California Wine Club and get amazing handcrafted award-winning wines from small artisan wineries in California home-delivered every month. Host a wine tasting to enjoy with your spouse, neighbor, or friends each time a box arrives.
Make A Daily Schedule
Photo via @poseandponder
If you start to feel bored in retirement, add a little structure back into your life! From establishing a bedtime and wake-up time to picking a weekday to visit your grandchildren, creating daily habits will make your days feel meaningful and focused. Adjusting to retirement can take some getting used to, but it will go a lot smoother if you develop a routine early on!
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Changes To Your Lifestyle
Retirement is a challenging new phase in life. While it ranks high on the scale of stressful life events, it also provides the opportunity to enjoy a new lease of life. You are likely to enjoy the freedom to develop new interests but on the other hand may feel lonely, isolated and bored at times. An important step is to plan your goals and work towards them.
If you’re still working, why not ask about retirement preparation programmes, perhaps including different working options? Some employers provide a range of seminars, workshops and useful information for future reference.
Age NI campaigns to highlight the potential of the retirement years. Age NI’s handbook, ‘Time for Retirement’ covers finances, travel and holidays, health and community involvement.