Personal Finance Blog by Debit versus Credit

Retirement Planning: What You Can Do To Retire In Good Financial Shape

October 17, 2008 | Filed in: Personal Finance | 1 comment

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Today I’m featuring a guest post about retirement planning.  Stay tuned next week for some great updates including a new Friday Book Club and the continuation of my Investing for Beginners series.

Where do you want to be when you retire? Will you be on an island in the Bahamas? Working in a different field? Or simply enjoying your spouse? Ninety-five percent of Americans have fears about retirement and 42% feel they will run out of money entirely, according to a 2005 study by NAVA. Just as you wouldn’t go on vacation without an itinerary or a budget, you shouldn’t run toward your retirement blind. With the right plan, retirement planning can be a breeze.

When you’re first getting started, you’ll want to envision how you want your retirement to be. While you’ll be saving money on gas and eating on-the-run, remember that there will be additional expenses — notably healthcare — as you age. Check with the Social Security Administration to find out what your benefits will be. Go over your employer’s retirement and 401k plan. After realistic considerations, you may want to consult a retirement planning calculator.

Some feel most comfortable using retirement planning software. Forbes Magazine recommends Quicken Retirement Planner ($59), Morningstar ($125) and ESPlanner Plus ($199). This option allows you the time and a no-pressure approach to examining your options independently. If you like having things explained in person, you can ask your banker, life insurance agent, investment broker, accountant or attorney for advice. To avoid the hassle, retirement planning services are another avenue, although most places charge around $200 per consultation.

Don’t rely on social security! Social security only provides for approximately one-third of the average American’s retirement plan. Instead, focus on your 401k as the bulk of your retirement savings and invest as much as possible. Consider annuities as a great supplemental retirement plan. Remember, tax-efficient options are increasingly crucial in saving up that nest egg.

Contribute the maximum on your 401k! Putnam Funds did a study in 2005 that found if you earned $40,000 in 1990 saving 2% of your salary, you’d have $40,000 by 2005. However, if had you saved 6% of your salary, your return would have tripled!

Beware of inflation! Ronald Reagan once warned, “Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hit man.” Many people forget to factor inflation into their retirement planning. Consider that a $60,000/year lifestyle will cost you $80,635 in ten years and double that in thirty years! Your investment returns should be high enough to cover this pitfall. Most pensions and social security account for inflation and adjust accordingly; however, if you plan to dip into savings accounts or investments, your money will decrease in value over time.

While it may seem overwhelming at first, all the tools are available to make your retirement planning less tedious. Whether it’s a retirement planning service and personal consultant or retirement planning software, you’ll find answers. You can leave the investments up to a trustee who will take the guesswork out or you may choose to take a more active role in your investments. Your best bet is to start now and make a variety of investments to ensure your golden years are truly the best.

Tags: Guest Post, Retirement Planning

Win a $25 Gas Card and a Personal Finance Book!

October 15, 2008 | Filed in: Miscellaneous | No comment

With the high price of gas and entertainment these days it’s sometimes better to just stay inside and entertain yourself at home.  I want to offer you something more than that though.  How about a $25 gas card and a personal finance book?  This way you can afford to drive your car to the other side of town AND for those nights you want to stay in you’ll have a great book to sit down and read.  It’s an absolute win-win situation, in my honest opinion.

So here’s what you need to do.  There are five ways to enter the contest.

• 1 Entry    - Subscribe to my feed via e-mail
• 1 Entry    - Follow me on Twitter
• 2 Entries - Write a short blog post about Debit versus Credit and why you think your readers and friends ought to check it out.
• 1 Entry    - Link to Debit versus Credit

In order to qualify, however, you need to leave a comment at my one-year blogoversary post where I introduced the contest.  So leave your comment letting me know what you did and how many entries you deserve.  I’ll make sure that your entries are legit and then at the end of this month I’ll do a drawing to see who the lucky winners are!

Tags: contests

Blog Action Day 2008: Fighting Poverty

October 15, 2008 | Filed in: Miscellaneous | 2 comments

Today is Blog Action Day 2008.  The focus this year is on Poverty and overcoming the devastating effects of said tragedy.

Poverty is a terrible thing.  So many people around the world are suffering because of a lack of resources, a lack of money and a lack of opportunity.  Truly I am blessed having lived in the U.S. my entire life.  I’ve been blessed with many opportunities.  Unfortunately being so blessed its sometimes difficult to remember that others aren’t nearly as fortunate.  It’s not fair to only think about the suffering outside of my little world more than once a year, and I hope that you, my readers, don’t think of me that way.  I hope to one day devote my life to philanthropy and charitable giving.  However this day, this Blog Action Day gives us all a great chance to think about what is wrong in the world and more importantly, what we can do to help it.

What can we do anyway?  I am sure you have asked this question by now.  I want you to follow this link (it will  open in a new window or tab) to see what one person can do.  There are a great many ways to donate of your time or your money to fight a cause so important as poverty is.  My plan is to donate all ad income from this blog today to either a charity listed in the above listed link, or to microfinance a loan to someone faced with poverty.  I can’t of course encourage any ad link clicking, but if you do see something that looks interesting, please feel free to let your finger do the talking.

For more information I strongly encourage you to check out the homepage of Blog Action Day.  Good luck everyone and lets do what we can to fight poverty not only today, but until it is gone from the face of the earth.

Tags: Blog Action Day

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