Retirement

Do You Need to Leave an Estate?

One of the most common topics in personal finance writing is estate planning. Life insurance? A will? A living trust? These are always bandied about and readers are always encouraged to get on board with all of these things. What’s often not asked is whether or not estate planning really even applies to you at …

Categories: Money, Retirement

Review: You’re Fifty, Now What?

Each Friday, The Simple Dollar reviews a personal finance book. Lately, as my parents and my wife’s parents begin to inch towards retirement, I’ve become quite interested in looking at the financial issues they face at this point in their lives. Their situations are very different – the one thing they have in common is …

My Retirement Portfolio As I Approach 30

Very soon, I will be celebrating my 30th birthday, and I thought it would be interesting to take a look at my retirement portfolio as it currently sits. I’ve rounded each amount to the nearest $100 to make the math easier as I evaluate where I’m at and what my future plans may be. My …

Categories: Investing, Retirement

Retirement Savings: How I’m Doing It

A number of people have asked me how I’m saving for retirement now that I’m self-employed, and several more asked yesterday when I mentioned that I was signing up for a SEP-IRA. In order to clarify everything, here’s exactly how I’m saving for retirement as a self-employed writer. For comparison’s sake, my previous retirement savings …

Categories: Investing, Retirement

Increasing Your 401(k) Contributions: Benefits and Drawbacks

Lately, I’ve had a lot of fun playing with this 401(k) contribution calculator. Ever wondered what sort of impact changing your 401(k) contribution would have? This calculator tells you based on your own information. What’s interesting is that for most people, the benefits far outweigh the drawbacks. To play with the tool, I created a …

Categories: Investing, Retirement

Predicting the Future: Will People In Their Twenties Today Collect Social Security In Retirement? And How Should That Answer Change Our Plans?

One common question I get from people fresh into the workforce and setting up their new 401(k)s is this: how much retirement income should I count on from Social Security? It’s not an easy question to answer because we don’t know what the political future of the United States holds. We do know one thing: …

How Much Money Do You Need For Retirement? Here’s How I’m Figuring My Number

Many people have no idea how much they should be saving for retirement and thus quite often they do whatever their retirement counselor suggests without actually knowing if what they’re doing is right. I wanted to understand the full process better, so I spent some time figuring out what I would need for retirement and …

Categories: Retirement

Are Inflation Rates Accelerating? How Should I Plan For It?

My wife’s grandfather likes to regularly comment on how fast the price of everything seems to be increasing lately. He’s loudly adamant that the rate of inflation is actually speeding up and that prices are doubling faster and faster and faster. He strongly encourages me to estimate high for inflation when I do my financial …

Categories: Retirement

Retirement Savings or Debt Repayment?

A few days ago, on my post about SmartMoney’s “7 Money Mistakes”, LTruslow left the following comment: I have always had a problem with those who believe that you should not invest before paying off all debts and establishing an emergency fund. For many, they would never begin saving for retirement. While an emergency fund …

The Future: Where Will Tax Brackets Go In 30 Years?

I try very hard to avoid political discussions on The Simple Dollar because it often winds up in partisan bickering, but I feel that a discussion about the future of taxes and their impact on your personal finance decisions today is vital. First of all, why is it important to think about future tax rates? …

Categories: Retirement, Taxes

The New Roth 401(k) Versus The Traditional 401(k): Which Is The Better Route?

Recently, a number of readers have asked me about the new Roth 401(k). Is it really a good deal, they ask? In a nutshell, it’s a very good deal for almost anyone eligible for it, but let’s walk through the scenario carefully. What Is A Roth 401(k)? A Roth 401(k) is not all that different …

Categories: Investing, Retirement

Financial Planning For A Life Of Volunteerism And Social Work

One of the most amazing people I’ve ever met has chosen a path of volunteerism and social work for her life. She’s taken the gifts and talents God has given her and chosen to forsake several much more lucrative opportunities to participate in a social work program fraught with challenges that I wouldn’t face for …

Categories: Frugality, Money, Retirement

Cashing Out 401(k) To Pay Off Credit Card Debt?

A reader writes in with an interesting scenario: I’m 28 years old and I have two 401(k) accounts, both with about $30,000 in them. At the same time, I have about $25,000 in credit card debt because I made some very stupid moves a few years ago. I’m paying this debt down, but it’s at …

What Does It Mean To Put Away 10% Of Your Salary For Retirement?

A reader wrote in with the following question: I have read in many places that you should maximize your 401(k) contributions. To me it seems there are MANY definitions of maximizing this and I was wondering what you mean when you say you should be saving at least 10% of your income for retirement. Right …

Categories: Retirement

Ultra-Frugal? Still Need A 401(k) Or A Roth IRA?

An ultra-frugal reader writes in with an interesting question – why even bother with a 401(k)? My husband and I have been living on about half our income for many years. If our expenses and savings rate stay about the same, we’ll have enough savings to live off the interest in about 7-10 years (depending …

A Closer Look At Money Magazine’s Retirement Benchmarks

In my recent review of the April 2007 issue of Money Magazine, several people were quite interested in my comments on the early retirement article that appeared in the magazine. In brief, here’s the part that was interesting: Assuming you want to retire at age 60 and plan to have no pension and no job …

Categories: Money, Retirement

Five Minute Finances #5: Get Started on Setting Up Your 401(k)

Five Minute Finances is a series of tips on how you can save significant money or reorganize your financial life in just five minutes. These tips appear Monday, Wednesday, and Friday on The Simple Dollar. If you haven’t started up a 401(k) plan (if you’re an employee) yet, what are you waiting for? Let’s say …

Categories: Money, Retirement

Inflation: What Is It And Why Should I Care?

Inflation is one of those topics that crops up time and time again on the news, and it’s one of those topics that makes my wife’s eyes immediately glaze over. It’s not long before the channel has been turned or the newspaper page has been flipped. Yet inflation (and avoiding it) is one of those …

Borrowing Against A Retirement Plan To Make A 20% Down Payment

My wife and I are currently contemplating an interesting question: should we borrow against our retirement plans in order to make a 20% down payment and avoid PMI or an adjustable rate mortgage? We’ve arrived at an answer to this question, but it’s not an answer that works for everyone, so let’s work through the …

Categories: Housing, Retirement

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