Planning for retirement has always been a traditional part of the saving process for most working people. As recent as the 1980’s, many companies have offered retirement savings called pensions as a benefit for workers.  A pension plan is a guaranteed monthly sum granted at retirement and requires no employee contribution.  In the last 20 years these pensions have been replaced in many companies by the now well known 401K plan.  The 401K plan is a tax deferred retirement savings plan where contributions are made by employees and the company.  The contributions are invested into stocks bonds or money market accounts.  Individuals can change these investments as they see fit.  The payoff at retirement time with a 401K plan is dependent on how much money was made off of the investments.  

Many of those approaching what they thought was their retirement age now see that golden age of retirement racing  further into the future.  The losses that many have sustained to their retirement investments leave people wondering how to restore their retirement nest egg.

 There are ways to plan for retirement and safeguard investments; it is just more difficult than it has been in years past. Postponing retirement and delaying social security benefits is one option to increasing retirement income.  According to this years report the average social security benefit is $1,150 per month.  This is a modest amount for many who have established a certain standard of living.  The remainder of the retiree’s monthly income is supplemented by retirement savings.  It is estimated that monthly benefits increase by about 8% for each year of work.  Delaying retirement would increase benefits and allow for more contributions in to the retirement plan.  Regularly researching and frequently adjusting investments depending on the changes in the market is crucial to holding on to the earnings in any retirement plan. 

The risks associated with deciding how to save for retirement have increased because the playing field has changed dramatically in terms of retirement savings.  Investing in a time of financial instability is always a risk, especially for those close to retirement age.  Those in their 20’s or 30’s have years of a fluctuating market to gain back any lost investments.  Younger people who are years from retirement can invest with a higher level of risk but for those who are nearing retirement age the main goal is to secure investments and maximize the income for the retirement years. 

Retirement planning has become a series of difficult choices.  Deciding how you want to live after retirement can be a determining factor to deciding on what age to retire.  Many dream of the many things they will do after retirement from travelling to purchasing that summer home on the beach. The reality is that because of increased risks associated with the investments in retirement savings and the financial instability of the economy many will be forced to change their plans. 

Researching and learning how to be your own investment planner rather than relying on others is a major factor in avoiding continued loss to retirement savings.

Retirement Planning After Recession Becomes a Series of Difficult Choices was created by and is property of American Consumer News.

Here are some tips to help keep your retirement from happening before the end of your life. The younger you start heading in the right direction, the better off you will be.

Stop Living Beyond Your Means

Especially now, during an economic crunch, people living beyond their means will never be able to properly prepare or save for retirement. It is an everyday, conscious decision to purchase only the things you need and forget the things you can live without. Perhaps taking less vacations, staying home to eat meals, and by cutting back on daily spending, you can start saving for retirement bit by bit.

Disregarding Savings Plans

If you are not contributing well to your 401k plan or other means of savings and investment accounts on a regular basis, you are missing out on prime opportunities to tuck away your hard-earned cash for your retirement.

Analyze Future Earnings

People who do not accurate estimate their income in future years may be seriously disappointed when it turns out they were not prepared for the future. You can not expect to fly by the seat of your pants when it comes to financial security. Many people only anticipate the good things in life and disregard the bad, such as potential job loss and increased rates of living.

Do Not Overlook Everything Retirement Encompasses

While many people imagine living a life of luxury on the golf courses of Florida during their retirement years, falling to plan for all aspects of a retirement plan can get you in real trouble. Scenarios that include long-term care options, medical expenses, as well as funeral expenses all need to be taken in to consideration before leaving your job for the good life.

 Again, it is important to remember retirement is a topic of concern for everybody, not just grandparents. The earlier you start saving, the earlier you can retire. By not planning and preparing for your retirement at the beginning of your working career, you can expect one thing for sure, you’ll be working a lot longer than you had hoped.

How to Improve Your Chances of Retiring was created by and is property of American Consumer News.

1.  It’s never to late too start, but start as early as possible!
If you start early in your life, your money will have more time to grow.  Each year your interest gains will be based on the previous year- which is what we call “compounding”.

2.  Use your company 401K plan if you have one.
Contributing money to 401K plans gives you a tax deduction, not to mention tax-deferred growth on the money you put there.  Many employers offer some kind of matching- whether they match 100% of your contributions or a smaller percentage- that’s free money.

3.  Be realistic with goals.
How do you want to live when you are retired?  How much will that lifestyle cost you?  With that in mind, determine how much money you’ll need to supplement your social security, 401k and other sources of retirement income and then put that amount into your budget for saving.

4.  Consider IRA’s
An IRA offers tax advantages.  Traditional IRA’s give contributors tax deferred growth (you only pay tax on the money when you actually withdraw it) while a Roth IRA offers tax free growth but doesn’t allow for any deductible contributions.

5.  Invest in Stocks over the long term.
Over a long period of time, stocks are among your best opportunities for achieving high returns.

6.  Have a diversified portfolio
The best investors are those who “diversify”.  Have a good mix of stocks, bonds, savings accounts, cd’s and other investment vehicles to ensure you are getting the best gains possible while minimizing your risk.
7.  make smaller withdrawals upon retirement to stretch out your money.
When you retire, don’t pull out all of your saved money all at once.  Instead, take out money from your taxable accounts first and allow the tax-advantage accounts that you have to continue to compound and grow for as long as possible. 
8. Consider a part time job.
You’ve probably seen many retired aged individuals working part time in places like Walmart as greeters. Not only does working help you reduce the amount of money you need in your savings for retirement, but it gives you socializing opportunities you may not otherwise have.
9.  Stretch it out!
When you retire, you can stretch out your assets by moving to an area with a lower cost of living, or making modifications to your lifestyle.

Retirement Planning Basics: Things Ain’t What They Used To Be was created by and is property of American Consumer News.