Best Places To Retire

While looking over CNN/Money this morning I discovered a great resource. They have a great page filled with videos of the Best Places To Retire.

They also have a state by state breakdown of key retirement stats and some other useful information to help you pick your retirement location.

Personally, I think I'd like to retire somewhere near the grandkids so I could see they all the time. Since my kids are both less than 4 years old, it's not something that I'm giving much thought to right now.

Small-Business Owners - Retirement Planning Options

Being a small business owner myself, I keep meaning to start a SEP (Simplified Employee Pension) but I never get around to it. In fact several years have gone by and I keep saying to myself that this is the year that I start the SEP. Let's hope that in 2006, I actually get around to it. I'm wasting valuable years of interest.

Retirement Planning for Small-Business Owners: "Among the options small businesses commonly use are SIMPLE IRAs, SEP IRAs, profit-sharing plans, SIMPLE 401(k) plans, and single-participant 401(k) plans..." - Fool.com

5 Retirement Facts

The Retirement Center section of The Motley Fool has a great article about 5 things you need to know about your retirement.:

"1. This isn't your parents' retirement.
Your retirement will be very different. You will live longer, and you'll have a more active (read: expensive) lifestyle. Your parents may have survived on 70% of their pre-retirement income (perhaps you've heard this common rule of thumb?). But that's probably not enough for you."

And once again we see someone mention that our retirements are going to be much different than our parents. I think this is the most important thing that people need to know about retirement planning. We're going to live longer and have better health (hopefully) and that means we'll need more money.

Retirement for a lot of people may not mean completely stopping working. If you're in good shape financially, then it's really a great time to start a new career or business on a part time basis or give back to your community by doing charity work.

Take for example, my father. He bought 3 acres in the country and is growing grapes and making wine. I don't know if he plans on ever starting a wine company and selling the products of his labor but he's definitely enjoying the labor. He said to me recentely that now that he's retired, he's never worked this hard in his life.

These ideas are detailed futher in the book The New Retirement: The Ultimate Guide to the Rest of Your Life.

If you can prepare yourself mentally and financially years before retirement age, then when you do quit your 9-5, your golden years can really begin.

Find Cheap Gas

The high price of gas is changing the way we live. Spending less of your money on gas is a great way to stay on budget. Here's 10 ways to find cheap gas.

"With gas prices stuck in the stratosphere, you can save hundreds of dollars a year by using these tips and tricks to buy your gas for less..." - MSN Money

Getting Term Life Insurance

A big part of financial planning is making sure that your loved ones will be provided for when you're gone. Buying a life insurance policy is a great way to start. The last thing on a 20 or 30 something's mind is life insurance but that's the best time to buy it. Don't wait until you're in your 40ies or 50ies.

When I was being screened on the phone for my life insurance policy, the simple questions, "How tall are you?" and "How much do you weigh?" were enough to raise the premium. Doesn't matter how fit you are or even if you just completed the New York Marathon. The chart that the telephone operator looks at said that 5'10" and 220 pounds requires MORE MONEY.

Term life insurance has never cost less: "But rates for plain-vanilla term life insurance policies are the lowest they've ever been. Premiums -- the annual fee you pay for a policy -- have fallen by about 50 percent since 1995, according to AccuQuote, the insurance-shopping Web site..."

When To Start Receiving Social Security Benefits

When To Start Receiving Social Security Benefits?: "Conventional wisdom and many financial planners say that you should start taking Social Security benefits as soon as you are eligible. For many, that is at age 62. This is another time that conventional wisdom may be wrong..."

Whether it's 62 or later, I still have a long way to go.

Retirement Income

Working during your retirement is becoming more of a reality for Baby Boomers. Although it's not always to provide additional retirement income, some people are doing it to keep their minds active and to avoid boredom. Leave it to the Boomers to spend their golden years at work.

TIPRA

New tax law means big changes in retirement planning: "The Jobs and Growth Tax Relief Reconciliation Act of 2003 established a maximum tax rate of 15% for long-term capital gains and qualifying dividend income. For taxpayers in the lowest two tax brackets, the maximum tax rate is 5% and will drop to 0% in 2008. These rates were scheduled to expire after 2008, but TIPRA extends the rates that apply in 2008 for two years, through 2010, according to Forefield, a Marlboro, Mass.-based financial-education firm..." - MarketWatch.com

Retirement Myths

Now that the Boomer Generation is starting to retire, several Retirement Myths are being exposed.

I think retirement plans must become more fluid now. Gone are the days of stopping working and reducing spending. That sounds like a boring way to spend your golden years.

Books like The New Retirement: The Ultimate Guide to the Rest of Your Life are coming up with some new ideas about retirement. People are starting businesses, traveling overseas and some are continuing working.

Working After Retirement

The BBC has an article about an HSBC study that concluded that The elderly prefer work to retirement. Now I understand how people want to keep busy and have an active retirement but continuing your 9-5 job is no way to spend your retirement.

Now if you need to work because of financial reasons, well that's another perfectly good reason. But for all of you out there who were involved in the HSBC study I have three words for you, GET A HOBBY! Go out there and get a hobby that you're passionate about. Something that you can focus your energy into and get excited about.

Simplified Employee Pension

Being a small business owner I really need to start a SEP (Simplified Employee Pension). As a one person company I don't have the normal benefits that most working people receive. So a creating a retirement fund through my company should be a high priority.

Technically I could still do it this year but I filed my 2005 Taxes last month and already have the refund in the bank. Every year I say that this is the year that I start a SEP but I never get around to it.

Well let's mark 2006 as the year that I finally start that SEP. I hear it's really easy to do so there's no excuse.

Simplified Employee Pension: "The payoff of creating a SEP or any other retirement plan is huge. For the 2005 tax year, an employer can deduct up to 25 percent of an employee's compensation, or up to $42,000..." - Mohave Daily News

Squidoo Retirement Planning

Squidoo is a new website from the marketing guru Seth Godin. He says that everyone is an expert in something, and Squidoo is the place to share that expertise. Users can create a "Lens" about they are passionate about and others can reap the benefits of their knowledge.

From the Squidoo FAQ
"A lens is one person's (lensmaster's) view on a topic he cares about. More specifically, a lens is a single web page filled with information and links that point to other web pages, to continually updated RSS feeds, or to relevant advertising. It's a place to start, not finish."

I've created a lens about Retirement Planning. Squidoo : Getting Ready For Retirement.

Perhaps I should create a post about all ways to suppliment your retirement income by making money online. Squidoo seems like it'll join Ebay and Amazon Affiliates as ways for retirees to earn money online.

Retirement Planning News

Brave New World of Retirement Planning: "With the Dow Jones average above 11,000 again and other stock indexes at five-year highs, workers with 401(k)s and other tax-favored retirement accounts may feel emboldened about investment risks and forget the bear market that tanked their accounts..." - Rocklintoday.com

House Flipping

A few months ago my father and I had a talk about what he might want to do with his new found free time once he retires in March. One of the ideas that he mentioned was House Flipping. House Flipping is when you buy a house with the sole purpose of selling it for a profit. Usually House Flippers buy a house with great potential but one that has been neglected by it's previous owners. They make some quick renovations like a new kitchen, landscaping, paint, carpet/hardwood floors, etc and quickly put the house back on the market.

My dad being very handy and experienced with tons of home improvement projects thought this might be a good fit for his retirement time. I told him we should look into what it takes to become a sucessful House Flipper and see if it was something we could do together. If it all worked out I'd partner up with him and help fix up these houses. Now it was time for some research to see what House Flipping was all about.

We bought some books and magazines and started reading. It seems like House Flippers need lots of great contacts in the real estate industry. It's good to know agents, mortgage lenders, foreclosure people, contractors, landscapers and tons of other folks who do this stuff day in and day out.

While House Flipping seems like a business suited for someone who's good with a hammer, it's actually more tailored for someone with salesmen's personality to create and maintain all these relationships. And you'll definitely need these relationships in order to prosper.

Our house flipping idea wasn't going to work out so my dad began focusing more on his wine making hobby and we didn't give it another thought.

Last night while flipping through the channels, I found a show on A&E Network about house flipping called Flip This House. Besides being entertaining, it shows you why some house flippers are successful. The key seems to be having good contractors and other contacts that you trust to get work done quickly.

In the show I saw last night, they bought a house for $849K, put in $50K in about a week and then sold it for $1.5mil.

It seems that buying a house, doing the work yourself and holding on to it for too long is a great way to lose money. I think I'm going to invite my dad over to watch this show while we enjoy a nice bottle of homemade wine.

Half of us are not ready

"More than half of U.S. workers fear they may not be financially prepared to retire and will have to keep working, according to a Financial Services Forum poll released on Wednesday..." - Reuters

Don't Forget College

What, me worry about college costs? - Yahoo! News: "'Even with nearly $122 billion in financial aid currently made available, paying for college is indeed a major challenge for most families.'"

Most of the retirement planning books that I've been reading talk about eliminating unnecessary spending. For example those bottled waters that you buy everyday, if you drank tap water and invested the water money, in 25 years you'd have 800 billion dollars. Obviously I'm exagerating but you get the idea.

There's usually two problems with this cutting back idea. First, you had to start putting away those few dollars a day when you were like 20 years old. Second, guess what? You have to pay for your kids to go college. When your kids are college age, usually about 20 years before you retire, you'll have to fork over up $40,000 a year for their tutition. What's that you say you have more than one child? Well then you'll be paying more. Large families are screwed.

Paying for college while still saving for retirement can be a problem for a lot of families. The answer that most of these retirement planning books give us is that college can be paid for with a loan such as a student loan or home equitity and you should never put off your retirement savings or that bottled water money that you're putting away won't ever earn any compounded interest and turn into those billions that you'll need.

I don't really have a solution for paying for college yet but I know I don't want my kids to take student loans. This is my burden, not theirs. Perhaps I'll have to give up something besides bottled water, like maybe food.

50 ways to trim your budget

One of best and most overlooked ways of saving for retirement is spending less money. Everyone is always giving tips on where to invest your money and tax saving tips but what about just putting away more. Here are 50 ways to trim your budget.

Are you saving too much for retirement?

"Forget the idea that you need millions to retire comfortably, as some would have you believe. One expert says you'll need less money than you thought..."

Saving While Spending

Here's an interesting program that I just signed up for. It's Bank of America's Keep the Change. What they do is everytime you use your debit card, they round up the amount to the nearest dollar amount and deposit the difference into your savings account.

For example, let's say your grocery total comes to $55.35, pay with your Bank of America debit card and they will debit you $56.00 and deposit $0.65 into your savings. So the more you use your debit card, the more you save.

Obviously you won't be able to retire on your Keep The Change savings but it could become a nice little bonus that you cash out every once in a while. Sort of like keeping your change in a jar and bringing it to the Coinstar machine when it's full.

I think the best part about this service is that it makes it easier to balance your checkbook. All of the debit card purchases become nice round dollar amounts.

Late Retirement Planning

Late Retirement Planning Lessons from 1980 Olympic Hockey Team: "Their dramatic turnaround in such a short time is a solid example of two things: 1) It's never too late to reach your goals, and 2) with the proper planning and strategy, you're more likely to accomplish great things. This couldn�t be a better vision to have in your head if you�re nearing retirement and haven't spent much time planning and saving for life after work..."

How many times have you heard someone say that if you starting putting away a nickel every week from the time your were 20 until you're ready to retire, you'd have like 8 million dollars saved for retirement. I obviously don't remember the actual figures but the important part was to start saving when you are young.

Another question for you, how many articles have you seen about playing catch up with your retirement savings? Well here's another one but this is the first one that I've seen mention the "catch-up provision". If you're 50 or older you can add an additional $5000 (in 2006) to your 401(k) or $1000 to your IRA.

Now if we all started saving in our 20ies like we were supposed to, then we wouldn't need to play catch up. But unfortunately, when I was in my twenties I spent all my money at bars and on vacations. Who would have thought that retirement would come so quickly?

The New Roth 401(k)

The New Roth 401(k): "The Roth 401(k) is a cross between traditional 401(k) accounts and Roth individual retirement accounts, or Roth IRAs. For some savers, the new accounts will be a good choice because the money they invest won’t be taxed in retirement..."

Welcome to The Ready For Retirement Blog

Welcome to The Ready For Retirement Blog. I plan to focus on getting my readers and myself, mentally and financially ready for retirement.

I'm a 37 year old father of two and my own father is retiring in a few months. He has always prepared financially for this time of his life by making some good investments and also by being seriously cheap. But I didn't think he would be ready mentally. What would he do with his time? How would he spend his days?

There's more to retirement than putting away enough money to live. You also need to plan how you want to live. By setting some goals and planning accordingly, I hoping for a happy retirement for my father, me and also you, my readers.