What constitutes the ideal savings level? Now let's examine a hypothetical case.
Suppose I am able to save 20% of my gross annual income.
I need another 10% for going to work and for paying work related expenses.
I make a further provision of 5% for income tax.
This leaves 65% for me to survive on.
Now supposing I am in retirement.
Remember that I have already saved 20% of my income.
Another 10% will be coming from pension, and possibly 30% from the social security benefits available to me and my wife.
Naturally, I would require only further 10% or 15% investments to pad my retirement.
For many people this argument may not seem convincing enough, and they become fixated on achieving a daunting 75% savings/ investments target! Taxes and long term medical care can impact savings levels Possibly the biggest expense that is likely to upset the applecart on the retirement trail is medical expenditure-the cost of medicines and nursing care.
Consumer expenditure surveys reveal that expenses (at least the discretionary or frivolous type of expenses) decline as the couple ages.
The exception is treatment of serious ailments and long term medical care that increase expenses dramatically.
One misconception is that taxes get lowered as income levels decline.
That may not be entirely true.
Tax rates are notoriously fickle and rates can increase even if income levels plummet.
Besides, more checks and balances are being applied on social security like never before and these are affecting our take home benefits.
That's why it would be too early to deduce the impact of your expenses when you are three decades away from retirement.
Once you are within a decade of retirement you'd get a better idea where expenses stand vis a vis your income, and what is the correct savings amount that can ensure your survival.
If you are fortunate enough to wriggle your way into a higher income bracket closer to retirement then you might feel confident enough to retire prematurely.
Information that is relevant to employer sponsored IRA plans, and traditional IRAs, and deciding the safer alternative You could be saving substantially in employer sponsored IRA plans only to fear creditors taking it all away.
This could impact your income levels in retirement.
Is this a real or imagined threat? The truth is that employer IRAs have complete protection against a creditor's claim and in a bankruptcy there's nothing they can do to even remotely touch your employer IRA corpus.
But the IRS and also your ex-spouse can file a valid claim against your fund.
The individual IRAs and Roth IRAs have only a limited protection against a creditor's claim and the ceilings are fixed by state governments.
If you happen to be considering a bankruptcy petition or facing a creditor lawsuit, an experienced attorney can help you consider your options.
Understanding how social security provides survivor benefits For the sake of a simple illustration let's assume that I am 62 years old and I am electing to start my social security (SS) benefit this year; my spouse will be turning 62 the following year and she is also contemplating to avail SS benefits next year.
The question is, what would I get if my spouse expires before she avails her SS benefit? The answer is simple-in case the spouse dies prematurely before availing her SS benefit, I will be entitled to the amount that she would have claimed if she had attained full retirement age of 66 or 67 years (as the rule may stipulate).
In case my wife was availing the benefit when she died then I would be entitled for the reduced benefit.
The amount gets further lowered if I have not attained full retirement age.
In any case it must be borne in mind I stand to get either my own benefit or my spouse's benefit, whichever happens to the larger, but I can't claim both the benefits.
The vehicle title loan can be helpful in padding a retirement fund through the investment route Sometimes you come across high growth company stocks that are begging to be invested in, but you are not in the picture because you are perennially short of funds.
The sad reality may be that you have no ready cash to fund such investments which could do wonders to your retirement savings.
Cash title loans can be of immense help especially in situations where you face cash shortages.
By using these loans you can avoid exhausting your savings or an emergency fund.
The loan amount can be readily utilized to pad retirement expenses or fund investments that yield the highest returns.
The car title loans come to you on the simple collateral of your car pink slip papers.
Title lenders approve loans up to 60% of the resale value of your vehicle, and the amount approved has no correlation to your credit standing or credit worthiness.
The pink slip loan charges rates below 25% APR and repayments can be matched to your repaying capacity.
Suppose I am able to save 20% of my gross annual income.
I need another 10% for going to work and for paying work related expenses.
I make a further provision of 5% for income tax.
This leaves 65% for me to survive on.
Now supposing I am in retirement.
Remember that I have already saved 20% of my income.
Another 10% will be coming from pension, and possibly 30% from the social security benefits available to me and my wife.
Naturally, I would require only further 10% or 15% investments to pad my retirement.
For many people this argument may not seem convincing enough, and they become fixated on achieving a daunting 75% savings/ investments target! Taxes and long term medical care can impact savings levels Possibly the biggest expense that is likely to upset the applecart on the retirement trail is medical expenditure-the cost of medicines and nursing care.
Consumer expenditure surveys reveal that expenses (at least the discretionary or frivolous type of expenses) decline as the couple ages.
The exception is treatment of serious ailments and long term medical care that increase expenses dramatically.
One misconception is that taxes get lowered as income levels decline.
That may not be entirely true.
Tax rates are notoriously fickle and rates can increase even if income levels plummet.
Besides, more checks and balances are being applied on social security like never before and these are affecting our take home benefits.
That's why it would be too early to deduce the impact of your expenses when you are three decades away from retirement.
Once you are within a decade of retirement you'd get a better idea where expenses stand vis a vis your income, and what is the correct savings amount that can ensure your survival.
If you are fortunate enough to wriggle your way into a higher income bracket closer to retirement then you might feel confident enough to retire prematurely.
Information that is relevant to employer sponsored IRA plans, and traditional IRAs, and deciding the safer alternative You could be saving substantially in employer sponsored IRA plans only to fear creditors taking it all away.
This could impact your income levels in retirement.
Is this a real or imagined threat? The truth is that employer IRAs have complete protection against a creditor's claim and in a bankruptcy there's nothing they can do to even remotely touch your employer IRA corpus.
But the IRS and also your ex-spouse can file a valid claim against your fund.
The individual IRAs and Roth IRAs have only a limited protection against a creditor's claim and the ceilings are fixed by state governments.
If you happen to be considering a bankruptcy petition or facing a creditor lawsuit, an experienced attorney can help you consider your options.
Understanding how social security provides survivor benefits For the sake of a simple illustration let's assume that I am 62 years old and I am electing to start my social security (SS) benefit this year; my spouse will be turning 62 the following year and she is also contemplating to avail SS benefits next year.
The question is, what would I get if my spouse expires before she avails her SS benefit? The answer is simple-in case the spouse dies prematurely before availing her SS benefit, I will be entitled to the amount that she would have claimed if she had attained full retirement age of 66 or 67 years (as the rule may stipulate).
In case my wife was availing the benefit when she died then I would be entitled for the reduced benefit.
The amount gets further lowered if I have not attained full retirement age.
In any case it must be borne in mind I stand to get either my own benefit or my spouse's benefit, whichever happens to the larger, but I can't claim both the benefits.
The vehicle title loan can be helpful in padding a retirement fund through the investment route Sometimes you come across high growth company stocks that are begging to be invested in, but you are not in the picture because you are perennially short of funds.
The sad reality may be that you have no ready cash to fund such investments which could do wonders to your retirement savings.
Cash title loans can be of immense help especially in situations where you face cash shortages.
By using these loans you can avoid exhausting your savings or an emergency fund.
The loan amount can be readily utilized to pad retirement expenses or fund investments that yield the highest returns.
The car title loans come to you on the simple collateral of your car pink slip papers.
Title lenders approve loans up to 60% of the resale value of your vehicle, and the amount approved has no correlation to your credit standing or credit worthiness.
The pink slip loan charges rates below 25% APR and repayments can be matched to your repaying capacity.
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