Retirement Planning - The Words That Scare Us All
By Barry Waxller
If your idea of planning for your senior years is playing the lotto, it is time for a reality check. Those years are going to be here before you know it. Here are some facts and tips to prime the pump for you.

If your employer offers a tax-sheltered savings plan, such as a 401(k), sign up and contribute all you can. Your taxes will be lower, your company may kick in more, and automatic deductions make it easy.

Start early. The sooner you start saving, the more time your money has to grow. Put time on your side. Make retirement savings a high priority. Devise a plan, stick to it, and set goals for yourself.

Women represent 58 percent of all Social Security beneficiaries age 62 and older and approximately 71 percent of all beneficiaries age 85 and older.

If you can, consider working a few extra years after your retirement age. It can make all the difference in your retirement income.

Call the Social Security Administration at 1.800.772.1213 for a free Social Security Statement and find out more about your benefits.

On average, a female retiring at age 65 can expect to live another 20 years, 3 years longer than a man retiring at the same age. Savings can increase a woman's chances of having enough money to last during her retirement.

Take inflation into account. A mere 3 percent gain each year can mean you will need nearly twice your salary at 40 to live comfortably at 80.

Financial Planners say that a person needs about 70% of their pre-retirement income to live a comfortable retirement.

For the average worker Social Security replaces only about 40% of pre-retirement income, the balance must come from pensions and savings and investments.

Select a target date for your retirement. Now assume you will need 70 percent of your current salary to live comfortably on that date. How much money will you need for 18 years of retirement and where will it come from?

An investment of $10,000

that earns 10% annually over the course of 40 years will amount to nearly $453,000 at the end of that stretch of time. Over the course of just 25 years, however, that same 10 grand increases to a mere $108,347.

The biggest mistake you can make with your employers 401k plan is simple - not participating. Start saving now with pre-tax dollars even if you are only contributing a tiny amount.

If you have a lump sum of cash to contribute to an IRA, go with a Roth IRA. Why? You will get the distributions tax-free.

Don't access the equity in your house unless the money is used to improve the value of your home. Don't buy flat screen televisions and such.

Consider using annuities to fund your retirement. They are a decent retirement vehicle, but are great because they allow you to be sure you will receive a check each month for a certain period of time.

Do you have enough money to retire comfortably? You will never know for sure, so you need to save more than you expect to need. The difference between living on a couple thousand dollars a month and five times that is huge.

Article Source: http://www.articlemap.com

Barry Waxler is a financial planner who writes about financial planning for UFCAmerica.com.