Your Transition To Retirement

By John T Jones, Ph.D.

 Have you thought about your transition to retirement? Young or old you need to think about it. Young people need to plan for retirement and old people need to preserve their assets during retirement. I am not a financial advisor or retirement planner. I do want to tell you what I've learned over the years and how it has affected my retirement.

When you are young you think about buying a home, raising children, and going to Disney World. When you are middle-age you think about getting your children through college and taking a trip to France. When you are near retirement age you think about planning for retirement. When you retire, you feel that you should have planned sooner.

When there was job stability in this country we could expect our employer to do our retirement planning with pension plans and RIAs. Now that has gone to the dogs there being little stability in business. Our retirement left for China last year.

At some time during our life we learn that we should be saving for retirement. Few do it. Some times you will read a sign on the back of an RV saying, I'm Spending My Children's Inheritance. That means that the driver doesn't realize that the "children's inheritance" will be spent during his retirement years just to survive.

Following are some things that can help you as you plan for retirement. The younger you are the better. Don't wait until you are sixty years old to start planning.

1. Save 10 Percent of Your Income: That means to "pay yourself first." This "nest egg" will help you in those times when economic situations would plunge you into debt. It also can be used to take advantage of opportunities that will better your retirement.

2. Carry life and medical insurance to protect your family and to reduce financial risk. You can learn about insurance on the Internet before you purchase insurance.

3. Keep your eye on your financial advisor. He is looking to earning a living and he may recommend funds, annuities, and other instruments which pay him a large commission but are not really in your interest.

4. Avoid risk in the stock and bond markets. You are gambling with your retirement money. You may want to put some percentage of your investments in stocks because the stock market is known to improve yield. However, it can also destroy your retirement in one swell swoop. Never buy and sell options from your retirement funds.

5. Think about investments that preserve your capital. Annuities may be of interest. I got out of the stock market and bought some annuities some years back. They have had a good return and the death benefit is guaranteed. Mine our in IRAs so I must remove a certain percentage every year to avoid excessive tax.

6. Think about investing in assets having intrinsic value. Land, art, diamonds, and other such instruments of investment can be profitable. But you must know what you are doing.

7. Learn to stay out of debt when you are young. Grow fruits and vegetables and preserve them for consumption later. Keep your home in good repair. It is one of your main assets. Be frugal and don't blow money on things you don't really need. You can always make do, repair, or go without.

8. Teach your children to be independent, to work hard, and to contribute to the welfare of the family.

9. Think about long-term care for the eventuality that you or your spouse will have to be placed in a care center. This will protect your assets and reduce your cost if that occurs. Check out your long-term company carefully. Mine is in trouble and I may have to go to the State of Arizona where I bought the policy to receive help (most states guarantee long-term policies).

I hope your have a secure and happy retirement. Plan for it.

Fly Old Glory!

Article Source: http://www.streetarticles.com/retirement-planning/your-transition-to-retirement