Tips for Retirement Income Security in 2011
Tips for Retirement Income Security in 2011
It'salwaysthe right time torecall of thepromisesyou made to yourself, and start making plans forincreasing your income and building the financial security.
Here are some short andsweettips for achieving just that.
Cut Off High-Interest Debts
It's not just aboutbuilding wealth, it is also aboutkeeping more of the money that you earn.
Go ahead and reduce the amount of money spent on interest payments, especially high-interest payments for credit card purchases. This won't have a great impact on yourretirement income security, but it'll ensure theimprovementin the long run, andeveryone can do it.
Choose Wisely Low-Cost Mutual Funds
Pay attention to the cost of investing and stick to low-cost, no-load mutual funds.
Invest intono-load, small-cap, value fund with low operating expenses, instead of investing intovalue funds with a commission and higher-than-average operating expenses.
You can calculate these differences with various mutual fund fees calculators.
Consistent and SteadySavings
Year after year, keep investing intoa diversified set of low-cost mutual funds and exchange-traded funds.
Turn FICA Cut to Your Advantage
Money you won't be paying in FICA (Federal Insurance Contributions Act) taxes this year, you should redirect to your 401(k). This way you'd take that 2% and use it to fund your retirement, it's simple as that.
You can also talk with human resources ASAP and revise your deductions, hoping you'll keep these good saving habits through next year.
Have a Balanced Account
Don't justslumber away when it comes to yourretirement account.You don't want only fixed-rate instruments such as bonds and CDs, because it takes more than compounding interest to build a retirement fund.
Get involved into planning yourretirement funds, keep it well-balanced and diversified. You shouldlearn about what's going on in your retirement account.
Max Out YourHealth Savings Account
HSAoffer better tax benefits than a traditional retirement fund.
With HSA, you receive an upfront tax break, compounding investment earning, and pay no tax on the money that is withdrawn, as long as its use is for health expenses.But you obviously have to have a high-deductible health plan.
Before 65, if you pull money from your HSA for nonhealth expenses, you will pay income tax and a 20% penalty on the withdrawal. After 65, or in cases of death or disability, than kind of withdrawals are taxed as income, without the 20% penalty.
The max you can put into your HSA in 2011 is $3,050 for an individual account, plus an extra $1,000 if you're 55 or older, and $6,150 for a family account.
Buy a House
Yes, buy a house!Mortgage rates are low,prices are about one-third lower than 5 years ago.
It'spretty elementary and obvious thing, homeownership. But it is the important step, and with it you should ensure yourlong-term ride to financialsecurity.
Start a Side Business
Use your free time and start your own sidebusiness, related to what you are passionate about. Turn yourhobby to a small businessventure.
Tend to start a side business that doesn't cost much, wherethe biggestinvestment will be you skill and knowledge.
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