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The Retirement Planning Guide

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The Internet Guide To Planning Your Retirement



Note that these pages do not constitute financial or legal advice. They can, however, be used to help you prepare for a consultation with a qualified financial advisor or other expert



How to Get Ready For Retirement: Save Money and Make Money


Get rid of debt  

No matter how close or how far away your retirement is, the time to get ready for it is now. You need to increase your retirement savings, knowing that a dollar that you invest now can be worth three dollars in the future.

If you feel that you haven't saved enough, here are some statistics to make you feel better. In mid-2006:

  • The average of retirement savings for families with a head of the household who's 43 is $18,750;
  • A before-retirement household of people older than 55 has retirement savings of $60,000;
  • Baby boomers aged from 41 and 54 have retirement savings of $30,000;
  • Baby boomers have a median total household personal retirement savings of $35,000;
  • Baby boomers who save in a 401k have an average 401k account balance of $80,000;
  • A survey says that 51 percent of workers 55 and up have saved less than $50,000 in retirement savings – this doesn't include their investment in their primary residence. In the same group, 39 per cent had saved less than $25,000 in retirement savings;
  • Another survey estimates that one in five pre-retirees from 50 to 64 have less than $5,000 in retirement savings.

So if you feel you haven't paid enough attention to your retirement funds, relax. You can start doing a few simple things now, and you'll soon boost your stake. Let's start by plugging  your money leaks – where money is being drained away and you don't even realize it. The major money leak for most people is debt, both credit card and other debts.


Plugging your debt money leaks

For most people, credit cards are the primary way in which money leaks out of their pockets. Take steps to plug those insidious leaks today, and you will find that you have more money, without working harder or changing your lifestyle.

How many credit cards do you have? It's instructive to count the number. Then, work out how much you owe on each card, and how much you're paying in interest. Credit card debt is VERY expensive, although the card companies work ultra-hard to disguise this fact from you.

There's a solution: pay off your credit card debt. TODAY, on all your cards.

If you can't pay off your card debt immediately, you're in trouble, because card debt can eat into your savings if something comes up so that you have no money coming in. This could be an illness, an accident, or being out of work. If you're like most of us, you've never bothered to check how much you owe on your cards, you just use them. However, when you're trying to build your retirement savings, avoid credit cards.

If you have serious credit card debt, realize that you're not alone. Credit card companies spend millions of dollars to encourage consumers into debt. If you need help getting out from under a mountain of card debt, then see a counselor at a non-profit credit counseling bureau. They're set up in all states to help people just like you, so don't hesitate to call them. They're trained to help you to get out of debt, plugging that enormous money leak.


Are you paying too much interest? You CAN switch cards

All card companies are not equal. Some charge huge interest rates. If you're going to need a few months or longer to pay off your card debt, check out which card company has the lowest interest rates. If you have a good credit history, and are a heavy credit user, then credit card companies make it easy to switch to the card that they’re offering. It will only take a couple of phone calls, and a few minutes of paperwork. Considering that you can be saving hundreds or even thousands of dollars, which will boost your retirement fund, invest the time.


How much do you owe? Taking stock of debts

A money leak is a money leak. You won't be able to power up your retirement savings if your money is dripping away. Make a list of everything you owe, to everyone, including personal debt.

Your list should look like the table below, with the highest interest rate charge listed first:

Owed To

Balance Owing



 Cycle int.





2 cycle

Dept. store




Av. daily






Be sure to list your personal debts. Yes, our friends and relatives say: "Pay when you can" and "Don't worry about it", but you do, and they do, and your own guilt will over time erode your valued relationships. So be strong, and put your personal debt on an equal footing with your corporate debt.


The emotional debt: counseling can help

Most of us were taught everything else in school, but we weren't told about debt and how to manage money. It can take a huge burden off your shoulders when you see a counselor for even one session. The major benefit is that you realize that you're not alone – most people have challenges with money, and the worst thing you can do is to keep going and hope that somehow everything will magically fix itself, because chances are that it won't.


What if you owe huge credit card debt? Getting out of credit card debt

If you're shocked when you list your credit card debts, relax. Do not panic. You can get out of credit card debt, but it will take a little time, and you'll need to make some adjustments. The most important one you can make is to pay off more than the minimum that you owe on each card – if you don't pay more than the minimum, paying off your credit card debt with the interest can take you longer than paying off your mortgage – you become a unwilling slave to the credit card company.

Here's how to get out from under credit card debt:

1. Decide what's the biggest amount you can afford to pay off each month on all your cards. It might be $300. Add $10 each to the minimum you're paying off on all your cards. Let's say that you're left with $200 after adding $10 to each of the cards.

2. Pay the extra $200 on the card which is charging you the highest interest. Keep it up until that card is paid off, and then cancel the card.

3. Now pay off the next highest-interest charging card. Pay it off with the $200 every month, until it's paid. Cancel it. Then start again with the next card, and so on.

Paying off your card debt can take time. However, that's not important. Even if it takes years, you're taking action, and each month your debt is going down.


Taking out a home equity loan to pay off  your cards

If you have extensive credit card debt, there's an alternative to paying them off one by one. You can take out a home equity loan to pay off  your debt. The big advantage to taking out a home equity loan is that it will be at a lower rate than you're being charged by the card companies.

Home equity is the difference between what your home is worth, and how much you owe on it with your mortgage. For example, if you have a home that's worth $300,000, and you owe $150,000 on your mortgage, your equity is around $150,000. However, this doesn't mean that you can borrow that amount. Banks have ways of working out the equity which is never more than 80 per cent of the value of the property, they also take into account the mortgage, how long you've been paying it off, the house market, and many other factors. It's worth discussing it with your bank, because if you can borrow against the equity, it consolidates all your credit card debt.

Using the equity in your home with an equity line of credit

You can also choose to take out an equity line of credit. This is credit against your equity in your home. The amount of interest changes according to the current interest rates. One of the challenges with this kind of loan is that the payback period is not set. While this sounds excellent, it can be a trap unless you're very disciplined: remember that you're being charged interest on the amount you've borrowed – it's not a free line of credit.

Do you own a business? If so, see your bank to see what commercial options they have. You may be able to get an interest-free business loan and apply some of it to your debt. As with all situations, this one has a challenge: it's a loan to your business, not to you. See your accountant to ask whether he has any suggestions. You may be able to take a loan in lieu of your salary for a period.

Yes! Happy days, you're out of debt!

Once you're out of debt, not only can you now put the money that you were using to pay off the debt into savings, but you can also have the satisfaction of knowing that you've plugged a money leak that will go a long way towards ensuring that you have a happy – and prosperous – retirement.


Put your money to work for you before retirement (and after)

Later in this guide we'll be discussing a safe form of investment that you return you income during your retirement. However, before we discuss municipal bonds, let's discuss the money that you're letting slip through your fingers every day.

Have you paid off your home? If you haven't you have another money leak, that's leaking money that you could and should be using.

Pay off your mortgage

If you haven't paid off your mortgage, look at paying it off as a priority. The real estate market rises and falls, but no matter at what level the cycle happens to be at currently, one thing's certain – there's a limited supply of land, and whenever there's a limited supply, the cost of it goes up. Therefore, look into what savings you could make if you were to pay off your mortgage faster. You could save thousands of dollars that you can put into your retirement fund.

Saving money on your money

Many people never look at their bank statements to see what fees they're being charged. Please get out some bank statements and look at the fees. Then, spend a few moments online, and see where you can save.

 Save money on checks

Save money on checks by buying them through check discounters like:

  • Checks Unlimited 
  • Checks in the Mail
  • CheckWorks 

Your bank charges $20 to $25 per 200 checks, discounters charge around $6.00 to $8.00 for 200 checks.  Depending on how many checks you use, you can save $19 dollars a year and more.

Save money on Automated Teller Machines (ATM)

Check your bank statement to see whether you're being charged fees on your withdrawals from ATMs. Usually your own bank's ATMs lets you make a number of withdrawals before you're charged. Make sure you know how many you can make, and don't make withdrawals from out-of-network ATMs, because with the surcharge, you're paying interest of around 7 per cent to access your own money, which is outrageous. By avoiding ATM fees, you can save from $100 to $200 a year.

Watch for new finance and money management services online

The Internet cuts down on the cost of providing financial and money management services. This means that the smaller operators who are not as well known often provide better services and much better rates than the larger established players. Be on the watch for new programs and new deals.






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