Top 5 Retirement Planning Mistakes

1. Not having Long Term Care insurance: This one mistake can wipe out your entire nest egg in one fell swoop. Even faster if both you and your spouse were to need care in any given year. For the money, this one insurance product buys not just financial but mental security.

2. Being too conservative: it is easy to understand why a lot of us prefer to be conservative in these brutal markets but this is also the biggest mistake we can make unless we have enough money to cover all our income needs far into the future, counting for inflation. Our biggest task is keeping up with inflation and we cannot do the job adequately unless we keep a healthy slug of our portfolio in stocks.

3. Not counting social security as a bond investment in asset allocation: when you retire, you will get a fixed income from social security just like a CD or a bond. Same thing with a pension. When you allocate your assets, count these sources of income as "bonds" or "fixed income".

4. You need 70 percent of your current income for retirement: this is almost always wrong because most retirees spend more than they did when they were working, at least in the first few years of retirement. You need to look closely at your monthly expenses after retirement but it makes a lot more sense to aim at replacing your entire pre-retirement income if not more. Do you care if your overshoot your goals?

5. Assume you will be in a lower tax bracket after retirement: This may hit you with higher tax bills than you expected when you pay tax on your IRA and 401(k) withdrawals. You need to look at your expected tax bracket every year, specially if you are near the mandatory distribution age of 70 1/2.

Jay has retired after more than 2 decades on Wall Street and writes on investments and finance topics. If you find this article to be of value, please check out his latest diversions at Daybed Bedding Sets and Day Bed Covers.

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Top IRA Certificate of Deposit Rates - October 2009

The big player seems to be Alliant Credit Union. Believe it or not you can find CD rate specials here frequently. If you are a current member the process is much faster than trying to become a member and then completing a certificate of deposit. So even if you run out of time, I think it would be a good idea to open a membership. The hardest thing is Alliiant won't lock the rate beyond the current day. So if you put the IRA process into gear and the rate drops, your out of luck. Anyone can become a member by first joining the National PTA. This is $25, I believe. You then can complete the Alliant member application. Be forewarned that their online process has proven difficult for many in the past. It asks a series of questions about information it pulls from the credit bureaus and I've known several people that claimed the information was erroneous and thus they couldn't complete it online. You can always go the route of snail mail if necessary. The current IRA rates are:

1y -- 2.30% APY
2Y -- 2.55% APY
3Y -- 3.00% APY
5Y -- 3.25% APY

Their NCUA# is 67955 and they are based in the windy city of Chicago, IL. They are large for a credit union with over $6 Billion in assets. As of March 2009 data, they have a 4-star rating.

Another big player is Ally Bank, but they don't offer rates for IRA CDs. People's Trust Federal Credit Union has an 18-month IRA for 2.12% APY. They are based in Houston, TX. They have a 2-star rating. People's NCUA # is 177. Looks like they have been around for a while. I did have to make quite a few clicks to get to the rates. I hate that. This is true for many banks and credit unions. They really should make it much easier.

If you're wanting to stick with a bank try Nationwide Bank, FDIC# 34710. Their process isn't too difficult. They are about $2.25 Billion in assets, had a nice second quarter profit, and 4.5 stars. Rates are:

1Y -- 1.95% APY
2Y -- 2.35% APY
2Y -- 2.25% APY
3Y -- 2.45% APY

I think that is a pretty good window into IRA rates across the internet. Let me know what you are finding.

Happy Investing.
cd :O)

Chris Duncan is a NASD Registered Representative. He specializes in helping clients find the best and highest CD rates nationwide. His clients include individuals, financial institutions, corporations, and public agencies. Check out our CD Rates offers or our California CD rates

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Income Drawdown - A Quick Guide

In the UK when reaching retirement age it is common for people to purchase a pension annuity. A pension annuity converts a person's pension fund into a regular income that will be paid to them for the rest of their life. There are however alternatives to annuities available. One such alternative is income drawdown.

With income drawdown, unlike a traditional pension annuity, the pension fund is not used to purchase a guaranteed income. Instead the pension fund is reinvested in a range of assets and a variable income is taken from this fund. The level of income that can be taken from income drawdown plans is limited by the Government Actuary Department (GAD). Income drawn from the fund must be within the maximum and minimum limits set by the GAD. Income drawdown is a short to medium term alternative to buying an annuity. Once a person reaches the age of 75 it is compulsory for them to take out an annuity policy.

As the value of the pension fund can go down as well as up income drawdown is considered to be more risky than traditional annuities. There is a further risk in that in the future annuity rates may be lower and so by not purchasing an annuity now there is a possibility of losing out.

The risk associated with any drawdown plan is measured using a formula known as critical yield. Critical yield shows how much the invested pension fund must grow each year to be able to provide the income the policy holder wishes to take each year and maintain this income at the age of 75 when the person purchases their annuity. In simple terms the lower the critical yield associated with a plan the less risky it involves.

As an alternative to annuities income drawdown isn't suitable for everyone. However for people with large pension funds or those who have another source of secured income it can be a good option.

Based in the UK, Annuities4U provide independent pension annuity and income drawdown advice to clients nationwide. We help our clients to find the best annuity and income drawdown quotes available.

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Saving For the Future While You Enjoy the Present

The philosophy of planning for the future has always confounded me. It seems to me there are two very basic world views in conflict when this issue is raised. One world view is the responsible response: the "planning for the future" type of person. This type of person seems to think he will live to be at least 100 years old, and that everything he refrains from enjoying, doing, or buying now will pay off as millions of dollars in that inevitable and very real place called the future.

Then there is that other sort of person that believes that nothing can be as wonderful as the fun that a person can have right now. Since I can't "take it with me", as they say, I might as well "eat, drink and be merry" right now.

I myself don't adhere to either of these points of view. I have a tendency towards not missing opportunities today that might never come again, such as spending money, perhaps more than is wise, on a meaningful activity with my family which will become a wonderful memory to cherish for years to come. In many ways this type of spending is actually a type of investing; in the future of the health of my family. The relationships we develop with our loved ones must be worked on now, and not at some obscure future time. Remember Harry Chapin's famous song "Cat's Cradle?" This song illustrated the well-known "tomorrow" syndrome in a poignant and heartbreaking way. The mistake we all have a tendency to make when we tell our children "we'll get together when I have time."

Of course, on the other hand, quality time with our families does not always require large sums of money. Sometimes the inexpensive or free moments can be the best. But sometimes a really great time for everyone might require some money spent, and if so, sometimes it might be wise to say, "the future is now."

Then again, if we are lucky, and we live a long time, long enough to retire and do some of the things we just couldn't do when we were working 40 or more hours each week; when our children needed a lot of tending to and all the other things that get in the way of traveling, hobbies we love, enjoying long walks, or whatever it may be, it might be nice to have a bit of money to enjoy that time without worry.

So in conclusion it appears to me that the correct approach to this dilemma is to strive towards a responsible savings plan to ensure a worry-free and active retirement, while at the same time keeping our options open for some "irresponsible" spending today, while we still have our good health and our young children around to enjoy ourselves together with them. It is true you can't take it with you, but it is also true that one day the future will be here and you will be happy that you were prepared and ready to meet it in style.

Emily Salisbury, the author of this article, writes about crafts, cooking, and home decorating. Her creative skills are far more developed than her financial skills, so she turns to professionals for investment advice.

Putting together a savings plan she could live with wasn't easy, so Emily looked for a reliable investment adviser. Harry Rady of Rady Asset Management came highly recommended and helped her to make a plan that lets her enjoy her life now while planning for a secure retirement.

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Financial Clients Leaving Brokers Who Didn't Buy Then Back Into the Market at the Bottom

During times of economic crisis and chaos, many clients of financial planners and stockbrokers will choose to leave and find a new broker. In fact, one recent survey in Financial Planner Magazine showed that 85% of the clients were considering getting a new broker right now.

That's pretty scary, and I don't know of many businesses that could survive with an 85% turnover rate, especially professional services in the same year. Incidentally, many financial planners and stockbrokers are leaving the business or have already left. And it doesn't take a rocket scientist to see why.

Now, many of the fairly astute financial planners and stockbrokers were able to get their clients out of the market before things really got too rocky. And their clients were very thankful for not losing 45% of their life savings when the stock market completely collapsed into chaos.

Nevertheless, most of those stockbrokers and financial professionals were not able to get their clients back into the market at the bottom. Most clients were too sketchy, and afraid to get back into the market when they should have. Now it may be too late for them, because they missed the big run-up.

These clients now blame their broker for not "making" them get back into the market, of course the reality is that the clients were risk adverse and would have prevented their broker from getting back into the market anyway. So it is interesting that the stockbroker or financial planning consultant appears to have gotten caught in a Catch-22.

So, not only are people leaving their brokers because they didn't get them out of the market before the collapse, or because they lost a good chunk of their financial wherewithal, but clients are also leaving those brokers who didn't give him back into the bottom. So, everyone in the industry is finding themselves being dropped by some of their best clientele. I hope you will please consider this.

Lance Winslow is a retired Founder of a Nationwide Franchise Chain, and now runs the Online Think Tank. Lance Winslow believes that if you need financial online content, go to http://www.bloggingcontent.net

Note: All of Lance Winslow's articles are written by him, not by Automated Software, any Computer Program, or Artificially Intelligent Software. None of his articles are outsourced, PLR Content or written by ghost writers. Lance Winslow believes those who use these strategies lack integrity and mislead the reader. Indeed, those who use such cheating tools, crutches, and tricks of the trade may even be breaking the law by misleading the consumer and misrepresenting themselves in online marketing, which he finds completely unacceptable.

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Safe Investment Strategies For Retirement

Let's assume you are in or approaching retirement. You have your retirement nest egg, which has been working overtime lately, trying to catch up the time lost since the global financial crisis decided to change the rules on steady and consistent returns.

Your financial adviser asked you a whole bunch of questions and told you that you had a 'balanced' investor profile. You weren't quite sure what that meant but it sounded like he was treating you as 'normal' so that was comforting. He also reckons that because your are 'normal' he's going to stick half of your money in 'defensive' investments like cash, fixed interest, bonds, hybrid securities and perhaps even mortgage funds (cringe). The rest of your money is not retiring - it's going to remain working in the share markets or other 'growth' investments so you can lead a happy retirement.

But are you? Is this really the best investment strategy in retirement? Something based on your 'risk profile' rather than your actual needs? If you had anything invested in the share markets over the last few years then you already know what your reaction was when markets fell. If you felt like having a heart attack because your investments collapsed then either you haven't been taking care of yourself or you've been feeding yourself the wrong information. The problem with basing an investment strategy on 'risk profiles,' as so many financial advisers do, is that it doesn't actually match your needs with market risk.

A better approach for a safe investment strategy for retirement is to first determine how much income you want to draw each year, taking into account all your living expenses including holidays and asset purchases. Multiply that figure by 3. That's how much you need to put away in 'defensive' assets. The rest of your nest egg keeps working for you in what ever 'growth' investments you are comfortable with and appropriate to your risk level.

Your income or pension drawdown is deducted only from your 'defensive' assets. Markets can go south for 3 years before you need to withdraw anything from your 'growth' assets. Too many financial advisers still use the 'risk profile' approach to investment strategies and rebalance the portfolio on a yearly or more frequent basis to keep the original asset allocation, crystallizing losses along the way if markets are in an extended downturn.

The strategy is designed to set aside 3 years worth of income that you will need, allowing for what income is also generated from those 'defensive' assets. For example, if your nest egg was $500,000 and you wanted to draw down $40,000 per year then you set aside $120,000 less what income is likely to be generated on that amount over the next 3 years (depends on interest rates). At appropriate times you would top up your defensive portfolio with profits from your 'growth' portfolio. More frequently in good times, less frequently in bad times. The aim is to always have 3 years of income set aside but only if you can do so without crystallizing losses.

This strategy will work for any 'risk profile' and knowing that you have at least 3 years income set aside should provide you with greater comfort and security in market downturns.

Rob Bourne has been involved in the financial services industry for over 35 years. A practicing financial adviser he now focuses on the need for people to be better informed through realistic and down-to-earth financial education. The aim is to help people make their own informed decisions on financial investments and business opportunities.

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Are You Considering Selling an Annuity?

Many people have assets available to them that they are not even aware of. One form of asset that many have, but never think about, is an annuity. In the challenging economy of today you might consider selling your annuity.

You should first know more about annuities, and determine whether or not you have an asset that you can sell. Annuities are a type of retirement fund. They are a common form or retirement accounts held by employees of Universities and governments, but are not limited to those employers. Annuities, like other type of retirement accounts, have an age limit before they can be cashed in. In most cases you will not be able to receive money from an annuity until you reach retirement age, at least not without stiff penalties attached.

Annuities are designed to carry through your retirement years, but are different than Individual Retirement Accounts, also called IRAs. If you own an IRA, you probably already know that you can usually transfer the money from one account to another when you change employers. With annuities, that is not usually the case.

So, why would someone want to consider selling an annuity? People are selling annuities for many different reasons. In some cases, the annuity is a small amount of money, and it is better to have the money now rather than wait for retirement. If the owner waited for such a small amount, then they would only receive a small check each month. In the economic climate of today, many people are selling an annuity simply because they need money.

Visit Selling Annuity Help for additional information on selling an annuity.

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