| ing for your retirement is something you'll do | | | | basket” as everyone says. You'll want to |
| throughout most of your life (ideally!) A retirement | | | | divide your money and retirement savings among a |
| plan is more than figuring out how you will live out | | | | variety of investments, from employer-sponsored |
| your golden years once you've stopped working | | | | retirement plans and IRAs, to certificate of deposits |
| – it's also a great way to figure out your | | | | and money market accounts, mutual funds, stocks |
| current finances and improve your overall money | | | | and bonds, and cash. This will give you a complete |
| management. | | | | and diversified portfolio. The percentage of money |
| Getting Started Planning For Retirement | | | | you contribute into each type of investment is based |
| If you already have some investments or a | | | | on your risk tolerance and how much time you have |
| retirement account, take a look at how much you've | | | | before you retire. |
| obtained so far. Consider how much you are likely to | | | | Annual Withdrawal Rate |
| need when you retire, by estimating the age you | | | | You don't want to outlive your money when you are |
| plan to be when you retire and the number of years | | | | retired! Determining an annual withdrawal rate will help |
| you will probably live – then determining how | | | | you make sure your investments will last you |
| much you will need per year to live on to cover your | | | | throughout your retirement years. You determine the |
| expenses. You'll want to consider how much you | | | | annual withdrawal rate by knowing the amount of |
| might receive from Social Security, personal | | | | your total assets available when you retire, the |
| investments, pensions and employment earnings if | | | | assumed rate of inflation, and how many years you |
| you plan to take a different job when you | | | | plan to live during retirement (a good estimate since |
| “retire”. Finally, think about your | | | | no one knows this for sure!) |
| tolerance to risk. Do you have 20 or more years left | | | | You may want to withdraw money from different |
| before you retire or are you quickly approaching | | | | investments at different times during your |
| retirement? The sooner you plan to retire, the less | | | | retirement, depending on the tax benefits of doing |
| risk you will probably want to allow, but keep in mind | | | | so. Some accounts allow you to start receiving the |
| that long-term performance investments may help | | | | benefits at the age of 59 and a half; while some |
| compensate for investments with short-term risk | | | | tax-deferred retirement accounts require that you |
| potential. | | | | are making annual withdrawals once you reach the |
| Employer-Sponsored Retirement Plans | | | | age of 70 and a half. |
| If you are lucky enough to work in a place that | | | | Your Will |
| offers employer-sponsored retirement plans, you | | | | Part of your retirement planning involves the creation |
| should contribute as much as they allow – or | | | | of your will. This will ensure that your final wishes are |
| at least as much as your employer will match in the | | | | legally documented and that you are doing all you can |
| case of employer matching retirement plans. | | | | to minimize the tax burden you might leave to your |
| Investing in these retirement plans, as well as IRAs | | | | heirs. As your life changes, you'll want to review and |
| help your money work harder because they are | | | | update the will to make sure it is still what you want |
| tax-advantage accounts. The longer your money | | | | it to be. Planning for retirement is something most |
| remains in these accounts, the more it can grow | | | | people do throughout the course of a lifetime, and |
| through compounding interest. | | | | plans can be modified and adjusted as your lifestyle |
| Asset Allocation | | | | and financial situation changes. |
| You don't want to put “all your eggs into one | | | | |