The Best retirement System – One of the biggest financial challenges you’ll face in life is saving for retirement. There are various schools of thought on how much money you’ll need in order to live comfortably after you stop working.
457 Retirement Plans
Are you familiar with Section 457 retirement plans? Heard about the concept before? If yes, you’ve probably have encountered it the time you were planning which of the retirement plans available is best to consider. Well, just like the rest of the retirement plans, the Section 457 covers a lot of things that are worth knowing.
On the most basic, the Section 457 retirement plans are a type of non-qualified deferred compensation plan that only certain governmental and tax-exempt companies and organizations can offer for their employees. The purpose behind this plan is to allow employees to set aside funds for their retirement. And, it is interesting to know that although the 457 retirement plans are non-qualified plans, they somehow mimic a qualified plan for the reason that they offer a number of tax benefits for employees in the same way the qualified plan does.
What benefits are given? The Section 457 retirement plans basically provide the tax benefits that generally include pretax salary-reduction contributions, as well as tax-deferred growth of the investment earnings.
There are two forms of Section 457 retirement plans. The first is the so-called “eligible” Section 457 plans, and the second is the “ineligible” Section 457 plans. On one hand, the eligible plans cover certain restrictions on the amounts deferred. These plans are also subject to favorable tax treatment. On the other hand, the ineligible Section 457 retirement plans are those that provide or offer a greater degree of deferral and are specifically designed for executives.
Whatever form you may consider, it is important to note that both of those above mentioned forms have set certain limits on the amounts to be deferred. For instance, in the eligible Section 457 retirement plans, the amount deferred annually by an employee cannot exceed the littlest of 100% of his or her compensation. If we will put that into figures, here’s what the deferrals will look like:
- $14,000 for tax year 2005
- $15,000 for tax year 2006
After 2006, it is expected that the applicable dollar amount will be adjusted for cost of living surges in increments of about $500.
So that’s said. Now in terms of distribution, it has been maintained that in the Section 457 retirement plans, the distributions can only be made after the calendar year that the employee reaches age of 70 ½; after severance from employment; and after an unforeseen emergency. The distribution, however, can be rolled over into an IRA or other forms of eligible plans, but this time it must be under the same rules that apply generally to the rollover to the eligible plans. In addition, employees who consider Section 457 retirement plans can also rollover their plans into another Section 457 plan without even incurring the income tax placed on the amount rolled over.
Best Retirement Cities
Once more, “baby boomers” are contravening the rules. This significant group has bumped traditional retirement off its precedence. While retirees before flee to Leisure Worlds, boomers are considering what to do in the next phase and where. Studies estimated seventy percent of those forty-five years old and older are planning to continue working in their “retirement” years. Financial stability is not the only reason, pure enjoyment of work or desire to try something new are reasons that keep these boomers on the job.
Amongst those people aged forty to fifty-four, only 4.7 percent, which is fewer than one out of twenty, will move across county lines every year, although even a fewer will move across state lines. A large portion of them will stay put but with some occasional traveling here and there. The reason for this is that a lot of boomers see their homes as legacies. Still some would look for the best retirement cities where they can live, work, and relax all in one.
For those who decide to move, sometimes the draw of the “familiar” is an answer. A lot of them will move to be near family; the divergence between baby boomers and older “silent generation” is that the younger faction is not rebelling against their family ties, in fact remaining close to their family ties. Some of the most common settings or the best retirement cities surroundings that baby boomers look for include: college towns for a familiar feel; a new locale, one with appealing cultural and recreational activities; purchasing vacation homes with view to being there in the future.
A research team viewed ten criteria considering the interests, needs, and tastes of Americans age fifty and older to come up with some of the best retirement cities for the baby boomers. Although not all towns stand out in every category, each town ranked high in several and a lot scored high in nearly all. The criteria included: availability of jobs given that this group will work beyond the age of sixty-five; affordable housing; culture and entertainment; access to outdoor recreation; safety; colleges and universities; sense of community; proximity to complete well-regarded health care facilities; good public high schools since many of them will have teens at home; and ease of getting around.
The three of the best retirement cities from the set criteria include:
Loveland/Fort Collins Colorado is one of the best retirement cities both for its older residential areas of single-family homes under huge trees and the newer outlying neighborhoods the spring from grassland summons visitors with stunning mountain views and easy access to year-round outdoor fun. Both places are just forty five minutes from Denver and are neighboring cities facing the majestic Front Range of the Rockies.
Median house price: $198,655 in Loveland and $221,714 in Fort Collins
Bellingham, WA
This western find is located on a bay along the Pacific Northwest coast in the middle of Seattle and Vancouver. Set with a seaside marina, lush forests, freshwater lakes, Victorian historic districts, and to the east is the snow-capped Mount Baker. All the natural charms combined with affordable neighborhoods and recreational opportunities make it one of the best retirement cities, and have enticed a slew of transplants in recent years.
Median House Price: $163,000
Raleigh/Durham/Chapel Hill, North Carolina
These places are deemed to be one of the best retirement cities with its dynamic city area anchored by the state-of-the-art and biotechnology facilities situated in its Research Triangle Park and through more then ten higher-education institutions, just three hours from seashore and close to mountains, plus the most affordable and flamboyantly diverse of three towns.
Median House Price: $147,000
Other best retirement cities include: Sarasota, Florida; Fayetteville, AR; Charleston, SC; Asheville, NC; San Diego, CA; San Antonio, TX; Santa Fe, NM; Gainesville, FL; Iowa City, IA; Portsmouth, NH; Spokane, WA; and Ashland, OR.
Choosing the Best Retirement Plans
Retirement has long been playing a very important part in every person’s life. It is considered by many as the most exciting part of their life’s journey in which they can enjoy doing anything they wish to do aside from spending most of their time working in a company. Indeed, this is the right time for them to do something for themselves. But retirement wouldn’t as special as it should be if not planned early and properly. As you may know, retirement planning is not a one-time process. There are a lot of things to consider for a successful retirement, and perhaps one of the best things to do is to determine exactly what retirement plans will be best for you.
There are a myriad of retirement plans available out there on the government shelves for you to choose from. However, with the ever growing number of retirement plans, finding the best one is somehow puzzling. It is even more puzzling if you don’t know exactly what is behind the plans. I bet you know that there are a lot of things involved in each plan and what may seem best for you may not be best for the others.
Because of this, a closer look to the individual plans is certainly important. It then follows that if you want to determine the best retirement plans, you should try looking at everything involved in each plan. Know everything about the nature of the best retirement plans you are considering, including their purposes, advantages and disadvantages. The best way to do this is to do a research on the most preferred retirement plans on earth. I am sure that you can find a lot of information about them with lots of resources available out there, not to mention the retirement sites online. However, it is necessary to make sure that you understood everything that is said, and if possible see to it that whatever you consider is best fits well to your specific needs.
When finding out about the best retirement plans, it is a wise idea to keep a list in hand of what you want to ask for. I am simply talking about your retirement goals here. So before you consider one of the best retirement plans, set your goals first. Consider the goals as your starting point, and if possible make them work by choosing the right and the best retirement plans for yourself. You’ve got the information you need about the best retirement plans, right? If so, then you can proceed with identifying which of the available retirement plans is best.
If in the end you find yourself a bit puzzled with a myriad of choices available and lots of things to consider, the best move you can do is to ask for help. A lot of retirement planning experts is available out there to assist you in finding the best retirement plans. You probably have a good friend who is willing to help you do the calculations and the evaluations. So ask for his or her help. Retirement planning is after all not a do-it-yourself process.
Center for Retirement Research
The Center for Retirement Research at Boston College aims to promote research on retirement matters, to convey new findings to the policy community and the public, to widen access to important data sources, and to help train new scholars. The center’s mission is to create first-class research and form a strong link between the academic community and decision makers in the private and public sectors about a matter of serious importance to the future of the nation.
The Center for Retirement Research’s staff has wide-ranging experience in retirement research, grant management, and government policymaking. The center’s staff also consists of student research assistants who give support for all activities of the center. The Panel of Outside Scholars/Advisors is a set of six independent experts that evaluatesthe center’s research program and its dissemination and education activities.
The research priorities of the Center for Retirement Research are addressed to an assortment of important retirement policy issues. The center comprises researchers and experts at Boston College and several affiliated institutions. The team holds a breadth of knowledge on retirement matters and institutions almost unmatched in the field. The group is really interdisciplinary with backgrounds in demography, political science, sociology, actuarial science, economics, social work, and psychology.
There are over thirty ongoing research projects at the Center for Retirement Research that concentrate on wide range retirement issues including Social Security, labor force participation, employer-sponsored pensions, and household saving.
The publications of the Center for Retirement Research include the following:
Social Security
This program of the center, which has long offered the immensity of retirement income for most Americans, features future challenges. The full retirement age for complete benefits is rising and the program goes on to face a long-term funding shortfall. Views vary on whether spending and revenue changes should be done within the present system or in combination with the introduction of personal accounts. Researchers of the center are studying various options for reforming the system and shed light on their social, economic, and budgetary implications.
Private Pensions
The center’s researchers discover the adequacy of present household saving and issues that could influence current and future saving behavior as the nature of pension coverage has shifted dramatically throughout this time with the fast rise of 401 (k)s and other plans with comparable features.
Savings and Consumption
Researchers explore the sufficiency of existing household saving and aspects that affect today’s and future’s saving manners as the individual’s need to save, even those with pensions, become an important issue.
Work Retirement
Center researchers evaluate the potential impact of health care expenditures on individuals’ retirement security.
International issues
Researchers of the center survey the retirement setting in other nations and reviews the implications of their policy choices.
The Center for Retirement Research also provides financial assistance to train new scholars and to offer additional experience for current researchers.
Civil Service Retirement System
The Civil Service Retirement System (CSRS) began in 1920 and has given disability, survivor and retirement benefits for the majority of civilian employees in the Federal government until 1987 when the new Federal Employees Retirement System (FERS) was created. Nevertheless, over two million people carry on receiving Civil Service Retirement System retirement and survivor benefits every month.
Retirement benefits are presently financed by both Government and employee contributions to the retirement fund, and the benefits are provided based on the duration of service and the average pay over the highest three years of pay.
What are the eligibility requirements for Civil Service Retirement System benefits? An employee is qualified to retire voluntarily if the following provisions are met: at least five years of creditable civilian service; is separated from a position subject to Civil Service Retirement System coverage; is covered by Civil Service Retirement System for at least one year within the two-year period immediately preceding the separation; and meets age/service combinations of age 55 with 30 years of service, or age 60 with 20 years of service, or age 62 with five years of service.
For employees who separate from service and have met the criteria except for the age/service combination may be permitted to a deferred annuity at age sixty-two. To be qualified, the employee must not take a refund of retirement deductions upon separation.
In determining the service which may be used for an employee’s eligibility for retirement under the Civil Service Retirement System, is not restricted to service in positions subject to CSRS retirement deductions, it may also comprise service where the pay of the employee is not subject to retirement deductions, such as under a temporary appointment. Honorable active military service may also be qualified, subject to conditions: it was executed before the separation date upon which is the basis for entitlement to annuity; it is not comprised in computation of military retired pay except for certain service-connected disability requirements; if the military service was executed after December 31, 1956, some employees will have to create a deposit for the service to receive firstly or for other employees, to retain credit after the age of sixty-two.
Although the service used in determining an employee’s eligibility for retirement is typically the same as creditable service for computation purposes, there are some exceptions: periods of CSRS service refunded, will not be creditable unless a redeposit is made; if the refunded service was executed before October 1, 1990, it will be qualified even if no redeposit is made but the annuity will be actuarially decreased; non-education service is made on or October 1, 1982, is not qualified if a deposit has not been made. October 1, 1982 prior service is creditable by the annuity will be decreased by ten percent of amount owed; active military service executed after December 31, 1956 is not creditable for employees first employed in a covered position after September 30, 1982 except if a military deposit for the service is made; and unused sick leave is commendable in computing benefits. Sick leave is changed into days or months of service using the Sick Leave Chart in the OPM operating manual, but it can never be used for eligibility.
IRA Retirement Plans
Retirement plans are arrangements that bestow income or pension to individuals during retirement, either due to old age or when the physical condition of a person inhibits the person to work (as a result of poor health or accident). An Individual Retirement Account (or commonly referred as IRA”) is a retirement plan account in the United States that offers various tax compensations for retirement savings.
There are numerous types of IRA retirement plans. These types of IRA retirement plans can either be provided by the employer or self provided. Listed below are some of the IRA retirement plans available in the United States:
Traditional IRA
Traditional IRAs are conventional types of IRA retirement plans that are held at a custodian (ex. bank, brokerage, etc.). These types of IRA retirement plans may be invested in anyway a custodian chooses. For example, a bank may allocate deposit certificates while a brokerage may allocate stocks and mutual funds. The best provision of these types of IRA retirement plans is the tax deductibility of the contributions made. The conventional IRA has strict eligibility requisites based on income, filing condition, and accessibility of other retirement plans as mandated by the United States Internal Revenue Service.
Roth IRA
Roth IRAs are one of the types of IRA retirement plans in the United States that invests in securities, usually deals with common stocks or mutual funds. The contributions of the Roth IRA come from the earned income of an individual that already has been levied (these are not tax deductible). Withdrawals (up to the overall amount of contributions) are federal income tax free and the withdrawals of the total amount of earnings (everything beyond the total contributions) are frequently federal income tax free. The main disadvantage of Roth IRA is that when compared to a conventional IRA, its contributions are, in no way, tax deductible. If an individual that belongs to a high tax bracket contributes a thousand dollars to a conventional IRA, that individual can frequently receive a tax deduction. This significantly, reduces the primary cost of contributing or possibly allowing someone with no large amount of disposable income to harbor more income. There are severe penalties if an individual makes early withdrawals of earnings, and an unqualified withdrawal of earnings will result in federal income tax and an additional ten percent penalty of the amount.
Simple IRA
Simple IRAs are types of IRA retirement plans in the United States that are provided by the employers. It is specifically set up as a type of Individual Retirement Account that an employer provides. More known as the 401(k) (or profit sharing plan) and 403 (b) (the tax sheltered annuity plans). This type of IRA retirement plan offers simpler and less costly administration policies.
Online Retirement Opportunity
For a lot of people, the idea of retirement and depending on pension checks is not quite a happy vision. Although they may always have had dreams of retirement that is unstressed and with some luxuries thrown in such as traveling here and there, the harsh reality that pensions will likely give them just the most basic living conditions, with none of the hoped for “luxuries” still remain.
Whether the retirement is thirty years away, fifteen years away, or is already upon them, the best assurance of a happy future is to start constructing a second stream of income now. For a number of people this would mean starting their own business and marketing products or service in the expectation of making some big profits. However, a lot of people don’t have the skills or even time to manage such a go-getting task. But, they may have time to write and access the internet from the comfort of their own home.
The internet these days presents a great online retirement opportunity, specifically freelance copywriting. If one has the skill to write a letter or a simple company memo, then they’ll have the skills to make some money through an online retirement opportunity of freelance copywriting.
There are numerous ways of how to turn words into cash, but the most common way to do it is through the craft of copywriting. And for retirees, this can be the best online retirement opportunity. Why copywriting and what makes it such a good source of second income? Well, first of all it does not need special qualifications, a university degree is not necessary at all. Second, it does not matter where you are located, or how old or young you are. And third, it does not cost much to get started. Just by taking a really good copywriting course, then you’re on your way to your second source of income.
Freelance copywriting is one of the best online retirement opportunity, which blends with the high-tech world as internet access, web services galore, and laptops, gives the flexibility to work from home or anywhere you like, from a country, a city, or even while on the beach. One can now literally wander the globe while running a good source of second income. And not only that, you can choose from lots of profitable markets for copywriters, such as health and fitness, travel writing, resume writing, financial market, catalog writing, white paper writing, business to business, and fundraising.
For short, freelance copywriting as an online retirement opportunity is the ultimate retirement opportunity, giving each retiree the potential for some good money whilst leaving them with the flexibility they need to fit around their existing obligations.
Public Employees Retirement System
For every employee who has dedicatedly worked for years, retirement is something they enthusiastically look forward to. … days when they would no longer be getting up early, beating the traffic, or making it through the hustle and bustle of everyday working life. The vision of just being relaxed throughout the day, doing things at their own way and at their own pace, is a feeling of complete satisfaction after long years of commitment to work. It’s finally time to reap the fruits of hard work, whether you have been a private firm’s employee or a public employee.
For public employees, the benefits of their automatic deductions for their retirement through the Public Employees Retirement System, which they have been paying for the whole duration of their working days, are at last at hand.
The Public Employees Retirement System is a retirement system applicable for government employees or public employees, except for teachers and students. This is a compulsory membership and every member should fill out an application form at the start of their employment. It is a benefit plan that provides benefits to public employees once they retire; based on their average pay and the number of years they have rendered service.
The Public Employees Retirement System also includes survivor and disability protection. The system also permits those with thirty years of service to file for an early retirement, as well as providing death benefits and beneficiary benefits. All Public Employees Retirement System of every state is dedicated to guaranteeing the retirement benefits of every employee.
The Public Employees Retirement System automatically deducts contributions from the public employee’s payrolls. The amount of contribution may vary from employee to employee depending on their coverage and retire plan. Presently, the contribution rate is 8.5 percent of the employee’s salary and will increase up to 9.5 percent in 2007. The benefits are permanent depending on the legislation set by each state, so it is essential for members to be aware of their benefits and coverage to get the most of their contributions once they retire.
Even if the Public Employees Retirement System is mandatory for all employees, there is still a criteria needed to be met to become a member. The criteria needed to be met are as follows: the applicant should be a regular employee and their yearly pay should be $1,500 or higher; the position of the applicant should be under the coverage of the Social Security System; if not covered by the Social Security; if currently employed by the Job Training Partnership Act and paid by their federal funds; if a temporary employee; inmates in correctional institution; mental health and retardation patients do not qualify for the Public Employees retirement System; and students employed by their schools and universities where they attend regular classes may sometimes not qualify.
The Best retirement System: Retirement Age
A retirement age is an age wherein employees no longer work. There is no mandatory retirement age; however, most companies and institutions do impose a retirement age. There is no standard in retirement age and it has become more and more variable. The retirement age of the federal government is seventy and many of the companies and institutions these days have a retirement age of sixty-five. Most employees or workers start to collect their Social Security benefits at the age of sixty-two, although sixty-five is the minimum age for collecting full Social Security benefits and is steadily escalating to age sixty-seven.
A mandatory retirement age is the age of a person wherein that person who held certain profession or office is obliged by the statute or law to resign or retire. On average, the mandatory retirement ages are warranted by the contention that certain occupations or professions are too hazardous (military professions) or require high amount of physical and mental ability (pilots). Nevertheless, since the age of retirement is mandated, it tends to be a bit arbitrary and not based on the definite physical assessment of the person. Many people view this practice as one form of age prejudice or ageism.
The age of retirement generally vary from one country to another. The common age of retirement is between fifty to seventy years of age. In some nations, the age of retirement differs from male and female. On occasions, certain occupations and professions (those involving danger and fatigue) have earlier age of retirement.
In the United States, many consider sixty-five as a normal or standard age of retirement, however many individuals stop working before they reach that certain age. On the other hand, contributory grounds like job loss, disability and funds are some of factors of early retirement.
In the past, most workers have to go on working until their deaths or depend on the support of family or friends because of the absence of pension arrangements. These days, almost all developed countries have schemes to provide pensions on retirement age. These pensions are either sponsored by the employers or the State. On the other hand, in most poor nations, the support for the old is still generally provided by the family. Many of these people require assistance due to weakening health.
In most countries, those who need care but do not require regular aid prefer to live in retirement homes. A retirement home is a medical facility that provides retired workers with some extent of freedom; while those who need the highest extent of care and constant assistance may choose to live in a nursing home.
A retiree can go back to work; most retirees who go back to work have their own reasons for doing so. One of the main reasons is financial difficulties, while there are some that prefer to go back to work for the simple desire for activities.
The Best retirement System: Retirement Calculator
How financially secured are you for your retirement? To help you find out what it takes to work towards a secure retirement or create your retirement plan, you can make use of retirement calculators. The retirement calculators, which are available as added feature to the many websites covering up retirement issues, are free of charge.
Planning carefully your retirement finances the earliest possible time, could mean better days ahead. Although many of our younger workers of today don’t give so much thought about retirement planning, sooner or later they will come to realize the importance of a secure retirement. And for those who already knew and wanted to prepare for it, retirement calculators can be an additional help to planning investing strategy in order that you will have enough to see you through retirement years. This is why retirement calculators are sometimes called retirement planner.
After you have made your calculations that show you’re on the right track does not mean that’s it! – You’re secure. No, not yet. It is advisable to update your calculations every three to five years since the results from your previous assumptions are likely to change every few years. Just remember that you shouldn’t rely your retirement planning on retirement calculators alone. Everything computed isn’t fixed. Are you ready to secure your golden days? Do your computation now. It’s very easy to find these retirement calculators and it’s just a mouse-click away. Just look it up on the internet and voila, you’re ready to go.
Using these retirement calculators is not very difficult. Most of the websites with this feature often have instructions how to work on them. Note that not all calculators have the same input requirements, so follow the instructions carefully. These are the basic information required to make your calculation:
Current Savings – The total savings you have set aside for your retirement.
Annual Retirement Income – The amount you need to live on once you retire (after taxes). This amount should cover all living expenses for a year and should not be less than 70 % of your current income if you want to maintain your current standard of living.
Annual Yield – It is your expected rate of return. For stocks or mutual funds, consult a prospectus.
Other Income – The amount you’ll enter here can include Social Security, employer-funded pension plans, or other external source of income.
Inflation Rate – This is the average expected annual inflation rate over the period encompassing your remaining working years and retirement years.
Current Age
Current Tax Rate – Enter your current federal tax bracket.
Retirement Age –Know the official retirement age. For those who were born in 1960 or later, 67is the official retirement age.
Retirement Tax Rate – The tax bracket you expect to be in, once you retire.
Withdraw Until Age – The number of years you need your retirement income.
Inflate Contributions – Do you like to increase your investment amounts to account for inflation over the length of the investment period? Clicking on Yes will increment the investment each year by the exact amount of inflation. Selecting No will make each investment an equal amount.
Are Annual Contributions Tax Sheltered – Yes, if your investments are in a tax deferred account such as a 401(k) plan or a retirement IRA. No, if your investments are subject to federal income tax each year.