Category: Retirement

How To Retire The Right Way

how to retireRetiring is something that all of us look forward to. You’ve been working all of your life, and now it’s time to sit back and enjoy everything you have earned. It’s about being financially independent. You no longer need to work in order to live.

Sounds lovely, but how do we retire the right way?

Get social

Have a think about who your friends are. Are they all work colleagues? – If the answer’s yes, then you may need to become a social butterfly again and expand your network. Explained by

Unfortunately, even if you have some great work pals, it starts becoming an effort to see each other, and one day you may realize that you’ve drifted apart so much that there is no point trying to reach out. – You want to avoid this at all costs, as this is how depression can kick in. So instead, get making new friends even before you leave your job, that way you can start building new relationships with others before it feels too late.

Think towards the future

Make a list of goals that you would like to achieve now that you have the time to. Just because you’re retiring doesn’t mean that your life is over… It’s only just beginning its next chapter.

So get planning. If you need help, there are companies like that can assist you with the financial side of things.

In the meantime time, start thinking of ideas to add to your bucket list!

Stimulate your brain

Now you’ve finished working; it can be very easy to fall into the trap of sitting on the sofa all day watching tv, never seeing the light of day. – But this isn’t good if it becomes your daily routine. So keep your mind active; get out of the house and join a group, or learn something new. It’s so important to keep yourself stimulated; otherwise, you will just end up wasting your life away in front of the television.

Talk to your partner

Expect things to change in the dynamic of your relationship. Now you’re at home all day, it can be hard to figure out the new routine, and this is where problems can start forming.

There needs to be an understanding between the two of you as to what is left to come. If you don’t talk openly about this, you may just find yourself turning into a roommate, as a pose to their life partner.

Having said that, it’s not all bad! This is the time where you can both make the most of your lives together. You can travel around without having to keep watch of the calendar. Nothing is left to hold you back. … Besides the odd Grandchild or two…

So don’t look at it as retiring, as that makes it seem like everything is coming to an end – and it’s not – it’s only just beginning. So see it as more of a transition towards your future.

This is your time now to enjoy riding that big wave, after working so hard to stay afloat.

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Government Employees Can Choose Their NPS Fund Managers

pension plansThe National Pension System (NPS) is a defined contribution retirement plan offered by the government. The plan is regulated by the Pension Fund Regulatory and Development Authority (PFRDA).

Subscribers must avail their Tier 1 NPS accounts with one of the PFRDA-appointed Point of Presence (POP). The contributions may be invested in 3 asset classes’ viz. equities, government securities, and corporate bonds. These funds are managed by professional fund managers designated by the regulator.

NPS is compulsory for government employees except the armed forces. The plan is optional for the private sector personnel. An increasing number of private sector employees are choosing NPS to take advantage of the various tax benefits available under the Income Tax (IT) Act.

Here is how government employees may choose fund managers

Permanent Retirement Account Number (PRAN)

Applicants are updated about their PRAN application status through an email or SMS. This number is unique for each subscriber, which makes the NPS account completely portable. The applicants may check the status with the POP or the regulator’s website in case the PRAN card is not received.

Choosing the fund manager

Government employees did not have the liberty of choosing their fund manager as available under the All Citizen Model. The state or the central government had the responsibility of choosing the fund managers. However, recently, PFRDA announced that public sector employees will now be at par and may choose their preferred fund manager to handletheir NPS contributions.

Being able to choose their preferred fund manager provides the subscribers an opportunity to assume higher risks and enjoy better NPS interest rate. The returns on NPS contributions depend on the percentage that is invested in the different asset classes. Therefore, by investing the maximum permissible amount (50% of the total annual contribution) in equities offers investors the chance to earn higher returns.

Changing the fund manager

The private sector personnel also have the option of changing the fund manager in case they are unsatisfied with the services. The proposed modification by the regulator also makes the option of changing the fund manager available for the government employees.

Opportunity to earn higher returns

The public sector employer matches the annual contribution made by the employees to the NPS. Having the option to choose their preferred fund manager allows the subscribers to take advantage of investing more in equities, which may potentially increase their returns.

The NPS corpus may be withdrawn on maturity. Investors may withdraw 60% of this amount as a lump sum. The balance must be compulsorily converted to an annuity plan. Subscribers may use a pension plan calculator to estimate the potential returns on their investments.

The revised norms for government subscribers make NPS beneficial for the investors. They may now choose the fund manager and the investment breakdown to maximize their returns.However, the existing system of the government choosing the fund manager will also continue for those subscribers who do not want to make their own choice.

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The Top Three Ways To Invest Your Pension Fund

yearly investmentsSaving for our future is one of those things we all know we should be doing. However, whether we actually get around to it is another point entirely. It is so easy to just put off sorting out for another day. But when the time comes for you to retire, you will need to have some kind of plan in place for your next steps. Chances are you will have been putting money into a pension scheme in addition to the workplace pension you will be entitled to receive. But, what do you do if this isn’t enough to tide you over? With other financial issues looming over us as we approach retirement age, such as whether you have the best life insurance policy, our retirement funds should be the least of our worries. If you are thinking about investing your pension fund, don’t rush into it. We all want to enjoy our retirement, but make sure that whatever you are investing your money in is right for you.

Property investment

Real estate is quite literally hot property these days. If you’re looking to invest your pension somewhere, look no further than the real estate sector. The best way to go about this is by acquiring property through a real estate IRA. This way, you open yourself up to unique investment opportunities and you can be sure that you are putting your money into a secure asset. It also has the added benefit of being able to rise in value, which is perfect for if you are hoping to pass the property down generations. You also don’t need to be restricted to houses or apartments when investing with an IRA. You can also claim farmland or holiday resorts, or commercial property such as shopping malls.

Stocks and shares

The stock market might initially seem like a bit of a daunting minefield. But, it could be the perfect place for your pension to go if you have chosen to self-invest. In fact, in provides a great opportunity to protect against rising inflation and bring in higher returns than cash and bonds. You can go into ‘direct investment’ into the stock market via a stockbroker. This essentially means that you buy shares in a single company, which makes you what is known as a shareholder. If you want to minimise the risk associated with investing in stocks and shares, instead consider investing indirectly. This way you can invest your money in a number of different companies rather than just one.

Precious metals

This may appear unusual at first, but precious metal investment has soared in recent years. They are a hard investment, which means that they are also hedged against inflation. If you are looking to invest in precious metals, you will need to comply with the rules and regulations set up by your pension account. Gold, silver, palladium and platinum are all approved by IRA accounts. You will need to purchase the metals yourself through a dealership, and then keep them in an approved depository.

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Retired? How best to earn some extra cash

retirement moneyIt’s extremely unfortunate, but with rising living costs, many people who’ve retired are discovering they have to take on work to make ends meet. Sometimes pensions may just about cover expenses, but not provide people with the cash to enjoy things they’ve always wanted to do. In other scenarios, retirees’ income isn’t even enough to pay for food, heating and the plethora of other expenses associated with modern day life. Often, discovering they have to go back to work can be very upsetting for people. But there is a great range of options available if individuals need to make some extra cash.

One great way to earn some extra money is to utilise the skills people already hold. For example, nurses can find an abundance of work by picking up a few temporary shifts here and there. Home care services also require nurses, and a variety of shift lengths allow people to choose the best working pattern to suit their needs. Likewise, retired accountants can find work bookkeeping or helping contractors fill out their self-assessment forms. Other retirees who have plumbing or carpentry skills make the ideal local handyman for neighbours to call on, whilst those who have creative expertise, such as photography, could turn to wedding and event photography to make some extra money.

Another great option for innovative and entrepreneurial retirees’ is to set up a small home business. Those with good English and writing skills could become copywriters, creating content that can be used for websites and press releases around the world. Individuals who love crafting could set up an eBay or Etsy shop and sell their work, whilst keen bakers and cooks can turn ingredients into artisan products to be sold at farmers’ markets or to local restaurants.

For those not wanting to set up a business, part-time work might also be found close to home. Many supermarkets and high street stores have policies encouraging the hiring of older people, so it’s worth visiting these shops and taking a moment to speak to a manager to see if any vacancies are available. Local newspaper and newsagent windows are also a great source of wanted ads, and part time or temporary work can often be found listed there.

It’s important for anyone wanting to take on extra work to pay very close attention to their finances and ensure they don’t start to earn too much. Whilst many people want to earn a little money to supplement their income, earning too much could put pensions into jeopardy, so it’s crucial to do a little research and discover the personal income limits before undertaking work. Unfortunately, there are also a few unscrupulous individuals out there waiting to take advantage of older people, so individuals wanting work should never send money to agencies claiming to find jobs for a fee.

Taking on a small job when retiring can actually be very enjoyable, not only providing a little bit of extra cash, but also giving people an entirely new social circle; and, with retiring being an ideal time to make a career change and try something new, getting a job can bring about a new lease of life.

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Choosing the best retirement plan for a secure future

Financial retirementA financially secure future is what most of us are constantly working towards. We set a portion of our funds aside for a safe future, invest in 401(k) plans, set up IRA accounts and try investing in sound retirement plans based on part research, part hearsay. Choosing a safe investment vehicle is a matter most people lose their sleep over. Does a 401(k) plan carry interesting tax benefits? Does an IRA account effectively maximize your money? Are bonds a sounder investment option than stocks? These are some questions that might occur to you while trying to choose an optimum retirement plan, which keeps your future out of harm’s way.

The fundamental solution to a retirement plan problem is the understanding of tax benefits and returns that each investment plan offers. The 401(k) plan and the IRA (individual retirement account) are tax free investment options where you don’t have to pay taxes on the money invested or the interest unless you begin receiving benefits. As contributing to these accounts leads to a decrease in your taxable income, you pay lesser taxes overall. However, both methods are fundamentally different from each other and need careful research before they you take a decision.

While the 401(k) plan is set up by your employer, an IRA is an individual choice. The 401(k) plan will allocate similar distributions to employees, while an IRA leaves you with a lot of options as far as investment vehicles go. The 401(k) plan gives you the option of withdrawing money during an emergency; other than reducing your net taxable income. However, when you start to withdraw money from your account, the amount will be taxed as additional income. Also, there are penalties for premature withdrawal.

The IRA comes with its own pros and cons. You don’t need any help from a financial planner as the account is easy to set up. It also gives you a lot of freedom in choosing investment options like bonds, stocks or mutual funds. However, it imposes penalties on premature withdrawal and has a low contribution rate.

Through a 401(k) or an IRA account, you could invest your money in a number of things such as bonds, mutual funds, stocks, real estate and so on. Each profile has a unique risk to returns ratio that must be studied before choosing to invest in. The stock market has always been an enigmatic and unassailable investment option to most. With a high risk and an even higher reward associated with it, a stock portfolio could potentially take your investments to new heights. Bonds do not carry the high risk that stocks do, but neither do they offer promising returns on investment.

Choosing the best plan would require extensive research and an understanding of your financial requirements. Investing in both, IRA and a 410(k) could well be a sound diversification strategy, according to some professionals. Other new age IRA plans like investing in commercial real estate could also be the key to an assured future. Seek expert advice before going for any option available to you.
When retirement finally happens, a retirement plan could be your knight in shining armour. A careful approach towards choosing a sound plan will go a long way in ensuring financial security.

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