Retirement Calculators
Monday, 11 August 2008 17:14
Author: Rex Truman
A retirement calculator is one of the most useful things you can use when planning your retirement savings. You see most people plan for retirement without any idea of how much they need to save, or how much they want in retirement. A retirement calculator provides the answers.
A retirement calculator shows you how much to need to save to get the income you need when you retire. Or it may be how much you want! That depends how much you are making, and how young you are. Either way do use a retirement calculator.
You can find a retirement calculator on many web sites, so you do not need to get the services or a retirement planner or investment advisor to find the answers. In this way, you use the retirement calculator, calculate the amounts you need, and then visit an investment advisor or retirement planner.
To decide how much you need to save, you need:
1. The income you need to live on at today's prices
2. The rate of inflation per annum between now and the retirement date.
3. The rate at which your fund will grow.
Let's go through these and how they relate to a retirement calculator. First, how much do you need to live on? Remember, that retired people do not normally spend as much as people who work. When you retire, you won't need:
special clothes for work the sort of car that keeps you up with the Joneses
you will be able to take holidays at off-peak times
and you will have time to do things - instead of paying to get them done.
So your costs will be lower. So let's say you are earning $60,000 a year now, you might think that $50,000 would be enough. Next you need to remember that if you are healthy, you expect to live for 15-20 years, and so need to allow for inflation in that period - so actually you need more! This is where a good retirement calculator comes in.
2. The next thing the retirement calculator needs is the rate of inflation, or what you expect it to average until you retire. With the price of oil going up, we know that inflation over the next decade will be higher than it is now. Official figures put inflation at around 2-3%, but the true figure is more like 5%.
This means that you need to allow for at least 5%, and probably 7% and feed that into the retirement calculator.
4. At what rate will your retirement plan grow? A difficult one this. Five years ago, people were talking in terms of 10%, but not now experts suggest a lower figure. The problem is that a retirement fund or retirement plan has to be prudent - you don't want to wake up one morning, a year or before you retire, to find that a crash on Wall Street has cut the value of your fund by 30%. You just won't have the time to get that money back.
So you will be doing well to get 10% return, but could almost guarantee 5-6%. Maybe 7-8% would be a realistic figure to put into the retirement calculator.
The retirement calculator is just some software set up to make a calculation after you enter some figures. As I said earlier, the retirement calculator needs:
Required income
Inflation
Expected return
And of course, how long till you retire.
Here are some results from a retirement calculator:
Required income: $30,000 per annum
Years till retirement: 15 years
Annual inflation: 2.5% (unrealistic)
Annual yield: 5%
Income needed in 15 years: $43,448
Required value of retirement plan in 15 years: $825,000
Quite a lot of money for a modest retirement income. Here's another one:
Required income: $30,000 per annum
Years till retirement: 20 years
Annual inflation: 5%
Annual yield: 8%
Required value of retirement plan in 20 years: $987,573
If you want an income of $45,000 when you retire - equivalent to less than $30,000 today - you will need: $148,000.
When you use a retirement calculator, make sure you use one that does calculate the income you will get at retirement adjusted for inflation - over 20 years, you will need 50% more than think you need today. If you do this, then you will benefit form using a retirement calculator.
About the Author:
Rex Truman is not retired but should be - instead he gives information at RetireWhenULike.com to help people save enough so they can enjoy retirement, ideally with an interesting job where they are in control.
Article Source: ArticlesBase.com - Retirement Calculators
Last Updated on Thursday, 10 December 2009 14:58
Great Benefits Of Custodial Savings Account
Monday, 11 August 2008 15:14
Great Benefits Of Custodial Savings Account
Author: Jizmack Baraceros
A custodial savings account is a very specific type of savings account in the sense that it is opened for people at a minor age, or those who are 18 years of age or younger. A custodial savings account may also be opened for people who are over the age of 60. Custodial savings account require its account holders to maintain a minimum monthly balance. The balance ranges from around $25 to $50, depending on your provider.
One of the benefits to having custodial savings accounts is the ability to access 24-hour hotlines for any issues an account holder may have. This is a service that is given to many custodial savings accounts in many different banks. Custodial savings accounts are also quite ideal for families to teach their children the value of money and saving while letting them handle their own expenses.
Savings accounts are paid interest by such financial institutions, with the understanding that they cannot be used directly in the same manner as money or regular currency. Savings accounts allow customers of banks to set aside an amount of their liquid assets while at the same time earning a set amount of monetary return. A savings calculator is an tool that can really help with determining someone's own finances. Savings calculators are mostly available online, and are an added service benefit from many online web sites, usually given for free. Using a savings calculator can have one see how a balanced approach to investing can make their money grow.
Savings interest rates vary from bank to bank. Some banks may offer a higher interest rate, but may have a higher minimum maintaining balance required for the account. Some others may offer mediocre interest rates, but with more account holder flexibility. High interest savings accounts may be the best choice for a type of savings account, especially for those who are managing their own businesses. High interest savings accounts are a great way to put in one's profits, as the high interest rate guarantees that your money will be growing in the bank. For more information and tips on Great Benefits Of Custodial Savings Account visit, http://custodialsavingsaccount.com
About the Author:
Freelance Web designer and Artist
Article Source: ArticlesBase.com - Great Benefits Of Custodial Savings Account
Last Updated on Thursday, 10 December 2009 14:08
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How To Keep Banking Simple
Monday, 11 August 2008 09:19
If you are new to banking, then it can seem like a confusing subject. All the different banks, accounts and cards on offer can make the task of starting to bank a daunting one. However, the basics of banking are quite simple, and once you know them you will be on your way to all types of monetary products. Here are the basics of banking and how they can help you look after your money:
Why get a bank account?
Using banks and having a bank account has become an essential part of society. Once you start working or have incoming and outgoing money, you really need to get yourself a bank account. Banks are an easy and convenient place to store your money, and allow you to access it various places. Although there are alternatives such as credit unions, banks are the easiest and most readily available tools to store and access your money.
Basic bank accounts
To get started with banking you will need to open a basic bank account. Deciding which account and bank is right for you can take some research, but once you have decided this you need to open an account. Basic accounts usually issue you with a chequebook and a debit card. If you have regular income then you may also be entitled to a credit card, but at first it is best to stick to the basics.
How to get an account
To get an account you usually apply at your local bank, and they will ask for forms of identification as well as checking your credit report to see if you have mishandled bank accounts in the past. Getting a bank account is usually not very hard, and as long as you have identification and can pay some money into the account you should be able to get one.
Using at ATM
Once you have an account open you will be issued with a cash or debit card, which you can use in an ATM or cash machine. This card is protected with a unique 4-digit PIN number. You will be issued with a number to start with, but you can change this at any time. To take cash out you simply place your card in the machine, type in your number and then follow the instructions. You can also buy items with your card in shops or online by quoting your card number or entering your PIN in a machine.
Using a chequebook
You may also be given a chequebook with your account. A cheque is something you can use to pay for items and also to pay other people. You right who the cheque is payable to, and the amount, and then that person can put the cheque in their account. This will usually take a few days to clear so it is a good way to spend money if you are low on cash right now but will have money in your account in the next day or two.
Savings accounts
In addition to a normal 'current' account, you might want to open a savings account. Money that you put into a savings account is not as easily accessible as a current account, but will make you money by adding interest to your savings. Over time your money will grow, which is good for money that you don't immediately need. Having a savings account is basically like getting paid to store your money safely. Whatever account you open, make sure that you shop around and get the accounts for your needs.
Source: http://www.articlecircle.com/ - Free Articles Directory
About the Author
Peter Kenny is a writer for The Thrifty Scot. For additional articles and the latest financial news, please visit us at http://www.thriftyscot.co.uk/Banking-Savings/ and http://www.thriftyscot.co.uk/Banking-Savings/Current_Accounts.html
Last Updated on Thursday, 10 December 2009 14:44
Debt Consolidation- Is it Right for You?
Monday, 11 August 2008 09:17
As the bills continue to pile up, and money seems to run thin you don't know what to do. Being in debt can be frustrating and overwhelming. Sometimes it feels like it will never end, and getting out of debt on your own is very challenging. Creditors and collectors make it difficult to get out of debt. They want you to be in debt, because that's how they make their money. However you don't have to do it alone, there are options on how to get out of debt.
Debt consolidation is a great way to customize your payment options. By using debt consolidation, which is done through a third party, you are taken out of direct contact with the creditors and collectors. Debt consolidation combines all your debt in one monthly bill. The debt consolidation organization takes over the payments from your creditors, and you pay one monthly payment of an agreed amount to the debt consolidation organization. Most credit card companies prefer working with debt consolidators because they are more confident that they will get their money back. By using a debt consolidator you take yourself out of the heated and stressful situation.
You will be required to cancel your credit card accounts, this is highly beneficial since you will be forced to change your spending habits. This will make it easier for you to watch where your money goes and you will be focused on buying only what you need. You will be able to drop the mentality about paying it off later.
You can't let debt consume your life. You have to be able to ask for help, because sometimes you just can't do it alone. Asking for help is most important step. Not only do debt consolidation organizations help you to reduce your debt, but they can give life altering information on how to budget for your lifestyle, and money saving tips. Most debt consolidation organizations are non-profit and are only there to assist you in time of financial difficulty.
Debt consolidation is not for everyone, however it is an option that works for many. When one becomes serious about getting out of debt, they should sit down and clearly write out all the solutions that could help get them out of their debt solution and pick the one that fits best for them. As well, there's always the option of calling upon a credit counselor that is trusted and have them suggest some options to getting out of debt. These are only suggestions, so it doesn't hurt to continue to do researh to help you in your steps to over coming your debt.
Source: http://www.articlecircle.com/ - Free Articles Directory
About the Author
Nathan Dawson writes for http://www.inchargeorg.org a great online source for finance information in dealing with bad credit, debt management, as well as bankruptcy.
Last Updated on Sunday, 10 January 2010 20:57
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