Money Management Part 7

More Money Management Tips

money management

As we progress through the building blocks of money management, we are at the point of discussing retirement.  If you missed any of the previous parts of our series on money management, check them out.


Retirement looms large in your future.  Are you ready?  Will you have enough money to live on till your death, or will you out last your money?

It’s never too early to start planning for retirement.  If you’re in your 20’s invest in a 401k or other retirement account.  Set aside enough to maximize the amount your company will match.   If you’re in your 20’s pick your company’s most aggressive 401k fund(s) to invest in.  If you’re in your 30’s & 40’s max out your contributions to your retirement fund. The easiest way to set an appropriately aggressive level of investment is to choice a ‘lifestyle’ or ‘life cycle’ fund that automatically adjust your holdings to less risky investments based on the number of years until you expect to retire.   If you’re in your 50’s you can take advantage of the 401 k catch up provision which allow you add an additional $5000/ yr to the amount you contribute to your account.  Consider downsizing your home at this time in your life.  You can take up to  $250,000 in gains ($500,000 if married) tax free from the sale of your home.  Consider putting what’s left after the purchase of your new home into your retirement accounts.

Develop a plan for making sure you’ll have a rich and rewarding life after retirement.  Quicken has a wonderful retirement planning tool that makes this sometimes overwhelming task much easier

Redirect your raise this year into your 401K or Ira.  If your retirement plan offers a “lifestyle” fund put all of your savings into it. These plans split your money among stock funds, bond funds and cash to give you a mix that is appropriate for your age.

Want to earn retirement funds by spending on your everyday purchases? Then is your site .  They’ll invest your rewards shopping account into mutual funds, IRA or money market accounts.

Be sure you are taking advantage of retirement savings tax laws by  contributing the maximum you can each year.

A lot of people approaching retirement age, find that they really don’t have enough money saved to last a lifetime in the lifestyle they wish to live.  An alternative to make your retirement savings stretch is to consider moving to another country.  Countries such as Mexico & Costa Rico offer warmer climates, and a far considerably cheaper cost of living.  Along with many “American” lifestyle pleasures to add to the prize.   A great resource for checking out information about relocating to another country is International Living  Their monthly magazine offers hundreds of destinations to retire and bountiful advice on making the transition.

College Costs

College is an expensive proposition.  Learn the best places to save and get free money for college. You can prepare your teen for the next step in their financial journey to college. Number one rule is to remember not to use your retirement funds to finance college.  Your student can always take out a student loan and has a whole career to pay it back.  You can not recoup those lost dollars by borrowing from your retirement fund(s).   529 savings plans allow parents, grandparents and other relatives to deposit money into an account that can be used for college, technical and trade schools after high school.

Continue on with the series – Protecting your assets – part 8

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