Plan a Retirement the Canadian Way

To give us an overall understanding what is a retirement plan well a brief definition of it would be, it is an act of keeping aside a certain portion of your money during your years of earning in order for the said money to accumulate and provide you with your desired amount during your retirement period.

In Canada just like any other place in the world has a special type of retirement planning system in which it is being supplemented and assisted by its government. In order for you to have a comfortable retirement benefits the Canadian Pension Plan and the Old Age Security are the ones who will support you and help you through this.

To those who haven't known yet Canada has its own Registered Education Savings Plan (RESP) or known as a plan that will cater every child's needs for their higher education. From this they have also what they called as the Retirement Education Savings Plan. This is for everybody once they have finished their education. As a whole no matter neither what age you are nor what income level you have there is no limit for you to have an active interest about your retirement planning. Planning ahead of time is your best weapon in the future.

Before having your own retirement plant you should be first knowledgeable enough about the different things that govern their retirement plan or shall we say the governing terms and conditions of their retirement benefits. It is a basic trend or pattern for the Canadian way of planning a retirement to earn or to save a nigger or a much more money from the start in order for you to get a higher output amount in the future. Well this is right but always remember there are also things around us that make us a bit shaky when they arrive. The best example for this is about health issues. Health issues are really a big factor when it comes to retirement planning.

Regrets absolutely comes in the end not unless you are able to read your future, so therefore it is very advisable to take a step now in order for you to have what you wish for in the future. Canadian retirement plan is all about learning the efficient or the effective way how you can maximize your financial strategies. Of course you will have to go along with you tools that will help you as you go along the way.

In Canada issues such as lack of funds in the future for the retirement plans are common but these are all products or outputs of wrong investment. Good investment will absolutely produce a good output. That means putting your trust and your money to the right person at the right time, and then there will be no doubt to harvest fruits of your labors in the end.

Financial retirement is just a simple thing. All you need to do is to understand the philosophy and the concept of the matter then there will be no problem at all. All you need to do is to understand the things that are around you today in order for you to realize them in the future.

The Advantages of Self-Directed Investing

Having a dream of taking the full control of your planned portfolio and becoming really the master of your fate? Well it's time for you to become a "self-directed" investor in the realm of the stock market. Before going through that there are some things that you should need to learn in order for you to become one.

When it comes to topics that will involve ourselves, most people will think of it as an exhibition because of misconceptions and worries that may hinder us from our plans. I think this is the wrong side of most stories because no matter what it is as long as you have the right tools, knowledge and ideas about that certain thing just like being a self-directed investor then there is no reason for you to be a sloppy one. The advantage of being a self-directed investor is your freedom to do things that was based on your own analysis and decisions. This is an unusual thing for us because we seldom find things that are governed by all ourselves alone. As what I've said before managing finances and funds accompanied by good strategies would not show off impossibility for you to produce well results and an almost excellent returns.

Self-directed investment also means that you are taking the full responsibility and control of the decisions that are all over you or shall we say your investments. You have all the authority about choosing the type of investment that you want into your portfolio. This is the contrary of the managed accounts which is directed to you by some financial planners and other professionals. When you don't want to pay a fee unlike the others well self-directed investment is a must have for you.

Self-direct investing has so many advantages. The most obvious thing about it is the wide control that you can have and also for the better potential returns that you can have. This will also enable you to save more since your fees are reduced and capital appreciation and liquidity are at high elevations. Some downside of this decision also may cause you some emotional stress because of the risk of taking them all together at once. If you are a person that has a minimal amount of time, knowledge and discipline then it would be a disadvantage for you if you will pursue this.

Investing on this kind of plan needs a minimal amount of money and it is not true that if you will be involved on this kind of investment you will need a lot of cash to start. You can self-direct as long as you are steady enough about the money that you have. Based on the Canadian laws under the Tax Free Savings Account you can deposit directly an amount of $5.000 dollars each year and turns you in automatically to be a self-directed investor. You may also want to choose to self-direct only a portion of your investment that is if only you have a large sum of money invested. You can self-direct first the smaller portion of your investment and as you go along and as you gain more knowledge then you can convert it all into a full self-directed investment if you like.

The best thing to do at first is to know well and understand well the things that you are into because we are talking here of cash and not some other useless things. So if you think you have all the stuff that you need to pursue this plan then that wouldn't be a problem. Always remember also that no man is an island and always remember that no matter how good you are, you still need others in order to survive.

Planning for Retirement in a Time of Fear

It is change in the world that drive men to excel. Extreme volatility has everyone in the market jumpy and fearful but history seems to indicate that while some were losing their life savings, others made their fortunes. The only thing they did differently was to not be afraid of the change and they actually changed right along with it.

Whenever I have been asked how to begin to learn how to become a trader, I suggested that they start by reading a small book by Dr. Spencer Johnson called "Who Moved My Cheese". I will also suggest this to investors as well. Life is all about change, most of the time we call that change progress but sometimes it is a black cloud momentarily obscuring the view of the sun. The sun never leaves, it's still there, even in those dark times when our vision is obstructed.

When we begin to look around for solutions, we find that they are all around us. New ways to trade in a new market that came about because of unsatisfying changes somewhere else. A new need brings about a new cure. But those cures have been around all the time just waiting for someone to discover them. It's just that no one does until there is a need to do so.

Take for example the new ruling that prohibits Americans from trading with brokers that are outside the U.S. Many give up in defeat and quit trying to invest in profitable ways. Some try to adapt by forcing that square peg into a small round hole. Still others step back and look around. For over 200 years American businessmen have been starting businesses in other countries. McDonald's golden arches are recognized all over the world. Others have begun companies outside of the U.S. and they grew to be international corporations. Those companies most often hold and trade assets, invest and trade in what ever way it is legal and profitable to do so. The laws of the owner's country has no limiting effects on the foreign business because it has to operate under the laws of it's host country.

When it was illegal for Americans to own gold bullion, those that had overseas trust or businesses simply gave their gold to the overseas legal entity and it kept the gold for them. Was that legal? It was the citizen's property to do with what ever he chose until all the gold was confiscated by the government. He could stack it up, melt it down or give it away. Today's new restrictions are not all that much different. It is perfectly legal for Americans to open a business or trust in some other country and let that trust trade with what ever broker that they want it to. It can trade in what ever way it is legal for it to do so in the country where the trust or business is located.

It is also intelligent to hold some of your liquid assets in a legal trust so that if something happens in your home country that makes it undesirable to remain there, you have a head start by having some funds to go to. Doctors, lawyers and others who may be considered wealthy and a target for lawsuits almost always have a trust which is out of the reach of frivolous lawsuits.

So there are solutions to every problem when we begin to look for them. When things seem dark, the world is not ending, it's just raining. To keep from getting soaked, learn from your fathers. When the going got tough, the tough got going, some even to a new life in a new country. Desperation may have started them on their way but it was opportunity that drew them on. We are only defeated when we say we are. OK, it may cost an extra $1700 to start a trust but that is a small price for freedom.

What ever country that you live in, change is on the way. The world is growing smaller and we may need to move toward our opportunity. The best way to learn to become a talented investor is to begin with the book, "Who Moved My Cheese".

The Big Retirement Planning Secret

Let's suppose you've had enough of your job and want to retire - tomorrow! What would it take? How could you satisfy yourself that you have the financial wherewithal to walk away from the security of your paycheck?
Before you read ahead, humor me. Play the game out in your head. I don't want to know if you could walk away, just how would you know if you could?
What did you come up with? Does trying to grapple with such a nebulous issue spread over so many years in the future seem overwhelming, impossible?
I will let you in on a big secret. This is really a very simple question.
If you have a great deal of confidence in your retirement plan, you have probably already figured out what I am about to tell you. If you have no idea what it will take or when you will get there, read on...
Financially, retirement planning boils down to three and only three things: cash flow, cash and insurance. If I have these three things, in sufficient quantities, for an indefinite period of time, I am free to ride off into the sunset.
Really? Could it be that easy? Let's examine them one at a time...
Cash flow - While you are working, your cash flow comes from your job or your business. When you retire, your cash flow must come from your assets.
In retirement, cash flow sources fall somewhere along a continuum of certainty. At one end, you have near-term Social Security benefits, fixed annuities and pensions. Examples, on the other end would include rental income, oil and gas royalties and investment income from your portfolio.
The number one job of a retirement portfolio is to produce the cash flow necessary to fill any gap between your retirement expenses and guaranteed sources of income.
Cash - Every household needs a stash of cash held in a readily accessible, risk-free parking place that can be drawn on in the event of an emergency. Ours is held mostly in interest-bearing savings accounts, CDs and ultra-short bills, bonds and commercial paper. This particular bucket of cash is known as your emergency fund.
The emergency fund has a single job. It is to smooth out the ups and downs of markets and the economy. While you are working, that means the emergency fund is used in the event one or both spouses lose their job, became disabled or otherwise can't work. In retirement, the job of the emergency fund is to smooth out the inevitable fluctuations in investment income.
Insurance - Insurance is a mechanism by which we pool together risks we cannot afford to insure individually.
When you are in your 20s and 30s, the most common insurance needs are property, casualty, life and health. In your 40s and 50s, you need to purchase long-term care insurance. In your 60s, life insurance will often become unnecessary but you will have to grapple with Medicare and Medicare Supplement insurance.
The number one rule of insurance is, if you cannot afford to pay for something, insure it. If you cannot afford to replace your house if it burns, you insure that liability. If you cannot afford a lawsuit, you insure the liability. If you cannot afford years and years of long-term care, you insure the liability.
The second rule of insurance is the less you can afford to spend money on an insurance premium, the more you need insurance.
Think about it, if you can't afford $500 for car insurance, you sure can't afford to fix your car if it is in a wreck. If you can't afford $400 a month for health insurance, then you certainly can't afford to pay all the doctor and hospital bills if you were badly injured in that wreck. And if you can't afford $5000 a year in long-term care insurance, you certainly can't afford to pay for home health care, home modifications, physical therapists and skilled nursing care for the next 30 years if you were permanently disabled in that wreck to the point you needed long-term care.
So let's revisit... Cash flow is your life blood in retirement. It is what pays the bills. Not your net worth. Not the number on the top of your statement.
In retirement, the only thing that matters, (except to your heirs), is the money coming into your account that is available to sustain your lifestyle. Without it, you die. On the other hand, so long as you have plenty of it, you can easily and comfortably maintain your standard of living indefinitely into the future.
Cash smooths out cash flow. The more uncertain your cash flow, the more cash you need to have. If you can live very comfortably on Social Security, Medicare and your pension, your cash requirements will be smaller. If you retire at 45, you are still carrying a mortgage, a pile of debt and all of your cash flow comes from your investment portfolio, you cash needs will be much, much bigger.
Finally, insurance protects your assets, your sources of cash flow and lifestyle, from catastrophic loss. If you can't afford to lose it or pay it, even if the chances of a loss occurring are very small, it must be insured.
So, back to my original question... you are tired of working and want to know if you can retire. How do you know? Simple. The question is do I have enough?
Enough cash flow?Enough cash?Enough insurance?
If you are short in one or all of these three areas, put your nose to the grindstone and create a plan to get where you need to be. The good news is you don't have a million things to focus on - there are only three: cash flow, cash and insurance. With enough of these three, you can take care of everything else.
Provided the answer is yes, you have plenty of all three, well then... you go find your sweetie and ride off into the sunset!
Happy trails!

The intent of this article is to help expand your financial education. Although the information included may be relevant to your particular situation, it is not meant to be personalized advice. When it comes to investing, insurance and financial planning, it is important to speak to a professional and get advice that is tailored to your unique, individual situation. All investments involve risk including possible loss of principal. Investment objectives, risks and other information are contained in the Snider Investment Method Owner's Manual; read and consider them carefully before investing. More information can be found on our website or by calling 1-888-6SNIDER. Past performance is not indicative of future results.

Kim Snider has helped thousands learn sound financial management practices. Her firm, Snider Advisors, was built on the belief that a good financial education is the best way to avoid being taken advantage of. That's why we combine financial education with other products and services such as asset management, medicare supplement insurance, long-term care insurance, life insurance, disability insurance and retirement planning.

Retirement Planning Is Possible At Age 40

Many investors will underestimate the power of compounding and not start an adequate savings program until much later. In fact, the average age for people starting an active retirement savings program is between 35 and 40 years, which has already wiped away plenty of compounding potential. To illustrate this point, consider an investment goal of $1,000,000 by age 60...

Starting at 20
For younger investors looking to save $1 million, they can take a fairly low risk approach and earn an average 5% for the next thirty five years. Their monthly contribution would be approximately $880.21. Without increasing their contributions over the next thirty five years, this 20 year old will have saved and earned $1 million dollars.

Starting at 40
If that same 20 year old waits until age 40 to get started, there are several difficulties. By wasting 15 years of compounded growth, the new saver at 40 would only save $361,796 if they kept their contribution of $880.21. To find $1 million waiting for them at 60, the 40 year old must save $2,432.89 on a monthly basis. That assumes the same risk level and annual rate of return of 5%.

Alternatives
Understandably, saving more than $2,400 every month is not easily accomplished. For many, this could represent half of the entire household income on an after-tax basis. However, that does not mean that both earners (or even single earners) need to get two or three jobs to save $1 million.

One alternative is increasing one's risk profile in an attempt to earn greater returns. In order to stay at the $880.21 per month contribution, the investor's risk will need to increase considerably to allow for a 13% annual compounded rate of return. Not entirely impossible, but such returns will require considerably greater risk tolerance as well as regular monitoring by the investor to ensure the right risks are being taken (e.g. bonds instead of stocks, international equities instead of domestic, etc.). Again, not quite impossible, but time consuming.

A better alternative would be increase one's contributions, say by 50% to $1,320.32 as well as increase one's risk tolerance. To reach $1 million by making such contributions, investors will need to earn an annualized compounded return of 10%. Yes, it is much more aggressive than the 5% that the 20 year old would have to achieve, but it is more realizable than 13%.

Of course, as a saver ages, earnings typically increase. A 50% increase to one's monthly contributions may not be all that difficult to swallow for some. As well, risk and return relationships are variable, meaning that some years might see 10% from a relatively safe investment while others will see 5% as a great return from a riskier investment.

To get a better understanding of how much one needs to save for retirement, it is always advisable to speak with a financial planning professional.

Wealth Builders - The Vision

The pursuit and attainment of prosperity, in all its forms, will require certain things from you - all important, all necessary, and all having a proper place in the overall project. These requirements are:-

• Vision
• Education
• Opportunity
• System

We will only be looking at vision in this article - YOUR vision - because unless you have at least some, you can't succeed in your pursuit of prosperity. You cannot attain your desires for prosperity with just desire.

Desire can birth vision, but desire is not vision. Unless you are able to see forward into the future and see where you wish to be at different stages of your life, you won't be able to set the targets you need to achieve. The problem, of course, is that if you don't know what you want to achieve, you won't be able to work out what you will have to do to get there.

The fact is that every one of us is most likely to only achieve what we can 'see' or, in other words, the extent of our vision. There is a well-known saying that says, "What the mind can conceive, it can achieve." You see, nothing can be achieved unless it can be seen, but the opposite is true, also; if you can't see it, it is highly unlikely that you will ever achieve it. There is good news, however - vision can grow, so as long as you have some to start with, and get the right help and teaching, your vision will grow as large as you want it to.

So, to get you started, some of the things you could think about in regard to your vision for the future:-

We can break it down into time zones - what do you want to have money for over the next 5, 10, 20, 30, or more years? Things such as -

• Children's education
• A great home
• Travel
• Hobbies, etc
• Further education
• Charities
• Retirement
• Leaving a legacy

One very important aspect of your vision - and your ultimate success - is your mindset; the way you think. Prosperous people think quite differently to, and often apparently contradictory to, the way the average man in the street thinks. Does that last sentence mean that, because you may consider yourself to be an average thinker now, you can't be wildly successful and incredibly prosperous? No! The very fact that you are reading this article confirms that you are wanting to improve your lifestyle, so you know already that even at this point in time, you have within you at least greatness in embryonic form. The choice is yours; you can breathe life into it, or you can go on as you are now.

When you have thought about what you want for the future - as far as you are able at this point in time - you need to find someone who can help you make your vision a reality; someone who can give you the knowledge you need and assist you to work out your plan of action.

We are currently experiencing a time during which the greatest transfer of wealth is occurring. The middle class is shrinking and may well disappear altogether. When it is finished and the dust has settled, where will you be?

For more information on how you can protect your assets and become one of the wealth builders in the 'new economy' - follow the link.

Asset Allocation: The Cornerstone of Your Investment Strategy

During the 2008 sell off, stock markets around the world plummeted on average by more than 35% while emerging markets indexes crashed more than 50% on average. Since many investors rely on the stock market to insure their retirement trough their pension funds or IRA, such an event had many disastrous results for those with heavy weight in equities in their portfolios. Was their asset allocation optimal? Possibly not.

But what is a proper asset allocation? This depends mostly on the age, risk tolerance, financial profile and life expectancy of the investor. A general rule of thumb says that 100 minus your age should represent your equity exposure in your retirement portfolio. For example, I'm 40 years old so the equity portion of my retirement portfolio should be around 60%. While this simple might not look very scientific, it does give an honest landmark.

Does a sound asset allocation matter so much? Wouldn't you be better off if you did some decent stock picking to do the work? What about market timing?

It might be a shock to you but according to a study made by Brinson, Singer, Beebowery in 1991, 91.5% of a portfolio volatility is explained by it's asset allocation. In other words, to make sure that your portfolio meets your risk tolerance and, consequently, your expectations of returns, you must concentrate the majority of your efforts on a sound asset allocation.

The volatility of a portfolio is explained by:

Asset allocation 91.5%

Stock selection 4.6%

Market timing 1.8%

Other factors 2.1%

Asset allocation got more complicated in the recent years because of the thousands of exchange traded funds (ETF) that offer a vast selection of asset classes such as:

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• Geographic areas (United States, Europe, Emerging markets, etc.)
• The different asset classes (Equities, Bonds, Real estate, Commodities, etc.)
• Different sectors (Energy, Financial Institutions, Healthcare, etc.)
• Different management styles (Value vs Growth)
• Etc.

With a choice so vast, a lot of investors could get lost very easily. Let's keep it simple; a complete diversification across the 2 major asset classes, bonds and stocks, could very be done with only 2 ETF's:

Equity portion of portfolio: Vanguard Total Stock Market ETF (VTI)

Bond portion of portfolio: iShares Barclays Aggregate Bond (AGG)

Just make sure you allocate properly your assets between stocks and bonds, and you should do fine in you investments.

Retirement Planning Booby Traps

Perhaps you haven't started investing regularly, or the amount you allocate is not enough to reach your retirement goals. Here are a few errors people make that can ruin otherwise good investment goals.

Booby Trap #1: Not viewing debt as negative investment earnings

If you are paying 18% interest on a credit card while earning 8% in an investment, that immediately places you in a 10% loss position. Moreover, where else can you get such a guarantee on your investment return, as you can by investing in your debt repayment? By paying off $5,000 over one year, you'll earn $900 risk-free and you won't have to pay that with after-tax dollars ever again.

Unsecured credit card debt can kill a once-healthy budget, while substantially reducing your income, and opportunities can suffer when your cash flow is crippled by debt. It is harder to solve the need for emergency cash if you are debt-ridden. Especially look at paying down debts that carry interest that cannot be written off as you are paying for both the principal and the interest with after-tax dollars.

Booby Trap #2: Not putting money away into an emergency fund

If an emergency arises you should be able to access a simple bank account to cover three to six months' worth of living expenses such as your rent or mortgage, food, debt repayment, car payments, etc. Failing to have this emergency reserve could, in very extreme cases lead to personal bankruptcy, or at a minimum foreclosure on your home or repossession of your car.

Booby Trap #3: Not assessing your retirement time horizon

You can analyze what you will need to invest annually, by running calculations such as those provided by a number of personal accounting software applications. Confer also with your advisor about how you can get there over your remaining employment years, by investing with a clear vision.

Booby Trap #4: Not investing regularly

The value of compound interest can never be underestimated. As a rule of thumb, your money when invested in a moderate plan can double every seven years. Even a simple investment of $25 per week can compound to nearly $20,000 in 10 years.

There are a number of other significant and potential land mines that can completely unhinge your retirement plans if you are not careful and do not plan correctly.

At the least, you should never trust your own judgment but should seek out the advice and guidance of a licensed financial planner. The amount you invest in their services can pave your way to a smooth and rewarding retirement.

Investment After Retirement

So, here it is, the big 'R'. You've spent a lifetime working, setting monies aside for investment after retirement. Now you're here! What to do? Most likely, your investment after retirement will consist of a pension (?), 401(K), or IRA and Social Security. Statistics say that the average savings in a retirement plan is $100,000.

After you've figured out your expenses, down sizing, making changes, you must figure income including a part time job if necessary. Once you have all of the particulars figured out you can give attention to how you are going to manage your investment after retirement.

Two of the main components of investing after retirement is to be conservative and use your funds in a tax advantage way. Too many retirees get foiled into thinking that they can invest in investments that promise high returns usually in a short period of time. Can you say Bernie Madoff? We have heard the saying, "if it's too good to be true, is usually is". We can't let greed be our guide.

Look for investment after retirement that will be relatively stable such as bonds, c.d., money market accounts and annuities. These are not sexy but will keep you safe. Remember, each of them has their own definitions. It's up to you to see what fits your risk tolerance. These should not have risks associated with them.

As far as taxes are concerned when investing after retirement, use funds that have the lowest tax liability. This strategy allows you to maintain your principal balance at as high a level as possible because the more taxes taken out of your withdrawals, the more principal you will have to withdraw to meet your expenses.

First investment after retirement is to withdraw any monies from a non retirement savings account. You've already paid taxes on these funds, so withdrawals will not cost you anything. Once these are depleted, go to your 401(K) or IRA. The best way to do this is to roll these funds into an annuity and start receiving a monthly income. You will enjoy a safe monthly income with guaranteed income while investing after retirement.

Remember, investments after retirement are probably more important to you than ever before. Consult a financial specialist, tax attorney.

Growing Money and Making It Last Through Retirement

A perfect storm has hit people planning for retirement. More people are living longer, expenses are higher, and there are fewer safe ways to invest for retirement. It is estimated that Boomers today have a $4.6 billion shortfall in money needed to live comfortably in retirement. Only 11% of Americans have pensions, Social Security probably won't make it through the baby boomer generation, and most 401(k) plans have been decimated the past decade due to the unpredictable stock market. But in addition to problems saving for retirement, how do you keep the money that you do save through retirement?

The following are some 'conventional wisdom' ideas on how to save and live through retirement:

* Savings Accounts. Some people still have a Depression-era mentality when it comes to saving money and like to have the safety and security of a bank account. The downside to how banks really work is the low interest rates they pay for this service. Banks are currently able to borrow money from the Fed almost interest free, therefore, they don't need to pay consumers a high interest rate for their deposits. As such, most interest rates for savings accounts and even Certificates of Deposit are below the level of inflation. And what little interest they do pay they are taking out in fees and charges. If you still want to put your money in banks, be thoughtful of FDIC Insurance and the maximums they pay out.

* Treasury Bills. The safest way to invest is through TBills as your investment is backed by the Federal Government. Unfortunately, with safe investments come very low returns. For example, as of the summer of 2010, a 10 year T Bill pays 2.61% interest. Using the rule of 72, your money would double in (72/2.61%=)27.5 years. Assuming an inflation rate of just 3% over the next 10 years, you're actually losing money on the investments. Finally, you'll be taxed on that 2.61%, so it really is a lose-lose situation.

* Stock Market. The stock market has been a roller coaster the past 10 years, with many people's 401(k)s on the bottom. While there is an unlimited potential for profit and the stock market does outperform mutual funds, their unpredictability and high fees associated with the market make it a very risky investment. Also, very few people know anything about most companies or their stocks, making investment decisions complicated. To combat this risk, many people feel that diversification is important. However, diversification in the market is still investing in the market, and if the market crashes, your portfolio crashes. It's like being on the Titanic; it didn't matter if you were in first class or cargo, when the ship went down, it took everyone with it.

* Annuities. With an annuity, you put money in an insurance contract that pays a fixed or variable rate of return and start receiving guaranteed payments. Many people like the guaranteed payments and the safety associated with earning a guaranteed interest rate. But the reality is that the fees associated with these plans and the fact that you lose your principal when the policy 'annuitizes' and you begin receiving payments make this a horrible solution. The Insurance Companies put together 170+ pages of information for consumers knowing that they will never read anything about all the fees and charges. As such, it becomes too complicated to understand. Plus, once you start receiving payments, you lose your principal. For example, my father contributed to an annuity for most of his life and had paid over $70,000 into this fund. When he began receiving his guaranteed $300 per month for the rest of his life, he no longer had any rights to the lump sum principal of $70,000. My father passed 3 months later and had essentially paid $70,000 for a $900 return. While safety and guaranteed interest rates are good, you will want to put your money someplace simple, watch the fees associated with these programs, and will want to find a vehicle that will allow you to keep your principal and receive interest payments.

Based on the conclusion above, common sense tells us that Americans want safe investments that are simple to understand and pay a guaranteed interest rate. When you have a guaranteed interest rate, you can accurately forecast the future value of your money and how much you will receive in payments without affecting your principal. Simple, accurate, and guaranteed growth of your money. This is how retirement investing should work.

Things to Consider in Early Retirement Planning

Retirement is something we need to consider while we still have the capability of working for it. It is something we need to invest into since this will be the one to carry us after we have given all the efforts we can during pre-retirement. Retirement is also something we need to plan as early as now.

Essentials of Early Retirement Planning

Planning for early retirement will not be that easy, this will need a budgeting skill since that will not be the only thing that comes to everybody's mind when money is on hand, the fact is, it barely comes into everyone else's mind. In order for us to save for our retirement we need to have a plan since plain saving will not help us go through it. Cutting a portion of each pay all by ourselves will surely end up to cheating, or skipping from one pay period to another. Plans will help us require ourselves to deduct a part of our earning but will first require us an early retirement planning.

How Much Do I Need to Retire?

In early retirement planning, the first thing we should ask ourselves is, "how much do I need to retire?" Projecting what life could offer in twenty-five to thirty years from now takes into the picture. Some suggestions include, investing on a business, a house or a car.

Good thing here comes retirement planning services that helps us get through the hardship of saving for an early retirement. These services offer different kind of plans, which we can choose in any way convenient to us. Upon knowing the different courses they offer in applying, financial planning for retirement comes in. We should take into consideration the different expenses between pre-retirement and retirement period. We all know that upon retirement, demands will be much lower but we need to choose a program that surely sustains the cost of living we used to have.

Also, another thing to consider is the monetary amount we are willing to sacrifice just for the sake early retirement planning. Remember that it is very important that you will have to be realistic in your estimated on the kind of expenses that you will have in your retirement. Your estimated are valued when you have figured out how much money you will need to save in order for you to afford happily on your retirement.

After taking into considerations all the above mentioned factors, that is the time to choose the perfect plan for you. A plan that you are able to acquire and will provide for you on the first day of your retirement up to the end.

Good Investment Options For Retirement: Dollar Cost Averaging

You've probably heard of dollar cost averaging (DCA) in the past. If not, it's an investment strategy taking the form of investing equal monetary amounts regularly and periodically over specific time periods (such as $100 monthly) in a particular investment. The main benefit: more shares are purchased when prices are low and fewer shares are purchased when prices are high.

We've put this strategy to the test. 1929 and 2008 were the worst years in the last century for equity markets so we thought it might be interesting to test DCA during these periods. How did DCA trough the worst two periods of the last century for equity markets? Our little study showed it produced impressive results. The following examples are for illustrative purpose and do not take into account dividends.

1929

Let's simulate the worst financial meltdown of the last century occurring at the end of the 1920's. The Dow Jones Industrial Average was at the time (and still is) the most followed stock index. Its descent started after it reached a high of 380 in August 1929. The downward spiral lasted 3 years until it touched bottom at 41.22 on July 1932, a whopping 89.2% lower. Most investors were decimated at the time and the Great Depression coincided with the collapse.

How would a monthly DCA invested in the Dow have done during the same time span? In mid 1934, almost 5 years after the top of 1929, the Dow was still at the very low level of 103 or -72.89% from the summit. However, at that specific time, a monthly DCA strategy started at the top of the market would have already recovered all the losses. That's right; while buy and hold investors would be left with a little more than a quarter of their initial investment, the DCA investor would already be breaking even after the worst financial meltdown of the century. Furthermore, it took the Dow Jones 25 years - in November 1954 - to reach once again its all time high of 380 of 1929.

Bottom line: DCA not only reduces the risk of equity investment, it also provides a boost in returns when markets turn on the upside after a decline.

2008

1929 is ancient history and most of us were not there to witness it. However, we do remember 2008 when a similar event took place. However, the 2008 meltdown compared to the one of 1929 wasn't as dramatic. But as you probably know, it did harm a lot of pension funds and retirement accounts. Also, almost all equity investors took a beating during this period.

Here is a quick recap of the events. In October 2007, the Dow Jones reached an all time high of 14164. When Lehman Brothers collapsed one year later, markets went down pretty fast in the following weeks. From the Dow level the day before Lehman's chapter 11 to the bottom of 6547 reached in early March 2009 - 5 months later - the Dow had lost 40% of its value. At this level, the Dow stood at a -53.5% from its all time high of October 2007. How would have done a monthly DCA strategy in such a context? While the Dow Jones stands today (November 2010) at 11193, it's still 20% lower from the all time high of October 2007. However, the monthly DCA investor, who started investing at the top of the market in October 2007, would already be up 9% on its invested capital. Furthermore, one year ago - October 2009 - our DCA investor recovered entirely its investment, the buy and hold approach would still be 25% under.

Bottom line: the 2008 meltdown was short lived for the DCA investor. Buy and hold investors however, still have important losses on their books and nobody know when the markets will reach their all time highs again.

Investing in Fixed Indexed Funds Can Restrict Your Capital Growth

Annuity investing is grabbing the headlines a lot these days as it seems to be an uncomplicated, systematic and lucrative investment opportunity, but only until the facts disguised are made public. So, here's a detailed guide for those who want to know what are the negatives of investing in a fixed indexed annuity before they buy into the words of their investment advisors and salespersons and gear-up to invest their money in a proposition beset with pitfalls and downsides. At the time of signing the final application for a fixed indexed annuity investment, often investors do not pay heed to the terms and conditions column, and pencil in their unique signatures, in turn, finalizing the contract. However, there are several negatives which are intentionally or unintentionally kept secret during the entire process. Let us take glimpse at the most important ones.

Unfolding Untold Story of Capped Returns

A fixed indexed annuity locks your principal amount for a long term, say 15 to 20 years. To top that, the returns earned are capped by the insurance companies; holding you back from having complete access to your own money. Certainly, the investment plan has been designed to fetch returns the way indexed markets do, however, some limitations have been imposed, cutting down the investors' profits. Moreover, a fixed indexed annuity is designed with emphasis on fund management, no matter how far capital growth is neglected.

Don't Ignore Taxation Trouble

Returns from a fixed indexed annuity are subject to income tax, unlike other indexed instruments that enjoy the benefit of paying much lower capital gains tax. This doesn't just confirm a higher rate of taxpaying; it also makes the nominee/survivor of the applicant liable to pay a part of the return from this scheme as income tax. However, this instrument enjoys deferred tax treatment; still the taxation policy takes it far away from being an ideal annuity instrument. Procedural Fees may Rob your Returns The procedural fee, operational cost and the fees of the fund manager collectively come out to be 1-3%, depending on the internal and some external factors. This further drops down the return for the investor and most of the time, the return underperforms indices.

Ouch! Does That Withdrawal Fee Hurt?

With a fixed index annuity, the investor is liable to bear a 5-10% early withdrawal fee for the amount beyond the set threshold or the maximum penalty-free annual amount. Once you know your withdrawal limit, and know how to stay within the brackets, things go smooth, but if the annual withdrawal amount crosses the limit, things might turn topsy-turvy. You might not be looking for a fixed indexed annuity, but chances are that it's been sold to you! If this is the case, someone who understands your present and future financial needs and can well plan out a scheme for you and your heirs can probably act as a shoe-horn in this situation, guiding you to mold your annuity and get at least something beneficial out of it.

The Veterans Aid and Attendance Pension

The inevitable realities of aging require advance planning, and to gain true peace of mind you need to cover all of your bases and prepare for any eventuality. Senior citizens during the current era are faced with some unprecedented circumstances because people are living longer, and medical science can now do some amazing things. People over the age of 85 are the fastest growing portion of American society, so when you are planning your estate you have to take the implications of this ever-increasing longevity into consideration.

As you are planning for the inevitabilities of aging you do need to take stock of the assets that you have accrued, but at the same time, it is important to do your research and gain an understanding of any government benefits that may be available to you. Many of our senior citizens have honorably served their country, and there is a veterans' benefit that is very relevant to those who are engaged in advance planning called the Veterans Aid and Assistance Pension. This benefit provides a monthly payment to qualified veterans who need daily assistance addressing their basic needs, like dressing, eating, cooking, bathing, etc.

The Veterans A & A Pension is not to be confused with the military retirement pension that veterans receive after 20 years or more of continuous service. This benefit is available to veterans who served on active duty for a minimum of one day during wartime, along with a total of at least 90 days of active duty overall. These figures are subject to change by the VA, but as of this writing single qualified veterans can receive as much as $1,632 per month and couples may be eligible for up to $1,949 per month. To apply for the Veterans Aid and Attendance Pension, contact the United States Veterans Benefits Administration.

Investing in Real Estate for Retirement

Why would one want to invest in real estate? All realtors will tell you: appreciation, cash flow and depreciation. Undoubtedly, over time, real properties will again rise in value. Even with the pounding that prices have taken, over the past 10 years (as August 2010), residential properties, on average (Case Shiller/SP 10 City data), outperformed the S&P 500 +47.3% for real estate, -30.9% for stocks! If you are saving for retirement, doesn't it make sense to diversify using investment properties?

If you have though of "downsizing" at or prior to retirement, consider the purchase of your retirement home now. After a professional adviser "crunches" the numbers, you might be amazed to see that buying a second home that can be rented can very well fit into your budget. In addition to rental income that you could receive, rental real estate also benefits from depreciation. This is a phantom expense that can turn a situation that is profitable from a cash flow perspective into a loss for tax purposes.

If you file jointly and your Adjusted Gross Income (AGI) is $100,000 or less, you may be able to write off up to $25,000 of your real estate losses against your income. That's a $6,250 reduction in taxes for those in the 25% tax bracket.

When you are ready to downsize, there could be great news for you. Unless current tax laws change, you may be able to sell your current residence and receive a tax exemption on up to $500,000 on the capital gains you realize. With that money, you can probably have enough to pay off the existing mortgage on the rental and move in to it. You might even have enough extra to provide you with extra income for the rest of your life.

One of the keys to success in the real estate market is understanding how the tax laws work in your favor. With proper planning, your cash flows can be managed and taxes reduced, making your purchases affordable.

Always be sure to check with your professional tax adviser before entering into complex investment transactions and tax laws are continually changing.

Gary Lewis' ideas incorporate more than 30 years working with investments including 20 years experience in the derivatives industry and 10 years as a fee-only comprehensive financial planner. He specializes in designing portfolios that meet the client's required rate of return with a minimum level of volatility. You can read his writings on financial markets at Asset Design Center.

Financing Your Investment Properties

An investment property is a property (land, house, flat, apartment, building etc.) that you buy with the purpose of producing monetary returns. Financing your investment property can be a great way to earn some steady income. Many people buy homes with the aim of renting them and thereby bringing in a considerable amount of monthly income. Similarly, several real estate investors are there who pay for multiple properties, get them renovated and then sell them for a higher profit.

To start on the road to successful journey, there are three best ways to finance your investment on property. While you use them correctly, they can help you get a substantial amount of money from your property investments:

1. Self Financing:

It is much viable to make use of your own resources to buy the property. You will have to meet all the expenses yourself. Similarly, you will be liable for all profits and losses. Self finance is the easiest and reliable source of investing because this way you lower your accountability. This prevents you from going through lots of paperwork, adhering to the strict rules of financing companies and having to discuss your every move with your partner. You can do things liberally but it will be risky if you do not stay careful. However, by seeking advice from qualified experts, it is possible to use your resources properly and maximize the benefits.

2. Loan and Mortgages:

Normally banks, building societies and credit unions offer bank loans or mortgages as a way to finance your investment on property. Such institutions offer loan for a percentage of the purchase-price whereby keeping the property secured as guarantee for the loan. Depending on the interest rates fixed by the finance ministry or central bank, the loans or mortgages are held with either fixed interest rates or variable interest rates.

This way to finance a property investment really is the most established, safe and well-known. Not only you can make down payments but also meet other capital requirements. In addition, you can repay the bank from the amount you earn from rent or sales of properties.

3. Partnership:

Partnership with other investor is a great way to finance your investment on property.It is a win-win relationship for both parties whereby you divide the cost and share with other partners. Utilizing the assets of your helping hand will make your credit rating sky-rocket. Although you get restricted in decision-making process but there is less risk factor if you have the good business chemistry with your partner. Being able to master the art of partnership gives you the ability to finance as many property investments as you want.

Remember, a safe and reliable financing strategy affects your investment venture in the long run. Carefully consider all your options before you decide how to finance your property investments. Choose the right option that keeps your risks low, ensures a high rate of profit and works best for your interest.

Vacation Property Management - Web Tools Are Best

Every rental manager knows how difficult vacation property management is. It can become even more of a horror without modern tools. Imagine taking and organizing reservations and bookings over the phone and logging everything by hand. The good news is that you don't have to think of ever experiencing this nightmare.

These days, you can get your hands on rental software. These are outstanding pieces of modern technology that let you breeze through reservations, payments, information dissemination, fees and more in just a few minutes. You can install one in your website and click on or drag and drop items and color schemes to update information on your properties. With just one glance you and your customer will get vital information about the status of various properties.

Software for vacation property management can come in download or web-based form. There are excellent options for both types but you will be in an advantageous position if you pick a web-based tool.

One clear reason why web tools are best is because they are highly accessible any time anywhere. All you need is a stable internet connection and you can manage your properties from any place in the world. Even if you're off on a business conference or on a holiday trip, you can slot reservations, change minimum stay policies and serve up the freshest promos to your customers.

Accessibility is not the only thing you will enjoy. Web tools also take away the headache of managing the software package itself. Vacation property management tools that are based entirely on the internet don't drain your bandwidth because the software providers host the tools themselves. Hence, you don't need to pay for a bandwidth upgrade.

Also, developers of online tools take care of the costs and complexities of technical maintenance. What you will essentially be getting from a web tool is software as a service or (SAAS). You don't need to pay someone else to monitor and take care of software. You also don't need to worry about very expensive upgrades.

One last advantage to internet based tools is the ease of use. You don't have to go through hoops and loops to integrate or install a system. Many online tools are so simple to use that if you can follow basic instructions and click on a mouse, you'll have no trouble using them at all.

In general, it's easy to see why online software is better than its stand-alone counterpart. Of course, much depends on choosing vacation property management software that's top of the line. Go for a name that has stood the test of time and that enjoys a good reputation among its users. Take a look at some of the sites maintained by other managers and find out what they use. A good reputation product will most likely be used by many.

Condominium Property Management

A condominium is where a specified part of a piece of real estate is individually owned while use of and access to common facilities such as hallways, heating system, elevators, exterior areas is executed under legal rights associated with the individual ownership and controlled by the association of owners that jointly represent ownership of the whole piece.

Looking after a Condo suite is a full time job. From the moment you receive the keys to the day you sell the Condo, a good management company can make the difference between a profitable investment and a poor one.

Property Managers in Toronto will step in and perform, on the owner behalf, all the day-to-day tasks with regards to the condominium. These tasks include rent collection and bill payments. During the normal operation of a tenanted unit rent checks might return NSF, tenants might want to pay cash or use another banks to pay the rent dues. A local point of contact is needed. Bills need to be paid and constant contact must be kept with the billing agencies like the city, the condominium building management and the utility companies.

The local property manager is your tenant's point of contact for questions, requests and assistance. The professional property manager will be able to inspect the tenanted suites, supervise the tenants and buildings and keep an eye on the owner's interests.

When you get possession a tenant needs to be found. In Toronto, tenant screening needs to be done very carefully to avoid renting the property to an incompetent tenant.

Credit Check, Letter of Employment, references are one part of the screening and the experience of meeting hundreds of tenants is the other. Finding you a tenant quickly is important but doing it in a professional way is even more important to the success of your investment.

Three Qualities of Excellent Property Management

Whether you own a single executive office building or a string of apartment buildings, you want to make sure you are getting the best possible return on your investment at all times. Smart real estate investors use a property management service to handle the upkeep on their properties as well as keep them filled with quality tenants. Like anything else, not all property management companies are created equal. So here are three qualities to look for to make sure you're getting the most for your money.

• Focus on Occupancy: The bottom line is you need to make payments to the bank and simply cannot afford to have offices or rentals lie vacant for prolonged periods of time. An excellent team will employ various strategies and market your property on the right venues to ensure high occupancy rates. A service understands that quality is as important as quantity and will do everything possible to draw in desirable tenants.
• Impeccable Building and Grounds Maintenance: If you want tenants to become long-term tenants, the buildings and grounds on your property must be well-kept and made to look as attractive as possible year-round. The best property management teams contract only with quality and dependable services and repair providers so you can be sure that everything will be ship-shape at all times.
• Excellent Customer Service: You shouldn't have to worry about the daily ins and outs of operating your properties; after all, that's what you hire a management team for! Monthly financial statements, timely rent collections, annual reports and other customer service essentials are a must.

If your current management team is simply not cutting in with one or more of the above, it may be time to look for a new one. After all, your real estate investment is too important to leave to chance.