Author Archives: ernie

Add New Life to Existing Content

Sometimes old content on your blog becomes out of date, the details change, posts are too short and to maintain the value of this content writers should really spend time updating them and tweaking the content. It is time to Add New Life to Existing Content. With perhaps thousands of pages, how does one go about updating this content and keep it fresh? This is a huge problem for large and small companies. They may be limited by staff levels and also want to continue generating new and fresh content. We have outlined a few ideas about how to go about this. Make efficient use of your time and still generate new content aimed at your readers.

Add New Life to Existing Content – Approach to Updating Content

One approach is to add to your daily schedule an objective to update content each day. Perhaps you modify one post per day. Bring it up to current specifications and update the information so that it is relevant to today’s readers. If you have thousands of pages, this may need to be done to many files per day. However, you also must be careful to avoid signaling to the search engines that your content is spam by mistake. Our approach is to update no more than five posts each day. Tweaking them here and there, adding a few sentences, correcting spelling and grammar, etc. We also update the Google Adsense code on these pages as well when Google makes changes to their code.

It may take us several years to get through all of the content. However, that is much better than never going through it at all at the same time. We also are using this opportunity to remove links that are no longer valid or perhaps do not align with our content. With Google’s focus on indexing good quality content, we feel that this is another excellent approach to take over time.

Advertise Your Web Sites Content

You need to advertise as well on your message boards, twitter, Facebook, etc. Get your message out there so that readers are aware of what is available and can link to it as they refer content to their friends etc.

A good time to update old content is when the creative juices may not be flowing. No one can write every day and all day. We get tired, we run out of ideas and it is just too difficult. By taking the time to update old content, you are keeping your old content up to date and you just may get some ideas for new posts from your old content. This is an excellent way to help develop new ideas as well since the process of rewriting content or updating it sometimes gets you thinking about ideas that were not covered in the old content. Depending on the topic, this may be an opportunity to create a new post about this new topic and link back to the original post.

Paying for special needs

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Paying for special needs can place an extra load on a family in all kinds of ways. This post will take a quick look at retirement options . What it may mean for couples looking after someone with special needs.

Consider a special needs child who has no way of earning an income. The child depends on his parents for everything. As the parents plan for retirement, they also must plan for an extra income that will look after their special needs child. This must include when they are retired and later when they are no longer alive. This is a very serious situation that keeps many people up at night worrying about what will happen to their child. Also their spouse or someone they are looking after. Another situation is where one spouse becomes sick or has a major health challenge. They may need special care in a health facility costing thousands of dollars. While the other remains at home with all of the normal home-related expenses.

Paying for special needs – Set Up a Trust Fund

For many couples, this means setting up a trust that will have sufficient money to look after their child as long as he or she lives. There also needs to be instructions as well for what to do with the trust when the child also passes away. There are also must be a trust administrator to make sure the trust is maintained. They must look after the child’s financial requirements.

All of these factors can be handled by your lawyer or a trusted financial adviser. It is important to have things set up in a professional way with everything set out properly and clearly. The paperwork and financial plans are important. There are other factors that need to be considered. For example, after you are gone who will administer the trust fund. More importantly, make sure that your child is looked after? Selecting an administrator is an important decision.

The Personal Touch

While it is nice to have the money in place, it is also important to have someone that you trust to look after the special needs person. Usually, this is a brother or sister, or a cousin that is close to the family and can be trusted to take good personal care of the person. Aside from paying for whatever services you may need, it is the personal needs, such as clothes, toiletries, visitations, medical visits, etc that also need to be taken care of.

This can be a significant commitment for many people and sometimes it will be shared by members of the family so that not all of the time and the work is born by one person. When people share responsibilities it can be much easier for everyone. Still, there must be one person that takes the responsibility to coordinate and manage everything. Diplomacy is required since you want to avoid creating differences that become major issues at the same time. Choose wisely.

Tax Deferred Retirement Plan

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A tax deferred retirement plan is an investment plan that allows us as tax payers to invest pretax dollars into a plan, and collect income within the plan without paying tax as long as the funds are left in the plan. This is an excellent way for individuals to save for retirement using income that is only taxed when the money is withdrawn from the plan. The usual mantra is to invest in these plans when you have a high income and are attracting more income tax, then withdraw income when you are making less income. You still will pay tax, but at a lower rate of tax. The theory is that there will be a net savings for the tax payer and in many cases this is true.

Consumers can build up huge retirement savings by using pretax dollars when invested wisely with diversity in mind and in quality stocks and bonds. There will be wide swings in the actual value of the plan since stocks and mutual funds will vary a great deal, however if you are well invested in high quality dividend paying stocks, the value of your investment plans will continue to increase over time. This increase will be from both income from dividends and interest as well as appreciation of these investments.

Tax Deferred Retirement Plan – What to do With Tax Refunds

Consumers can save thousands of dollars with pretax money by using a tax deferred retirement plan. They can save much faster with pretax dollars than they could with after tax dollars. If they are in a high tax bracket they can save or reduce their tax payable by a significant amount. Withdraw the money when they are in a lower tax bracket after they have retired. Tax refunds that are triggered due to investing in a tax deferred plan should always be invested. Invest into these plans or use the funds to reduce other debt such as mortgages and loans.

For example, $10,000 invested in a tax deferred retirement plan would trigger a $5000 tax savings for a person at a 50% tax bracket. Therefore the cost to the tax pager is only $5000. Later when he retires he can begin to withdraw money. Letâ€™s assume now that he is in a 25% tax bracket and withdraws the same $10,000. He will only pay $2500 in tax for a net tax reduction of $2500. This is the real power of a tax deferred retirement plan. Tax planning and income planning is something that your tax adviser or your income adviser can help you with. Determine the best time to withdraw money from your plans.

Sheltering Income

All income in the tax deferred retirement plan is tax sheltered until it is withdrawn from the plan. This is a really powerful method for consumers to save money for their retirement! Begin early in your life by saving money in a tax deferred retirement plan. It is quite easy to accumulate well over a million dollars in the plan for your retirement. Save for retirement even if you have a company sponsored retirement plan. With a tax deferred retirement plan as well you will have the confidence of knowing that your retirement is financially secure.

Why Should You Invest in a Tax Deferred Retirement Plan when you Have a Company Plan

Many lucky people to have a company pension. Consumers ask themselves why should they save additional money in a tax deferred plan. Turns out there are a number of reasons to save in one of these plans over and above the savings you get from decreasing your taxes.

These reasons include the following:

Not all pension plans are sufficient to provide the quality of life you may want to have in retirement.
Many companies do not survive long enough to provide a pension
Not all companies pay sufficient money into the company pension plan
Early layoffs and retirements can mean a lower pension than planned

Assume that none of these things mentioned above occur. The real bonus is that you have a savings plan sitting there. It can be used to provide you with a better quality of life than you were expecting. We really are suggesting that consumers should plan for the worst. In most cases the worst does not happen. You gain the benefits of having a savings plan to use for improving your quality of life during your retirement.

Sell your home fast for top dollar

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Sell your home fast for top dollar. Selling your home is one of the most important steps in your life. This nine steps system will give you the tools you need to maximize your profits, maintain control, and reduce the stress that comes with the home selling process;

Know why you’re selling and keep it to yourself. The reasons behind your decision to sell, affect everything from setting a price to deciding how much time and money to invest in getting her home ready for sale. What’s more important to you; the money you walk away with, or the length of time you’ve your property is on the market or both? Different goals will dictate different strategies.

However, don’t reveal your motivation to anyone else or they may use it against you at the negotiating table. When asked, simply say that your housing needs have changed.

Do your homework before setting a price.

Settling on its offering price shouldn’t be done lightly. Once you set your price, you’ve told the buyers the absolute maximum they have to pay for your home, but pricing to high is as dangerous as pricing too low. Remember that the average buyer is looking at multiple homes at the same time they’re considering yours. This means that they have a basis of comparison, and if your home doesn’t compare favorably with others in the price range you said, you will be taken seriously by prospects or agents. As a result, your home will sit on the market for a long time and, knowing this, new buyers on the market will think that there must be something wrong with your home.

Do your homework. Find out what homes in your own and similar neighborhoods have sold for in the past 3 to 6 months, and research what current homes are listed for. That certainly helps prospective buyers will assess the work of your home.

Find a good real estate agent to represent your needs.

Nearly 3/4 of homeowners claim they wouldn’t use the same real estate agent who sold their last home. Dissatisfaction boils down to poor communication, which results in not enough feedback, lower pricing, and strained relations. Picking the right agent is one of those critical issues that can cost or save you thousands of dollars. It is important to find out what unique plan And programs and agents have a place to make sure that your home stands out.

Maximize your home’s sales potential.

Each year, corporate North America spends billions of product packaging design. Appearance is critical, and it would be foolish to ignore this when selling your home.

You may not be able to change your Holmes location or foreplay, but you can do a lot to improve its appearance. The look and feel of your home generate a great emotional response than any other factor. Before showings clean like you’ve never cleaned before. Pick up, straightened, uncluttered, scrub, scour, and dust. Fix everything, the matter how insignificant it may appear. Present your home to get a wow response from prospective buyers.

Allow the buyers to imagine themselves living in your home.

The decision to buy a home is based on emotion, not logic. Prospective buyers want to try on your home just like they wanted a new suit of clothing. If you follow them around pointing out improvements, or if you’re decorous so different that it’s difficult for a buyer to stripping away in his or her mind, you make it difficult for them to feel comfortable enough to imagine themselves an owner.

Make it easy for prospects to get information on your home.

You may be surprised to know that the two marketing tools that most agents used to sell homes are actually not very effective at all. In fact, less than 3% of people purchase their homes as a result of calling to a classified ads, and less than 1% of homes are sold at an open house.

Furthermore, the prospects calling for information on your home probably value their time as much as you do. The last thing they want to be subjected to is either a game of telephone tag with an agent or an unwanted sales pitch. Make sure the ad your agent places for your home is attached to a 24-hour prerecorded hotline with the specified telephone number for your home which gives buyers access to detailed information about your property day or night seven days a week, without having to talk to anyone. It’s been proven that three times as many buyers call for information on your home under the system. And remember, the more buyers you have competing for your home the better because it sets up an auction-like atmosphere that puts you in the driver seat.

Sell your home fast for top dollar – Know your buyer.

In the negotiation process, your objective is to control the pace set the duration. What is our buyer’s motivation? Does she or he need to move quickly? Does she or he have enough money to pay you your asking price? Knowing this information gives you the upper hand in the negotiation because you know how far you can push to get what you want.

Make sure the contract is complete.

For your part as a seller, make sure you disclose everything. Smart sellers proactively go above and beyond legal requirements to disclose all known defects to their buyers, in writing. If the buyer knows about a problem he or she cannot come back with a lawsuit later on.

Make sure all terms, costs, and responsibilities are spelled out in the contract of sale and resist the temptation to diverge from the contract. For example, if the buyer request to move in prior to closing, just say no. Now is not the time to take any chances of the deal falling through.

Don’t move out before you sell.

Studies have shown that it is more difficult to sell a home that is vacant. Because it looks forlorn, forgotten, simply not appealing. You could even cost you thousands. If you move, you’re also telling buyers that you have a new home. It sends a message to buyers that are probably highly motivated to sell fast. This, of course, will give them the advantage at the negotiating table.

For more posts about selling real estate, click here.

Retirement Plans for Self Employed

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Retirement plans for self employed people are one of the most important issues that people who run their own businesses have. Most do not even realize that their quality of life is going to be impacted by poor planning. They are focused on running their business and building it into a successful operation. They sometimes give very little thought to long-term planning. If we can get even one person to think about their retirement and plan for it, then we have done our job.

Obviously we would like many people who are self employed to embrace retirement planning. In addition, many employees of small companies also do not have company sponsored retirement plans. They must do their own planning as well for their retirement.

Retirement Plans for Self Employed Business People

Many business owners believe that their business will be their retirement plan. They will either sell it or will turn it over to a family member who will run it for them and they will reap the benefits. We hope that this strategy works for everyone. But we also believe that there should be a backup plan just in case the business fails, it does not sell for what you think that it should or it cannot support multiple family membersÂ in a life style that everyone would like. Having a backup strategy just makes good business sense and that is why we think that business owners should save for retirement outside of their business operations.

If they are successful in selling their business and have retirement plans set up as well, then this is a total bonus situation. The best of both worlds. If on the other hand their business venture does not turn out as well as they had hoped they still have their retirement savings to live on.

Employees who participate in a company pension plan will receive a pension from their employer when they retire. They may choose to top up their employer sponsored retirement plan to provide them with the quality of life during retirement that they are looking for. Self employed individuals must plan 1005 for their retirement and set aside money that will give them the quality of life they are looking for. They must 100% fund themselves and they must manage their retirement savings to deal with market changes over a period that could be as long as 40 years in some cases if someone were to begin work at 20 and retire at 60.

Biggest Mistake for Retirement Plans for Self Employed

The biggest mistake that most people make about retirement is that they start saving for retirement much too late. They end up not having enough money to retire in the lifestyle that they had assumed that they would have. There are only so many options when faced with this kind of situation. Either you continue working and work longer than planned, or you reduce your expectations during retirement and do not have the quality of life you had planned.

We mention quality of life several times. For some people this is traveling and vacationing around the world when they retire. For others, living at the cottage and spending time with the family is what is important. Whatever your plan is, we suggest that you take the time to figure out how much money you will need each year to live in the manner you prefer and then ensure that you have a savings plan in place that will allow you to achieve these retirement dreams.

One last point we would like to make. Sometimes unforeseen events come along that prevent us from working as long as we had planned. It could be everything from a failed business to health related issues. In addition to your retirement fund, try to also have an emergency fund set aside to deal with these unforeseen surprises. If you never use the emergency fund, then you will have more for your retirement!

The real estate market has changed

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The real estate market has changed in the last few years partly due to the recession and partly due to the fact that people in general have less money to spend after paying for many of the other things we need to survive in life. Everything has gone up in price. While many people have lost jobs or are in jobs that do not pay well enough for them to be able to afford a home of their own.

Remember not so long ago, when you could make your fortune in real estate. It was nothing then to buy a home, wait a short while, and then sell it at a tidy profit. And then they would do it again. Inflation was raising the price of homes dramatically. Then came the huge recession. The price of homes dropped like a stone with many homeowners losing their homes because they could not afford the mortgage. If you had money at this time, a lot of money can be made in real estate by buying when prices were low. They have since recovered somewhat.

Real Estate Market Seller Mistakes

Well, as you probably know, times have changed. Since markets are constantly fluctuating, real estate markets are unpredictable because of changing prices and interest rates. Therefore, it is now more critical than ever to learn what you need to know to avoid costly seller mistakes in order to sell your home fast and for the most amount of money.

Buyers are far more discriminating, and a large percentage of homes listed for sale don’t sell the first time they are listed for sale. Buyers want everything to be upgraded or they want the home to be priced so low that they can afford to do the upgrades themselves. Then again many buyers do not want to be even bothered with the mess and difficulty of upgrading a home.

Older Homes

For example, if you have an older home with wood-framed windows, these windows require painting every few years. They may need to be replaced if the wood begins to deteriorate. Windows can be expensive to replace. Some homes costing as much as $15,000 or even more to replace all of the windows. Many buyers want to see that this upgrade has already been completed. They do not want to have to deal with it and come up with the money. At the same time sellers will sell their home faster and for a little more money than they would with a home with wooden windows. But they do not reap the entire amount when they sell.

The same situation applies to kitchen and bathroom upgrades. Someone who has taken excellent care of their home may feel that their kitchen and bathrooms are in excellent condition. But the problem is that in a 25-year-old home they are outdated. They are not attracted to someone who is looking for a beautiful bathroom with marble counters and tiled showers. Kitchens need to have granite countertops. Upgraded or modern cupboards as well and new appliances to be attractive to buyers, particularly the younger buyers.

Real Estate Market – Don’t Spend Too Much

Some homeowners will spend up words of $50,000 on these upgrades. Only to find that the price of their home does not increase accordingly. It will definitely sell faster. They will get more for their home than the guy next door who has not completed any upgrades. But they will not get the full amount that they have put into their house.

For most people this is ok. Since they plan to stay in their home for several years and enjoy the work they have done on their homes. When they do decide to sell they at least have enjoyed what they have. At the same time will obtain a higher price for their home than they might have otherwise.

Fixer-Uppers

Some consumers are willing to purchase homes that need work. However, they expect a corresponding decrease in the cost of the home they are buying. With the money saved, they plan to do the upgrades to meet their personal taste and then enjoy them. These consumers tend to know the cost of upgrades, and are good at estimating the costs. They are good at designing their own rooms the way they want them to look. They also are willing to put up with the dust and the construction activity while it is being completed, which many people are not.

The real estate market has certainly changed and if you are planning to sell, you must take all of these factors into account when you prepare to sell or buy a home.

Retirement Plans for Individuals

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There are several questions which will make a huge impact on your success at planning and saving for retirement! All the rest of the decisions are trivial by comparison. Fussing over the rise and fall of the stock market will make little difference in the big scheme of things over your working life. Investing in quality investments and not chasing get rich quick schemes will also make a difference. Â Depending on how you answer these questions and how you apply these answers to these questions will determine your long term retirement lifestyle and quality of life. This is important since it affects how well you will live during your retirement, the quality of your life, and what if anything you leave to your heirs. Focus on these for success.

Retirement Plans Questions

Are you a saver or an investor?
How should you divide up your money?
How much help do you really need?
What’s the best use of tax-deferred plans?
How much can you draw from your savings?

More Details

1. Are you a saver or an investor? Long term savings using conservative investments have proven to be more successful over the long term compared to chasing the elusive stock speculation objective. Saving at least 10% of your income every year is going to make a huge difference. Not touching this money and not taking it out early will ensure that you have adequate savings when you retire. Some experts suggest that you need 11 times your salary saved up to ensure that you have adequate funds for retirement.

2. How should you divide up your money? Practice diversification between stocks, mutual and bonds to protect from market swings. Avoid placing all of your money in one investment or even with one investment manager. Diversity over the long term is the key element along with investing in quality stocks, bonds, and mutual funds. Focus on dividend-paying stocks who have both a growth trend in the value of their shares and a history of increasing the dividends each year.

Get Advice

3. How much help do you really need? Get advice from experts and teach yourself about investing and planning for retirement. If you need help with calculations of how much retirement income you will need and how much you will have don’t hesitate to ask for it. But fundamentally retain control and never turn complete control over to a so-called expert. Be involved in all decisions and if you do not understand what is being suggested, ask enough questions to allow you to understand, and if you still donâ€™t get it, then back off until you do understand.

4. What’s the best use of tax-deferred plans? The experts can help you figure out the right balance between tax-deferred plans and regular savings plans. Remember that tax-deferred plans mean that taxes are deferred until later in life presumably when you have a lower tax rate. The government wants you to be self-sufficient, but they also want your taxable income as well.

5. How much can you draw from your savings? When should you retire and how much can you take out each year to make sure your money lasts through your retirement. Some experts say that if you take out 4% each year you have an 80% chance of your money lasting during your retirement. This obviously depends on how you are invested and how long you live. Â Investing in GIC’s at 1 to 3% will likely mean your money will run out early. Investing in dividend-paying stocks and living on the income only will ensure that the money lasts much longer. Figure out how much you need and withdraw money from your accounts accordingly.

Retirement Plans – Summary

That’s it, lots to think about but only five questions! They are complicated questions but given our lifelong practical experience, we think these are the important ones. Invest wisely, get involved, and keep abreast of what is happening in the markets. Focus on the medium to long term and do not react to the short term volatility of the markets.

If the market’s plunge and you are well invested in high-quality blue-chip stocks you probably will be ok. The markets will recover. You must monitor and make sure that you are not invested in a company such as GM who was considered blue-chip at one point then went bankrupt when the economy tanked and they could not react in time. Bankruptcy was the only option to clear debt and to clear union contracts that were holding them back and making them totally unprofitable. So monitor and if you are concerned talk to the experts and then make you own decision.

The seven deadly mistakes most home sellers make

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The seven deadly mistakes most home sellers make. Our daughter and son-in-law are in the process of selling their home. We thought it would be interesting to look at what the right things are to do to sell a home. What the wrong things are about selling a home. We came across this list of mistakes that many people make when they decide to sell. They may be useful and it would be interesting to examine them in some detail. If you are planning to sell a home in the near future it may be worth a read. Avoiding these issues may help you sell your home more quickly. It may even help you sell for a higher price which is always interesting to many people.

Seven Deadly Mistakes Most Home Sellers Make

Here are the seven deadly mistakes most home sellers make. We will discuss each in more detail.

Failing to analyze why they are selling.
Not preparing their home for the buyer’s eye.
Pricing their homes incorrectly.
Selling too hard during showings.
Signing a long-term listing agreement without the written performance guarantee.
Making it difficult for buyers to get information on their homes.
Failing to obtain a pre-approved mortgage for one’s next home.

Seven deadly mistakes most home sellers make

Failing to analyze why they are selling

Knowing why you are selling will lead to making many right decisions vs. wrong decisions during the sale process. It will also help to avoid self-sabotage of the sale process. For example, someone who is transferred is a pretty clear-cut reason for moving. While moving to find a larger home in a better location can be a little fuzzier especially if one partner is not fully committed to the move.

Not preparing their home for the buyer’s eye

Clutter and too much personalization distract the potential buyer from visualizing what their furniture and knickknacks would look like in your home. If they begin visualizing there is a definite interest that may lead to an offer. In addition, most people do want a home that is move-in ready and does not need a lot of renovations or maintenance before they move in or major repairs. Get your home ready before you put it up for sale.

Pricing their homes incorrectly

Pricing a home is always tricky. Too low means it will sell fast, but you may leave money on the table. Priced too high and it may not sell at all. Motivated sellers who have been transferred are sometimes urged by their real estate agents to sell quickly by lowering the price. Beware of agents who will guarantee the sale by buying it from you if it does not sell within a specified time frame. You can be sure that the price they will pay you is below market value.

Selling too hard during showings

Potential buyers need time to explore your home and visualize what their furniture etc will look like in your home. They also will visualize what it would be like living in that home, the neighborhood, etc. Pushing too hard will distract them, however, knowing when to push a little bit and knowing when to back off is something that many agents learn over time and people who are more observant or are in sales.

Signing a long-term listing agreement without the written performance guarantee

Avoid this like the plague. Agents need to be motivated to perform just like everyone else and if there is a chance that they will lose the listing to another agent, they will work much harder to show your home and to sell it through advertising, etc. Keep your listing arrangement to a maximum of three months and avoid automatic renewals.

Making it difficult for buyers to get information on their homes

This is a large purchase for most buyers, for some, it is the largest purchase they will ever make. They will want to know all kinds of details and the motivated seller will have all of this information readily available. This could include all of the basics about the home as well as dates when the roof was replaced, the furnace, the hot water heater, the air conditioning, Â the square footage, the taxes, the cost to heat and cool the place, etc. make it easy for the buyer to get interested in your home.

The Last of the seven deadly mistakes most home sellers make

Failing to obtain a pre-approved mortgage for ones next home

Obtaining approval takes time and if you are in a hurry you may want to take this step of being pre-approved for a mortgage. Also if you are moving and planning to move into a larger home, you may get a nasty surprise if your mortgage approval gets bogged down because you cannot get approval for the size of mortgage you need due to credit issues, etc.

We hope this list helps both buyers and sellers alike and let us know your comments and any additional suggestions that might make sense to be included in this list of seven mistakes that home sellers make.

Retirement Plan Options

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With so many people retiring these days we thought we should do a series of posts about retirement planning and retirement planning options. More people will be retiring than ever before and it is all due to the baby boom group reaching the magic age of retirement. Some will retire at 50, while others will work well into their late 60â€™s or even into their seventies depending on their financial situation as well as their personal objectives.

If there is one message that you should take out of this post, it is â€œplan for your retirement!â€ This can take many different aspects so that is why it is important to begin early, develop several retirement plan options and be prepared to adjust them over time, to select one over the other, and even change them completely based on whatever life throws at you. The important thing is to have a plan, develop the things you need to do to make that plan happen, and then take the action to achieve your plan.

Complete a Financial Plan

Either do this yourself or have a financial adviser do it for you. The data you will need includes:

Planned retirement date
Current savings
Current debt
Present living costs
Living costs first year of retirement
Living cost in subsequent years of retirement
Special costs and expenses that you know about
Planned trips, expenses, etc that must be considered

From this plan, you will quickly know how much more money you need to save to achieve the level of income you will need to live in the style that you would prefer while retired. You may also have some idea of the quality of life you will experience and the things you will like to do wild retired. You cannot sit in front of the TV all day or your health will decline and you will become extremely bored. Planning for retirement and developing retirement plan options is includes financial as well as the lifestyle that you will need.

Test Drive Your Retirement Plan Options

This is an interesting challenge for many people. If you know how much you will have to live on each year during retirement and have worked this out with your investment planner, why not test drive your plan. Take six months or a year, and attempt to live on whatever income you feel that you will have during your first year of retirement.

This can be an interesting exercise for many people who have no idea of how much they need during retirement. If you are going to be short of money, you will quickly understand and the reality check will help to confirm what you need to do to avoid getting into the situation of retiring without enough money to live on or at least live to the level that you prefer. Test each of your options this way to really make sure that your plans will be realistic.

Retirement Plan Options to Consider

There are many options and they will differ for many people based on their savings, their income, and their preferred lifestyle. The following are a few issues to consider as you develop options and try to make up your mind on what the best course of options is correct for you:

Be conservative in all of your assumptions, you will be pleasantly surprised
Diversify your investments
Invest in high-quality investments and avoid chasing high-risk yield
Hire an investment advisor
Never relinquish control
Assess your plan every year to recheck and adjust as needed
Work longer if needed to ensure that you have benefits or income or both
Cut down on expenses where ever you can
Develop the main plan which is the preferred plan and at least two others that include
A plan that is much more aggressive in term of income i.e. +20%
A plan that is much more aggressive in terms of expense I.e. +20%

Develop your retirement plan options using these types of guidelines, recheck every year, and adjust as needed. Be prepared for change and be prepared to keep on working or go back to work to help your plan out if the economy for example does not cooperate e.g. interest rates are low and will remain low, limiting your income as a result.

Main Financial Risks in Retirement

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Financial Risks in Retirement – Everyone should have a retirement plan in place to ensure that they have explicitly considered, and have strategies in place to address any or all of the issues listed below. When you review the list, you may feel that some of these may not be ever an issue for you. Thatâ€™s fine, set those aside, and focus on those that you are concerned about. If you have time and/or the inclination come back to the others and address them. At least you will have a plan to deal with those issues that concern you the most.

The mainÂ Financial Risks in Retirement which may occur during retirement:

Outlive your money: Many people are living longer than their ancestors and their parents these days and as a result, must plan for a longer life. Running out of money can make retirement very uncomfortable and even miserable. Take stock of your assets and plan withdrawals from your savings in such a manner that they will last beyond your anticipated demise.

Ensure a reasonable plan is in place: expense level, income sources, asset draw
Develop a plan at least five years before retirement, and review it annually

A temporary loss in value of investment assets, resulting in less income: the stock market, the housing market, etc appears to take corrections every decade. When this occurs will this impact your living standard and will you be able to sustain your living standard? What plans can you put in place that will sustain your income and allow you to sleep at night without worrying about whether your assets will be available or not?

Is this a major proportion of retirement income?
Are the investments balanced for regular income, versus growth?
Structure portfolio to ensure no income is available for at least a five-year horizon
Are guarantees needed to lock in a portion of this income?

Other Risks that Consumers do not Like to Consider

Death of a spouse, and resulting reduction, up to 50%, pension income: we have seen it over and over again. One spouse will die and the company pension plan is halved or eliminated as a result leaving the other spouse without the funds to live comfortably in their remaining years. Decide before you retire if a survivor option should be added to your retirement plan?

Is this a major proportion of retirement income?
Is life insurance required?

The need for long-term care, resulting in the depletion of assets:

What is the probability that you will need long-term care? Long-term care is extremely expensive and all of your assets can and will be consumed if you spend any significant time in long-term care. Can your spouse look after you? Will your spouse look after you?

Disability for one, or both, spouses. Others close wishes to retain or live in the home
Other assets that can be sold to provide additional funds?
Do a long-term insurance analysis.

Continuing elderly parent or disabled child support: who will look after your disabled child when you are gone? How will you work and look after your elderly parents and your disabled child?

Is this a large proportion of the expenses?
Are RRSPs, and Henson trust in the will.

Inability to handle your financial affairs: this can happen slowly over several years providing you with time to prepare wills etc., or you can be suddenly smitten with a stroke or heart attack leaving you unable to look after your own affairs. What do you do in a situation like this? What does your spouse or family do in situations like this?

Ensure that wills and POA’s are in place in advance.
Create a complete estate plan: beneficiaries, testamentary trusts, funeral costs.
Is joint insurance required to cover: estate capital gains and RRIF taxes?
Large legacies or charitable gifts?
Special circumstances or considerations e.g. business owner?

Summary

We may not have covered all of the situations that we all must deal with in retirement and as we age. However, these appear to be the main issues and if nothing else we hope that it will get you thinking about your personal situation and making some plans with regards to those issues. Doing nothing is really not an option although many people do just that and then have to live with the consequences.

Donâ€™t be one of those people. Take control of your life and make sure that you can live the life you want for yourself and do not become a burden for your family. In the end, no one wants to be a burden. We all want to be independent as much as we possibly can even if we are incapacitated.

For more information about retirement risk, click here.

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