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Unprepared For Your Golden Years?
Round Up These Resources For A Financial Fix
By Mark Landsbaum
Solo entrepreneurs, micro-business owners and even individuals just starting a business have one eventual goal in common: retirement.
It’s never too early—or too late—to do what you can to prepare for the day you no longer want to work.
Planning for retirement requires more than comparing your anticipated expenses to your anticipated income. Numerous other variables such as housing costs and tax burdens should also be considered to get a fuller view of what’s in store for your golden years.
Whether you’re decades from retirement or only days, have operated a micro-business for years or are just launching one, you’ll
find tools and resources here to shore up your future.
Government Resources The first stop for retirement planning is the government’s big umbrellas. They are foundational, but rarely sufficient in themselves. So, plan to investigate other resources after visiting these sites.
IRS Retirement Plans Navigator
Retirementplans.irs.gov
This IRS website lists the benefits of setting up a retirement plan for you and your employees. Information is provided to help choose a plan that best suits your business.
Those with a retirement plan already in place can find tips on maintaining it and staying legally compliant. There’s a section for correcting mistakes, which is advisable earlier rather than later.
While you’re on the IRS retirement website, navigate to its glossary page for brief definitions of commonly used retirement plan terms.
Social Security Online
SSA.gov
Errors in reporting wages and using incorrect Social Security numbers can jeopardize retirement accounts for you and your employees.
Use the Social Security Administration website to check earnings status, estimate retirement benefits and other services. Also included are tutorials, handbooks and a means to view the status of error notices for your company.
Department of Labor Retirement Plans
DOL.gov
This website answers questions about retirement savings options for small-business employers.
At the website, under “Browse by topic,” click “Retirement Plans, Benefits & Savings.” From there you can drill down to subtopics such as:
■ Retirement savings
■ Small-business pension plan options
■ Types of retirement plans
■ Plan information
■ And more
Retirement News
Numerous reputable, independent sources offer news on retirement issues. The following two are only examples, and not meant as endorsements.
Kiplinger
Kiplinger.com/retirement
This business publisher provides not only the expected advice columns and preparation checklists, but also up-to-date modifications in retirement law and investing trends. A community function on the website allows readers to share questions and answers.
CNN Money
Money.cnn.com/retirement
This site offers more than simple news updates that could affect your retirement decisions. It also features a section called the “Ultimate guide to retirement.” The guide provides a point-by-point examination, beginning with the basics of getting started on retirement planning and stepping through other tools such as comparing retirement plans.
A particularly interesting nugget for those over age 50 is the site’s “What if I’m running out of time?” segment. It explains that “there are still a few things you can do. The key is to do them now.” Then it lists catch-up advice.
General Resources
Apart from mainstream news journals, many specialized online publications provide useful information about retirement options, ranging from overviews to targeted advice, such as how to roll over your company 401(k).
American Institute of Certified Public Accountants
360financialliteracy.org
At the site, click “Life Stages,” then “Retirement.”
This trade organization’s website provides an overview of retirement planning without playing favorites. There’s information about annuities, mutual funds, estate planning and more. You’ll find general retirement and estate planning advice, but the site doesn’t recommend any specific financial actions.
About.com retirement planning
Retireplan.about.com
This comprehensive, independent advice site has particularly helpful features such as its “Quick Start” option that steps you through five short phases of retirement planning.
The Motley Fool
Fool.com
A division of Yahoo Finance, The Motley Fool is a group of financial advisory people with a sense of humor.
Click the “Retirement Planning” tab to find a comprehensive guide that provides free answers to numerous important questions about how to prepare for your golden years.
The site also exposes myths while helping you determine the best retirement account choices. The Fool has another variation on the methodical preparation approach, an “easy-to-follow” 13 steps to retirement.
The Motley Fool columnists, who often recommend services to purchase, typically disclose ownership of stocks and other interests.
Public colleges and libraries
Many public colleges and libraries offer low-cost seminars and classes on preparing for retirement. Presentations and workshops typically provide product-independent advice that ranges from setting up a retirement program to actions you can take if you lose your nest egg.
To quickly narrow the field of choices, use Google to not only tailor your query by subject (such as “retirement planning”), but also by geography. To search for a seminar at a college near San Antonio, for example, include the phrase in quotes “near San Antonio, Texas” and the search will turn up local colleges.
Rolling Over A 401(k)?
If you need to roll over a 401(k) from a previous employer, you can get help for free.
First, a broker you use for other investment advice should willingly give you guidance at no cost.
Don’t have a broker? Turn to unaffiliated websites like Bankrate.com. Search “roll over a 401(k)” for all sorts of independent information.
You can also get answers and guidance from any number of mutual fund companies, such as Fidelity and Vanguard.
Don’t tackle a roll over until you have all the information you need. Withdrawing your 401(k) funds in a lump sum carries substantial tax liabilities, plus a 10-percent penalty if you’re younger than 59 1/2.
Financial Calculators
There are innumerable websites to hold your hand as you enter personal information into their retirement planning calculators.
The calculators can help you determine such things as:
■ How much you’ll have saved by a certain year or age
■ The amount of your anticipated living expenses after you retire
■ The adequacy of your savings to meet your retirement needs
Some calculators are rudimentary and take only a few minutes. Others can be time-consuming.
If you have an account with an investment brokerage house, it probably offers a sophisticated calculator at no cost. Many brokerages also offer free calculator use to people who aren’t clients. You just won’t enjoy amenities like the ability to save your work for later modification.
A query for “retirement calculators” using any of the major search engines will produce more results than you have time to read. Here are a few to get you started.
CNN.com
At the website click the tab “Money” then “Retirement Calculators” under the “Retirement” tab.
You’ll find several retirement calculators to help you:
■ Figure how much you need to save
■ Calculate how fast your savings will grow
■ Determine if you can retire early
■ Compare the cost of living in two cities
■ And more
Moneycentral.MSN.com
In the left-hand column under “Personal Finance,” click “Retirement.”
The site features a straightforward Retirement Planner calculator that helps determine how much you need to save and how long you need to work for comfortable retirement, incorporating an annual 3-percent inflation rate.
Tax Concerns In Retirement
Taxes can eat into a retiree’s nest egg, and they come in many forms: income taxes, property taxes, sales taxes and more. These resources can help you plan for and reduce taxes in retirement.
“Tax Guide for the Retiree”
Publication 4190 from IRS.gov
This free downloadable booklet of frequently asked questions addresses which types of income are taxable and which aren’t, how pensions are taxed and other related questions. It provides an abundance of cross-references to other IRS publications for further information.
Retirementliving.com
The Connecticut-based Retirement Living Information Center is an online advertising directory of retirement communities and senior housing. But the site also provides tax information by state, which is a nearly exhaustive tax index that parses data down to the county level in some cases.
Taxfoundation.org
At the site, enter the search term “handbook.” The search results will turn up a free, downloadable book “2010 Facts & Figures, How Does Your State Compare?” The PDF book ranks all 50 states by a variety of taxes, including income tax, property tax and sales tax.
The Tax Foundation is a nonpartisan, nonprofit research institution founded in 1937 to educate taxpayers about tax policy.
Retirement Software And Books
When free calculators aren’t enough and you want to delve into more details for planning your retirement, check out these resources.
RetirementWORKS, Inc.
Retirementworks2.com/
This product was previously sold only to financial professionals. It provides a comprehensive analysis for the retired or those nearing retirement.
The software costs $189 for a one-year license, with a $44.50-annual renewal charge. Its format asks plain-English questions about family, goals and other specifics to evaluate things like whether you need to sell your home or merely extract equity from it. The software recommends action based on your answers, but doesn’t recommend specific investments. The product was developed by Chuck Yanikoski, president of Still River Retirement Planning Software Inc., and a chartered life underwriter since 1980.
“The New Retirement: Revised and Updated: The Ultimate Guide to the Rest of Your Life”
by Jan Cullinane
Rodale Books (2007)
“Work Less, Live More: The Way to Semi-Retirement”
by Robert Clyatt
NOLO (2007)
Mark Landsbaum is a freelance writer and the author of “Streetwise Low-Cost Marketing: Savvy Strategies for Maximizing Your Marketing Dollars” (Adams Media, 2004).