Search
Related Links

 

 

Informative Articles

Alternative Retirement Income Options in 2005
A very wise and good friend of mine told me once: "One good investment is worth a 'lifetime' of labor." After reading this article, the wisdom behind this statement will be clear to you. The big question we should all be asking ourselves is "how...

Filling the Data Leaks - the Importance of Digital Asset Protection
The flow of electronic data permeates the fibers of every business. Try to make a transaction without accessing the binary realm - bets are that even the cash register used to ring your favorite morning beverage is accessing electronic data....

Good First Impressions Count when You Mean Business
First impressions can mean the difference between closing the deal of a lifetime or getting shot down in flames. When meeting with a client or a customer for the first time, or interviewing with your prospective employer, you have just a few...

Hey! That was my idea!... Corporate Games for a Rainy Day
People occasionally come to me and ask about situations with their jobs or within their companies. The primary question I hear is "What do I do if...?" Usually, they got caught up in a turf war or game and have no idea what to do next. Most of my...

What if Peter Drucker were your CEO
Now and again, I find it healthy for my business thinking to exercise an imponderable. I get to consider problems and opportunities in an entirely different manner. It's an exercise that stretches and challenges my present business logic and forces...

 
Alternative Retirement Income Options in 2005

A very wise and good friend of mine told me once: "One good investment is worth a 'lifetime' of labor." After reading this article, the wisdom behind this statement will be clear to you.

The big question we should all be asking ourselves is "how much do we need to save to be able to support ourselves?". We cant estimate that unless we first make some basic assumptions:

A zero-inflation is unrealistic. It's safe to assume however about 2% inflation. If it is higher than that, it is bad for the economy of the country., The Bank of Canada is is mandated to keep inflation under control, using interest rates. If the average rate of inflation for the next 50 years is 2%, then a dollar 50 years from now will be worth roughly (1 - 0.02)^50 = 36 cents. So if save one million dollars today, these retirement dollars will be worth about $360,000. That's still enough to give you an annual income of $36,000 -- well above the poverty level.

Compound interest is powerful magic. In 50 years, money doubles roughly 7 times, which means that a single $1000.00
investment will grow to roughly $128000.00. Other than the work you did in the first year to save the money, you haven't had to do anything for the next 50 years.

That's roughly one-tenth of the million dollars most people would like to have sqirreled away for retirement. If you also want to have a million dollars, you'll need to invest about ten times this amount: say, $1000 a year for the next 10 years. Or roughly save $100 a month. Not too difficult is it?

If you can save more, sooner and earn more longer; this is better. Hence the name of my website http://www.BetterRetirementSooner.com.

Lets not forget about the federal and state taxes we have to pay every year. We dont have many tax breaks anymore, but the RRSP / 401(k) is there for us to use. Your RRSP / 401(k) is your friend because the money that you put into an RRSP / 401(k) is not taxed until you draw from the plan.

If you can make a 10% return on your money inside your RRSP, you get to keep the entire 10% and the compounded untaxed growth dollars until you retire and start making withdrawals. If this same 10% was earned outside your RRSP/401(k), and your yearly marginal tax rate is roughly 45%, you only get to keep about 5.5 percent of that. So you can reinvest less,and therefore your money over the years will grows slower.

These days...How do you make a double-digit return on your money? GICs are a low risk investment. And respectively, GICS only pay upto 5%. At 5%, it will take 14 years for your money to double. A $10000.000 GIC will grow to about $115,000 over 50 years. If you managed to save $300 each month instead of $100, you could get up to $300,000 or $400,000, but you should also think about taking on a little more risk than just GICs. What do you do if you cant wait 50 years for your retirement nest-egg?

According to Statistics Canada the stock market has maintained an average return of 9% annually. If you're not a seasoned investor, you may not be comfortable with the idea of putting your money into the stock market. Trust me, if you do not know what you are doing, leave the stockmarket to the professionals because you can lose your shirt.

Don't try to time the markets yourself. There are to many variables and you don't have the information required fast enough to make the timely decisions necessary to be profitable. An inexperienced Day Trader will fsail as miserably as an inexperienced gambler! The odds are very much infavour of the house!

Large mutual funds are a good investment vehicle. You can regularly invest a small amount every month in a mutual fund
instead of stocks, realize better growth than if you invested in a stock or two yourself. Mutual funds reduce the risk of losing all your money because they are managed daily by professional money market analysts. Politics and the economy are very difficult to predict. Merely not being able to sell in the first few hours of a crisis can be very very costly to you and your retirement fund. A Mutual Fund manager will be ready and better prepared to properly deal with a major shift in the market so we dont all lose our shirts.

You must Plan and budget to build Savings. If your goals and your expenses are out of balance -- there's no way you can save enough to meet your goals -- make a first pass through your expenses, seeing where you can trim them. Even consider lowering your goals a little.

It is usually much easier to save $100.00, than it is to earn an extra $200.00 because of the taxes payable. Roughly $100 in tax must be paid on that extra $200.00 you earn based on your middle class tax bracket. So planning yor retirement at a later stage in your life, starts with a change in priorities. Begin spending less rather than trying to work overtime to earn more. You may have to do without some of those "nice


to have items" that you are dreaming of, or you may end up having to eat cat food in your later years if you don't!

Once you've got some savings accumulated, keep three months worth in a bank account for short term emergencies. Liquid assets are the easiest to get your hands on when yo need them. Dont worry about making big interest on this money. When you have your emergency money saved, we can talk about savings-building options, to meet our goals. Once you have your short term nest egg squirrelled away, you can begin regularly contributing to long term investments for retirement.

Can You retire at 65? Because of modern medicine, our life expectancy is longer. Much longer now in 2005 than it was in 1927. Whereas, we used to live until an average age of 61, we now live to an average age of 78! Do you know? The chances are that if you live to be 65, there is a 25% chance that you will live well into your 90's today.

There is a big problem with this because of our life expectancy, we need live longer on our retirement savings, much longer! So it is harder to retire comfortably today! This means that if you did not start saving significantly when you were young, most likely you will NOT have enough money to live well, for very long, after you are retired, unless you win the lottery. But don't panic! The
situtation is still not that desperate.

In fact, Financial advisors are now telling older people not to retire at retirement age, but instead, keep working. Work, even part time, as long as you can after the official retirement age. This helps to build furthur savings or at least stretch the savings you did have so you can live well in retirement longer and wealthier. The bottom line is, we all need a lot more savings and even so, one can no longer retire well on savings alone - at least not for 20-30 years of retirement - thats for sure!

What if you dont feel like working into your 70's? What if Mopping floors at Walmart and flipping burgers for minimum wage at MacDonalds, until your 70, is not for you? This is the million dollar question!

Remember my friends statement: "One good investment is worth a 'lifetime' of labor."? If you have an investment that is
bringing-in income, month after month; monthy income for the rest of your life , then you have succeed in securing a wealthy retirement for yourself. You can retire and not worry about running out of savings! Cool. What kind of investment are we talking about? We know real-estate rental properties are such a means because they are not a lot of work adn they bring in money month after month. This is not the only way though.

We are lucky today. We have some really good options for earning money now. In fact, because of the internet, we have the entire world as our marketplace now. Via the internet we can all have a home based-business and a customer base too! All we need is an internet business that we can tend to a few hours a day...a business that will generate monthly income for us 24/7/365 days a year, for the rest of our life.

Here are some Recent Internet facts and Figures:

1. By 2007 there will be 1.1 billion Internet users worldwide. - IDC, 2004

2. Worldwide broadband subscribers exceeded 150 million in 2004. - Point Topic, 2004

3. Over 40% of all Americans have made a purchase online. - NDP Group, 2004

4. Over 75% of online consumers do not care whether an online store is run by a large or small company. - TNS, 2004

5. $1.6 trillion was made via e-commerce in 2003; $7.1 trillion is expected in 2007. - Source: IDC, 2004

6. A recent UK study indicated that 82% of Internet users go online to research products and services. - UK Stats Office 2004

7. More than 60 million Europeans now shop online, an increase of 50% since 2003. - Forrester, December 2004

8. US online retail sales will more than double over the next six years, reaching $316 billion by 2010. - Forrester, Aug 2004

9. 61% of small and mid-sized enterprises believe the Internet is a significant advertising medium.-The Kelsey Group, Nov 2004

10. In 2004, paid search advertising grew by 51% to $3.6 billion in the US alone. - eMarketer 2004

The internet has big potential and opportunity that we did no have back in 1927. It should not be overlooked or under-estimated!

If you can save more, sooner and earn more longer; you will have secured yourself a fabulous retirement! Hence the name of my website http://www.BetterRetirementSooner.com

Happy Retirement!


About the Author

http://www.betterretirementsooner.com
email: jtmcnaught@detailsinstantly.com
Re-print Rights: You may use this article in it's entirety, all that I ask is that you contact me with an email here: ReprintRights@BetterRetirmentSooner.com to let me know. Thank You!!
------------------------------------------

 

 

 

Content Menu
  • 10 reasons to start a home business

  • 10 things you will like about a home based business

  • 18 caveats on how not to change

  • 5 common free agent myths

  • achievers interview with david showalter

  • adam smith the real life grinch who stole christmas and won

  • advance your nursing career work as an independent nurse contractor

  • all aboardeveryone going global

  • alternative retirement income options in 2005

  • and you can quote me

  • an honest look at your business

  • audio marketing comes of age educate first and sales will follow

  • avoid the three biggest financial pitfalls

  • a hitchhikers guide to the internet

  • balancing your priorities with your search for at home work

  • basics about writing a business plan

  • beginners guide to blogging

  • being other focused

  • benefits of using freelance consultants trainers for your projects

  • ben franklin didnt quite get it right

  • ben franklin didn t quite get it right

  • beyond budgeting a new approach to annual budgets

  • be a pest make money

  • biweekly mortgage

  • blogging for business

  • blogosphere networking

  • book summary nice girls dont get the corner office 101

  • bridging the gap dont forget your core customers

  • bridging the gap don t forget your core customers

  • building better teams through executive coaching

  • business like image

  • business planning myopia

  • business plan basics

  • can nurses be entrepreneurs

  • career management in a jobless economy

  • change or reinforce

  • christian business opportunities bring relief to your daily routine

  • coaching generation x

  • computer business opportunity provide huge profit potential

  • could a roth ira be better than a 401 k

  • creative strategies for brainstorming for business success

  • crm

  • dance on your brain tonight for a better tomorrow

  • decisions how close are you to a 100 strike rate

  • dej… vu all over again and again

  • dont fall for email scams

  • downtown san diego condo market is ideal for investors

  • do you have the global entrepreneurial spirit

  • entrepreneur runs list sales company from office in his home

  • eq at the office

  • executive coaching and the american president

  • factors to make or break your home business and home business residual income streams that work

  • filling the data leaks the importance of digital asset protection

  • finding the purpose in online networking groups

  • five questions to ask yourself before launching a new business

  • five questions to ask yourself before starting a new business

  • forex trading

  • freelancers your job away from job

  • fun with credit cards

  • going against the conventional investment wisdom

  • going mobile part 1 wireless phone service for your home business

  • going mobile part 2 how to get in on the wireless revolution without credit checks or 2 year commitments

  • going mobile part 3 finding the perfect wireless phone

  • good first impressions count when you mean business

  • good news in our brave new world

  • google slavery old habits die hard

  • hey that was my idea corporate games for a rainy day

  • home business

  • home business solutions 60 minute money

  • how corporations can use real estate to access untapped capital

  • how to get a visa mastercard with no credit check

  • how to get that promotion

  • how to increase your chance of promotion at work

  • how to make money working from home

  • how to share your home office with a sick child

  • how to use an hr consultant

  • how to use emotion in stock trading

  • how your new years eve bash can grow your career

  • important considerations when setting up a profitable home business and a handful of work from home income streams that are quick simple to set up

  • independent rn contractors are taking the nursing profession

  • index

  • innovative entrepreneur ideas

  • investors look for the real estate sweet spots

  • is it boys vs girls on the internet

  • is there any money left in currency trading

  • is the medicalcare system still a disaster in us

  • its high time for lifetime savings accounts

  • know your career goals

  • leadership by persuasion four steps to success

  • learn the art of dynamic leadership

  • life is short love what you do do what you love

  • looking for a change

  • madeline hill senior community pioneer

  • maintaining your motivation

  • make or break home business tips and home based residual incomes that work

  • make your career offshore proof

  • managing project risks part 1 dont be snared by these 6 common traps

  • managing the human resource project

  • marketing your home business in just 30 minutes a week

  • mlm success training why some people become wealthy in network marketing and others dont

  • my identity crisis

  • narcissism in the boardroom

  • narcissism in the boardroom part ii

  • new mobile applications shock market part 1 of 2

  • new years resolutions for your home business

  • new year s resolutions for your home business

  • nine sure fire ways to boost your career

  • no plan no cash back to square one

  • office politics

  • offshore investing leveraging overseas trading

  • oil demand and the effects on the global stock market

  • organizational political savvy

  • paid surveys and focus groups maximize your online income with these tips

  • political selling 101

  • preparing for change during international expansion

  • present like a pro ten ways to wow your audience

  • print and modern thought

  • problogging making money from blogs

  • professional relationship blueprints

  • profiles of the powerful advertising exec steve grasse

  • qualities of a winner

  • reloading the matrix with jada mrs smith that is

  • remember its the world wide web

  • retire debt free

  • rocket investing stock market research advice

  • roi on the 8 step coaching model

  • rotator

  • sales force of the future its not about selling

  • self publishing at the speed of thought

  • sell you with your small talk yes you can

  • several red flags for spotting a phony or scam

  • six of one half a dozen of the other

  • speak with es part 1

  • speak with e s part 1

  • sports betting as an alternative investment

  • succeed the natural way

  • succession planning not on my watch

  • success in the import export business

  • surviving corporate politics

  • surviving corporate politics part 2 keeping up appearances

  • surviving corporate politics part 3

  • talk the talk

  • tax reform my way

  • ten fatal flaws frequently found from the podium

  • theodore roosevelt the original rough rider

  • the advantages of having a home business

  • the benefits of using freelance consultants trainers for your next project

  • the biggest oil opportunity in the world and how you can profit from it

  • the business meeting

  • the fabric of economic trust

  • the fairness of office politics integrity and political motivation

  • the macedonian lottery

  • the musketeer approach

  • the perfect project manager

  • the real story of the little engine that could

  • the sickly state of public hospitals

  • the top 10 brainstorming techniques for business success

  • the top 10 strategies for moving into action and for getting bottom line results

  • the ultimate career builder

  • the wages of science

  • the wages of science part ii

  • think outside the box home business ideas

  • three common deadly mistakes made in job interviews

  • throw out the lifeline

  • time to think outside the box

  • tired of jumping jobs

  • top 10 ways to handle problem co workers

  • top ten brainstorming techniques for business success

  • to get free publicity think local

  • to grow out of unemployment

  • triple the response of your ales letters by harnessing the mysterious power of mind reading

  • trust in a digital economy

  • uncovering soul in the workplace

  • wearing your politics on your sleeve

  • what if peter drucker were your ceo

  • what shes got five essential traits of web wonder women

  • what work at home moms can learn by watching the apprentice

  • when politics prevent innovation

  • when the levee breaks a selfish look at the financial effects of katrina and how many more fuel increases we can take

  • whose goals are they

  • why demo fx account performance is often better than real account performance

  • why dont they just get it done 7 performance tactics for ceos

  • why is it more profitable for an indian to take up work at home business

  • why the internet is an entrepreneurs dream

  • why would anyone hold a bad meeting

  • why would anyone want to hold a bad meeting

  • winning the credit game

  • work from home office policies

  • worse than tsunami trade protectionism hurts third world citizens

  • youre the boss