FiLife Help Center: Get Your Retirement Back on Track
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Afraid to go back in the water?
Despite recovering from abysmal lows, the stock market swoon has permanently changed how we think about the safety of our retirement assets. If you don't know your current risk capacity, you can't adequately prepare for the future.
According to data from Employee Benefit Research Institute, the median balance in 401k plans fell 16.4% from 2007 to mid-June 2009. The median for families earning more than $100,000 fell 22%. And the wealthiest 401ks dropped 28%. The more you had and the longer you worked, the more you lost.
So if you’re still shoving your 401k and other retirement account statements into a desk drawer, it’s time to face the music and learn to look again. FiLife will help you get your retirement back on track with information and tools to plan for a relaxing retirement whether it’s ten or thirty years off.
1. Protect Your Retirement Plan: You’re on the right track if you’ve already set up a retirement plan. And if you haven’t? Well, it’s time to get going. Most investment professionals say that long-term investors are going to come out of this financial crisis A-OK.
Resurrect your retirement funds:
- You can face it–Rebuild your 401k
- Weatherproof your nest egg
- Rebalance your portfolio
- 5 ways to fix your 401k
Just getting started?
- Tips for setting up a retirement plan
- Choose the right mutual fund
- Outsource your 401k
- How much money should you put in stocks? How much in bonds?
2. Your Employer and Your 401k: Sure, it’s great that many employers provide their workers 401k plans. But not all of the items on your HR’s menu are good for you.
- 7 keys to a successful retirement
- 5 pitfalls of 401k plans
- Red flags in your 401k
- What if your company match is cut?
3. When should you retire? Managing your exit strategy is as important as making an investment plan.
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I already lost my entire 401(k) savings in my last job crisis. I realized now I have to take a different approach to retirement. I am already in the early 40s so it is too late to start and, in fact, I work for a small company that don’t offer 401(k) and with this crisis I have no income to save. I am trying to clean up my finances, reduce debt and start saving again in 2 years. I know I may have to delay retirement or not retire at all and get my ss, plus some small savings. I know it is sad but is the reality. Any other thoughts?
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Realistically, I think most people should be planning to continue working as long as they are physically able. In practice, many people are finding that a sedentary retirement is not much fun. Continuing to work pushes off the point when you need to start tapping retirement funds and allows you to keep saving when you are in your peak earnings years.
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Well... Most people take the wrong approach to saving. Here is a small parible to start:
There once was a minor English Poet named Richardson. His father came to london to work & ran a small shop. Whenever he had a few extra coins, he would stash them in a chest in the back room of his shop. When he was too old to run the shop, he retired to the country and ... whenever he needed money, he resorted to the chest.
Your retirement savings IS THAT CHEST! !!!
So, what to do? Five basic things:
1) If you have a company match on a 401k, MATCH IT!
2) If you can do the max, then MAX IT!
3) Do a ROTH IRA also TO THE MAX!
4) Become a THRIFTY SCOT & squirrel away as much cash as you can.
DO THIS FOR 20 YEARS! IT CAN BE DONE, I KNOW BECAUSE I DID IT! ...
Then ... employment hick-up ...here is your safety net. ... In order:
1) Severance payments ...
2) Unemployment Insurance checks (you paid in , now take it out) ...
3) Cash savings ...
4) Principal from ROTH IRA ...
5) 401K distributions ...
Remember, your goal is that small chest of gold coins that Richardson's father had! 10 Years & you can stop funding as the overall growth at 6% (conservatively) start to exceed your savings contributions. ... but 20 years is best.
START NOW!
David Ecale
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Some further thoughts:
Ms. Ormand has recently been criticized for saying that having 6 months of ready cash available for emergencies wasn't enough & that folks should have at least 10 months! Well, look at my list above & you will see 10+ years of available savings.
Suzie was wrong & her critics were complete IDIOTS. 10 months is not nearly enough. You need 10+ years! Suzie, be *more* conservative & keep up the good work!
PS. Remember Scrooge McDuck (Donald's uncle)? He wanted 100 feet of money in his bank vault. An enviable goal. But, he was just a bit over obsessed. Just remember to ensure that you still have time & money to enjoy life.
(Note: there are zillions of things to do that cost very little money. Ex. Tonight, 1:00 AM ~ 5:00 AM ... Persiad Metior Shower! I'll be out there watching the show, will you?)
David Ecale
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