Life seems so long when you’re young, And then one day you actually start thinking about retirement — and it’s not all that far off. How did you get there? Seems impossible. And yet there you are. Worried you haven’t done enough to prepare.

Although early on you somehow assume all this will just happen, you want to have enough money set aside so you actually can retire. Even if “retire” for you might include doing things you truly love that also earns money. And for most of us that takes some solid planning early on.

But thinking about retirement is BORING!

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A few years ago, someone I know got the shock of their life. Their Social Security was suddenly over $300 less than usual. Since they often turn to me with finance questions, they were understandably upset when they called me. Turns out, their monthly Medicare cost (the premium) went WAY up.

Why did that happen? Well, the reason for this unexpected outcome seemed like a wonderful thing at the time. As a fellow blogger, they sold a website they had owned for many years and got a windfall lump sum payment.

But while they were prepared for the hit to their income taxes, no one had ever told them [Read more…]

It can be really scary to see stock market averages taking a roller coaster ride just as you’re about to retire. So I’m adding this very short post to help bring you comfort.

Not that anyone can guarantee anything or make the numbers do what you and most of us would wish for. And not that you are wrong to keep an eye on the market and how it affects your retirement investments. But there’s a little secret that may help:

You don’t do your retirement all at once!

So what the stock market averages are showing today, is not the for ever after story. And that’s important to keep in mind when thinking  about your future.

Of course, there may come a time that you declare the actual date when you are officially retired. And so, if the market is down on that date, you might be tempted to freak out, seeing how much less there is for you to live off of today than just a few weeks ago.

But what goes down can go up. And stock market averages have historically always gone up. Even if it takes time. (See link below for more info and a comforting chart you can turn to as often as needed during the scariest times.)

So you don’t need the money all at once.

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Judy H. wrote to ask me about her Medicare coverage. She says she’s confused by all the information and choices out there. She’s not alone! She’s looking at Medicare Advantage vs Medigap (Medicare Supplement).  Or should she return to Original Medicare and pay the 20% on her own?

While I’m not a Medicare expert, I do understand some of the basics. I also did some online snooping to hopefully help guide her to finding an answer that’s right for her. Here is her question and my response. Your situation may be different, but hopefully this can help you decide too:

Decision: Medicare vs Advantage vs Medigap

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If you’re self-employed, you may think that a regular IRA plan is your only retirement savings option. But there’s something else you may not even know exists: the SEP IRA (Simplified Employee Pension) Plan. And it offers some real advantages to freelancers.

In order to qualify for an individual SEP IRA, you must be self-employed in some way. That could mean owning your own business (with real live employees). But the good news is that it also applies to those of us who earn a living as hard-working freelancers / sole proprietors.

What’s special about a SEP IRA plan?

While the SEP plan offers a lot of the same features of a traditional IRA, it also comes with some nice advantages:

Some of the similarities

• Easy to set up with the help of your banker or broker
• Tax deductible
• Your money grows tax-deferred until needed
• Withdrawals before 59 1/2 taxed as regular income and subject to 10% penalty for early withdrawal
• Withdrawals after 59 1/2 are taxed at your then current rate, but no withdrawal penalty
• Required minimum distributions by age 70 1/2

Some of the key advantages of a SEP

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Are you thinking about your retirement accounts? If so, you may be wondering what are the basic differences between a Roth IRA vs a traditional IRA.

Is one type of account better than the other? How does each affect your taxes, now and in the future? And how will they affect the amount of money you’ll actually get to use when you retire?

What’s a traditional IRA?

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Thinking about retiring, but afraid to retire yet? In a recent post, I talked about reasons why people (bosses) won’t retire. One of those reasons was fear, something I think most people feel (at least to some degree) as the time approaches.

It’s not surprising that the mere thought of retirement is scary. Once you get past visions of pina coladas on the beach and lounging in a hammock as gentle breezes caress you, there is a lot of vast unknown stretching in front of you. And bills to be paid. Can you make it work for you?

Is retirement now right for you?

First, let me say that I have no idea whether YOU should retire. Each person is different. For some it’s the absolute right decision, although the question of when to retire is key. And for some, who love their work and are happy staying right where they are, retirement age is just a number.

But for those people who are afraid to retire or just keep putting it off despite feeling the tug, it’s because there are far more important questions getting in the way. So let’s look at a few of them, one by one.

Change is hard.

And so is deciding to do it anyway.

Who am I without my job?

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The guy who sold me my hot lottery ticket for a $252 Mega Millions pot asked if I’ll quit my job if I win the lottery. But before I could answer, the guy standing next to me said “Oh no! Never quit your job! A job keeps you from spending too much time thinking about your everyday problems.”

Such an interesting thing to say. And a different perspective from the comments I get on this blog. For most readers, jobs seem to be a major source of their everyday problems. Ideally, giving that up is the stuff lottery dreams are made of!

Is not working really a great thing?

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For some of you, retirement probably seems a long way off. For others, maybe it’s right around the corner. So, when you think about how much money you need to retire, what should you consider? And is there something you should do right now to start planning for your future?

While these are indeed important questions, there isn’t really a one-size-fits-all answer. Our different work histories, preferred lifestyles, and what we consider basic needs make retirement planning even more complicated.

A few retirement money questions

“I’m self-employed. What are my saving options?”

“How much of my income should I put into a retirement plan?”

“Should I max out the employer match?”

“Where should I invest my retirement money?”

And also:

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Ah! Retirement dreams. Most of us look forward to that wondrous day we can finally tell our boss adios … and sleep until noon. No more office BS. No more worrying about who’s coming after your job — or will there even be a job. No more doing all the work while others take the credit. In fact, no more work at all. Your dream is now a reality!

But then, for far too many, come the harsh realities. Not enough money. No sense of purpose. Not feeling needed. Day after day of nothingness looking for something — including extra money — to fill them with. Looking for something to make you feel vital again.

That’s NOT going to be me!

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