Make your account retirement Last - three steps to insure retirement security

Ten to fifteen years have been financially very good for most of us. With a little effort and a lot of tail wind market, our retirement accounts have increased at an incredible pace. With annual inventory returns as high as 20% or more, most of us who have private retirement investment accounts (savings, IRA, etc) have been feeling pretty good. In most areas of real estate U.S. values spiraled upwards and upwards. The combination makes good number of us owned houses and stock/bond paper millionaire investments. Then along comes 2008. Our values holding gross investment decreased by 35-40% and our position once fat equity in property passed quickly. Your retirement account no longer look so secure.

Here are three suggestions for making your nest egg last as long as you do so.

1 Take a legacy look at your present cash flow

It is best to do this on a monthly basis, as most of the expenditure and revenue are easily calculated on this basis. A financial software package is an excellent tool to help you to structure this part.

List your monthly income cash in detail by source, i.e. social security pensions, income from rental, etc. You can already be drawing a monthly fixed amount of your retirement accounts. If you're not, here is the place to decide what happens this amount and enter it as income. A word of warning here: be sure that you understand the rules regarding the IRA withdrawals and savings type retirement accounts.You can visit the Web of IRS for a prudent review.There, you'll find information about the rate required by IRS .the minimum withdrawal is you decide the maximum you want to remove.Most experts recommend that limit you the maximum annual amount of more than 4% of the outstanding balance. This is a good starting point. Use the greater of the two numbers at the moment, you can refine it later.

Then list your monthly expenses of trésorerie.Incluez everything you purchase as well as all réguliers.Cela payments will take some thought; it is easy to forget the little things like a casual meal or film, repairs of car, etc.Include some "unforeseen" as subscription, co-pays and other medical items drug expenses. At this point, it is probably easiest to expenditure which does not occur all months on average. If you do not include insurance or taxes in your monthly mortgage costs, make sure that they are included here.

If you use a financial software package, you can enter the above data in budgeting program part, and you now have a preliminary view of your monthly cash flow.

2. Develop a realistic cash flow budget monthly

If the preliminary budget than you came with prior step given a positive cash flow, you start from a good place.Go over your budget once, spending more accurate raffinage.Être, monthly cash detailing monthly expenditure than you average in step 1. You can create in a "canceled" account to earn cash for extraordinary items as other expenditure and auto repairs large which do not occur every month. Emergencies will occur always to less practical time, provide for them in your budgeting process.

3 Act now for transactions with negative cash flow

Review your monthly budget; research spending you can reduce or eliminate.Can you reduce large cable TV Bill by switching to the basic service, or remove that membership in the local gym?Perhaps shopping discount from Macy stores, etc. in unpleasant that it can be, you'll need to eliminate or reduce certain expenditure, including invoices which are not paid immediately.You will be surprised by the lenders how flexible can be if they know you have a good faith effort to pay, so get on the phone and negotiate a payment plan that you can live with.

If you have reduced the discretionary spending of the OS and always have a negative cash flow, you need to watch of revenu.Si difference is small, perhaps a slight increase in the amount of your retirement account withdrawal is in order.Especially if you think that the problem is in the short term (less than 3-5years).Be very careful here; more than 10% throughput is very likely to deplete your account retirement in 7 to 10 years.If you are not in a position to do this, it is time that you look more painful alternatives.

Perhaps a part-time job would be to make the difference.If you have a real estate or other tangible property, perhaps now is the time to think about selling.Consider "effective" in a cheaper House, or same rental during a certain temps.Le market is now depressed, but there are still buyers there .the price of this little house or condo has undergone the same decrease value yours a.Une "reverse mortgage" would perhaps good for vous.Toutefois I would not recommend that prior to obtaining professional advice.

If you can't work, to find a good CPA, award-winning firm financière.Ils planning services can give you a well rounded view of your options.Il is probably too late for a conventional financial planner help, in particular the planners "free" heavy rely on you sell something to earn a living, and the last thing you need now is to buy something again.

At about of the author: Burt Widener writes widely on issues relating to the website retraite.Son http://www.allthingsretired.com offers a range of articles and other resources from retirees find answers to common questions about the site retraite.Le is updated frequently to keep updated the contenu.Vous can contact Burt at: webmaster@allthingsretired.com.

Financial planning does not end the retirement

Financial planning is as relevant prior to and during retirement. Some aspects of financial planning may be modulated by the context of retirement however. This continuous need planning arises from the need to plan for 30 years of retirement. I've seen people comment that they either don't want or would not live as long. Unless you know your departure time, you must plan for thirty years. The uncertainty is what makes the necessary planning and difficult. It would have been easier to plan if we knew exactly how long the period of retirement would be. Even if you cannot properly plan, there may be some damage control that you can implement in retirement.

The first step for a financially secure retirement is to ensure that you have adequate health coverage. The need for health and critical illness coverage is particularly acute during retirement. Unfortunately, many medical plans provide coverage until a specific age. This age would generally around seventy, based on the fact that above of this age, the risk of disease would be much higher. Since it is logical to have coverage when you most need, a plan that provides coverage of life would be ideal. Fortunately, some insurers offer these plans. Another thing incredible on some of these plans is that they are affordable. I know a medical plan that offers a premium level of life.With a coverage in this area in particular, would help you maximize your savings by reducing the risks of liquidité.Cela facilitate investment in the high-back savings vehicles.

Your life insurance plan should be reviewed to retirement. Although some retirees may still have financial dependencies, a majority would need less. Life in this period would be instrumental in estate planning. In some cases, life does provide nor any significant income protection.Plans universal and whole life insurance are most appropriate successorale.La planning better idea isn't necessarily to deliver your life plans, once the role of income protection became redundant. You must make sure that your beneficiaries do not face additional charges with the estate taxes and legal fees created by internship.

Economies remain very critical during your retirement. Especially if you were not sufficiently diligent before retirement, you'll find that you need to continue saving considerably during your retirement. Some retirees have yet to find a job in this period. A high percentage of retirees receive lump sum retirement. You generally not spend more than 5% of the lump sum during the first year. If you really need to make these renovations, leave the scope of the renovation that inspiration. Always distinguish between needs and desires correctly.Also, try to avoid any investment in the portfolio remains essential to life stage thus conservateur.Diversification savings plan it. This is a myth that retirees must be ultra-conservative when you invest. Savings vehicles same conservator should provide competitive interest rates.

Life is happy and known achievement.Retirement should be a period where retirees enjoy more freedom and control in your life.They should ensure that they are involved in the family and community.Retirees should have learned enough over the years continued positive.Il contribution is would tonic to make interesting step a retirement positive.La contribution is not all about finances.Toutefois, taking care of finances permanently prevent additional concern and stress.retraités deserve do step to worry about losing their life savings.

Darrell Victor is a financial services sales professional who specializes in planning for retirement and benefits group.
Contact: darrell_victor_service@hotmail.com

Personal financial planning - planning for retirement

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Advances in medical science have resulted in people living longer. This increase in life expectancy makes retirement planning even more crucial.Furthermore, with better affluence, there is also an increase in demand for a better lifestyle during retirement.

The objective of retirement planning varied depending on circumstances, and normally includes:

-Maintaining a self sufficient pre-retirement standard of living
-Coping with increasing health care cost
-Protection of property and against personal liability
-Providing for dependents
-Estate planning

The process for retirement planning:

Step 1: Overcome Obstacles
Step 2: Determine Goals
Step 3: Measurement
Step 4: Reference Point
Step 5: Overall Plan

Overcoming The Road Blocks

There is only a limited period of accumulation and a continuous period of consumption.The first step is to overcome the many obstacles hindering retirement planning.These include spending beyond means, unprepared for unexpected expenses (like repairs), inadequate insurance (like property loss, medical bills), tapping into retirement funds for other purposes (like upgrading house, holidays), etc.

(1) Aim to save at least 10% of income and gradually increase it to 20% when it is nearer to retirement.This accumulates towards retirement funds and helps to accustom to a retirement lifestyle within the financial means.

(2) Establish an emergency fund of at least 6 months of income that is separate from the retirement plan fund.The will be used for risk retention, covering for unexpected expenses without drawing on the retirement funds.

(3) Have sufficient insurance.A major crisis will be a huge drain on all of the savings, it is best to transfer this risk by being adequately covered.

(4) Saving for other specific purposes should be saved for separately.It will derail the retirement plans due to the shortfall.

Determine Retirement Goals

Depending on the circumstances, the goals will vary from individual to individual.Some common areas to consider:

(1) Lifestyle.
-Housing: Sami house, mortgage ˜getting, upgrade, downgrade, migrate.
-Leisure: Pursuit of hobbies like golf, yoga, charity or religious activities.
-Travel: Overseas holidays, car ownership.

(2) The age of retirement.
-The last day to have to work or the last day to want to work.
-Early retirement due to from corporate, health, care giving concerns, etc.

(3) Health.
-Coping with increasing health care cost.
-Health screening.
-Dental care.

(4) Estate planning.
-Passing on the wealth eventually.

(5) Caring for dependents.
-Physical gold medical care for elderly parents.
-Providing for children not yet independent gold siblings requiring aid.

Measuring The Finance Required

From the above goals, the required amount needs to be quantified.

(1) Lifestyle and dependent expenses.An estimate is about 60% of pre-retirement income.
(2) Project the retirement age.The statutory retirement age is 62 years old.
(3) Health expenses.Total up the amount of insurance premiums and health screening cost.

In addition, some assumptions need to be made:

(1) Inflation rate.The average historical inflation rate in Singapore is about 1.5%.
(2) Investment returns.Depending on the choice of investment, this varied significantly.
(3) Life expectancy.A reference will be the natural death ages of great-grandparents, grandparents or parents. The average age is 78 for males and 82 for females, and this average is increasing.

Reference Point

The current position needs to be analyzed so as to determine the strategies to achieve the goals.

(1) Current age.Number of years to accumulate funds before retirement.
(2) Current health.Deteriorating health will be more of an immediate concern.
(3) Financial position.Amount of savings, assets, liabilities, income, current expenses.
(4) Existing plans.CPF, SRS, insurance and investments already in place.

Overall Plan

Depending on which stage on the retirement plan, the approach to arrête will be different.

(1) Accumulation Period
The period when one starts to save for retirement until about 10 years prior to retirement.The focus will be on the shortfall of funds required for retirement form the current reference point.The strategy will be hand on saving to invest.Investment will be covered in a later topic.

(2) Transition Period
The period about 10 years just prior to retirement.As retirement draws nearer, the goals become clearer.It is important to review if the desired lifestyle can be achieved with the funds or if more savings is required.The earlier will also need to be repositioned into less risky investments gradually accumulated funds.

(3) Retirement Period
This continuous throughout since retirement.The funds will be used to generate current income.Some considerations during this period:
-Purchase of tenements (CPF Life)
To provide a guaranteed income for life.Recommended to purchase to cover for the minimum monthly living expenses required.
-Maximize use of property
Reverse mortgage, downgrading, renting out spare rooms can be considered for additional income.
-Work
To perhaps work on a part time basis, as a consultant or run a business.

As with all plans, it will need to be continuously reviewed when personal circumstances change (like a newborn or divorce), external market conditions affecting investments, or introduction of new policies (like Exchange of statutory retirement age or CPF rules).

Use of the Present Value and Future Value calculations covered earlier will need to be used to give a better estimate of the amount needed.A simple example:

John Doe in good health, age 40, intends to withdraw at age 60, current income is $ 60,000 annually.

Package: Projected expenses at retirement is 60% of pre-retirement income, income will increase 3% annually, is 2% inflation, investment returns is 7%, life span will be till age 80, will carry on to stay at current residence.CPF contributions mainly used for housing and repayment of loan and has not started any retirement plans.

PV = 60,000, 1/Y = 3%, N = 60 / 40 = 20; FV = 108,367.
Therefore, pre-retirement income needed per year = 60% of FV = $ 65,020

PMT = 65,020, 1/Y = 7%-2% = 5%, N = 80-60 = 20; PV = $ 810,293
Total retirement fund needed at point of retirement = $ 810,293

FV = 810,293, 1/Y = 7%, N = 60 / 40 = 20; PMT = 19,765
Amount needed to save per year is $ 19,765 Gold $ 1,647 per month.

Aaron Lau is an independent financial adviser in Singapore.He shares his awareness of good personal financial planning in areas of:
1. Financial Goals
2 Risk Management
3 Insurance
4 Retirement Planning
5 Tax Planning
6 Estate Planning
7 Investment
8 Reviewing
Visit http://anifaview.blogspot.com/2010/02/personal-financial-planning.html

He also shares insights into how to improve your physical and financial health and wealth.
Visit http://anifaview.blogspot.com/ to find out more and receive my free ebook "A Practical Guide To Financial Success" at no. loads.

Calculator financial - Fears retirement of losing my money.

Will I have enough money to last the rest of my life? The number a fear to retirees is if they are going to have enough money to retire. Ironically, this fear exists independently of the actual value. Indeed, the active report of $ 10 million people are more concerned with having enough money than people who have 500 thousand dollars of assets. In fact, it is only when people report having more than 100 million dollars do they relax on their financial future.

How could be? The easy answer is what American of all income levels spend more that they do.As your wealth increase so does your expectations of your level life minimum.Quel's interest to have 10 million dollars in the Bank, you ask, if you cannot take advantage?

To answer the question where not, you'll have enough money to last the rest of your life, you discover what is fear. Is based on an assessment of your financial situation of fear or a psychological problem?

To understand the fear of not having enough money, you should consider two things. The first is to evaluate your actual financial situation. The second is to explore the fear of psychological problems.

The best way to minimize your fear about not having enough money for the rest of your life last is to spend less than you make.If you are removed and investment income, are you able to live only interest? (Financial advisors recommend that does no more than five percent of you portfolio each année.Il is assumed that the bad and the good years will be in balance.)(This withdrawal rate, you will have enough to last in your life.) Do you need to tap into the principle, on a regular basis? ideally, you want to leave the quiet principle and grow each year.

If you go into debt to pay for the current way of life, you have some legitimate concerns. If you are not willing or cannot reduce your expenses, explore ways, you can increase your income by working or start-up of an entreprise.Vous can see the work fills time that you would otherwise have used spending money.

Compile a budget so you know how comes in every month and how much goes. The most important aspect of the budget is to explore your fixed and discretionary expenses.Fixed expenses are what you spend each month on housing loans, and while most everything else circulation.La is discretionary.

Browse your discrétionnaires.Regardez spend how much you eat purchases off and unnecessary.Many people, especially women, store when they are bored. If you are bored and purchases to occupy your time, explore other activities which would commit your time. You could volunteer for Australian store. (spending money, your step.)

Many financial concerns are based to pay for the health care and other expenses in the future. Based on your income, you can purchase additional medical and long-term insurance.It is important to find a financial professional who can advise you on your financial situation current and projected and how best to plan your future as you age.

You've done everything you can prepare your future by seeking professional advice and understand your financial situation.You have reduced spending, and increase your income and you still have concerns with money, you may want to Explorer from a psychological perspective.Psychological problems of money mean that money helps resolve emotional needs.Examine your beliefs about money and possessions.Maintain a life of certain to impress your friends or family you concerned?Do you think you need to give your kids money when they ask for it? do you you need you can buy what you want, when you want to have a sense of self-worth?Do you use money as a means of manipulating your other concerns significant?

Another challenge of adult retirees is learning to live without earning money while working.Remember when you have children and asked your parents you buy a toy.They replied, "If you want the yo-yo, you will save money to buy."A large part of the identity of Americans has just being the employees and the fournisseurs.Cela is particularly true for men. ""."If I am over a supplier, what value should I?".This is a State of mind different let your money work for you.

The transition to the malfunction is a huge changement.Comprendre Dynamics varied your relationship with money will help determine the peace of mind you have in your years later.

(This article is not intended to provide financial advice, but only offer information to help you explore your economic situation.)

Cathy Severson, is a leading authority in planning lifelong retraite.Baby boomers understand that it is not your parents.Découvrez retired how do the rest of your life the best of your life with free ingredients e-book 7 for a retirement satisfies the http://tinyurl.com/8moymb

Financial planning for retirement life 101

After fifty years of work, the chances are that us locate the day where we can retire. We no longer have to wake up at 5 a.m., sit in peak traffic times or insist on unrealistic deadlines. These factors are very just the reason why we rely on the days of relaxation. While most people fantasize, majority of baby boomers are not aware that financial planning stops at 65. Retirement planning is critical, regardless of what stage you are.

It was always a common myth that people have step to save for their retirement until they sent their children to College have time to rest. This no longer far from the truth, as it is important to always anticipate, even if it means in your years. Unfortunately, we never will be around the corner.Due to problems of health or other questions, we have to retire earlier than we pensons.donc we must regularly save financial snacks burden is imposed on us.

The first thing you have to do is think of financial planning. Retirement planning is not easy, but it is possible, if you create a budget for your living expenses. After all, the more money you save each month, the luxury more that you can do once you stop working!You should be aware and each alternative that can be offered to you the savez.La most companies offer a certain percentage of the wage or pension packages go directly into a pension fund. This is a wonderful opportunity if you do, because it lets you create on your package of retirement planning.

If you do so on your own, you must make sure that you create realistic goals for yourself .for example, if your two children are away at College in one year, and you want to save the 50% of your pay retirement, chances are that this will not occur. You must make a list of your priorities and putting money aside for each one. Although the college education of your child may need more money for four years, you can assume that you can spend the rest of your salary on retirement after they have graduated schedule.

Another alternative is to colonies of insurance - life ends .beaucoup people eager to get rid of these policies due to a disease or a financial burden. Through the colonies of life, one can actually sell their insurance scheme to a third party. In doing so, the person acquires a large amount of money, and they are connected is more to life insurance. If you need extra money, many people feel that life insurance settlements are beneficial.

When we start to get older, we automatically receive worried for our future.With no steady income after age 65 or 70, it seems effrayant.Toutefois, as long as you make sure that you stay with your retirement planning, it should be no need to stress.There are hundreds of alternatives to earn money, including life insurance institutions and simply evenly distribute your salary.It is important to set goals and make sure you stay organized.The last thing you want to do is do not keep track of your argent.Si you do not, in 20 years from now, ensure you that will be kicking yourself.

Natalie Aranda writes about family and financière.Par regulations of life through planning, one can actually sell their insurance plan for a third partie.Ce forming, person acquires a large amount of money, and they are connected is no longer their vie.Si QA you need extra money, many people feel that life insurance settlements are beneficial.

Tax planning for retirement financially Secure

The only thing that is likely to be important but neglected, throughout the process of your planning for retirement, is tax planning for a financially secure retirement. It's easy to save on taxes and improve your total retirement income, simply to take informed, do a little judicious research and take appropriate action.

Consider a rollover IRA to a Roth IRA retirement funds
Defer income or accelerating deductions to qualify for the Roth IRA conversion
Consider an employer rollover, stocks and bonds to the IRA
Calculate the tax payable on the distribution of the lump sum of pension
Optimize the deferral of taxation through various methods of distribution for your IRA and annuities
Take the minimum distributions in low taxation years required for your IRA
Avoid the penalty tax on distributions from your IRAs.
Disability insurance premiums can maximize the non-taxable portion of disability benefits create IRA separate accounts for the beneficiaries in order to maximize the tax deferralHelps reduce or eliminate the federal estate tax on benefits of the beneficiary designations IRABienfaisance helps eliminate taxes on profits IRA

Various strategies for tax planning for a financially secure retirement, of which some are discussed below, are relatively simple and it can make a substantial difference to your finances in your example retraite.Par:

You can enjoy quite a solid long-term fiscal record if you transfer money from an IRA traditional to a Roth IRA. You can save taxes because you are on a lower tax bracket by the point where you would withdraw were given the funds transfer. You can also transfer assets to high-income to the Roth IRA, or pass your IRA funds to your heirs if there is a lot of remaining after the addition of die.In you, you can benefit from long-term due to differential tax rates tax savings.

Consider making transfer IRA to Roth IRA in the year especially when you have a tax loss or integrate a hook low tax, for any reason any. Although the amount transferred or any part thereof, is taxable income, it may be imposed on your tax losses. Otherwise, you will need to pay taxes on the Fund you are transferring to lower tax rates than those applicable to future distributions of IRA, providing tax savings in the long term with the differential tax rates, and pre-tax profit of the Roth IRA distribution.

Long term tax savings can also be grouped by asset income transfer high. IRAs regular usually have assets which can have a high income potential.Transfer these assets to IRAs Roth.Even if you need to borrow money to pay the tax on the transfer, the wages of the transferred assets is higher, the rate of interest on your loan, so there will be a fee for long-term substantial record.

Do not borrow from one can on line credit home equity to add to your savings, even if it qualifies for deductions on the interest you pay on the prêt.Vous can also use liquid funds low yield for the payment of tax on the transfer of the Roth IRA.

If you do not use your funds in retirement, IRA transfer to a Roth IRA, until your heirs inherit it.Advantage would be the fact that Roth IRAs do not make distributions during your lifetime, although that IRAs traditional minimum distributions when you reach the age of 70 half .Transfert to a Roth IRA avoids tax than you would pay on distributions.

Search, CPA professional help or do it and take the appropriate measures for tax planning for a financially secure retirement.

? 2008 Anna d. Banks, GCDF

Anna d. Banks, a defender impassioned of baby boomers by exploring their priorities, planning and setting goals for the next stage of their vie.Aider customers attract and build a professional and personal life compatible with their values is not only an objective of Anna, is its passion.Son work experience diverse in business, education and financial services allows you to help the population diversified of baby boomers with their lives, the needs and career coaching personnelles.Anna finance is currently auxiliary faculty in the County of Essex, College where she teaches Career Development & management.

Author's Note:
You have questions relating to career development or change of lifestyle for baby boomers, who you think than others, like you would like to know the answers? please put a post on http://www.annabanks.com or questions e-mail me at Anna@AnnaBanks.com

Retirement - who needs financial planning and financial planning?

When it comes to financial planning, there are many reasons people often give for not making a financial plan. They can range from "I don't have any money" type objections to "I don't have any time right now" excuses. But, in today's turbulent financial world, you must be very careful. Many Middle-Class Americans are one month away from living on the street. The perceived security and safety of a job is illusory (just ask any unemployed American).

Why Do You Need Financial Planning?

In short: life requires self-generated, goal oriented action - a plan. This extends to every area of our lives, including financial. The degree of our planning will determine - at least in part - the degree to which we are successful. And, although a financial plan does not guarantee success, it is necessary for it (at least in the long-term).

Those who scoff at this need to realize that life is motion. It will not stop or slow down for you. If you do not consciously make a financial plan, you will make one for yourself perhaps subconsciously, and randomly, and usually to your own detriment.

Consider the case of "John", who sees no need to meet with a professional financial advisor or learn anything about financial planning. He believes himself to be "small potatoes", or he perceives financial planning as "unnecessary" or "boring" and thus he avoids it - at least for a while. However, what John does not realize (or was not paying attention to) is the fact of reality that life demands that we make decisions every day in a variety of different ways and in different areas of our life.

Money happens to be one of those areas that we are forced to deal with almost constantly, and usually multiple times throughout the day. How do we make the decision to grab a cup of coffee from the local donut shop in the morning vs. putting that money back into our pocket and simply make it at home instead? For John, this decision making is done pragmatically, and emotionally. Whenever he feels like buying a cup of coffee from the local donut shop, he will. If anyone asks him why he spends so much on coffee every day, he rationalizes it: "$1 isn't that much." he tells himself (and anyone that dares to ask).

But John's statement is void of any context. Consider, if we were to put that $1 spent on coffee into an investment yielding 8%, that $1 would become $1,500. Strategically placed at 20%, it balloons to well over $20,000 after 30 years. Would you consider $20,000 to be "not that much money"?

But to be completely honest, this isn't about whether John should or should not buy that cup of coffee, it's about his reason for doing so. His disastrous "reasoning", which attempts to replace a truly objective approach to his financial life, can very easily spill over into other areas of his life. The coffee issue is "small potatoes". The line of "reasoning" is not.

Coffee is not John's problem. What if we were to take a look at another common dilemma in John's life (as well as many other American's lives)? Suppose the decision is whether John and his wife should pay off their mortgage as quickly as they can so that they can be rid of that "evil" mortgage payment and all of the interest that they are paying. As a result of his upbringing, or some in vogue article his wife read in a magazine, or just on a mere whim, John arbitrarily decides that paying off the mortgage quickly is a good thing. He and his wife have a 15 year mortgage, and are making payments on it as quickly as they can. They don't realize that they are losing many hundreds of thousands of dollars by financing a home this way. John is confronted by either a friend or a financial planner who tries to show him how would be better off if he just held onto that mortgage and invested the difference.

Now, John and his wife can rationalize their actions (being afraid to admit to having made a mistake at all) by saying "yeah, well...we just like the idea of having our home paid for". Yet, if pressed for a more thorough answer, they don't have one. When the facts of reality confront them that dumping their 15 year mortgage and carrying a big long mortgage instead (even well into retirement) and investing the difference is much better for them financially, they squirm and cringe and retreat into a mental fog. They no longer have any idea why they like the idea of having their home paid off.

John had decided long ago that he didn't need financial planning. That he had a handle on everything. Now perhaps John, like many other Americans do, continues to ignore or simply continues to dismiss the idea that financial planning is like any other subject - it needs to be learned. What are the consequences of not taking responsibility and the initiative to meet with a financial advisor (one that can teach them how to prepare for financial uncertainty as well as teach them sound financial planning strategies)? Well, in John's case, he eventually retires and without a mortgage. He has lots of equity in the home, but virtually no savings. His home has appreciated and depreciated with the real estate market, but even if he wanted or needed to cash out the money, he would have to take out a loan and pay it back (or sell the house). John and his wife were able to scrape together something that resembles a savings, but because they didn't pay much attention to the real effects of inflation, their nest egg is substantially smaller than what they had hoped for.

In addition to all of this, it's looking like John's wife's health is deteriorating, and she may need long-term care (statistics from major life insurance companies - like Met Life - suggest that 1 out of 2 people - 50% - will need long-term care at some point in their lives). Or expensive medication. Where do they get the money to pay for these things? Perhaps they go without. Perhaps they die prematurely because of it, taking to the grave the erroneous idea that financial planning never could have helped them. Never could have saved them. Never could have helped them live a better life. Yet the truth is the opposite. It could have helped them, and it could help you too.

Financial Planning As Practical

Many people don't think in terms of financial planning as being "practical", yet this key mistake is what keeps many individuals from becoming financially successful. Unless we make it a point to study it in school, our only formal education in finance and economics is perhaps from the worst of all teachers - the Government.

Governments do not induce better money management habits. The concept of deficit spending and the growing national debt that is a result are prime examples of why. They aren't very good at teaching individuals the value of investing either, and the ill-fated Social Security program is a good demonstration of what happens when Government allegedly invests our money for us.

Banks and certain other financial institutions regularly fail during recessions despite the fact that they are heavily regulated by the Government. In fact, at least for the banking industry, it is the Government that promotes such reckless lending and investing policies that lead to such failures. By forcing everyone to comply by the same irrational rules, chaos is inevitable.

The fact that these institutions are supposed to represent the hallmark of good money managers, it should be no surprise that many individuals are completely lost when it comes to personal financial planning. The folks who are supposed to be the experts can't even do it themselves.

The only individual that can help them is the financial advisor. By the very nature of the profession, financial advisors promote thrift, savings, and sound, rational investments and speculations. These are the essential concepts that are necessary for an economy to grow and thrive. If a nation is conserving it's finances instead of consuming them, it has a much better opportunity for growth.

For the individual, the financial advisor promotes personal growth - personal financial growth. And, without growth the only thing open to us is death.