On the Internet: Retirement Planning
by CI Staff
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As baby boomers move closer to retirement and younger workers are faced with the prospect of no Social Security when they reach retirement age, everyone worries about making the right choices regarding their retirement investments. Retirees are concerned with not outliving their savings so they can spend their retired years doing what makes them happy. Twenty- and thirty-somethings are concerned with saving enough and choosing the right investment vehicles in hopes of a comfortable retirement. With houses, cars, college and other responsibilities on our often-already-too-full tables, many people tend to put saving and planning for retirement on a back burner. Retirement planning is very important and does not have to be tedious or stressful. The Internet offers a wealth of data, calculators and more to help you plan and organize your way to a happy retirement.
Vanguard is a provider of mutual funds; however, some data on its site is free to all investors, not just those who invest in Vanguard funds. In addition to utilizing retirement-specific planning tools, you can research any mutual fund and compare performance numbers.
The Planning & Education section is where youll find the Vanguard Retirement Center. The area is divided into three parts: Im already saving or just starting to save for retirement, Im preparing to retire, and Im retired. Each of the sections focus on the important details for the phase of planning you are in. Beginning savers can set retirement goals, learn about and compare various retirement accounts, and determine the most appropriate asset allocation and contribution amounts.
If you are nearing retirement you can get help with planning a fulfilling retirement, deciding when to retire, evaluating expenses and income, and changing your portfolio as retirement nears. Once retired, you can review your retirement budget and health care costs, learn the withdrawal strategies that will make your money last the longest, monitor your portfolios, and get continuing investment advice.
The site also offers a Lifetime Spending Analyzer tool that does a good job of helping you project spending. The tool uses a variety of simulated market scenarios (based on historical return relationships among various asset groups) to determine your tax-deferred portfolios ability to sustain an income stream over your retirement period. The tool factors in your portfolios size, your asset allocation, your withdrawal amount and the length of your retirement. A full explanation of all assumptions used in the calculations is provided. To find Vanguards Lifetime Spending Analyzer, go to the General Planning section of Planning & Education, then go to Other Planning Tools, then Retirement Planning and scroll down to Vanguard Lifetime Spending Analyzer.
As with many comprehensive investment Web sites, CNN Money offers a section devoted to retirement planning. To find this section, choose Personal Finance from the top menu bar, then choose Retirement. Personal interest articles in this area give current and future retirees ample reading materials, covering topics such as Best Places to Retire, and Retire Rich: 5 Families Doing It Right.
For more of the fundamentals of retirement planning, CNN Money explains pensions and annuities and offers tips on playing catch-up. An Ask the Expert section discusses topics such as rolling over an IRA and comparing a 401(k) to a Roth IRA. A section called Specials provides revolving articles on various topics such as the best funds to invest in and how to achieve your dream retirement. You will also find savings, investment, and debt reduction calculators to assist you in planning. The site is free.
CCH Financial Planning Toolkit
This free Web site from CCHa provider of business, legal, and tax information to the business communityoffers tips and advice on personal financial planning from a team of finance and business professionals. The site gives a list of top stories impacting the investing world and links to various financial planning topics including retirement, taxes, estates, and insurance. The retirement planning section provides you with an overview of various planning techniques and attempts to illustrate the importance of saving for retirement.
You can also learn about and compare various retirement savings vehicles, read warnings about common pitfalls of planning, and learn how to handle special situations such as divorce or death. Finally, the site offers over 20 retirement calculators including annuity, Social Security, IRA, 401(k), 403(b), and required minimum distribution calculators.
Another comprehensive investment Web site, MSN Money, provides investors with a wealth of free data on a wide range of topics, including retirement planning. The site has an entire section devoted to this topic found in the Planning portion of the site. The area offers articles on common retirement mistakes, what to do if your portfolio is losing in the market, how to retire early and live well in retirement, what to do if you need to play catch-up, and estate planning.
You can also ask questions on the Your Money message board which are answered by an MSN Money columnist. Additionally, retirement tools help you plan for retirement expenses and income, calculate your life expectancy and decide if you should convert to a Roth IRA. You can also view frequently asked questions and take a Retirement IQ Test.
Social Security Online
Although many future retirees may not be able to rely on the Social Security program as it exists today, current and soon-to-be retirees need to understand how this program can impact their savings. Trying to understand the many facets of the Social Security system, however, can be a headache. The Social Security Administration Web site offers information on the basics.
The site offers links to recent news stories regarding Social Security. You can also calculate benefits, find out which ones you qualify for, and apply. Information on disability and Medicareincluding the new prescription drug planis included as well. You can learn what to do as a widow or widower or search the site for answers to frequently asked questions divided by subject matter.
This site is free.
SmartMoney.com, another comprehensive investment Web site, offers a section devoted to retirement planning. To access this section, choose Retirement from the Personal Finance list found on the left menu bar at the homepage.
SmartMoney.com provides Retirement Worksheets that cover important topics including the new Roth 401(k) and asset allocation. There are plenty of calculators on the site that can help you make tough decisions such as whether a Roth 401(k) is for you, how long your money will last, how much you should contribute to a 401(k), and how aggressively you should invest.
A section devoted to IRAs discusses topics such as rolling over IRAs and understanding withdrawal rules and answers frequently asked questions. Finally, for those quickly approaching retirement, SmartMoney offers last-minute planning tips and tax-friendly moves to make the most of your retirement savings.
The site is free.
T. Rowe Price
Mutual fund company T. Rowe Price offers free materials and advice on planning for your retirement to all investors, including those who are not clients. At the homepage, choose New to T. Rowe Price under the Individual Investors heading.
A Retirement Income Calculator helps you determine whether your retirement assets can support a given income level over the length of your retirement. Find the calculator by choosing Retirement Planning under the Investment Guidance & Tools heading, then Tools & Calculators, and then Retirement Planning Tools. The calculator simulates a wide variety of market scenarios and determines your portfolios ability to sustain an income stream over a period of time based on factors such as the size of your tax-deferred portfolio, your asset allocation, the amount of withdrawals, and your time period. A full explanation of all assumptions used in the calculations is included as well as explanatory articles