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| Do You Know How Much Money To Contribute To Your Retirement? |
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| Written by David C Lewis, RFA |
| Tuesday, 10 March 2009 09:27 |
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If you are making weekly 401k contribution, then you may want to start using a retirement calculator before you put any more money away for your future. Using a retirement calculator is a must. They are all over the Internet. The more detailed the better. They can help you determine how much money you will need for your future. It sure beats guessing. Some financial calculators only give you a basic idea of what you will need. They do not take into account taxes on your 401K when you withdraw funds, or variability in investment returns over 20 or 30 years. I know you may want a simple answer, but in this case, the more complex the calculator, the better. You may want to try to tackle a more sophisticated piece of software. That's not the answer you want to hear, but you might be happier knowing the truth. The alternative to plan properly could bankrupt you in your old age. Withdrawals and taxes are a major concern at some point in time. After all, that's what you are saving the money for, right? You may find incredibly difficult to do this, but give it your best try. To get you started, assume that taxes will not decrease over time. Unless you believe taxes will go away in the future, planning for them should be part of your financial plan. In some instances you may find that it is beneficial to shoot for a smaller lump sum of money if that means the distributions will be tax free. Larger nest eggs that are taxable may often produce a smaller amount of income than those tax-free accounts (i.e. cash value life insurance, Roth IRAs, etc.). About the Author: David Lewis is an expert on strategic personal financial planning for retirement. For more information, please visit www.twintierfinancial.com. Kindly provided by LJ-Marketing.dk You are welcome to use this article on your own website, if you include the link just before this text. |
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