Obviously, each person will need a different amount of money to secure their retirement years based on several factors.

• Current debt situation
• Lifestyle you want to live in retirement
• Portfolio performance after retirement and Inflation
• Life expectancy
• Health Insurance Coverage and your health
• Our current social security program

Your current debt situation is a major factor in determining a secure retirement. Typically, most Americans’ house payment accounts for 25%-28% of their monthly income. At either percentage it’s a big chunk of the monthly income. If you add auto loans and credit card payments into the mix then obviously you won’t be able to retire with a million dollars without having some type of extra income in retirement. Go into retirement debt free and a million bucks will probably last you through your golden years.

Another major factor in a secure retirement is your lifestyle expectancy. If you plan on spending your golden years on the lake fishing or growing a garden in the back yard you will probably be pretty safe with a million dollars. However, if you want to fulfill your retirement dreams and travel the world, you better get busy saving.

Inflation will play an important part in your nest egg. A vital part of ensuring your retirement savings will last is the ability to create some type of interest on the money you have stored away. Most financial experts will tell you to invest in safe low risk funds after you retire. However, if the inflation rate is more than your interest rate you will essentially be losing money. Be sure to keep a balanced portfolio even after retirement so you can stay ahead of inflation.

How long do you plan on living? Sure we want to live as long as we can and be completely healthy, but longer lives mean we need more money. If you plan your whole retirement savings around living until you are 80 and then live to be 90 you may be in some trouble the last 10 years of your life. Let’s face it, nobody knows how long they will live, but you want to plan for several years over the average life expectancy.

Unfortunately the cost of health care keeps rising and the benefits keep dropping. Health care and health insurance will consume a large portion of your retirement savings. Be sure you plan for these rising costs before you pick your retirement date. A Fidelity Investments report shows that typical out of pocket costs for health care after retirement are over $225,000! Trust me that number will probably not decrease as you get closer to retirement.

Ideally social security will still be around for all of us when we are ready to retire. The maximum benefit from social security is somewhere between $25,000 and $28,000. It doesn’t sound like a lot, but it makes for a great boost in your current retirement plan. Unfortunately, many Americans depend solely on the social security system to fund their retirement and the truth is if current trends continue there won’t be enough money left in the system to secure those funds in the future. Personally, I am not planning on the social security system to fund my retirement.

If you are in doubt about your retirement situation sit down with an honest financial adviser or professional personal finance manager. It may cost a few dollars now to talk to a professional, but the payout will be far greater to secure your retirement.

There are several articles written on the best places to retire, most of them based on the cost of living. According to cnnmoney.com the best place to retire in 2010 was Durham, NC. Durham, NC is the home of Duke University.With more than 1,500 members, Duke’s 33 year-0ld senior learning program is one of the largest in the country. With over 100 courses offered, it covers many diverse topics.

What else does Durham, NC  sport to the top spot to retire? The cost of living in Durham is also very reasonable.  The median home price is $161,000, well below the $222,600 median home price for the U.S. in 2010. Durham, North Carolina residents also enjoy all the seasons. Spring, Summer, Fall and Winter visit each year and none of the season are extreme. Residents also enjoy plenty of beautiful golf courses, parkland, a renowned university medical center, and a newly built  2,800-seat Durham Performing Arts Center.

Even though many people will agree Durham is a great place to retire, each individual must make their own decision. There are many factors to consider when it comes to moving during retirement. Family, friends, weather, entertainment, and many other personal preferences must be considered. Do some research and even visit several places before you settle into your retirement dream home.

How the Stock Market Works

The beginning concept of the stock market dates back to 12^th century France. Since then it has grown into a huge business and created full time jobs for millions of people. The stock market is vital to our economy chiefly because it is the most important way for companies to raise capitol for their business. Investors buy stock in a company which gives this company more money to invest to grow the business. Hopefully, the business will thrive increasing the value of the stock, the investor will sale the stock and make money.

Why should you invest in the stock market?

Many people use the stock market to earn extra income or to invest in their future retirement. Almost everyone could use some extra cash, right? From personal experience it is very difficult for the average investor to actually make a lot of extra income from the stock market. In order to earn huge gains from the stock market you have to have a lot of money to invest. Because of the “per trade” fee that investment companies charge you, investors have to purchase large quantities of a stock in order to offset the costs of investments. Also, any gains from the sale of stock are taxed more than personal income tax. I would recommend waiting to do this type of investment after you learn the basics of investing and have your retirement funded.

So, back to the original question, why should you invest in the stock market? Investing for your future retirement is a great reason to learn the ropes of the stock market. Many people don’t realize the importance of having their retirement funded. The earlier you start investing for retirement to more prepared you will be when the time comes. It may also allow you to retire sooner than your friends and co-workers.

So, Ready to start investing in the Stock Market?

Not so fast, investing in the stock market can be risky, know what you are doing before you sign up.

First, learn the lingo of the business. There are many websites online you can research and learn the basic lingo of the stock market. At least learn the basics before you start. It’s just like the rule of reading the instructions before you try to put together furniture. Sure you can jump right in and try to put it together, but you will probably miss a step or do something out of order and the whole piece of furniture is ruined. Take some time to read the stock market instruction book before throwing away your money.

Second, open a virtual portfolio at an online stock market trading website. There are many websites online that let you play the stock market game without investing a dime. You can choose any real stocks you want and they will track your progress over time. You can buy and sales just like the real market. After several months if you aren’t making virtual money odds are you won’t be very successful at the real game either.

Research, research, research is the key to success. Obviously, no one knows exactly how the market will work but if you know what to look for sometimes you can get a heads up over the competition. Key factors such as the company earnings reports can have an impact on the stocks value. You can also watch trends of stocks, sometimes the values of stocks peak at certain times of the year. There are many theories on stock market fluctuations but knowing the inner workings of a company can help you invest smarter.

Now, you have earned some virtual money and done some research on your favorite stocks you are to try your luck at the real stock market. There are many places that will allow you to invest in the stock market: two that I use and recommend are Zecco and Sharebuilder. These two programs do not require you to keep a minimum balance and their fees are very low for investing. Once you choose a place to start investing you must decide your investment goals. Do you want to invest for retirement or invest to make money right now?

I would always suggest to the beginning investor to invest for retirement. My choice of retirement investment would be a Roth IRA. A Roth IRA allows you to invest funds after taxes and those profits can be withdrawn at retirement tax free. A Roth IRA allows you to invest in stocks, bonds, mutual funds or ETF’s. It allows you to have a diversified portfolio and still have complete flexibility of your choice.

If you plan to invest to make money now, you should be aware of what this entails. Any gains you make from stock sales in a year are taxed at a different rate than income taxes. These gains are taxed harder so take this into consideration when investing.

Profit from investing in the Stock Market

Again, I obviously don’t know all the secrets to the stock market. If I did I probably wouldn’t be taking the time to write this article. However, there are some simple rules to follow in order to profit from the stock market.

First, buy low sale high. It’s an age old rule that investors still struggle with today. If a stock jumps in price to a peak, you may want to consider a sale and keep the profits. If a stock drops to a new low you may want to consider buying.

Remain calm. If a stock drops a considerable amount in one day, don’t panic. Unless the company is in danger of bankruptcy the stock price will rise. The best thing to do would be buy more of the stock at the lower price.

Diversify your portfolio. As the ole saying goes, don’t put all your eggs in one basket. If you put all your money into a single stock you are living very dangerous. If anything happens to this company your entire portfolio could disappear. It is a good idea to invest in different types of funds including, stocks, bonds, mutual funds and ETF’s. Spread your money around and even if something happens to a single company you will still make money in the long run.

Watch your portfolio. If you are going to make money you want to keep an eye on your investments. Track their progress over time and make necessary changes to your portfolio. You may need to sale some of your investments that have reached highs and maybe buy more of investments that are at all-time lows.

Change your investments with your lifestyle. As you grow older you should move more of your investments to safer areas of the stock market. Individual stocks are considered extremely risky and should be avoided the closer you get to retirement. Instead consider safer investments such as bonds and CD’s.

Conclusion

There is a lot of money to be made in the stock market and there is a lot of money to be lost. If you are going to play the game be sure you understand the rules. Know exactly where you are putting your money and why. Staying on top of your portfolio will increases your changes of winning with the stock market

What if a company you were wanting to work for offered a particular type of retirement program. Would this have any affect on your decision to take a job with this company?

Two popular choices among many companies are defined benefit or a defined contribution plan. Both of these plans are still in use today by employers. If you were given the option which would you prefer?

A defined benefit plan (DB) is like a traditional pension or fixed pension. Usually, the employee is guaranteed for the rest of their life and sometimes even the rest of their spouses life, a set monthly amount of money upon retirement. This amount is determined by factors such as years of service and their salary while working. This benefit may also include additional perks including health insurance and a cost-of-living increase each year. A defined benefit plan is popular among government agencies.

A defined contribution plan (DC)  is a retirement plan where the employer usually promises to contribute to the plan, but does not guarantee there will be any certain amount of funds available upon retirement. Examples of defined contribution plans include 457, 401(k), and 403(b) plans.

There are pros and cons to both types of retirement plans. Traditionally defined benefit plans offer much better retirement benefits, however in return salaries and wages are typically lower. Likewise, employers who offer defined contribution plans pay higher wages but don’t guarantee any funds available at retirement.

There are many factors I would have to consider before chosing a retirement benefits package if given the choice. Obviously, the percentage the employer offered to a defined contribution plan would have a great impact on my choice.

Second, many companies seem to be moving away from traditional pension plans. New employees aren’t offered the same plans older employees were offered years ago. The original retirement packages are much more taxing on the company than they originally assumed. So it appears pension plans are on the way out.

Finally, I think I like to have more control of where my money is placed. It’s my future and I feel involved more in the decisions. Most defined contribution plan have a variety of fund options available for investment. You also have control of how much money to put in these funds and can move funds around as you choose.

So, personally I would choose a defined contribution plan given the option. You have more control of your money and you typically earn a higher income while you are working. This means if you budget correctly during your working years you can save more for retirement years. 

Tracking the winners and losers show which fund values are high and which are low. Remember the old financial statement, buy low and sell high? Same holds true for your 401k funds. If a fund has performed well for the past year maybe it’s time to sell off some of that balance and buy another fund that has a good long term track record but has had a bad year.

If you are approaching the age of retirement in the next few years you may want to thoroughly examine your balances and do some detailed calculations about how much money you will need in retirement. It may even be a good idea to speak with a financial advisor about your options. If the past few years have shown poor performances you may want to consider working another year or so before calling it quits.

Keeping up to date with your 401k and retirement accounts will secure your financial future. Don’t be afraid to ask a professional financial advisor for advice. Spending a few dollars now could save or earn you a few thousand dollars in the future.

Now, I’m not writing this article to let those younger think they can wait until they are older to start saving for retirement. You will be much better off and able to enjoy a much happier retirement if start young. This article is to encourage older people that it’s never too late to start saving for a more enjoyable retirement.

Obviously, you are going to have to invest a little more money each month to get to this comfortable retirement, but it will be well worth the effort.  If you got 20 or 25 more years in your career then you will still be able to build a good nest egg for yourself.

The first step is to realize that you are going to be able to pull this feat off. Don’t keep telling yourself that you’ve waited too late in life to start, it’s never too late. You don’t know how long you are going to live, you could live to be 100. If so you will be kicking yourself for saying it was too late when you were 40 or even 50, well if you can get your legs off the ground!

Let’s be honest you are going to have to save a lot in order to catch up for lost time. Find any way possible to cut everyday living costs and expenses in order to save for your future. Turn those lights off when you leave a room, use lamps instead of overhead lights, turn the water off when burshing your teeth, and the list continues. Every penny you save today may be worth 3 in the future!

Next, take all this new found savings and start investing it. The first place to start would be an employee sponsored 401k program that matches your contributions. Next, setup a Roth IRA so your withdrawals will not be taxed, it doesn’t matter how much you invest to start, but consistently put something in your Roth. Finally, try to pay down those bills and debt. Being debt free will greatly reduce your financial needs when you retire.

Finally, don’t stop. Keep the momentium going until that long awaited day of retirement. When you get a raise at work increase your 401k contributions. Finish paying off a debt, add it to your monthly investment in your Roth IRA. Save, save, save and you will be a happy camper!

Finding an honest financial adviser is the most important part of preparing for retirement. It doesn’t matter if you make $10,000 or $1,000,000 per year you should use a financial adviser. You may think you are the best person to manage your money, but let’s face it, you are always busy, usually lazy and are the world’s worst procrastinator. Before finding a financial adviser you need to understand their function and how they are compensated for their hard earned work.

A financial adviser is a professional who is trained in the art of financial planning services. They are a skilled investor that understands all levels of risk and can explain those risks to their clients. Their main goal in their job is to help their clients achieve their personal finance goals for the future.

Financial advisers are usually paid through two different types of methods: commission based and fee based.  Commission-based advisers receive a percentage of the sales amount on the financial products they recommend such as mutual funds, stocks, bonds and insurance. Fee-based advisers are paid a flat fee. Their fees can be billed by the hour or project, as a flat annual amount, or as an annual percentage of assets under management. Before choosing a type of adviser do some research as to which type will benefit you more.

So How do you find an honest financial adviser? Here are some quick tips to test the honesty of your potential financial adviser:

1. Look at the fees and expenses associated with his financial suggestions. If he recommends any mutual funds with “load fees” then he may be thinking more about his own financial situation.
2. Is he going to overcharge you in fees? If he is going to charge you more than 1% of your assets then he probably is overcharging you.
3. Make sure you are comfortable talking to your adviser and that he is knowledgeable of all the products he is trying to sell you. I like how Dave Ramsey says it… If you can’t explain something you are investing your money into to a child then you shouldn’t be investing in that particular item. That’s a financial advisers job to teach you about investments.
4. Make sure they can actually use financial calculators and explain how they work to you. Sometimes financial advisers are simply sales people dressed in disguise. They don’t really know what they are selling themselves.
5. Don’t take the advice of friends and family. Just because they tell you a financial adviser is good doesn’t make them a great financial planner. Do the research yourself and ask the right questions. After all it’s your money not theirs

Keep these simple thoughts in mind when searching for an honest financial adviser. Your future is very important, don’t trust it to just anyone!

First, have a clear plan of what you want to do with the real estate. Do you want to purchase a run down house that needs a lot of work and flip the house for a quick profit? Do you want to purchase the real estate as a rental property? Or do you want to purchase the home as your main residence with intentions of reselling it in a few years for a profit?

Real estate is a great investment, but make sure that your plans will be profitable. Do some research about the surrounding areas. Is the city/town growing or are people actually leaving the area? If you are planning on flipping the house you need to find the average time that houses sit on the market for sale. If you are planning to use the real estate as rental income find out how much you can rent the house for each month. Finally, if you are using it as your primary residence think about improvements you will want to make to the house to live in, will it cost a fortune to make you happy?

Make sure you can actually afford this investment. Real estate is just like any other investment, don’t spend more than you can afford to lose. However, with real estate it’s much easier to lose because it’s a payment that you have to make. If you invest in a 401k plan or similar retirement account you can always stop the investments if you get in a bind, but once you close on a house you are stuck with that payment until it’s paid for.

Get an expert opinion about the structure of the home. Most states require a home inspection before a home can be bought or sold, but always use an outside source. Make sure the home is structurally sound before you sign on the line. Talk to neighbors in the area, maybe they can give you information about the home that an outsider wouldn’t know.

If you think you have good real estate investment ideas, just remember always do research. A little time now can save you thousands of dollars in the future.

It may sound like a strange idea, especially when a very small percentage of us have our own retirement secured, but just imagine how you could change your family tree forever! The only problem with the concept is that most people are too greedy or selfish to actually follow through with the plan.

If you are a numbers junkie like myself it doesn’t take too much calculating to figure out the small investment needed to make $1,000,000 when you have 60 years of compounding interest on your side. That’s about the amount of time a newborn child will have until they can retire.

By doing some quick calculations I get the following results for your newborn. If you put an initial deposit of $5,000 into a good mutual fund earning an average of 10% per year (not too hard to find) and let it sit in the fund for 60 years (the age your newborn can retire) then you investment will be worth just over 1.5 million dollars. It’s hard to believe that $5,000 can turn into that much value, but with time on your side money can do some amazing things.

Just imagine the life that your child could have knowing that a good portion of their retirement is already funded. It would give them the opportunity to do so many things in life and even set up their child’s retirement. I realize most of us don’t have that much money around but even $500 will turn into almost $200,000 with 60 years to grow. Just something for you to think about!

If you haven’t noticed, the US economy is taken a huge turn for the bad. Stocks have tumbled and the over the past three days The Dow Jones industrial average has fell nearly 515 points. It’s a little scary to think that many stocks, especially those in the financial sector may continue to fall even more over the next few months. Why is this good news?

It’s not exactly good news for everyone, but for me and the hundreds of thousands of other investors who are under the age of 30, it’s wonderful news. Throughout history the market has went up and down with steady increases. It may seem that the market is in horrible shape right now, however the Dow closed at 11,740 today and it closed at 11852 on October 11, 2006. Sure, it’s the lowest it’s been in two years, but if you are young that’s great news.

The advice you’ve probably heard before still holds true, buy low and sell high, guess what we are low. We might not be at the lowest point but it’s still a great time to start investing or increase the amount you are investing. Many financial institutions have seen their lowest points in history. I personally have invested in some major banks over the past few months and even though they continue to drop even lower, I’m not extremely worried. I will continue to buy more of the stock because I have confidence they will increase in value.

My advice for everyone is to either start investing for retirement now or increase the amount you are currently investing. I think over the course of the next 5 years or so you could see growth potential of over 20% if you put you money in the right areas. Here’s to the future!