Ideally, it is important that you create a written statement of your retirement plan. Your retirement plan should be simple rather than complex or verbose. According to surveys, having a written plan contributes to feelings of satisfaction in the long term. But why is that so? Often you will have to evaluate various interlinked factors to identify your expectations and needs. This is why the importance of developing a plan cannot be overstated. Through this plan, you get to grips with what your retirement entails. In this post are tips to help you answer the most important of retirement questions.

How Long Is Your Retirement?

To answer this question, you need to figure out how long you expect to live after retirement. Typically, a majority of people get the answer wrong. The number of years you expect to be in retirement determine the type of plan you can create. Underestimating the impact of average life expectancy can expose you to financial difficulties over the retirement years. Research more on expected life expectancy for your age group to help you overcome this challenge. Also, doing so will help you get a personalized estimate of your life expectancy.

For couples, it is important considering the question, how long do you expect to continue cohabiting? The demise of your spouse will alter your retirement dynamics such as expenses and income streams. Therefore, your retirement plan should factor these contingencies.

How Ready are You For Retirement?

Despite being a nonfinancial question, the answer determines your satisfaction level in retirement. Remember that age shouldn’t determine your retirement date. Being ready for retirement is a psychological condition. It implies that you are comfortable leaving behind your workplace responsibilities. And that you can effectively focus on other events and activities. Answering the following question will help you determine if you are ready to retire.

What do you plan to accomplish in retirement?

Getting an answer to this question will determine how much you will spend. Avoid over-relying on guidelines or instinct. Instead, you should create a spending estimate that suits your needs, activities, and interests. Hence, you must evaluate what standards of living you want during your retirement keeping in mind that expenses will vary annually.

Apparently, during retirement people tend to spend less as they grow older after taking care of their most important expenses. Many over 75-year-olds decrease their spending habits though this might increase due to long-term medical and healthcare needs. It is necessary, therefore, that your estimate considers the impact of inflation as living costs increase over time.

When will you be ready to retire?

Being ready for retirement requires that you have assets and income that can help you sustain an appropriate standard of living. To do so, assess your projected spending habits against your retirement revenue streams. Where necessary, make changes to align your lifestyle with your income and assets. Ensuring that you have a guaranteed revenue stream will enhance the quality of life you enjoy after retiring.

Most people have the resources necessary to cover their retirement expenses. In turn, this minimizes the amount of stress and strain you will experience once you retire. There are a few things that you can do to help you achieve a financially secure retirement. To begin with, don’t hesitate to sign up for Social Security especially if you are married. Besides that, it is important that you create an alternative source of income. You can do so through deferred income annuity or an immediate annuity. Other options include purchasing maximized medical insurance or using a mix of personal assets and insurance to help you manage long-term medical needs.

Finally, how will you invest and manage your assets?

To successfully manage your assets you need an investment strategy. Spending 7% of your retirement funds can deplete your savings fast despite contrary opinions. In contrast, financial planners recommend that you should spend approximately 4% or less. This is why establishing a spending policy is important to match your expenses with your retirement expectations.

In conclusion, retirement planning entails more than what has been discussed above. However, when planning for retirement, you should come up with answers to the above questions. Doing so will guarantee you a successful retirement.

Typically, investors receive the same admonishment any time markets perform poorly: don’t abandon ship! You should take this advice with a pinch of salt. Properly, investing your resources depends on your age and financial goals.

In the light of recent market turbulence, now is the right time to think about your investments. Why is it important to do so? Stocks have had a rocky second quarter. In the past week, news about new tariffs and technology sector distresses have affected the stability of the Dow. Early last week, Empower Retirement, a company that processes over $530 billion of retirement assets, had a10% increase in the volume of calling it receives. Likewise, Fidelity Investments, with a portfolio of 15 million retirement plans also experienced the same during February. But what does that portend? It means that investors are looking for assurance that their investments are safe. This is why it is important that you evaluate the soundness of your investment decision. Use the following point to help you do so.

Assess you Asset Allocation

Consider the amount of money you have invested in your retirement plan. Make sure that you allocate 70% of funds to equity and 30% to bonds. A retirement plan with over 70% in stocks is typically considered aggressive. And a plan with less than 70% being highly susceptible to market variations.

You should determine your ideal fund distribution based on when you are going to retire. If you are about to retire, you shouldn’t take on more risk. But if you are a long way from retirement, you shouldn’t be concerned about market fluctuations. Use online tools available from your 401(k) plan provider or third-party providers to assess your retirement scheme.

Consider Target Date Funds

These are funds that let you select your investment instrument based on your retirement date. With this instrument, investment decisions are made by fund managers with gradual adjustment over time. Target date funds are safer as they rely on investment professionals for making investment decisions. As a result, this protects you from making investment decisions based on emotions.

Even so, be cautious when picking a retirement date and its associated target fund. Target date funds assume that you will retire at the age of 65. Nowadays, most investors only claim Social Security when they are 67 or 68 years of age. As a result, you might consider vintage funds as your investment vehicle as it gives you more time for claiming Social Security.  For those in a 2050 fund, they might consider moving the retirement date to 2055.

Monitor Your Investment Portfolio

Avoid combining a 401(k) and a target date fund in your portfolio as this is most risky as well as impacting your retirement plan. You can avoid this by being extremely watchful of your investment; it nonetheless limits your investment options. Maintaining this level of control on your investment requires personal supervision instead of professional supervision.

Though you can build an investment on your own, it is hazardous doing so. Why? As you will incur unnecessary fees and overlapping investment options that can burn your investment plan. If this sounds intimidating, then a target date fund is your best option.

Remain Vigilant

A common investment mistake is a failure to rebalance your portfolio. Let’s say you let a 60% stock allocation increase to 75%. In the event of a recession, your investment will most likely suffer substantially. What can you do to prevent this? Reallocate any growth from stocks into other investment instruments. Annually, rebalance your portfolio. Use your birthday or any other key anniversary to help you remember.

Portfolio rebalancing is most important if you are nearing your retirement date. But this time you should do it on a quarterly basis. Combine rebalancing, dollar averaging, or fixed interest investments to ensure you attain long-term success.

As you approach your retirement, it is high time you address your tax obligations. Retirement’s sweet spot is the period between formal retirement and when you begin accessing RMDs from your 401(k) plan or your individual retirement plan. Typically, this is around the age of 70.5 years.

Since you no longer have any full-time commitments, you are now in a lower tax bracket. Subsequently, this is the right time to benefit from low tax rates. Even so, you need to ensure that your overall retirement goals are in line with your retirement goals. Caveat! You shouldn’t focus on reducing the amount of taxes you pay instead, you should concentrate on accomplishing your retirement goals. So read on to find out more about how to leverage reduced tax rates.  Here are a few suggestions you can capitalize on low tax returns.

# 1: Embrace Roth

Convert your presentIRA or 401(k) retirement plan into a Roth IRA. Though you must pay taxes on the conversion amount, it is at a much lower rate. On the other hand, retainingyour funds in a traditional IRA or a 401(k) plan without taking out any RMDs leads to higher taxes.

Roth IRA withdrawals typically charge no taxes. Plus, no RMDs requirements apply to them. Actually, you can pass accumulated Roth IRA funds and tax-freestatus to your heirs.  Besides that, you can stretch a Roth IRA over several years to minimize the impact of taxes as well speed up switch over to a higher tax bracketanytime you want. But before initiating a conversion, you need to consider the following factors.

To begin with, ensure that you have sufficient cash resources for settling your due taxes. Beware that 2018 tax rules allow for no conversion reversals ever. This means that your assets are permanently locked in a Roth IRA. Besides, you must abstain from tapping into a Roth IRA’s assets for five years after conversion.

Offload Valuable Assets

You might have stock or assets held in a taxable account. If so, consider offloading your long-term high-value assets when your tax obligations are still minimal. Doing so lets you benefit from any appreciated gains.  Why is this so? Because any long-term gains on capital are adjusted relative to your gross income (see the table below).

Selling any appreciated assets when your income is below the 0% threshold attracts tax at a rate between 15% and 20%. Also, if you are married with gross revenues of $250,000, a 3.8% tax is imposed on any other income you earn.

Leverage Employee Stock Options

Take advantage of low tax rates with employee stock options in your retirement twilight years. Doing so when your stock’s value is high and prices are low will increase your gains. Plus, use low tax years to offload most of your employee stocks.

Get Rid of Saving Bonds

Today, US saving bonds aren’t a viable means of long-term asset growth because of low interest. This is why many retirees hold on to bonds issued during high-interest rate periods. Offloading these bonds means you only pay ordinary income tax on any accumulated interest. So selling off these assets is a great financial coup.

Life insurance replaces your income in case of an early demise. It provides protection to a spouse, children, or other dependents. Often it is challenging determining how much life insurance is sufficient for your unique needs. Here are four tips to help you overcome this challenge:

Tip #1: Forecast Your Critical Needs

You can do so by reflecting on the following questions: Are your kids currently attending college or will they do so in the future?  If you answer yes, you need to assess how much that is likely to cost as well as create a payment plan.

Tip # 2: Alternative Income Stream

Though specific circumstances vary, identifying a source of alternative income is important. Typically, families find it necessary replacing 60% of its gross revenue. For example, replacing$75,000 requires an income stream of $45,000 per year.

Tip # 3: Leverage Shortfalls

Assume that your dependents require $45,000 to replace your income. With returns pegged at 5%, your life insurance plan amounts to $900,000 after 20 years. Even so, this figure doesn’t include college or medical expenses.

Tip # 4: Evaluate Your Current Assets

Knowing your dependents needs helps in assessing your current savings plan. Let’s say their needs amount to $1 million and you presently have $350,000 in assets, you need to raise $650,000 through savings.

As you approach your retirement, it is high time you address your tax obligations. Retirement’s sweet spot is the period between formal retirement and when you begin accessing RMDs from your 401(k) plan or your individual retirement plan. Typically, this is around the age of 70.5 years.

Since you no longer have any full-time commitment, you are now in a lower tax bracket. Subsequently, this is the right time to benefit from low tax rates. Even so, you need to ensure that your overall retirement goals are in line with your retirement goals. Caveat! You shouldn’t focus on reducing the amount of taxes you pay instead, you should concentrate on accomplishing your retirement goals. So read on to find out more about how to leverage reduced tax rates.  Here are a few suggestions you can capitalize on low tax returns.

# 1: Embrace Roth

Convert your present IRA or 401(k) retirement plan into a Roth IRA. Though you must pay taxes on the conversion amount, it is at a much lower rate. On the other hand, retaining your funds in a traditional IRA or a 401(k) plan without taking out any RMDs leads to higher taxes.

Roth IRA withdrawals typically charge no taxes. Plus, no RMDs requirements apply to them. Actually, you can pass accumulated Roth IRA funds and tax-free status to your heirs.  Besides that, you can stretch a Roth IRA over several years to minimize the impact of taxes as well speed up switch over to a higher tax bracket anytime you want. But before initiating a conversion, you need to consider the following factors.

To begin with, ensure that you have sufficient cash resources for settling your due taxes. Beware that 2018 tax rules allow for no conversion reversals ever. This means that your assets are permanently locked in a Roth IRA. Besides, you must abstain from tapping into a Roth IRA’s assets for five years after conversion.

Offload Valuable Assets

You might have stock or assets held in a taxable account. If so, consider offloading your long-term high-value assets when your tax obligations are still minimal. Doing so lets you benefit from any appreciated gains.  Why is this so? Because any long-term gains on capital are adjusted relative to your gross income (see the table below).

SSelling any appreciated assets when your income is below the 0% threshold attracts tax at a rate between 15% and 20%. Also, if you are married with gross revenues of $250,000, a 3.8% tax is imposed on any other income you earn.

Leverage Employee Stock Options

Take advantage of low tax rates with employee stock options in your retirement twilight years. Doing so when your stock’s value is high and pricesare low will increase your gains. Plus, use low tax years to offload most of your employee stocks.

Get Rid of Saving Bonds

Today, US saving bonds aren’t a viablemeansof long-termasset growth because of low-interest. This is why many retirees hold on to bonds issued during high-interestrate periods. Offloading these bonds means you only pay ordinary income tax on any accumulated interest. So selling off these assets is agreat financialcoup.

It appears that more military service members are choosing the blended retirement system but overlooking an important step. That’s the word coming from the Federal Retirement Thrift Investment Board.

According to the Director of the FRTIB’s Participant’s Services Tee Ramos, approximately, 20,000 people have chosen the blended retirement system (BRS) the TSP offers, and they’ll get an automatic one percent contribution from their branch of service. However, the step they’re overlooking is how much of their pay they will contribute to the plan.

BRS participant contributions are not automatic unless designated by service members to be that way.

So, when uniformed service members don’t indicate how much contribution they’ll make each pay period, they are missing out on the full potential the TSP has to offer. With the blended retirement, members automatically get one percent from their armed service, but when they decide how much of their own money to put forth toward their paychecks, they can receive up to five percent.

The TSP is turning to social media – Facebook and Twitter – posting multiple reminders regarding the opt-in process. Federal employees already in the BRS can get more information about the program in the mail.

Newly enrolled uniformed service members have been automatically enrolled in the TSP since the start of 2018 when the board officially made the BRS public. However, any service member with 12 or fewer years in the military could opt-in if they wanted to.

According to the FRTIB, it’s the 12 years or fewer service members that are not taking advantage of all the benefits the TSP has to offer. For its part, the FRTIB has created an instructional video telling them about the process to opt-in for the BRS. They have until Dec. 31, 2018, to elect which retirement option to go with – either the current retirement system or the blended retirement system.

Over 50 percent of the uniformed service members are enrolled in the TSP in some form or fashion, with 162,000 service members in the BRS.

FRTIB Customer Service Sees Some Improvement

It appears that customer service is finally improving at TSP contact centers. In times’ past, there were very long wait times. In the first week of April, Thriftline customer service representations took about 14 seconds to answer phone calls. In mid-February, that number was 761 seconds with only 5.6 percent of calls being answered within 20 seconds.

Today, the agency’s goal is 20 seconds for all calls, and 87 percent of the calls are being answered in that timeframe.

While the agency still has some work to do, it is doing everything it can do to finalize the details and ensure they are back on the right path.

In January, more than 120,000 callers were on the phone waiting on a Thriftline representative for over five minutes. The TSP’s own customer service goal is to answer 90 percent of people’s calls inside of 20 seconds.

In mid-February, the agency saw hang-ups hovering around 35 percent; in April, the percentage dropped to just one percent.

More staff members were added to the roles, and a new training pilot was launched to help the new employees. TSP contact centers are not getting as many phone calls as they did in January, February, and March, as that’s the peak season for the TSP.

The FRTIB is also creating new queue messages that it will use when customers are facing long wait times. The message will talks about the wait times, information about the TSP website and information about frequently asked questions regarding various topics such as withdrawals requests and loans.

The Republican Study Committee recently unveiled its yearly budget proposal – A Framework for Unified Conservatism – for the 2019 fiscal year. The proposal mirrors many recent Trump Administration and other legislative proposals to diminish the pay and benefits of federal employees.

The budget proposal’s primary goal is to reduce spending by over $12 million over the course of 10 years. The federal workforce makes up just a minute amount of the suggested spending reductions, but the proposal does lay out the need to decrease spending in most areas of the federal government to halt the national debt from rising even further.

When it comes to increasing debt and controlling deficits, the only surefire way to handle them is to curb the spending. And, without some type of action now, an unstoppable debt spiral is inevitable, and a debt crisis will ensure. History has shown that countries that have gone bankrupt don’t last much longer.

The budget put forth by the Republican Study Committee is its ways to bring prosperity back to the American people. However, each day that goes by makes choices even more difficult and action must be taken.

What Does The Budget Proposal Target?

Here’s a look at some of the important points of the RSC’s budget proposal as it relates to the federal workforce.

Reductions In Pay and Benefits

The goal is to reduce the yearly across-the-board modification to federal civilian employees pay. According to the budget, the rapidly increasing federal government debt is in a state of financial emergency, which calls for the need to halt the automatic pay raises the Federal Employees Pay Comparability Act of 1990 allows for.

The RSC budget notes a president can restrict the increase’s size if warranted by an existing national emergency. As the proposal lays out, the rapidly growing national debt is an existing national emergency. Former PresidentBarack Obama put forth legislation that halted pay increases from 2011 to 2013. Still, the national debt rose to more than $21 trillion, and it’s expected to hit more than $34 trillion in the next 10years.

The RSC budget suggests federal workers get a half a percentage less than the anticipated amount in the yearly increase.

To justify their proposal, the RSC committee said most Americans do not see any kind of automatic pay increase and the Congressional Budget Office said federal employees are compensated17 percent more than private industry employees.

Reasonable Bonus Limits

Another proposal set forth by the RSC budget includes enacting reasonable bonus limits that federal workers are paid. Although the suggestion was made, there was no outline of what is or is not reasonable.

The support given in this area of the proposal was due to the Federal Employee Bonus Disclosure Act enacted by South Carolina. This act deems that the reporting of all federal worker bonuses be made public, and agencies would have to make reports for Congress to review.

Reforming Pension Plan

The budget proposal also looks to reform the pension plans of federal employees, which include the following five:

• Pension calculation is determined on five highest years rather than the current three-year highest.
• Employee contributions shares to FERS must increase over time, aligning with the private industry.
• The cost of living adjustment for both CSRS and FERS needs to be done away with or decreased.
• Get rid of the Special Retirement Supplement.
• Decrease the G Fund’s interest rate for a better reflection of the temporary T-bill rate.

The budget also proposed that all – new and current – federal workers add more money to their retirement; not just new federal workers. According to the Middle-ClassTax Relief and Job Creation Act of 2012, just newly employed federal workers were ordered to pay higher contributions, but the proposal wants to balance out the treatment to everybody in the federal workforce.

Reforming The Federal Employees Health Benefits Program (FEHB)

According to the RSC budget, 30 percent of the premiums are paid by federal workers under the FEHB program while the other 70 percent is addressed by the government. Since the ratio isn’t changed throughout coverage ratios, federal workers often get the most expensive plan, but it’s the taxpayers paying for it.

A way to alleviate that problem is to modify the premium support system where the government offers a standard federal contribution toward health insurance and employees would pay the rest. According to the proposal, the option lets employees buy plans with the right amount of coverage that will fit their present needs.

The suggestion was made that the government decrease the amount it pays on premiums to align more with the private section but gave no percentage specifics other than the much less than 70 percent it currently pays out.

Make Firing Federal Employees Much Easier

The RSC proposal wants to include more legislation on a current one affecting the employees of the Department of Veterans Affairs. They want to include legislation that helps the VA secretary to suspend, demote or remove any VA employee not performing well in their job. This would cause federal employees to labeled “at-will employees” rather than the Congressional Staff they are right now.

This idea was initially brought to light by Indiana Republican Congressman Todd Rokita. The bill would let agency heads suspend or fire without any notice or right to appeal federal workers. The firing could be done for good reason, bad reason or no reason at all.

Use Recently Enacted Holman Rule

The budget proposal also suggests Congress use the modernized Holman Rule to get rid of any redundant executive branch positions. What does the budget actually say about the Holman Rule?

The rule lets amendments be added to House appropriations bills in an effort to decrease how much money the bill covers, limit the number of federal workers and decrease federal workers’ salary.

When used appropriately, the rule is a powerful ally for House of Representatives conservatives working with the Trump White House to restructure the federal government, allowing it to become more liable to the American people.

Federal agencies and the president must work together with the House to find redundant executive branch position and ensure House appropriations bills include the provisions of the Holman Rule to weed out positions that are not necessary to the running of the federal government.

Decrease The Federal Workforce Size

According to the budget, it is necessary to reduce the federal workforce size, limit new hires to one employee for every three that are fired, resigned or retired. The president is given the discretion to modify the federal employment when a national emergency arises.

Federal Unions and Union Due Collections

The RSC budget would also prohibit the power federal employee unions had and recommended that automatic union dues deductions be abolished. The budget states that the federal government is a dues collector for federal workers in a union when it the dues are taken out of the employee’s paycheck and then sent to the union. The RSC budget proposes that a federal worker who wants to be a part of the union should pay the union directly and not from the taxpayers.

Get Rid Of Official Time

Information from the RSC budget says that in 2012, taxpayers paid more than $157 million to federal workers for not doing their jobs. These workers, it found, were using official time to do other things. Getting rid of the official time would ensure the federal government workforce would be more efficient and effective.

The legislation also targets official time by reducing future annuity payments of federal employees that use most of that time working with the union.