As baby boomers, most of us are past the child-rearing points in our lives. Our children have grown, many have gone off to college, and a good number have gotten married and started careers. They are going off on their own, a bittersweet development that lessens your financial obligations but may easily cause you some sadness and nostalgia.

Due to the faltering economy, however, today’s younger adults (those in their twenties and early thirties) are less independent than previous generations. Many of them are underemployed and some are living with their parents. Others have their own place but receive financial assistance. In such a climate, it should come as little surprise that a growing number of baby boomer parents are helping finance their child’s mortgage. This is largely the result of high rates for first-time home buyers. Instead of paying 5% on a mortgage, a younger buyer can get his parents to take out a mortgage at, say, 3.5%. He can then pay them back at 4%.

This arrangement can be mutually beneficial to both parent and child. But is it right for your family? Here are a few considerations to keep in mind:

Is This An Appropriate Investment Vehicle?

Financing your child’s mortgage may be a good investment, especially for couples who are hesitant to invest in the stock market as they approach retirement. But such an investment can also greatly reduce the diversity of your portfolio and lock a substantial portion of your assets into a single house. On this note, if financing a mortgage is detrimental to your portfolio or your retirement planning, it may not be the right move to make.  Make sure to talk with a financial consultant, such as one from Cavalry Portfolio Services, before you proceed.

Is There Any Chance That Your Child Defaults?

If there is any chance that your child fails to pay, you should absolutely refrain from entering into an agreement of this sort. Not only can a default create considerable family tensions, but it could also be economically crippling for you and your spouse. A bank can absorb a single default but you, in all likelihood, cannot.

How Much of A Difference Can You Make?

Some parents finance a mortgage simply to help their child save some money. Others do so because, without those savings, the son or daughter would not be able to afford a mortgage in the first place. Consider where your child falls on that spectrum. Is your help essential to their purchase of a home? Or is it merely beneficial? If the latter is the case, and if you find yourself expressing doubts, you may want to avoid making this investment altogether.

These are the three main considerations to keep in mind when deciding whether to help finance your child’s mortgage. Many parents instinctively want to help an adult child who is responsible, who can otherwise afford a house, and who hasn’t been dependent for years. While this is understandable, make sure that you don’t proceed without considering the potential ramifications.

The current U.S. and oversea economic situations are grim and the market is constantly fluctuating. Even level-headed investors are panicking and looking for quick financial fixes. However, it is important that everyone takes a step back to put the market movements in perspective. A drastic and sudden investment decision may give you short-term relief, but it can also jeopardize your long-term retirement goals.

So what does the latest economic news really mean for your 401(k)? Well, if you are investing for your retirement based on a strategy created for your unique situation, probably nothing too significant. Make sure you refrain from making hasty decisions out of fear and remain sensible by keeping the following things in mind:

1. First and foremost, establish a plan that aligns with your savings and investment goals and then stick with it.

If you have a well-thought out plan based on your financial goals, you will feel more comfortable committing to it through all market conditions. Choose your investments based on diversification and your risk tolerance. Accurately establishing your risk tolerance should keep you on track in down markets, and it should provide a guideline to keep your portfolio from getting too aggressive in up markets. It’s easy to panic when you think about your retirement savings in a down market, especially if your retirement date is right around the corner. If you’re invested based on a sound strategy that takes your investing personality into consideration, you’ll be less likely to react to the latest market news and more likely to stick to your plan.

2. There’s no such thing as the perfect investment.

Investors look to find the one investment that will protect them from the market’s volatility, while still providing growth opportunities. Focusing on finding that perfect investment will keep you from thinking about the bigger picture – building your nest egg. Also, you will become short-sighted by chasing after the next investment and miss out on two important wealth building strategies: compounding and dollar-cost averaging. Compounding works by adding growth onto past growth and dollar-cost averaging allows you to buy more shares when the market is down and fewer shares when the market is up, enabling you to smooth out the market’s fluctuations.

3. Rebalancing is crucial.

Rebalancing your portfolio is important, especially if you want your investments to keep up with the market’s ups and downs. Your original allocation may change because of the volatility and your assets may no longer line up with your original strategy. Moving your assets to fit your original portfolio should keep you well balanced and moving towards your goals. Diversification is important, but rebalancing your allocation two or more times a year should strengthen your investment strategy.

Every day the media announces another changing factor to the market, causing some investors to abandon their original plan out of fear. Avoid throwing away your retirement future for short-term satisfactions and instead, focus on the bigger economic picture and concentrate on building your retirement strategy to meet your needs.

Scott Holsopple is the president and CEO of Smart401k, offering easy-to-use, cost effective 401(k) advice and solutions for the everyday investor. His advice has been featured on various news outlets, including FOX Business, USA Today and The Wall Street Journal.

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Are you panicking because you did not start saving for retirement when you were young? Are you now worried that you won’t have enough saved for when you do retire? If you answered yes then you should not wait another day. While it is of course better to start saving when you are young, it is better to start saving late than not at all. Here are some tips to help you get started if you are a late retirement planner.

Don’t Panic

Many people who don’t start saving when they are young panic and as a result freeze up and avoid doing what needs to be done. If you find yourself retirement planning later in life it will be important to dig into the task at hand, determine what you need to do and start doing it. This will require you to take a calm and collective approach.

Determine What You Will Need To Save

Late retirement planning requires a more decisive plan than if you had started early. You will want to quickly work to develop a retirement budget, to determine what income you will have coming in during your retirement, how much money you anticipate needing and how much you still need to save. Once you have done this you will need to come up with a figure of how much you will need to save on a monthly or yearly basis. Once you have a figure your next task will be to start saving.

Start Saving

You now need to come up with a savings plan. First, you will need to work into your budget the amount that you will need to save. For some this may prove to be a difficult challenge. Don’t let this discourage you. Instead, really focus on what you want your retirement to look like and make the sacrifices you need to make. No one said saving later in life would be easy, but just think of how much harder it will be if you keep putting it off. Since you did start saving later you may need to work a few years more than you anticipated or still work part time during your early retirement years.

Be Careful About Risky Investments

Some people who start saving later in life think that they need to get their funds into potentially high yield investments in order to make up for lost time. This is usually not a wise move since high yield investments are also quite risky. If you start saving for retirement later in life you cannot afford to be too risky. Your best bet is to have a diversified portfolio and keep your funds out of the higher risk funds. A solid steady return should be your goal.

Reevaluate Every Year

Finally, you will also want to stay on top of your investing. At the very least you will want to re evaluate where you are on an annual basis. Make sure you are getting the return you anticipated and that you are saving enough. If you need to adjust do so as soon as you can.

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Achieving an early retirement may be the life dream of many workers but it takes more than dreaming to actually reach such a goal without already being independently wealthy. There is actually a lifestyle associated with planning for an early retirement and planning is a key element in that lifestyle.

Here are some valuable questions you need to ask yourself as you plan to achieve an early retirement:

What Is Early Retirement For Me?

In order to live a lifestyle of early retirement it is essential to first identify when retirement would come early. There are workers who would like to see themselves retire by their early 40’s while others are aiming for the age of 60. Regardless of how you identify the early age of retirement, it is essential you do by considering a few factors like your specific life expectancy to ensure you would have enough cash; whether or not you can afford continued health insurance for the necessary period of time; and when you’ll actually be ready to put your career behind you.

What Kind of Income Will I Need in Retirement?

There can be so many factors that influence once ability to survive financially after retirement. Once you pinpoint your age desire, you’ll need to calculate your cost of living plus all the other expenses such as hobbies, entertainment, and even travel. This is not an easy calculation to determine but estimates are necessary to begin aggressive planning, especially if you are fast-approaching your designated early retirement age. It may be necessary to sit down with a financial advisor who can highlight the expenses to consider in retirement if the concept is too overwhelming. Many people skip the financial pre-planning process of planning for retirement simply because there is just too much financial information to ingest.

Can I Live Like I Am Already Retired?

In order to guarantee a successful early retirement, it is essential to have the financial means. This translates to starting to live like you’ve already retired. It will be very important to set goals that allow for the most money to be put into retirement accounts and investments. Living like you’ve already begun retirement will include balancing a frugal lifestyle but still living efficiently. Budgeting will be required to ensure the allocation of funds into retirement accounts is adequate. Depending on one’s income, it can be hard to put that cash towards retirement goals when other needs must be met. Those who hope to retire by 45 but have a family to support may find it difficult to meet all of their financial goals for retirement at a younger than average age.

What is My Investment Plan?

Retirement funds are solely created for the purpose of saving for later in life. Depending on early contributions as well as those after early retirement goals have been set, your retirement funds may not be enough to sustain you for long. Employer-offered retirement accounts should be utilized effectively to ensure that paychecks are sufficient but contributions are consistent. Those who invest their income into various vehicles to earn additional retirement funds are always at risk for losing money. It is essential to have an investment plan for now as well as for the future. You must be able to choose investments that will provide the funds you need in your retirement years. It is extremely important to research and plan investments wisely so they will fulfill that purpose. Mistakes can be made easily which can hurt your chances for achieving an early retirement.

Living an early retirement lifestyle also means living a progressive, forward-thinking life where early retirement remains a priority. Being willing to sacrifice now for what you can have in the future can be a hard commitment to live with especially if early retirement is still a long way of for you.

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Many people look forward to their retirement years so they have more time to travel. Working generally limits the amount of vacation time, so it’s natural for people who enjoy traveling to look forward to their golden years, when they’re not limited to two weeks a year for vacationing. Unfortunately, many people reach retirement only to discover they can’t fulfill their travel dreams due to a lack of available money to do so. Here are some tips for traveling in retirement, from budgeting to medical and packing:

Include Budget Airlines in Your Search

The most popular travel search engines for flights will only include the largest airlines. Use travel search engines to compare prices of various flights that include all the budget airlines, as well. You may overpay for flights simply because you didn’t check the budget airlines.

Skip Airfare Completely

Better yet, take your time and travel slowly rather than booking flight after flight. Often, we’re all in a race to get from one place to another and see as much as we can in our limited vacation time. When traveling in retirement, you have the luxury of traveling more slowly. Visit one or two destinations at a time, and take some time to really explore every place you visit. You can get to know the people who live there, you can learn a new language, you can live as a local for a month or more, and avoid paying airfare from one destination to another as often.

If there are domestic destinations you want to explore in your travels, consider buying an RV. Taking your accommodations with you when you travel opens the door to thousands of dollars in savings over hotels.

Consider Your Medical Needs

As people age, there is often an increase in medical needs. If you are traveling, make sure you have enough medication to last your entire trip – and even a few extra doses in case you are delayed in your travels. If possible, research where you can get additional prescriptions while on the road. Keep in mind not all American health insurance will be accepted outside of the US, so if traveling abroad you’ll need to know what is covered and what to do if you become ill or injured outside the country.

Don’t Overpack

You want to figure out the fine line between being prepared and overpacking! You certainly don’t want to be dragging heavy luggage around, only to discover you didn’t wear half of what you brought with you! Research the climate for where you’re going and pack clothes that match the expected temperatures. Bring along one outfit for unseasonably warm or cooler weather than expected, but don’t try to bring your entire wardrobe in an effort to be prepared for anything!

Be on the Look Out for Bargains

If you plan ahead, you can safe money in all aspects of travel from transportation to food to entertainment. If you like to visit local attractions when you’ve arrived to your travel destination, keep in mind that all attractions that allow children will tend to be busier on weekends and school holidays, so you will often get a discount on school days and you’ll avoid the major crowds, too. Always ask for senior discounts – even if they are not advertised, many locations offer discounts or specials for seniors.

photo credit: Michael R. Swigart

If you are planning a retirement party, whether for a family member, boss or other coworker it doesn’t have to be a stressful task. There is such an array of what you can do and so many options that it can be fun and exciting, the creative options are limitless. You will need to decide where to have the party, what food to serve, who to invite, whether or not there will be entertainment and so much more. Read on for some great ideas to get your party underway.

Determine What The Guest Of Honor Wants

First and foremost you should let the guest of honor help you decide where the party will be. It is a big day and they very well could have an opinion of whether they want the party in a fancy restaurant or if they prefer a more casual venue. You should additionally seek their input on the menu and they should also be able to help in creating the guest list.

Create A Theme

Next, you may want to consider a theme for the party. Does the guest of honor have a hobby or anything of particular interest that you could use as a party theme? For example, are they a big sports fan, do they love a certain type of music, are they a wine connoisseur, etc. Having a theme can help create great ambiance and make it easy for you to decorate, decide on entertainment and more.

A Trip Down Memory Lane

For the party you may want to consider surprising your guest with a trip down memory lane. You can do this in a variety of ways depending on your time and available resources. You can have co workers send pictures from the work place, ask them to write out their favorite work memory they have of the retiree or even create a video of people the guest of honor has worked with throughout the years reminiscing about work times.

Well Wishes For The Future

Another great idea is to have guests at the party offer their well wishes to the retiree. This can be done in a number of ways either having them write out their wishes or doing a video diary. Putting together a scrap book after the event for the guest of honor which includes everyone’s well wishes and photos of the event is a great gift idea that the retiree will most likely treasure for years to come.

All The Other Details

Of course there are a numerous other details that you will need to attend to and it is always advisable to get some assistance. Here is a quick check list to help you plan the big day.

• Secure a location for the party.
• Determine what food and beverage will be served.
• Create a guest list and send out invitations in a timely fashion with and RSVP date.
• Determine the theme, decoration needed, entertainment, other supplies, etc.
• If the party is a surprise have a plan to get the guest of honor there.
• A few days ahead determine a final head count.
• Finally, remember to take some time at the party to enjoy yourself.

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Gone are the days of people hitting retirement age, packing up and heading to Florida, and sitting outside their retirement home sipping tea and driving to bingo in their golf carts. Baby boomers reaching retirement age are looking for communities that offer plenty of culture and and active lifestyle. They are not ready to pack it in and move into “over 55” apartment complexes. Deciding where to spend ones retirement can be tremendously exciting. Without the restraints of a job, the opportunities are limitless.

“Top” Lists

Choosing which communities are best for retirement is very subjective. Scanning top 10 and top 100 lists will show you plenty of cities, none better then the other, each offering some similar benefits and unique qualities. It’s probably better for you to make your own list of what you are looking for in a retirement community, then look through these top 10 lists online to see if any of the cities mentioned meet your criteria.

One thing you will definitely find in common on these lists are cities in the South or Southwest. While boomers may not be flocking to Florida, it appears that heading to warmer climates is still very appealing. Arizona, Texas, California, and North Carolina boast some of the most popular cities for retirement.

What to Consider

Something that the most popular retirement communities have in common is access. They have access to airports, to a University, to cultural activities such as museums and theater, and to fine dining establishments. This seems to be in line with the trend that boomers want to be able to stay active and get to things easily. When choosing a retirement community, consider whether these types of things are important to you, and if you want a city that supports an active lifestyle.

In a survey by Met Life, boomers considered “old” to be age 79 and certainly do not consider themselves “seniors”. Since baby boomers are considered those born between 1946 and 1964, the oldest of boomers are just turning 65. However, with older age, can come the issue of health problems. The top cities boast excellent health care systems, and that may be something worth looking into, especially if you plan to stay in the retirement community you choose for any length of time.

A final thing to consider is the climate of the city, not in terms of weather, but in terms of real estate market, crime, and cost of living. Look into the availability of homes in various price ranges, and a cost of living that is in line with how much you have in retirement savings.

Other Factors

Some retirees still like to hold a part-time job both for extra income and for something interesting to do. Finding a city that has jobs that interest you could be a consideration.

Also, if you have close or extended family, you might consider how often you will want to see them. Perhaps if you have grandchildren, you want to choose a city that will allow for frequent and affordable visits.

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There have been more and more Baby Boomers becoming entrepreneurs. As they retire from their jobs, many of them are immediately starting their own businesses. In fact, they help make up the majority of self-employed workers along with older entrepreneurs.

For many Boomers, they’ve always wanted to be in business for themselves, and one option that many are choosing is to start an online business. This is fitting, since a majority of them are comfortable going online and regularly surf the web. Plus, running an online business is more flexible and appealing than running an actual storefront. They do not want to be tied down all the time with having to manage a physical building now that they are retired, and this is the perfect answer.

Some Reasons Baby Boomers Are Becoming Entrepreneurs

• Baby Boomers are healthier and live longer on average. When it comes time to retire, they still have plenty of years of good health left.
• Baby Boomers enjoy making money. They don’t want to come home after retirement and do nothing, but rather continue to feel useful by still earning a living of some sort.
• Baby Boomers want to remain active. They enjoy working and staying active and sitting around at home with nothing to do is not appealing to them.
• Baby Boomers already have plenty of experience. They have 20-30 years of experience already racked up, and can generally start an online business with the knowledge they already have.
• Baby Boomers get to pick what business they start. Again, with all the knowledge they already have, they can pick something that they enjoy doing and are good at.
• Baby Boomers want freedom. They don’t want to be tied down to a storefront which involves much more time and involvement. They want the freedom to be able to enjoy more things that they’ve always wanted to do, or just spend more time with family.
• Baby Boomers may already have the funds to start the business. If they have been planning all along, they may already have some money saved up to start this business, and have an advantage over a younger person who might not have the savings to help start a business.
• Baby Boomers won’t be discriminated because of age. With age comes experience, as a general rule, and they will have much more trust from potential customers in their products or services than perhaps a young person just starting out.

Not Retirement Ready

Many Baby Boomers going into retirement are really not ready to retire. Although they may want to move on from the job they’ve been doing for many years, they probably still want to remain active and vital to their community – that need to feel useful. For many, this is the perfect time to revisit what they always dreamed of doing as a career but was just not practical 20-30 years ago. Now they have the experience, and perhaps the savings, to begin on a journey that could be both rewarding and fruitful where they can also enjoy the freedoms of retirement.

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Approaching retirement, that thing you’ve worked all your life to get to, can look awfully scary once you are finally getting close to the long awaited goal. There are many things to think about, and the major things that concern people all have to do with finances. These include the fear of losing their money, the fear of outliving their money and the fear of making bad investments. People also fear that their standard of living could go down if they have to tighten up more on their bills and spending.

What Are Some of The Risks Retirees Face?

• The Longevity Risk –

  Even though the average life expectancy in the United States is 78, it is nearly impossible to predict how long an individual will live. It is wise to look into investments that can help protect you even at advanced ages. These include reverse mortgages, longevity insurance which usually starts paying you around age 85, and managed payout plans.

• Inflation Risk –

  Many people don’t factor in inflation while planning for retirement, but this is one of the biggest risks for retirement. If you are not saving for retirement with inflation in mind, you could run into trouble when you have not saved accordingly, making your retirement much more difficult.

• Interest Rates –

  This is also a difficult one to predict, because who knows where interest rates will take you? It is recommended that to help prepare for this to invest in immediate annuities, long-term bonds, mortgages or dividend-paying stocks.

• Business Risks –

  If you have retirement funds through your employer, you can’t always guarantee that it will remain safe because it is hard to predict whether or not the company will dissolve eventually, or even go bankrupt. You can help gauge your employer’s risk by checking out their credit rating, but you still need to be aware of this risk.

• The Stock Market –

  Another volatile investment, the stock market can fluctuate suddenly, reducing your retirement funds by quite a bit if you have these types of investments. The best thing to do is to diversify your investments across several individual stocks, in order to try and cover any losses that may occur. Older investors may want to limit their stock market investments since the market can be so unpredictable to lower their risks.

Although those are some of the main risks, other things like unexpected health care costs, death of a spouse, and the inability to live on your own anymore can all cause big risks for your retirement as well.

Be as Prepared as Possible

Although it is nearly impossible to be ready for every single risk that might come your way during retirement, there is a lot of ways to educate yourself before retiring so that you can try to be as prepared as possible. The more you take care of before retirement, the easier getting through that time of your life will probably be. Talk with your financial advisor, and make sure and discuss these things with your spouse as well so that you can both be prepared for many of the risks and challenges you are likely to face during retirement.

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There are countless things to consider as you near retirement age. Like when you will retire, whether or not you will continue working part time and where you will live. Many people when they retire look to sell their home and downsize to a condominium. As we get older many of us think about a time when we won’t have to do lawn upkeep, shovel snow in the winter, etc. If you are considering buying a retirement condo there is a great deal to know and understand. While condo living is great for some people, others may find that it is not for them.

Everything You Need To Know When It Comes To Buying and Living In A Condo

Condo living is quite different than living in your own detached home. Here is a look at what you will want to consider before you make the jump to condo ownership.

• Many condos do not have their own entrance and are set up like apartment living. This means there would be one main entrance to the building then hallways leading to individual condos.
• You will have to share common walls with your neighbors. Depending on your building you may not have the best sound proof walls. Additionally, if you are sensitive to smell and your neighbor like to cook you may have an issue.
• Privacy may be an issue but in the same sense if you are a sociable person and enjoy spending time with others a condo may provide you with a great social outlet.
• Most condos have monthly maintenance dues to pay for upkeep like lawn mowing, snow removal and other amenities you might be privileged to.
• Condo developments often offer community areas like a clubhouse, swimming pool, tennis courts and more.
• Condos vary greatly in cost depending on where you decide to purchase, what amenities are included, the size of the condo you purchase and more.
• Very often condos are more difficult to resell than a traditional home and they can also sometimes depreciate in value. If you plan to resell down the road you may want to consider a different living alternative.
• Most condos come with associations that have strict rules and regulations that owners must follow. You will most likely have little or no input on the rules and this will be something you will want to consider.
• Some retirement condo communities also have age restrictions when it comes to residency and even if you have family come to visit they may not be allowed to use your community swimming pool for example.

Making The Decision To Buy Or Not To Buy

So, you may now be thinking is purchasing a retirement condo the right move for me? The answer is really up to you. You will want to carefully look at the condo living lifestyle and decide whether or not it is right for you. Additionally, if you do decide it is right for you make sure you carefully check out different condo communities and pick one that will best meet your needs and lifestyle.

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