Free From Broke

A Personal Finance Blog for Regular Folks

Retirement

What is the 403(b) Retirement Plan? – Overview

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Even though the 401(k) is the most common retirement account in the United States, not everyone has access to such a plan.

Those who work for governments, schools and non-profit corporations don’t have access to an employer-sponsored 401(k).

If you don’t have access to a 401(k), you can, of course, open an IRA.  However, the contribution limits are fairly low, which can be discouraging if you want to contribute a higher amount toward a successful retirement.

The good news is that many hospitals, schools, non-profits (including churches), and governments have their own retirement account offering: The 403(b).

What is the 403(b)?

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New Federal Regulation for 401k Fee Transparency Rules

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Do you know how much it costs you on an annual basis to simply participate in an employer-sponsored 401k plan?

If you’re savvy, you probably already know that the mutual funds you select within your 401k plan have expense ratios.  That number shows how much out of every dollar invested you give to the mutual fund company to manage the fund.

On average actively managed mutual funds cost around 1% of invested assets (or $100 for every $10,000 invested).

But if you think that is the only fee being charged to you, prepare for a shock.

New 401k Fee Transparency Rules

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Will Your Investments Cover 30 Years of Retirement?

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Imagine working 40 years to fund a retirement that will last for 30; does it sound impossible?  Not if you live in a perfect world—but this isn’t, so that’s why we’ll be talking about whether your investments cover 30 years of retirement here.

A 30 year retirement is becoming the reality for more people all the time. It happens when people retire at 62 or even 65, and then live into their 90s.  This is happening for more people than ever and by all indications it will be even more common in the future.

Even if you don’t think you’ll live into your 90s, prudence dictates that you be prepared anyway. Healthier living and stunning medical advances are causing people to live far longer than they ever expected and the possibility that you’ll be one of them is increasing steadily.

Will you be ready for it financially?
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Playing the Retirement Catch-Up Game in Your Forties

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So, you’re in your forties and have little to no retirement savings.  “What shall I do?” you ask yourself.  First thing you need to do is not lose hope.  You have a challenge ahead of you but you can win this battle.  It’s something I like to call “Retirement Catch-Up.”  At its core, it’s a fairly simple game.  You have a certain time horizon and need a certain amount you need before you can retire.  With the proper knowledge, anyone can win this game.

Here’s you have a sort of “cheat sheet” to win the retirement catch-up game:

Max out your 401(k) plan immediately

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6 Things to Consider Before Retiring

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After working long and hard for many years, the idea of retiring is very appealing.  However, you do not want to just decide to retire without proper planning. 

There are 6 important things to consider before retiring.

1. Volatility

If you are planning on retiring, the market volatility influences your retirement account when you have stocks or bonds.  The factors that impact volatility include the state of the economy, current events in the world, taxes, changes in the industry, political unrest, natural disasters and war.  Expanding your money out over different types of investments could help control the risk involved.  It is important to keep track of your portfolio, and make sure it is aligned within your goals.  Make sure your accounts are flexible, so you can make changes when needed. [Read more…] about 6 Things to Consider Before Retiring