Five steps to early retirement

Five steps to early retirement
By Leah Gliniewicz • Bankrate.com

Even if you fail to win the lottery, don't give up your dreams -- you can still plan for an early retirement. But wait too long, and you won't have a nest egg to sit on.

According to the 2003 Retirement Confidence Survey by the American Savings Education Council in Washington, D.C., only 21 percent of saving Americans are very confident of having enough money to live comfortably after they retire. And, the study found that three in 10 workers have not saved for retirement.

Debt can play havoc with retirement planning.

"Debt is a deterrent to growth, says Jeffrey Levine, a certified financial planner in Albany, N.Y. and a member of the Financial Planning Association." You want to get rid of debt, especially if you have high interest rates like credit cards."

So how do you begin?

Step 1: Develop a plan
Figure out how much your present lifestyle costs you. Then think about the type of life you want to lead after retirement. Realize that you could be retiring at the midpoint in your life, and you'll be on a fixed salary, Levine says. Don't forget to consider your long-term health care costs.

Step 2: Think in two's
Make financial plans for two stages of retirement: the periods before and after you are 59 ½ years old, says Les Abromovitz, author of You Can Retire. First, secure the after-59 ½ stage of retirement with investments such as 401(k)s, Individual Retirement Accounts, pensions, annuities, Social Security and savings.

"If you're serious about early retirement, you also want to look for ways to fund the pre-59 ½ stage of retirement," Abromovitz says.

Figure out what assets you have that produce income. And you might want to begin investing more aggressively, with investments that produce a greater rate of return.

If your home won't suit your retirement lifestyle, remember that the Taxpayer Relief Act of 1997 allows you in many cases to keep the capital gain when you sell the home, Abromovitz says. That money could help carry you through the first years of early retirement.

Step 3: Take advantage of tax-deferred opportunities
To secure the back-end of your retirement, maximize the money you put into your retirement fund, says Ileen Malitz, certified financial planner and author of The Modern Role of Bond Covenants. She stresses starting a 401(k) and a Roth IRA from day one of employment.

"If you're willing to enroll in a 401(k) you're taking a major step to retiring early," Abromovitz says. "401(k)s and IRAs are can't-lose situations as long as you continue investing in the long haul. You take advantage of tax shelters and compounding for decades by doing so. So it's hard to go wrong."

Putting money in an IRA does not mean paying penalties if you go fishing earlier than planned. For the purpose of early retirement, you can withdraw from your IRA if you take advantage of the annuity payout.

Step 4: Invest it
The third place to stick your left-over money is in non-tax sheltered mutual funds. Figure out where to invest it so it produces a decent return. Look in the mutual fund column of the newspaper for funds with no custodial fees and no commissions, known as loads.

"It's best to combine it into a money market that earns good interest and stock mutual funds. It will be taxable, but it still is probably the best place for it," Malitz says.

While mutual funds outside an IRA or 401(k) may not be tax sheltered, they can be tax efficient. In the case of mutual funds, this means the fund managers buy and sell the fund's assets with an eye to tax consequences.

No matter where you invest your money, your best bet is to do it on a regular basis. "For people who don't find it easy to save, the best thing to do is to get into an automatic investment program," Abromovitz says. A fixed amount such as $50 to $100 is deducted from your paycheck monthly and invested in mutual funds. The result is dollar-cost averaging, which means you buy more shares when prices are low and fewer when prices are high.

Abromovitz says the last thing a would-be retiree should consider is investing on hot stock tips: "To me, you should have all of these solid investments first. If you hear about something, it should be money you're ready to lose. It should be a lower priority."

Step 5: Stick to your plan
Early retirement requires a long-term savings and investing plan, and it takes discipline. This means keeping debt down and perhaps not living as lavishly now, so you can reap the benefits later.

You make a choice between lifestyle and high wealth accumulation. If you want wealth accumulation, you have to live a modest lifestyle. It has to be a written, conscious choice.

Time is on your side. The earlier you start and the longer you leave your money untouched, the more compounding can work for you.

When you haven't saved, it's hard to go back and make up for it. Malitz says the easiest thing is to decide to save 10 percent of your income. You'll probably never miss it.

stupid system administrator

I feel like killing my system ad. He's bloody supposed to upgrade my pc. and he's there taking his own sweet time. i really hate him when it comes to work. slow lazy bug.

Don't Piss Off Mommy!

My eight-year-old son's hamster had eight little hamster babies two weeks ago. They were doing great, in another week we can separate them from the mommy hamster.

Today, I was checking on the brood and could only count seven babies. I took all the critters out and carefully sifted through the bedding (they bury themselves) - no eighth baby.

I sat son down to explain to him what had happened when he came home from school. He sat quietly and a tear welled up when I told him about the tragic demise of one of his babies. He accepted this, taking it rather well.

About an hour he walked up to me and asked if he would ever have to worry about a similar fate.

I confess that my brilliant, eight year old son is concerned that I may one day eat him.

He is so cute!

(I told him he would never, ever have to worry his pretty little head about that!)

just another damn fuckign week

just another damn fuckign week. now i'm left with the last sunday of the week. let's hope it would b better. and to the hell with japan

Who's That Fattie?

You know how when they speak about the obesity crisis on the news, they will sometimes show random fat people going about their lives? Of course, they never film their faces.

I confess that I saw myself on the news tonight - I was eating a burger. And even though they didn't show my face, it was pretty darn obvious it was me.

So nice to know that I am example of the obesity crisis in America.

momo is dying away at home and i'm at work.

It's so heartwrenching to see her withering away... when i can't do anything to lessen her sufferings.

"The death of a pet means the loss of a non-judgmental love source. There is no longer anything for the pet owner to nurture and care for."

ZOMBIE for Mon-Mid Fri, Human for Bottom mid Fri-Sun Night

ZOMBIE for mon-mid fri, human for mid fri-sun night

life is such a routine. wake up at 7, bath till 730, get outta house by 740, reach the interchage by 755, hop on the bus... sleep for an hour, buy my breakfast. Da-duh, jus nice, reach office at exactly 9 or earlier. Work ..... (occassionally surf...) till 1230 for an hour lunch.. work again....... knockoff time - 6pm! well.. nobody is leaving yet... a sense of guilt grows in me if i leave earlier than these bunch of pioneers. yea weak ain't it?

My only gratification @ work is the music resides in my harddisk (thank god for bit torrent), and my msn messager to connect to the outside world, in which i don't have to talk business with! but hell. boss has restricted our msn to only put our decent official names (on our appointment letter), followed by whatever rubbish u wish to put behind. well.... I couldn't even write a complaint there. (stupid me, I should have used another account for this.)

Lately i've been thinkin if this is the life i want. I've not been enjoying the stuffs that i'm doing lately (I'm still wondering why), imagine... this endless cycles would happens for like another 20 years if i'm lucky. Work for money to travel...and for a certain level of luxery...

I don't want to work to make money... i want to enjoy work, haha of cuz with abit of income to be realistic... but sometimes it's tough to balance both. When u enjoy your work, most probably you will not have the luck to get a fat pay cheque.

So what now ? work for money or work to enjoy? It's tough for me to choose...

Another monday, another week of unbearable work. =X what's life? Cycles of neverending work, and long awaiting weekends. Wish i could find some work in which i truly enjoy....

oh my gawd, we've got some boring boring blog huh, even the layout(i mean mine!) is boring, and we can't write! grrr... that's all for today!

今天只是礼拜二！！！

好闷啊！！！ 真的不想做工。。。天啊， 救救我吧！！！ 我的心好像不在这儿。。。

i'm so sleepy here after lunch! Now slowly warming up engine... to work...... listening to de-phazz.... dazing....

why did all the work start to come in only after i've tender my resignation? nab*y!

Moi Current Situation
 
Yeah i've just submitted my resignation letter, felt so relieved to get away from this place. I could say this is the worst working place that i've ever been to. Most prolly it's due the reason that i was brought in by the previous manager that they bear some grudges against me. Oh well, this is just not my place, and a lesson learnt.

My last day would be 20/21 Aug, and would b startin on my new job on the 25th Aug. A 6 months contract job, whether or not i'll b turned to perm shall rely on my performance. So i gotta work real hard in these 6 months, and hope everything goes well, with my weekends untouched! 

Moi Feeling after tendering

Guan wo pi shi le!!!
- I don't have any dealings with any of those mean fussy people ever again :)
- Watever happened here, and whatever apps that i've developed aren't mine anymore. FREEDOM!!!
- No more changing of stupid grammatical/spelling mistakes on those stupid web portals!!
- hee yay!!! and finally.........
- No more responsibilities, no more gossips, no more backstabbings. 

My New Job

I'll be joinin my new place as a solution developer, sounds nice huh? heh i'm lookin forward to it and at the same time, feeling petrified. What happens if i am unable to cope? Nonetheless, those coffee joints out there are ever-ready to welcome me back, aren't they? so i am not in the worst case :D haha!

hello joyce welcome to my blog :)

i hate enhancements to a systems, and i've got a meeting with the fussy users later at 3pm to talkin about the enhancements over this boring system. i simply hate it.

well well i'm back, still in the process of recovering from flu.

Check this site out, http://www.wholivesnearyou.com/, it actually shows profiles of those who stay on the same block as u and around u. kinda fun huh?

dell laptops are irritatin the hell outta me! screw the bloody fans.

oh yes, did i mention that i look like now?

i'm back with some updates!

- i had a sa gua tou haircut! but i hate my curls at the end! I mayb going for a rebonding soon, we'll c how thing goes with my ever-not-enough $$$.

- i've jus learnt T-Break, heh thanks to Lex. I got a 50-cents-and-a-half big bruise on my left buttock bone :( how to rub at home!!! hahaha guess i'll just leave it to go away.

- i've just told a white lie (is that a white lie?) to avoid attending a church wedding at dunno-where-church. I seriously don't enjoy going for wedding, with so much interactions to do. i am slowly turning anti-social. I jus don't find any fun mixing with people whom i'm not comfortable with, or the frequency just isn't right, so i'm not cut out for marketing and sales!

- It's just another day where i got nothin to do. sigh

Wee~ i'm going blading @ east coast today!