Tips on Managing Money - 401k Retirement Plans

401k Retirement Plans

With the severe volatility we are now experiencing in the markets, investing in 401k retirement plans is becoming a risky venture. That is why you need an alternative or supplemental retirement financial plan.

So why do you need an alternative or supplemental retirement financial plan? In a survey conducted by AARP:

"Retirement accounts eroded due to the volatility in the stock market"

Because of this and the rising cost of health care (forcing companies to cut retirees health care), many retirees are being forced to work past retirement age. But, its just not retirees who have to worry about their retirement accounts being eroded, it is also younger adults.

In another survey conducted by Scottrade, an online investment firm, the majority of Americans now have to depend on 401k and IRA for retirement. And why do most Americans have to depend on 401k and IRA for retirement? Very simply because most companies (in particular small companies) no longer offer old school retirement plans that guaranteed checks for retirement. They are instead switching to 401k retirement plans which shifts the burden of retirement investing to the worker (employee).

With 401k retirement plans the employer is not obligated to make up for stock market losses. In-other-words the average worker's retirement plan is now totally dependent on the volatile stock market!

Then to ad insult to injury some companies offer separate benefits plans. One plan offered to their highest paid employees (executives) and a second plan (scaled down version) offered to their lowest paid workers!

Other reasons why there is a need for a supplemental and or alternative retirement plan is downsizing and outsourcing which has made job security a thing of the past.

There is some positive news to report though. In the same survey conducted by Scottrade, Americans are... spending less, paying down their debts and cutting back on credit card usage. But, on the negative side, they are working more to earn more and are looking for higher paying jobs.

Fortunately with our financial planning action guide you will NOT have to worry about working more to earn more or have to go out looking for a higher paying job to pay down your debts.

Investing in Yourself

We are going to teach you that retirement planning involves investing in yourself. It starts with you paying off all of your credit cards including your mortgage. When you pay off all of your debts you are investing your money in yourself instead of your creditors.

Retirement planning means investing in the preventive maintenance of your own personal health and well being. By investing in the preventive maintenance of your health, you will not only save yourself hundreds, if not thousands of dollars in unnecessary medical bills, but also allow yourself to live a long healthy life.

When you choose to ignore health, you are in essence investing your money in the pharmaceutical industry (because of the amount of money you spend on prescription drugs), doctors, HMO's (because of the amount of visits to the doctors office) and in the hospitals.

Retirement planning is investing in your own personal assets (something that can generate a cash flow). This could be real estate (owning income producing rental properties) or an online business that produces multiple streams of income.

Finally, retirement planning is investing in your own personal success!

In conclusion, retirement planning is not only investing in yourself but also taking ownership of your life!

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