Figuring Out Your Military Retirement Benefits

Military retirement benefits can provide many valuable resources. Like most government programs, however, understanding the ins and outs of military retirement benefits is enough to make your head hurt.

The Three Systems Of Military Retirement

There are three basic systems of military retirement benefits. The type of system for which you are eligible depends upon the date on which you first entered the military.

The Final Pay System

If you entered the military before September 8, 1980, you are eligible for the Final Pay system. This system is relatively easy to figure out. Each year served translates into receiving 2.5% of your basic pay. Thus, if you retire after thirty years of service, you will receive 75% of your basic pay at the time of your retirement, not including allowances or special pay systems.

The High-Three Average System

The High-Three Average military retirement system applies to people who entered the military between September 8, 1980 and July 31, 1986. After fifteen years of service, this option is also offered to military personnel who joined the military after July 31, 1986. (The other option is called the REDUX option and is discussed in the following paragraph.) Unlike the Final Pay system which looks only at your base pay at retirement, the High-Three Average system looks at the average pay throughout the highest-paid 36 months of your career. Each year served earns you 2.5% of the highest 36-month average.

The REDUX System

Finally, the REDUX system is a system adopted by Congress as part of the National Defense Authorization Act of 1986 and amended in 2000. The REDUX system is for those who entered the military on or after August 1, 1986.

The REDUX system, like the High-Three Average, considers the average of the highest 36 months worth of wages. It is more complicated that the other two systems for several reasons.

First, the multiplier varies depending on time served. For instance, each year of the first 20 years is worth only 2% of the high average pay. Each year after the twentieth, however, is worth 3.5%. For instance, if an individual joined the army in 1987 at the age of twenty and retired in 2007 at the age of forty, his or her retirement pay would be 40% of the average of their 36 highest-paid months. If this same individual waited three more years and retired in 2010, he or she would receive 50.5%.

Additionally, REDUX offers a “catch-up” benefit to bring it in line with the High-Three Average benefit you reach the age of 62. Take the individual in the previous paragraph who retired from the military after twenty years of service at the age of 40. When this individual reaches the age of 62, his or her retirement benefit will “jump” to 50% of his or her highest 36-month average salary.

Finally after your fifteenth year of military service, you will be given a choice between the High-Three Average System and the REDUX system. If you select the REDUX system and agree to serve in the military for a minimum of thirty years total, you will receive a $30,000 bonus.

Still Confused?

To find answers to your questions or to learn more about military retirement benefits, check out Military Benefits at http://www.military.com/benefits/military-pay/questions-about-pay.

Your well-deserved military retirement benefits can bring you extra financial security as you plan to retire, but it is important to understand how much pay you can expect to receive and, when you have a choice, to choose the system that’s right for you.

Investing For Retirement At All Ages

Whether you’re twenty or fifty-five, investing for retirement is a good idea.

Many people believe they can depend on social security to take care of them after they retire, which is a mistake two reasons. First, social security pays only a portion of your current income, People trying to live on their social security checks alone often find themselves living an austere lifestyle indeed—no vacations, fancy restaurants, or expensive presents for grandchildren.

Second, as the Baby Boomers age, social security is facing a crisis of epic proportions. By the time you are of an age to retire, benefits will probably be reduced even more than they already are. Some cynics believe that the system may be eliminated entirely, which makes investing for retirement even more important.

Investing for retirement requires some strategic planning based on your current age.

Twenty-Something

If you are in your twenties, retirement is probably the furthest thing from your mind. You are probably just entering the work force and learning to enjoy having disposable income. But those forty or fifty years between now and retirement will pass faster than you think, and you certainly don’t want to be unprepared when the time comes. There are a few investing for retirement strategies you should start to follow now.

Opt into your company’s retirement plan, especially if your company offers benefits like matching or partially matching your contributions. Don’t worry if you can only afford to place a small amount into your retirement plan right now—it will have time to grow. Companies generally allow you to choose among several funds. Many advisors suggest that you put part of your money in a low-interest-rate-low-risk fund and part in a potentially higher-interest-rate-high-risk fund.

Thirty-Something

During this time, your money is probably wrapped up in raising a family, planning for college funds and worrying about what would happen to your kids if something happened to you. You are also probably making more money in your career than you did when you were in your twenties.

If you haven’t started planning for retirement yet, there’s still time. The most important thing you can do is pay yourself first. You can’t miss what you’ve never had, so have the company deduct the maximum allowable amount from your paycheck to put in your retirement fund.

Forty Or Fifty Something

If you are in your forties or fifties before you start thinking about investing for retirement, you have some catching up to do. First and foremost, immediately began contributing to your company’s retirement fund. The law will allow you to contribute up to 35% of your salary, if you can afford to do so. It’s best not to seek out aggressive/risky funds now, because you won’t have time to recoup your losses if their value takes a dip.

While you are working on investing for retirement, you might want to consider putting off retirement for a few years. This will help for two reasons. First, it will allow your retirement fund time to grow. Second, the longer you put off retiring, the greater the percentage of income you can collect from social security (assuming the current system doesn’t change).

Finally, you may want to consider taking a second job or doing some work from home to earn a little extra income, all of which should go into your retirement fund.

It doesn’t matter whether you’re twenty, thirty, or fifty. Investing for retirement should be an important part of your financial planning.

Having The Life Of Your Dreams With Individual Retirement Account

You have worked for more than twenty, thirty, or even forty years of your life and what you just want as a reward to yourself is a secure and comfortable retirement life but you know you could not just solely rely on your social security retirement benefits for you to achieve a more comfortable life. The answer for your problem is the individual retirement account or the IRA for you to have the kind of retirement life that you dream of.

The individual retirement account should be a must for every employee in the United States and the best time to start is the soonest or earliest.

What Is It?

The individual retirement account or IRA is the special tax that is delayed savings account that is authorized by the Internal Revenue code section 408. The individual retirement account is designed to make savings for people easier and also, to encourage them to save for their future. The money that you could get from your IRA could be a very great help especially in your retirement life, to provide you with the saved money in achieving your life goals and dreams.

So if you are thinking if the individual retirement account or IRA is a good investment, the answer is yes. It is because the contributions on the individual retirement account may be fully or partially deductable to every income earners and aside from that, the interest or earnings on it are protected from income taxes for everyone until they are withdrawn.

If you are still hesitant about having your own IRA and thinking if it is a good investment, a lot of assets could be generated from it like certificates of deposits or CD, treasury bonds, mutual funds, stocks, corporate bonds, savings accounts, life annuities, and a whole lot more. Probably the only thing that you could not invest on your IRA money is on life insurance.

Relying On IRA

If you are solely relying on your individual retirement account or IRA for your retirement, you could have as many IRAs as you wish provided that the total amount of money that could be tax deferred is a maximum of two thousand dollars. Another great thing about IRAs is that you could contribute on your spouse’s if he or she is not working and each account has a maximum qualified contribution of two thousand dollars per year.

So if you are thinking of a secured and comfortable retirement life, the best way for you to have it is through individual retirement account or IRA. So start now, have peace of mind, and live the life of your dreams because it is sure to happen.

How To Be Mentally Prepared – Looking At Important Aspects Of Retirement

There are many important aspects of retirement, but perhaps the most important is keeping mentally active after you leave work for the last time.

Many people struggle to cope when they retire, especially if they have been used to a busy day to day life with a hectic job. They key to a successful transition into retirement is to prepare for it well in advance.

Talking To Others

If this sounds like you and you are approaching your own retirement, now is the time to reach out and get as much help as you can to make sure your own transition is as pain free as possible.

One of the most important aspects of retirement is to talk to other people and get some help and advice whenever you need it. Talking to people who have already retired is a good step to take to find out exactly what it is like.

Talk to any friends and family who are retired to see how they coped. Find out if there are any support groups in your area. If not, why not start one? Seeking help and making new contacts is one of the most important aspects of retirement, and people who have already been through the transition from a busy job to a relaxed retirement will be best placed to tell you how they coped.

Finding New Interests

When you are working you have something to get you out of bed each day. You have a purpose in your life. This may also include children and other responsibilities. When you are retired and your children are making lives of their own it is easy to lose that sense of purpose.

Among the most important aspects of retirement is continuing to find a purpose in your life each day. Do you have grandchildren? If you do, now is the time to forge closer relationships with them.

Some people feel that when they retire they suddenly become old and redundant, but this is far from the truth. Having hobbies and activities that keep you mentally stimulated each day will help make your retirement an enjoyment and not a burden.

Make a list of all the things you’ve wanted to do over the years and never found the time for because of work. Now is the time to start crossing those items off! This is one of the most important aspects of retirement – keeping your brain stimulated and enjoying every day of your new found freedom as it comes.

Why Florida Retirement is So Popular

When you mention the word retirement, one of the first things that comes to mind is the state of Florida. It is really no wonder, considering that since 1980, the state’s population has increased dramatically, with an average of 873 new residents each and every day.

We all hear of people retiring and moving to Florida all the time, but do we really understand why they do it? There are actually a few good reasons in particular which go to explain why Florida retirement is so popular, of which will be discussed here.

The Popularity of Florida Retirement

One of the most major reasons that Florida retirement is so popular is one of the most obvious as well – the weather. The weather in Florida is so constantly mild and beautiful that it is no surprise that so many people would want to go there to spend their final years.

The climate of Florida is tempered somewhat by its proximity to water, and this explains why most of the state has such a humid subtropical climate. The seasons in Florida are really determined more by precipitation than they are by temperature with mild to cool winters and falls and hot, wet springs and summers.

The Florida retirement industry is also large enough that the state itself actually has perks for those people that choose to retire in Florida, and for example, the residents of Florida are entitled to property tax exemptions of up to $25,000 on the assessed value of owner or owner-dependant occupied homesteads. This can end up being incredibly rewarding, particularly if you spend your entire retirement in Florida, because obviously the longer you are there the more money you will profit.

However, before you go ahead and elect yourself for Florida retirement, you want to consider the population of the state. After all, what with all of the previously discussed perks and advantages that come from retiring in Florida, it is a state which has quickly become intensely populated, and so you have to consider this. Researching the best places to retire in Florida and finding the best Florida community is also incredibly important, before you pull up the stakes and move.

The most important thing is that you are happy in your retirement years, and so whether you make the move to Florida or somewhere else, as long as you are going to be happy and enjoy yourself, that is really all that matters.

Early Start To Financial Planning For Retirement Helps Hit Goal

Something that most people just entering the job market is financial planning for retirement, as the usually have a lot of other financial decision on their mind. Having a home, a car, raising a family and accumulating “stuff” is typically more important to the younger workers than financial planning for retirement and it is put off, possibly for decades.

There are many indications that Social Security benefits alone are not going to enable someone the standard of living they enjoyed while working and when the time comes to stop working, without sufficient financial planning for retirement the money for every day living expenses will be tight. However, it does not have to be that way and people can begin to build their retirement fund at about any age, but the important thing is that they get started as early as possible.

It is also becoming more difficult to count on retirement savings through employment as when companies close, it is possible that the funds in those accounts will no longer be available. In today’s environment, in order to be assured sufficient resources for ending work, financial planning for retirement must begin as soon as possible and be as completely thought through as possible.

Tomorrow Needs To Be Considered Today

The first step in financial planning for retirement is to determine the amount of cash that will be needed at the expected retirement date. Some guesses will be needed for some numbers such as expected longevity and the amount of possible growth of those funds following retirement. Once the person stops working, the only addition to the retirement fund will be interest being earned on what is already saved.

The next item on the list is how much money is currently saved from all sources, such as savings account, IRA, 401K planes and others, followed by how much needs to be put away, by month, for the remainder of the working life. Since financial planning for retirement is such an important part of the golden years, those not familiar with the planning stages may want to seek professional input in how to insure they have enough money on which to survive once they quit working.

There are many things to take into consideration and financial planning for retirement is not an exact science. Many variables can change throughout the time on the job and health issues can upset all of the formulas. However, the earlier a person begins planning, the easier to adapt to changes in the plan will become.

How To Plan For Early Retirement

One of my co-workers always said she was going to take an early retirement. “Out of here by age 50” was her motto. We teased her about it, telling her she’d probably end up working until she was 70 or 80, but we were wrong. She turned in her notice two weeks before her fiftieth birthday, and at age 50 she retired to a life of, if not luxury, then certainly a life of plenty. How did she manage this retirement? By following several important steps.

Early Retirement Step 1: Know What You Want And What You Need

Set a specific date for your early retirement. Also think about what you would like your retirement to be like. Is it okay to live a frugal life in a tiny, rent-controlled apartment just as long as you don’t have to go to work every day, or do you want to travel, enjoy fine dining, and spoil your grandkids on their birthdays? What is the minimum amount of annual income that would allow you to live the lifestyle you want?

Early Retirement Step 2: Start Saving Early

You can’t suddenly decide when you’re 32 that you want to retire by age 35. If you want to take an early retirement, it’s important to start planning almost the minute you enter the work force. Stuff as much money as you can afford into a retirement account. It also helps if you aggressively pursue the high-paying jobs that match employee retirement contributions. Some companies offer generous buyouts to employees who take early retirements, so keep you eyes open for these folks. You may also have to get a second job or work from home to earn extra money to go into your retirement account. No matter what always pay yourself first.

Early Retirement Step 3: Meet With A Financial Planner

A financial planner can look at your current situation and advise you on exactly how much you need to be saving now to retire when you want to. He or she can also give you advice about the best funds to invest in and unexpected expenses you may need to plan for. If you retire early, for instance, where will you get your health insurance until Medicare kicks in at the age of 65 or older?

Early Retirement Step 4: Keep A Close Eye On Your Financial Situation

This doesn’t mean changing your investments around with every little blip in the stock market—most experts strenuously oppose this tactic, in fact—but at least every year you should sit down and review your financial situation to make sure you are still on track to early retirement. If something seems wrong, make an appointment to talk to your financial planner right away.

You don’t have to be a millionaire to take early retirement, but you do have to start planning early, get professional advice and follow through on the promises you make to yourself. Following these simple steps should help you leave the work force at a young enough age to enjoy the rest of your life unencumbered by the burden of work.

Looking For The Best Retirement States

If you are looking for the right place wherein you could retire and spend the rest of your days staying active while at the same time find the right place to relax, there are numerous retirement communities across the country that would best suit your needs. These retirement places have the latest and most fun amenities that you could think of that you have been waiting all your life to do.

But the thing is, what about the location? What are the best retirement states that would make your every day the happiest of all time?

Top Five Places

The top five best retirement states across the country are Washington, Georgia, Arizona, Michigan, and Virginia. Washington made the top five cut because of the town of Walla Walla which has become a destination for wine connoisseurs, urban refugees, and moving retirees. The town of Walla Walla boasts of nineteenth century Italianate-style architecture and has been revamped to become cafes, bookstores, art galleries, and restaurants. It also has three colleges that becomes a hub wherein retirees could hold their activities while enjoying classical music. Truly, if you want an easy-going, art-inspired lifestyle, Washington is the top among the best retirement states for you.

Also making the cut for the best retirement states across the country is Georgia where St. Simons Island is located. The town has sandy beaches, lush marshes, and live oaks which makes it more fun for you to enjoy the sun while enjoying picturesque scenery. Also the town has large number of fine dining restaurants and art galleries wherein most of the town’s artists sell and display their creations.

If you like an active retirement lifestyle, the best retirement state is Arizona where the town of Prescott is situated. The town attracts many retirees who enjoy the outdoors and it has more than six golf courses for golf enthusiasts to get pleasure from. There are many outdoor events that are being organized on the town and also many saloon-style bars and restaurants wherein you could chill in. The town has three hospitals, expanded library, and a new adult center will be opened.

Also on the list of the best retirement states is the state of Michigan which the town of Holland is situated on the shores of Lake Michigan. This state is the best especially for those who enjoy the beach and likes sailing or boating. Though it is not warm or sunny the whole year round in Michigan, there are also fun things to do indoors for retirees during winter. There are many restaurants and independent shops to enjoy during winter time.

Lastly, making the cut for the best retirement states is the state of Virginia where the town of Williamsburg is located. The town of Williamsburg has an eighteenth century feel to it making it appear to be European since it was a British colonial capital before. But right now, the place have many modern-day comforts for you to enjoy, so if you like tripping down the memory lane, Virginia is the best retirement place for you.

Finding The Right One For You Among The Best Retirement Communities

If you are looking for a place wherein you could retire and give you all the things that you want to enjoy life and still stay active while relaxing, there are many retirement communities across the country for you to choose from. But sometimes, choosing the one for you among the list of the best retirement communities may be hard and confusing especially that most of these best retirement communities features the latest amenities that sometimes makes it pricier.

Here are some guidelines when it comes to finding the right retirement community for you. Just remember that you take note of them before choosing among the list of the best retirement communities.

Just Remember

Choosing a retirement community and relocating to another place is a hard and sometimes an exhausting task. Probably one of the standards that you should consider before choosing your retirement community is the price and weigh first if the price of the place is reasonable enough. You may be surprised that there are many plans that you may choose from and sometimes, you get to have a good bargain.

Another standard for you to consider before choosing among the list of the best retirement communities are the amenities that they offer. Do they have a golf course? Do they have certain programs that would support your pursuit of a more holistic lifestyle? Would going back to university and school make it easier for you? Would you have peace of mind when it comes to security matters? These are among the questions that you should ask yourself and look for in choosing the right retirement for you. It is your time, and your retirement life should allow you to do the things that you love doing but did not have the time before so your retirement community should support your life goals.

Also, before choosing among the list of the best retirement communities in the country is the location and the weather of the place. If you are from New York or somewhere where it is often cold, would you want to move to a sunnier place like Florida even if it means that you would be far from friends and family? If getting in touch with your friends and family often is very important to you, then you should move to a retirement community that is nearer where they are and weigh in your priorities and see if a good, sunny weather is also important. As I have said, this is your retirement life, it is there for you to enjoy so weigh your priorities and the proximity of the place.

Lastly, consider the people who live in the retirement community and know if they are friendly and warm to new residents. See if they could be your friends and share your best interests. Nothing is more important than living with the people that are easy to like and fun to share the rest of your time with.

A Review of the Best Retirement Cities

When it comes time for you to retire, one of the biggest questions that you are going to have to ask yourself is where are you going to move to? After all the location that you move to for retirement is basically where you are going to spending your final years, and so obviously you want to make it somewhere that is going to be appealing and enjoyable to you.

The Best Retirement Cities

Although of course you can relocate to wherever you like or even stay in the same area, there are a few cities which are known as being the ‘best retirement cities’. One in particular is Orlando, Florida. Whenever we hear the word retirement we all automatically tend to think of Florida, and this is because most retirees do end up going there to retire, and for very good reason.

After all, the climate in Florida, particularly in Orlando, is constantly mild, and it is considered that the climate of Florida is tempered somewhat by its proximity to water. Most of the state has a very humid subtropical climate, and the seasons in Florida are actually determined more by precipitation than by temperature, with mild to cool and relatively dry winters, and hot, wet springs and summers.

Another of the best retirement cities is Walla Walla, Washington, which is a southeastern Washington town that has truly become the prime destination for wine connoisseurs, urban refugees and roving retirees. It offers 19th century Italianate-style commercial buildings and colleges which are hubs of activity for retirees, who can enjoy classical music, lectures or lifelong learning classes.

Yet another locale considered as being one of the best retirement cities, is Holland, Michigan. Situated on the shores that connect Lake Erie to Michigan, Holland is full of summer fun for those beachgoers who simply can’t get enough sand and sun. It is definitely not warm here in the winter however there is plenty to do indoors once the cold weather rolls around. Downtown, a five-block stretch along Eighth Street, is a thriving area of independent shops and restaurants and close by to that you can find bigbox stores and even a small, private hospital.

When it comes to the best retirement cities, although there are certainly those in particular which are classified as being so, in all reality, the best retirement city is going to be one that you enjoy yourself in. Co whether that means living in Florida or living in Alaska, you should go wherever you are going to feel comfortable and enjoy yourself when it comes time for you to retire.