5 Essential Aspects to Consider for Planning an Early Retirement

5 Essential Aspects to Consider for Planning an Early Retirement

Apart from owning a dream house and a dream car, many individuals dream of early retirement, but there are several things that they will have to consider, prior to handing over their resignation letter. The most important amongst these is the fact that early retirement could be difficult on their finances and investing for this needs meticulous planning to obtain the desired results.

By following some simple tips, you can begin to make the most out of your plan to invest for early retirement. However, if you are not contributing adequately to your retirement account, then no doubt you are assaulting your future wallet by not planning early.

Here are 3 tips for early retirement investing. Follow these, and make smart investments, in order to look forward to your last day of work sooner down the lane.

1. Do Your Math!

The first and foremost aspect that you have to prioritize for early retirement investing is budget. The common value for discipline and thrift with finances is through controlling expenses, budgeting, and saving a part of your income for the future. Without this, all your plans will go for a toss. Proper budgeting allows you to assess the amount of money you can save for your retirement plan. Calculating budgets also help you to evaluate your expendable income every month and the amount you have for your savings. The contributions towards your 401(k) plan mostly depend on your available savings.

On the whole, we can say that all solid early retirement investing plans begin with a concrete budget.

2. Proper Asset Allocation

Investment portfolio allocation is recommended so as to get exposure to different asset classes. Real estate, equities, and bonds are 3 such segments, where return expectations vary for every category.

If you are planning for early retirement, include possible risks into the retirement portfolio. Making investments in hedge funds could be highly regulated and risky, even if they offer the highest returns in the financial market.

A retirement portfolio should include safety via government bonds as these are reliable conservative securities that will offer steady returns. Get advice from investment consultants to decide on the proper asset allocation based and economic and market conditions.

3. Get a Complete Match

To ensure that you are availing as much as possible out of your 401(k), get a complete match. Employer plans for 401(k) mostly donate 50 cents of each dollar you donate, up to 6% of your income. To obtain a complete match, you have to donate, at the least, the same percentage that is contributed by your employer.

For instance, if your annual income is $50,000 and your employer is giving 50 cents on each dollar at 6% of your income, the contribution from their end is $1,500 and you will have to donate the complete 6% of your income, which is $3,000.This does not mean that you should not be contributing higher than the match; doing so is always a better idea as this will contribute towards tax breaks apart from additional savings.

4. Max Out Your 401(K)

Irrespective of whether it is 401(k) or any other investment, be the most aggressive when you are young. Maxing out your 401(k) is the least you can do every year, and alongside that, you should consider investing in liquid funds, gold ETFs, some equities as well as debt funds.

5. Change Resource Allocation With Age to Minimize Risks

Another golden rule that you must follow is to reduce the equity exposure as you grow older; it could be a fantastic idea to have a health mix of 50% equity exposure, 30% debt funds, and 20% into other stocks, gold ETFs and futures when you’ve just entered into your 30s, but as you approach the 40s, you must reduce the equity exposure to less than 30% of your total resource allocation.

Follow these handy tips and become an early retirement investor to be able to break free from your 9-6 job way before you approach your 50s.


Author Bio – Michelle has been into the field of personal finance and debt management over 5 years. She has been working with small companies as well as individuals devising risk mitigation plans, advising on wealth management, and even assisting people in availing payday loan, and repaying them off in a jiffy.

Instant Payday loans – You last resort

Instant Payday loans – You last resort

Have you ever come across a situation where you are in need of money urgently and you don’t have it and also getting money is difficult for you? Managing finances has always been a big issue for everyone. People learn it with time and deal with it. Some people are spendthrift and they start saving after some experiences.

But, if you are one of those who are spendthrift, who has used all of his money in spending extravagantly and now is in need of some money till the next payday, then Instant payday loans is something you look up to for help. People learn it with time that saving do matter a lot and this is the only reason why Instant payday loans help them in getting some short term financial help and that too at a very decent rate.

What do you do in those situations when you need money and you discover that you don’t have sufficient cash to meet your needs and no one is around to help you, even if they are there, they have to manage their own expenses. Then, Instant payday loans are your last resort, the last thing that can give you instant financial help. A lot of us have faced this trouble, but this will be not a problem anymore as we can get finance easily at a better rate whenever we need with Instant payday loans.

They are short terms loan and are made to meet the short term needs. You can have a look at the plan of various such lending firms, can see the repayment terms and if you find it to be suitable for you, then only you should step forward for applying Instant payday loans. There are many companies that scam, so it will be really good if you get some extra information about the firm.

The Mortgage Interest Deductions and Tax Reforms

The Mortgage Interest Deductions and Tax Reforms
The controversial mortgage interest deductions have been raising eyebrows in the country recently. A lot of Americans are not that impressed by this program since they claim it only benefits a handful of citizens.

So what exactly is the mortgage interest deductions or the MID?

The MID allows homeowners who itemize their taxes to deduct interest from their mortgage debt on their first and second home of up to 1 million dollars and from up to 100 thousand dollars on interest on their debt.
Though this deduction has been widely popular but critics say it is only benefiting the few wealthy Americans and is a big waste of money on the part of the government.

There has been a continuing debate, numerous suggestions and various proposals whether the MID should be scrapped or should it stay and if it is time for tax reforms.

According to critics MID is considered to be one of the top three biggest tax expenditures in terms of cost that reaches up to 90 billion dollars annually. And it is claimed only by a few Americans who itemize their taxes which are about one third of the country’s population and not even all of them have mortgage interests.

It has been considered by critics to be a misallocation of capital and it could have helped save the economy from crisis and artificial inflation, creating a more sustainable economy and a stronger nation.

Some say it doesn’t even improve the home-ownership in the United States which is pretty much the same as in countries that doesn’t have these deductions, and they say it has done more harm than good.
There have been arguments that it will actually deteriorate the real estate industry and deprives low-income citizens from owning their dream homes.

And these are the facts being presented, 51 million or 68 percent or approximately 75 million owner-occupied homes in the United States in the year 2009 had a mortgage and 38.5 million of these claimed for mortgage interest deductions.

The average taxpayer who claims for the MID deductions gets 12,200 dollars in savings and he gets to save an average of 3,050 dollars in taxes every year.

However, if these deductions are totally eliminated what would it do to economy and what would its effect to the ordinary citizen?

For the government, it would raise revenues by 215 billion dollars through the year 2021, meaning it could build more bridges, roads, schools, hospitals and improve basic services.

But on the other end of the spectrum, homeowners would not only lose the deductions in one year but losing potential savings every year. At present, value of these lost savings is approximately 3.2 trillion dollars. The current value of all owner-occupied real estate in the United States is 19.3 trillion dollars as measured by the American Community Survey. And if this lost of tax saving would be fully capitalized into the price of houses then a decline in value of 17 percent is expected.

Well, whether you are pro or against the elimination of the Mortgage Interest deduction, you need to know that you can help politicians to come up with a solution. Do your research, weigh the pros and cons of MID and let your voice be heard.

If ever MID will be phased out or it will be made to stay, ultimately, it is the ordinary citizen who will benefit or who will suffer on any reforms that the politicians will make on the laws on taxes.

Georges Kfoury is the founder and Chief Executive Officer of Leaderscorp Financial Inc. headquartered in Rancho Cucamonga, CA, a leading provider of mortgage financing dedicated towards providing affordable home loans. He founded the company way back 2003 from a ground level, without having the mortgage background. In spite of this, he was able to immediately take the company a level of generating annual income ranging from 8 to 10 million dollars.