Dear Debt Adviser, I'm 37 years old, married with three kids, and I have about $15,000 in college debt from my MBA expenses. Should I withdraw retirement savings from my 401(k) or Roth individual retirement account to pay off the debt? I'm sick of having this debt and want to be done with it now. Can I avoid penalties if the retirement money is used to pay off student loans? -- Randy

Dear Randy, With three kids, I would have expected you to have developed more patience by now. Still, 37 is young in the scheme of things. Here's some advice from someone who has been patience-challenged for decades longer than you and comes from a family whose patriarch thought impatience was the most beautiful flower.

I have a three-part answer to your question.

You are responsible for a spouse and three children. Though it may be argued that she is equally responsible for you and the kids, we are talking about you -- and you are most certainly on the hook.

In my experience as a father and husband, I can tell you there is a very good chance in the next five to 10 years the $15,000 you are considering withdrawing may be needed for something more important than retiring an education debt you are "sick of having." Life has a way of sending the unexpected our way at the least convenient time, and often the unanticipated event(s) comes with a high price tag attached. It is hoped you have an emergency savings account of six to 12 months' of living expenses put aside to help fund life's financial curveballs, but you may find additional funds are required.

Also, the $15,000 you remove from retirement funds now could, if left where it is, be worth in the neighborhood of $80,000 by the time you're 67. Even when you take into consideration inflation, you could be missing out on the equivalent of $40,000 if you remove the $15,000 now. As an MBA, you'll no doubt appreciate the time value of money.

Let me suggest that a better idea may be to develop a plan to pay down your college debt more quickly.

Let's do some math. If we assume you have another 10 years to pay on your loan and your interest rate is 6%, your monthly payment is approximately $167 per month. If you were to add an additional $500 to each payment, for a total of $667 each month, your debt would be paid off in two short years. To pay off the debt in one year, you would need to boost your monthly payment by $1,125.

Whether you pay off your student loans sooner or later, my guess is once you know this debt is heading for the door, you won't feel the need to incur a penalty to send it on its way immediately.

Should you decide to withdraw retirement savings from your IRA, I would recommend you consult with a tax-planning professional to assure that you follow all the proper procedures. You do not want to complicate an already bad financial move with a problem with the Internal Revenue Service.

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Pay Student Loans With Retirement Savings?

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The youngest of Generation X will celebrate their 30th birthdays this year, pushing this key demographic into their prime income earning years and establishing them as the benchmark for new retirement saving trends. Gen X showed this past year they are not only saving for their retirement, but they arent wasting any more time.

Drastically more Gen Xers (born 1967 to 1982, ages 29 to 44) reported this year than last that they started saving for retirement between the ages of 25 and 34, according to Scottrade, Inc.s sixth annual American Retirement Study. This year, 51 percent reported starting their retirement savings in this age range, compared to 39 percent last year. This generation demonstrated they are learning from their elders to save earlier. Just 30 percent of Baby Boomers and 21 percent of Seniors started saving for retirement at 25 to 34 years of age.

The study also found the percentage of Gen Xers who reported having less than $25,000 saved for retirement continued its downward trend (53 percent in 2010, 45 percent in 2011 and 44 percent in 2012), while the number reporting retirement savings of $25,001 to $100,000 maintained upward momentum. In 2012, 20 percent said they have between $25,001 and $100,000 saved, compared to 17 percent in 2011 and 14 percent in 2010.

To aid their retirement savings goals, notably more Gen Xers hold a tax-deferred account today than a year ago and the majority, at 71 percent, reported saving some portion of their 2011 income for retirement. Even more, at 85 percent, plan to save some portion of this years earnings for retirement.

With a retirement horizon spanning into the 2050s, Gen Xers have decades of income-earning years ahead of them, said Derrick Brooks, Scottrades director of online investor solutions. They are recognizing the need to save now and seizing the opportunity.

To help them reach their retirement goals, Scottrade is committed to developing solutions so they can research, trade and monitor their investments in real-time, Brooks said. Scottrade understands that self-directed investors and traders have their own investment strategies and utilize the tools we offer in individual ways, and we work hard to continue to be an ally for them.

Through our branch office network, our online trading community, social media channels and usability testing, we are able to listen to our clients, gather their suggestions and continue to expand upon the features and functionalities of our online investing and trading tools, Brooks said. By developing new tools such as our mobile trading app and offering customizable account pages, clients can access the information they want when they need it to make informed trading decisions.

Last week alone Scottrade rolled out two new updates to its trading website: a Quick Trade bar that enables clients to place trades as they navigate from page to page; and a Ratings and Reports tab, which is an at-a-glance view of research items, including S&P Rankings, Reuters Ratings and MarketEdge Opinion.

The company also continues to enhance its offering of investment vehicles beyond its trademark $7 online stock trades to include a variety of IRA types, mutual funds and exchange-traded funds to meet diverse investing strategies. In 2011, Scottrade rolled out a suite of retail banking products, including checking and savings accounts, certificates of deposit, and money market accounts affording the ability to easily move money and manage finances between banking and brokerage accounts accessed with a single login.

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Scottrade Research Findings: Gen X Motivated to Save, Takes Action to Plan Retirement

Dear Debt Adviser, I'm 37 years old, married with three kids, and I have about $15,000 in college debt from my MBA expenses. Should I withdraw retirement savings from my 401(k) or Roth individual retirement account to pay off the debt? I'm sick of having this debt and want to be done with it now. Can I avoid penalties if the retirement money is used to pay off student loans? -- Randy

Dear Randy, With three kids, I would have expected you to have developed more patience by now. Still, 37 is young in the scheme of things. Here's some advice from someone who has been patience-challenged for decades longer than you and comes from a family whose patriarch thought impatience was the most beautiful flower.

I have a three-part answer to your question.

You are responsible for a spouse and three children. Though it may be argued that she is equally responsible for you and the kids, we are talking about you -- and you are most certainly on the hook.

In my experience as a father and husband, I can tell you there is a very good chance in the next five to 10 years the $15,000 you are considering withdrawing may be needed for something more important than retiring an education debt you are "sick of having." Life has a way of sending the unexpected our way at the least convenient time, and often the unanticipated event(s) comes with a high price tag attached. It is hoped you have an emergency savings account of six to 12 months' of living expenses put aside to help fund life's financial curveballs, but you may find additional funds are required.

Also, the $15,000 you remove from retirement funds now could, if left where it is, be worth in the neighborhood of $80,000 by the time you're 67. Even when you take into consideration inflation, you could be missing out on the equivalent of $40,000 if you remove the $15,000 now. As an MBA, you'll no doubt appreciate the time value of money.

Let me suggest that a better idea may be to develop a plan to pay down your college debt more quickly.

Let's do some math. If we assume you have another 10 years to pay on your loan and your interest rate is 6 percent, your monthly payment is approximately $167 per month. If you were to add an additional $500 to each payment, for a total of $667 each month, your debt would be paid off in two short years. To pay off the debt in one year, you would need to boost your monthly payment by $1,125.

Whether you pay off your student loans sooner or later, my guess is once you know this debt is heading for the door, you won't feel the need to incur a penalty to send it on its way immediately.

Should you decide to withdraw retirement savings from your IRA, I would recommend you consult with a tax-planning professional to assure that you follow all the proper procedures. You do not want to complicate an already bad financial move with a problem with the Internal Revenue Service.

See the original post here:
Should you raid retirement to pay college debt?

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Determining your retirement number is like getting on the bathroom scale: Sometimes it's a pleasant surprise; however, more often than not it forces you to face an ugly truth. Just as taking the dreaded step onto the scale is a necessary part of the weight-loss process, so too is crunching the numbers for retirement planning. According to recent research, only 40 percent of American workers have taken the time and effort to complete a retirement needs calculation. Without going through that process, you're flying blind into your retirement. That's why when I field questions about retirement - when to retire, how to invest for retirement - I always reiterate the big picture. Start with a plan, and the rest will become crystal clear!

Joe from NY had done planning, but now must revisit the numbers, after the heavy impact of college education. He's worried that he won't have enough money for retirement and is "not sure what the magic number is." The problem is, the magic number is different for everyone, so its best to crunch the numbers for your specific situation. I like the EBRI Choose to Save Ballpark E$timate, which is easy to use, but your retirement plan/401(k) website probably has a tool available as well.

The retirement outlook looks good for Ralph from Kentucky, but after being spooked by the stock market, he moved to cash and now needs a way to get back into the fray. I have fielded a lot of these questions recently and want to remind everyone that a diversified portfolio can help shield you from making a bad choice at market bottoms and tops. That's why I told Tim to focus less on sector funds and a high concentration in commodities and instead go broad, as in broadly-diversified portfolios. It's also why Phil from Boston and Bryan from CA should stick to the basic bond, domestic and international index funds at Fidelity, when they roll over their old retirement accounts.

With evidence that the housing market is inching towards recovery, the calls about what to do with real estate are on the rise. Wayne, who listens to us on KFGO in Fargo, ND is trying to determine whether to sell land and invest the proceeds, while Jose from CA is weighing the sale of a rental property. You'll hear me provide different advice to each of them.

Jason recently sold his house and is torn between building a new home and buying an existing home in central Arizona. As with most questions on real estate, location really matters. Noe in Houston is choosing between expanding a current home or buying a new home with a small mortgage.

Speaking of mortgages, Todd from Baltimore is about to inherit a chink of money and wants to know if he should use it to pay off his mortgage or if should invest the money? The answer is a bit more complicated, as I essentially ran through a mini-financial plan with him.

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Jill on Money: Retirement number, funds, housing

Most workers dream of the day when they swap their business attire for shorts and trade in business meetings for time on the links. Maintaining your desired lifestyle in retirement without a steady paycheck takes discipline and extensive planning, and theres no one-size-fits-all approach.

There is a high correlation between the action people take and seeing results, says Jean Setzfand, vice president forFinancial Security at AARP. She adds that the level of action in financial planning is a good predictor for financial freedom when the golden years roll around.

How someone fares financially after retirement is directly tied to three factors-- their salary level at retirement, how long they work beyond 65 and how much and whether they save in a defined-contribution retirement plan during their working lifetime, says Nevin Adams, director of education and external relations and co-director of EBRI Center for Research on Retirement Income.

Know Where You Spend Money

Whether youre planning for retirement or in retirement, knowing your expenses is important. Not just your fixed expenses, like rent and food, but also your discretionary expenses, like vacations and other payments that dont occur monthly, says Michael Goodman, certified public accountant and president at Wealthstream Advisors.

Many budgets dont change significantly in retirement, especially if they stay in the same home, but, for example, there are adjustments for travel or whether someone eats out more or less. As people age, their budgets will change and some costs will disappear, but these may be replaced by health-care costs, says Ted Sarenski, certified public accountant financial planner and CEO of Blue Ocean Strategic Capital.

With life expectancy for Americans at 78.1 years, according to the World Bank, 50% of the population lives beyond the life expectancy, says Goodman. Taking this into account, you should be conservative with your life expectancy when calculating how much money you will need.

Calculate How Much You Will Need

When calculating how much you will need to cover retirement funds, Goodman suggests using investment earnings and a portion of principal in a retirement account. And while planning for life after work should start in your 20s and 30s, realize that there will be a significant shift in lifestyle.

You should have different sources of income in retirement, says Sarenski. Social Security only replaces 25% to 30% of your preretirement income. If you need $50,000 for retirement annually while receiving $15,000 from Social Security for example, you calculate the amount of savings needed by dividing $35,000 ($50,000 minus $15,000) by a conservative 5% or multiplying $35,000 times 20 years. In this example, you would need $700,000 in savings.

Read more:
Financial Literacy Key to Sufficient Retirement Planning

Most retirement planning emphasizes financial considerations. How can I plan for the way I'll live after I leave work? -- David, Miami, Fla.

Many of us get so caught up in the financial aspects of preparing for retirement that we forget the reason we do all that saving, investing and planning in the first place: to have a meaningful and satisfying post-career life.

So "lifestyle" retirement planning is every bit as important as crunching the numbers, even if it doesn't always get the same attention.

If anything, lifestyle and financial retirement planning complement each other. After all, you can't really know how big a nest egg you'll need without having an idea of how you want to live in retirement. And the kind of life you'll be able to lead will depend in large part on how successful you are at accumulating savings.

It's essential to factor lifestyle considerations into your financial planning, especially in the ten years or so leading up to retirement. Here are four ways to do that:

1. Envision your future. As you enter the home stretch to retirement, you'll need to address big questions like whether to continue living in your current area or move to a new city or town like one of the 25 profiled in MONEY's Best Places to Retire.

But you'll want to focus on small-picture issues too, even down to how you'll actually spend the hours of each day once your work routine no longer provides the structure for your day.

One way to sharpen your vision of the future is to rev up a tool like T. Rowe Price's Ready-2-Retire. Among other things, this tool allows you to pick different retirement activities (travel, pursuing creative interests, going back to school, etc.) and then prioritize them based on how important each is to you.

How I'm easing into retirement

For a deeper dive, you may want to attend one of the growing number of pre-retirement seminars that can help you manage the transition from the work-a-day to retirement. For example, the North Carolina Center for Creative Retirement in Asheville, N.C., offers two three-day "Paths to Creative Retirement" workshops each year where participants explore options for retirement and figure out which are the best fit with their goals and values.

More here:
Retirement lifestyle

NEW YORK (CNNMoney) -- Most retirement planning emphasizes financial considerations. How can I plan for the way I'll live after I leave work? -- David, Miami, Fla.

Many of us get so caught up in the financial aspects of preparing for retirement that we forget the reason we do all that saving, investing and planning in the first place: to have a meaningful and satisfying post-career life.

So "lifestyle" retirement planning is every bit as important as crunching the numbers, even if it doesn't always get the same attention.

If anything, lifestyle and financial retirement planning complement each other. After all, you can't really know how big a nest egg you'll need without having an idea of how you want to live in retirement. And the kind of life you'll be able to lead will depend in large part on how successful you are at accumulating savings.

It's essential to factor lifestyle considerations into your financial planning, especially in the ten years or so leading up to retirement. Here are four ways to do that:

1. Envision your future. As you enter the home stretch to retirement, you'll need to address big questions like whether to continue living in your current area or move to a new city or town like one of the 25 profiled in MONEY's Best Places to Retire.

But you'll want to focus on small-picture issues too, even down to how you'll actually spend the hours of each day once your work routine no longer provides the structure for your day.

One way to sharpen your vision of the future is to rev up a tool like T. Rowe Price's Ready-2-Retire. Among other things, this tool allows you to pick different retirement activities (travel, pursuing creative interests, going back to school, etc.) and then prioritize them based on how important each is to you.

For a deeper dive, you may want to attend one of the growing number of pre-retirement seminars that can help you manage the transition from the work-a-day to retirement. For example, the North Carolina Center for Creative Retirement in Asheville, N.C., offers two three-day "Paths to Creative Retirement" workshops each year where participants explore options for retirement and figure out which are the best fit with their goals and values.

2. Do a test drive. Once you have a sense of what your ideal retirement might be, give it a trial run to see if the fantasy squares with reality.

Visit link:
Retirement planning: It's not just about the money

NEW YORK (CNNMoney) -- Most retirement planning emphasizes financial considerations. How can I plan for the way I'll live after I leave work? -- David, Miami, Fla.

Many of us get so caught up in the financial aspects of preparing for retirement that we forget the reason we do all that saving, investing and planning in the first place: to have a meaningful and satisfying post-career life.

So "lifestyle" retirement planning is every bit as important as crunching the numbers, even if it doesn't always get the same attention.

If anything, lifestyle and financial retirement planning complement each other. After all, you can't really know how big a nest egg you'll need without having an idea of how you want to live in retirement. And the kind of life you'll be able to lead will depend in large part on how successful you are at accumulating savings.

It's essential to factor lifestyle considerations into your financial planning, especially in the ten years or so leading up to retirement. Here are four ways to do that:

1. Envision your future. As you enter the home stretch to retirement, you'll need to address big questions like whether to continue living in your current area or move to a new city or town like one of the 25 profiled in MONEY's Best Places to Retire.

But you'll want to focus on small-picture issues too, even down to how you'll actually spend the hours of each day once your work routine no longer provides the structure for your day.

One way to sharpen your vision of the future is to rev up a tool like T. Rowe Price's Ready-2-Retire. Among other things, this tool allows you to pick different retirement activities (travel, pursuing creative interests, going back to school, etc.) and then prioritize them based on how important each is to you.

For a deeper dive, you may want to attend one of the growing number of pre-retirement seminars that can help you manage the transition from the work-a-day to retirement. For example, the North Carolina Center for Creative Retirement in Asheville, N.C., offers two three-day "Paths to Creative Retirement" workshops each year where participants explore options for retirement and figure out which are the best fit with their goals and values.

2. Do a test drive. Once you have a sense of what your ideal retirement might be, give it a trial run to see if the fantasy squares with reality.

Go here to read the rest:
Retirement planning: It's not just money

Video Link: https://www.youtube.com/watch?v=SIsbRTbKBVA

22-03-2012 00:02 Bruce Bowen Jersey Retirement 3/21/12 HD [ ALL COPYRIGHTS GOES TO NBA.COM ]

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Bruce Bowen Jersey Retirement 3/21/12 HD - Video

You've put in your retirement papers and are ready for the next phase of life. Now unless your financial situation allows for globe-trotting and a carefree lifestyle, you may need to readjust your spending habits to suit your income. However, there's no reason to cut down on leisure activities and hobbies. We offer a few suggestions that will keep you active and happy, but won't break the bank.

Photography Snapping your favorite images was costly when buying film and paying for processing were your only options. However, today's digital cameras (relatively inexpensive for a non-professional model) allow for unlimited picture-taking, sorting and printing on your home computer or laptop. Name-brand models with 10MP or higher can run for less than $100, a bargain for those starting out. Extra costs: photo paper runs about $15 for 50 sheets at most office supply stores. Bonus: You can post and send emails on your favorite website for free.

Genealogy Tracing your family roots can be a wonderful way to spend your spare time and preserve a little bit of history. Local libraries and the Internet are valuable resources for getting started. Also, there are several government websites where you can access free archived information, such as names and photographs, to trace your family tree. You might also look into forums and other online sources for information searching and sharing. Cost: free.

Reading and Writing Want to be the next great novelist? Love poetry? Need to catch up on the latest best-seller? Retirement affords you the time to do all of it, and you needn't dish out big bucks. Many public libraries participate in exchange co-op programs, so you can access any book, book-on-tape, CDs and DVDs for free. If you're interested in writing on a casual or personal basis, or if you want to try your hand at making a few extra bucks, try blogging or submitting your work to free sites that accept entries.

Meditation and Yoga These hobbies are relatively easy and inexpensive, as well as beneficial to your health. You may want to take a few yoga lessons to ensure proper positioning and breathing techniques. Senior centers and local adult school programs may offer lessons at reduced rates, and how-to guides are available in libraries and book stores. Once you achieve a basic understanding of the principles, you can perform the techniques on your own to suit your personal schedule. The best part: your body (and mind) will love you for it. Cost: yoga mat $20.

Arts and Crafts The word "retirement" might immediately bring to mind images of rocking chairs and knitting needles. However, today's retirees have access to a lot more options for their leisure time. While knitting and crocheting are wonderful hobbies and yield beautiful homemade items, yarn, needles and other supplies are not cheap. However, origami and paper crafts, scrapbooking, drawing, woodcarving and floral arranging are inexpensive ways to create wonderful gifts for friends or loved ones. Take a class or borrow how-to books from the library to get started. Cost: nominal supplies.

Sports and Physical Activities Golf and tennis are sports that can be enjoyed by people of all ages. However, memberships to exclusive country clubs can set you back a pretty penny. Instead, sign up to play on public golf courses, which charge considerably less for a round. If possible, walk rather than rent a cart (you'll get extra exercise in, too) and have your clubs cleaned and re-gripped instead of springing for a brand new set. Also, adapt your schedule to play in the off-hours, such as late afternoons or weekdays, when rates are reduced. (Some courses also offer nine-hole rates for off-peak times). The same applies to Tennis. Not only are outdoor public courts free, but you'll also get some fresh air. If sports are not your thing, dancing, bicycling, hiking and walking are perfect for staying in shape, meeting new people and having fun. Costs: varied.

Games and Puzzles Experts agree that playing games like chess, scrabble and cards are beneficial to your mental health and memory, warding off conditions such as depression and Alzheimer's. Crossword puzzles and Sudokus also help to keep your mind sharp as you age. Cost: Minimal.

Volunteering Offering your time and talent is a wonderful way to spend your retirement and give back to the community. Whether with a national organization or a local food bank, volunteers are always needed and always welcome. You also may want to consider tutoring or lecturing in your area of expertise, or doing odd jobs for folks who don't have the financial means to pay contractors. Cost: Nothing. Bonus: You'll be helping where help is needed the most.

The Bottom Line Retirement doesn't mean you have to stay still, and you don't have to break the bank to have fun and keep busy. Be sure to stay mentally and physically active in order to remain healthy and energetic after your working years are over.

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8 Affordable Retirement Hobbies