How to Manage Your Personal Finances – Retirement Capital Requirements

Many articles have been written about the subject of retirement planning and there are many books published by experts on this very important issue. I have just recently joined the fold of the retired group and I have been through the mill (so to speak) of planning and implementing my retirement plan in it's initial phase. It is this, the initial phase, which I would like to concentrate on in this article.

So, how do I plan my retirement date?

Most companies have contractual dates for retirement. For example, retirement ages could range from 55 years old for early retirement to 60 years old for Directors to 65 years old for operational staff. These dates are generally a guideline since companies do exercise some flexibility when applying these parameters. However, each individual should be using these parameters as a benchmark and then build a projected financial model to see if they are adequately provided for in retirement. Note: The use of a financial advisor is highly recommended in this planning process.

Since the above guidelines, your retirement date is in fact flexible provided that you can satisfy the golden formula which is expressed as: "Accrued income plus passive income must exceed your current cost of living plus an adjustment (up or down) for lifestyle choice in retirement plus inflation projections and sufficient liquid cash for emergencies ".

Let's face it, the thought of early retirement is in the minds of all of us but if you can not afford it, you are heading for suicide.

Let me expand the golden formula as follows:

  • Accrued income is the monthly pension or income that you can derive from your pension accumulation through your working life. This figure will be provided to you by your pension fund or your investment institution.
  • Passive income is income from investments that you made through your working life. Here you consider regular income from property investments, equity investments, dividends, savings interest, business partnerships and any other form of reliable income which you will derive on a monthly basis.
  • Current cost of living is the full annual cost of your current lifestyle. Be extravagant in estimating this figure and be sure to include everything that you incur as a cost.
  • Adjust your retirement requirements up or down depending on your circumstances and your intended lifestyle in retirement.
  • Make adequate provision for injury during your retirement years. Your financial advisor should project your retirement capital adequacy over your expected lifespan.
  • Ensure that you have a 'nestegg "of cash available for emergencies such as buying a new car, unexpected medical bills, renovating your house, helping your kids, taking some holidays and anything else which is relevant to your situation.

I spend many hours pondering the above elements and I suppose it is only natural to be very conservative about whether you can actually go ahead and retire. Assuming that the criteria for the golden formula are met and in order to make the decision a little easier, the following points are highly recommended:

  • You should have no heavy debt burdens. Your mortgage should be paid off, your car hire purchase agreements should be settled and you should have no major debt commitments. In fact, you should be able to live from cash out of your wallet.
  • Your "wish list" for your activities in retirement must be catered for in your planned expenditure.
  • You must not have any plans that requires you to erode your capital base.
  • You need to be sure that your monthly income is pretty secure and you need to have alternative plans if for some reason, your monthly income drops.
  • You need to be able to save some of your retirement income monthly just to prove that you are coping.

In this planning exercise, you need to budget for everything that you want in retirement. Once you have taken the step, there is no turning back if you are serious about retiring. You also do not want to find out that you can not afford some of the things which you had in your vision.

In conclusion, the most important factor in planning your retirement is to ensure that your life partner (if appropriate) is fully informed and on board with the plan and that you create a mutual acceptance and arbitration about your future in retirement.

The above article is created to stimulate thought on your own unique circumstances and you need to tailor your plan accordingly.

What to Do When the Debt Collector Sues

If you're behind paying your bills – and who is not, these days? – it's tempting to let the mail pile up. After all, who wants to face yet another reminder that their financial house is not in order? Ignoring the bills and debt collection calls can have a significant drawback, however, if a debt collection agency decides to take you to court.

Increasingly, debt collectors are using the court system not as their last line of defense, but as their first line of indemnity. There have been numerous reports in the mainstream media about debt collection attorneys filing hundreds of cases a week using automated software. Nonprofit organizations in New York City recently issued a report detailing the ways in which debt collectors routinely target lower income residents with lawsuits.

According to the law, you must be informed if you're being sued. Often, however, debt collection agencies do an end run around the law and do not notify the consumer (that's what the New York City study revealed). Other times, consumers let the mail pile up, not knowing that it contains legal documents that require their attention. Still other times, consumers know that they're being sued, but do not know how to go about defending themselves, and so either show up for court unprepared or do not show up at all. A recent survey of sentences conducted by the American Bar Association found that consumers who represent themselves in court do so to their own detriment, in that the have less favorable outputs than consumers who are represented by attorneys. For consumers who do not attend the legal proceedings, the judge has no real choice but to rule in favor of the debt collector.

Once you have a legal judgment against you, life can become even more difficult than it already is. If you do not have a job or any assets, you may think that a legal judgment can not do any real harm. After all, they can not squeeze blood out of a proverbial turnip, can they? That may be true, but chances are good that, ever, your financial situation will change. When it does, a debt collection agency will swoop in to collect on the judgment. In fact, there's been buzz in the debt collection industry about how it's time to get out those old judgments. Their thinking is that the economy is slowly improving, people are starting to go back to work, and the judgments will soon be enforceable. What does that mean? If you have a lawsuit against you and you get a new job, the debt collection agency could garnish your wages. It will feel like one step forward and two steps backwards.

The bottom line? If you're in a position where you might be sued by a debt collection agency, you need to keep an eye on any potential legal proceedings. If you're sued by a debt collector, you should mount a rigorous defense with the help of an attorney. Often, a fair debt attorney can help you to avoid a judgment, and sometimes even get the debt dismissed.

The Similarities and Differences in Graduate and Undergrading Financial Aid

In less than forty years the cost of a college education has dramatically dramatically and today a college education will cost about ten times as much as it did when I myself attended college. Fortunately though there are now a variety of programs available to help you to fund your education and the path that you follow will depend upon whether you are an undergraduate or a graduate student.

As an undergraduate you will rely on an often compounded mixture of scholarships, grants and loans and, in the case of loans, these will either be taken out alone, by your parents, or as a combination loan in which for example you take out the loan in your own name with your parents as co-borrowers or co-signers to the loan.

By far the most popular student loan program today, which accounts for more than ninety percent of government backed funding, is subsidized and unsubsidized Stafford loans. The most desirable are of course subsidized loans on which the government picks up the bill for interest payments while you are in college and for a grace period of up to six months after you graduate. These loans are however needs based and so there are a couple of hoops which you have to jump through to qualify. Unsubsidized loans in contrast are not needs based and so are available to almost all students.

For a graduate student however the picture is somewhat different and, while there are graduate scholarships and grants available, these tend to be few and far apart. It is however often possible to get a teaching or research assistantship, which is essentially a low paying, long hours job which many graduates avail themselves of to help them through their course or while carrying out research.

Another recently introduced option for graduations is a PLUS loan. PLUS stands for Parent Loans for Undergraduate Students and, as the name suggests, was originally designed to allow parents to take out a preferential loan in order to help a son or daughter through college. Now though this program has been extended to also allow graduate students to take a PLUS loan in their own right.

PLUS loans are available available and are credit, rather than need, based. For some graduates this may cause a problem but the majority of graduations have not had time to get them into the credit problems which are suffering by so many adults today. Consequently, although you may have a sparse credit history, you probably will not have enough bad marks on your credit report to rule you ineligible for a PLUS loan.

The downside of PLUS loans is that, in historical terms at least, current interest rates which are generally either 7.9% or 8.5% are not low. This means that interest charges on even a reliably small loan can be high and repayment will need to start within 60 days of the grant of the loan, with no grace period.

As with all student loans, whether for undergraduates or graduations, there are a variety of different loans available from both government and private sources and, government loans in particular, have different caps for both single loans and lifetime loans from individual programs. As a result this is one area which you will need to research carefully, rather than simply rushing in and applying for the first loan which springs to mind.

Travel Tips on What to Do and See While in Boston

Boston is a wonderful city and one that attracts many visitors every year. The historical significance combined with a large metropolitan area all located on the water makes it a very popular tourist destination. This article will offer travel tips from best ways to get there via airlines and Boston airport transportation or Manchester airport transportation, where to stay and things to do and see while being a visitor in Boston no matter what time of the year you go.

There are many airline deals to be found these days and if you are up to finding the best deal yourself, try the website kayak.com that offers the prices of all of the competing airlines giving you a great comparison of deals. Remember if you choose to travel on Tuesday, Wednesday or Saturday, those are the least expensive days to go so plan accordingly. Because you will be in a city with great transportation of trains, taxis and even boats, a car will not be necessary and parking in Boston is horrible so just take an airport shuttle or the train to get to your hotel downtown.

There are so many things to do and see while in Boston that making a plan is probably the best way to see the most you can. One of the absolute must do’s in Boston is to walk the Freedom trail. This is a great way to experience colonial history and can see 16 different sites along the trail. It is easy to follow as it is marked by a stripe to follow throughout Boston. The best way is to start the trail in the morning and that will land you in Quincy Market around lunchtime which is one of the best food markets around. Try Boston’s holy trinity of lobster, clams or chowder to experience true local flavors.

The North End of Boston is a great section of Boston with the famous old North Church and Paul Reveres home that is a special piece of history to witness. Nearby the North End is Boston’s Little Italy that has more authentic small family owned Italian restaurants and bistros to count so be sure to stop in one to get a wonderful bite to eat.

Another section of Boston that many people enjoy visiting is Beacon Hill filled with a the oldest park in the country and beautiful old buildings. If shopping is what you are interested in, go to Charles Street to hit a variety of popular stores as well as fun local boutiques.

The waterfront area is the last place to see while in Boston and that is also a wonderful place to go if you are a family traveling with children. Located near the water is the Children’s Museum and the Boston Tea Museum as well as the beautifully renovated New England Aquarium. If you are a baseball fan, try to catch a Red Sox game at Fenway Park although being able to find a ticket may be difficult as Red Sox fans are some of the most loyal.