Have you taken a closer look at your future retirement plan?  Some people may not give much thought to their retirement, but there are many good reasons why you should bother creating a realistic and solid retirement plan.

CNN Money reports (http://money.cnn.com/2010/03/09/pf/retirement_confidence/index.htm), about  43% of American workers have less than $10,000 in savings, 27% said they have less than $1,000 and only 16% said they are confident with their retirement savings.  These figures are based on the Employee Benefit Research Institute’s annual Retirement Confidence Survey.

Apparently, many workers think that they are too young to think about retirement and do not feel the urgency to do the necessary preparations.  However, if you will ask financial advisors, you would get a positive response regarding the need to set up a retirement savings as early as possible.  Consider the following retirement plan tips that you can apply this coming year.

1. Pay more to your 401(k) fund.  The IRS has increased the maximum allowable contribute for an employee from $500 to $17,000.  Are you regularly contributing to your 401(k) fund?  If you’re an employee, you should take advantage of the opportunity that your employer will match every cent of your contributions so this is a great time to pay as much as you can to build up your retirement savings.  On the other hand, you should also check if you are nearing to max and make the necessary adjustments.

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2. Apply for Roth IRA.  If you are self-employed, see if you are qualified for Roth IRA.  To be eligible, the adjusted gross income for single income tax return filers must be less $110,000 and $173,000 for joint filers.  It’s a good idea to ask an attorney about your privileges and limits before applying for a Roth IRA to make sure that you can make the most out of its provisions.

3. Don’t forget to take the RMD.  The RMD or Required Minimum Distribution is the required minimum amount that a retiree must take out once he/she reaches the age of 70 and a half.  The distribution amount varies from year to year, and is calculated by dividing the account’s year-end value by the distribution period.  Take note that RMD amounts that are not taken out on time will incur 50% tax.

4. Consider post-retirement costs.  An effective retirement plan is one that is specific and based on facts.  It’s a good idea to sit down and consider possible expenses you will be confronted with once you retire.  Aside from medical and health care issues, don’t forget to include day-to-day costs, travel expenses, etc.

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A lot of retirees choose to spend their retirement cash on a vacation and of course, there is nothing wrong with rewarding yourself with a much-deserved leisure time in an amazing destination.  However, it’s very important to make sure that you will still have enough finances to last your lifetime.  Are you planning to stay on the same house or will you be relocating to another State or country?  These are important considerations that you should ponder about today so you can be more prepared, both emotionally and financially.

About the Author
Melanie Mathis is a credit analyst and a writer for 8 years. She has been participating in the programs of http://www.newhorizon.org such as their continuous effort in giving out Free Credit Repair and Building Ebook. NHBS also has a list of recommended Credit Cards for People with Bad Credit

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About Melanie Mathis

Melanie Mathis is a credit analyst and a writer for 8 years. She has been participating in the programs of NHBS, Inc such as their continuous effort in giving out Free Credit Repair and Building Ebook. Connect with Melanie Mathis on Google+