Most people spend much of their working lives planning and dreaming of retirement. However, as the years go by there are several common mistakes that Baby Boomers make that can be disastrous, causing irreparable damage to their retirement plan. In this post, we will discuss 2 mistakes that are commonly made in the course of saving for retirement, which are falling in love with your company's stock, and not using long term care insurance as part of your financial plan.

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Per Wikipedia, Dollar cost averaging is a timing strategy of investing equal dollar amounts regularly and periodically over specific time periods (such as $100 monthly) in a particular investment or portfolio. By doing so, more shares are purchased when prices are low and fewer shares are purchased when prices are high. The point of this is to lower the total average cost per share of the investment, giving the investor a lower overall cost for the shares purchased over time.

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Bob and Lisa Smith, 58 and 63, are looking ahead to their retirement early next year. They dream about heading south to a cheaper and warmer state but haven't made conclusion either way. Bob is the sole breadwinner and earns $75,000.

The Smith’s two main concerns are outliving their savings and taxes. "Ideally, we would like to take distributions from our  retirement savings with the least amount of tax liability and make the money we have accrued last as long as we do," notes Bob. He also noted a concern about taking money out of tax-deferred plans in the correct manner to avoid IRS penalties.

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Are you looking for other ways of diversifying your investments in your IRA account? Most know that you can invest in stocks, bonds, and mutual funds within your tax deferred funds, but there are other investment vehicles available. 

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There is absolutely no doubt that the last few years have been rocky, and we may not be out of the woods yet. Certain factors such as high unemployment, inflation fears, and a still stagnant housing market, could be catalysts working against a full economic recovery.

As a result, the Obama administration has started proposing new changes to protect the retirement savings and income strategies for workers everywhere, even those without retirement plans. As with every government proposal, there are competing voices on both sides of the aisle. Here are some of the suggested changes:

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Historically, some of the most popular investments are the United States Treasury bonds, bills, and notes. While these bonds bring back memories of bond certificates in Grandma's safe deposit box, there are several misconceptions about U.S. treasury issues that are

commonplace. In this entry, we will address some of these investing misnomers, and parlay that knowledge into today's bond market.

"When you buy a Treasury security, you are actually lending the government money for a set period of time, from 30 days to 30 years, at a fixed rate of interest."

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Taxes imposed to finance Medicare

Medicare is financed in part by payroll taxes imposed by the Federal Insurance Contributions. When there are employees, the tax is equal to 2.9% (1.45% withheld from the employee and a matching 1.45% paid by the company) of the salaries and other compensation in connection with

employment. Until December of 1993, the law provided a cap on wages, etc., on which the Medicare tax could be imposed each year. On January 1, 1994, the compensation limit was removed. In the case of individuals who are self employed, the entire 2.9% tax of earnings must be paid by the self-employed individual, however half of the tax can be deducted from the income calculated for income tax purposes.

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First and foremost, for those who do not have a grasp on the definition of a pension plan, please read the following.

A pension plan is a way of saving for retirement in which an employee transfers part of his or her current salary toward retirement income. The two main types of pension plans are defined-benefit plans and defined-contribution plans. In the defined-benefit plan, the employer gives a guarantee that their employee will receive a defined amount of income upon retirement, regardless of how the investments perform. In a defined-contribution plan the employer makes a set contribution for the employee, but the salary taken at retirement is determined on the investment's performance.

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Life insurance is, and should be, a key part of every family's financial planning process. 

However, there are many different ways of obtaining life insurance coverage to protect your family. For example, life insurance can be offered through your employer, an alumni association, a professional group, of by purchasing it on your own. In this entry, we will review these methods of obtaining life insurance , and the pros and cons of each type of coverage.

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By Mike Rowan, 11/23/2009

I have noticed a major uptick in commercials for reverse mortgage income strategies for seniors recently. Many of the catchy taglines include promises that seniors can use their home to generate a lucrative income stream without selling their home. As with any financial planning strategy or tool, the reverse mortgage is right for some, but not for...

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