• Increasing life expectancy
• Rising inflation
• Increasing medical costs
• Rising standard of living

So, start planning for retirement as early as possible, so that you can prepare for your golden years. It enables you to retain financial independence. As the average number of employment years has not been increasing, then how can you depend on someone after your retirement. Even after your employment, you can live the way you like and you can enjoy the same lifestyle which you are used to live before. This can be attained by right planning.

The path to secure retirement is by your regular saving or investing. Get a habit of monthly savings by purchasing products like Systematic Investment Plans introduced by mutual funds, regular premium life insurance policies and recurring deposits offered by banks. Saving or investing early gives more power of compounding your investments. Moreover be sure to make tax-saving investments and avoid the investments that promise impractical returns. This systematical investments lead to a tension free healthy retirement life.

In case if you are currently not in a position to set apart the funds required to invest, then start with whatever is at your disposal. Life insurance pension plans offer huge tax benefits. So, select the right retirement age and get started on retirement planning, which will help you meet your post-retirement requirements. Early retirement planning can help you reduce your financial burden and stress incurred during the post retirement years and help you plan for a healthy and financially secured post retirement life.

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Retirement plans are of two types, defined benefit plan and defined contribution plan. A defined benefit plan comprises or gives a specified monthly benefit at retirement. The benefit in defined benefit plan is determined by the employee’s salary, number of years of employment, age at retirement, number of years of service, etc.

The retirement income mainly depends on the years of service to a particular organization. The longer the time you are associated with the organization, the more you get your monthly income at retirement. There are many methods used to calculate the defined benefit plan, however, the result is a fixed monthly income that the employer is committed to pay the retiree for the rest of his life.
Defined contribution plan does not ensure specific amount after retirement. In this plan, the employer or the employee contribute to the employees individual account. These contributions are generally invested on behalf of the employee in the employee’s account. The employee will ultimately receive the balance, and the value of contribution depends on the changes in the value of the investments.

A Simplified Employee Pension plan (SEP) allows employees to make contributions on a tax-favored basis, when employee owns or sets up an individual retirement accounts (IRAs). Thus many plans contribute to the benefit of the employees after retirement.

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There are some characteristics of TIPS:

• Maturities available with 5,10, 20 years.
• Bond’s principals increases or decreases with the rate of the consumer price Index-based.
• Payments of interest are a fixed percentage applied to an decreasing or increasing principal.
• Original principal or the adjusted principal whichever is greater, is paid to the investor upon maturity

Examples of Treasury Inflation Protected Security:
TIPS are very different from conventional bond. Coupon payments are made a conventional fixed rate coupon bond on the par amount. They return a par amount at maturity date of the bond. Not so with TIPS.

Checking account features:
Generally checking account don’t pay interest. In case bank offers interest on a special type of checking account then rate of interest much smaller than saving account. In checking account you can create unlimited withdrawls, you can use of debit card and you can get the ability to pay with personal checks.

Saving account features:
You can earn interest on the funds in this account, this is the primary feature of the saving account, For that bank uses the funds in saving account to give loans customers and conduct other businesses. It requires a minimum balance in these account to ensure that bank has sufficient funds at its disposal and it allows number of with-drawls per statement cycle.

Warnings:
If the account falls below the minimum balance then some saving accounts charge a fee.
Checking account usually don’t charge this penalty you write checks for extra money than account’s balance.

Saving account takes more time to transfer the money than checking account. You can transfer the money from checking account by the next business day but it will take up to 5 days from saving account.

Here there are several types of saving and checking accounts. There are 2 common type of checking account are express checking and joint checking.

There are 2 common types of saving account are high-yield saving account and passbook accounts.

Debt accumulates and increases through interests and penalties when a consumer does not pay or even if he pays minimum amount. To clear this never ending debt, you need to act smartly by understanding the issues involved and by taking the help of a specialist counselor.

Understand minimum payment issues
Every time you receive your monthly credit card bill, your creditor mentions the total outstanding amount as well as the ‘minimum amount’ you can pay. Most of the people pay minimum amount to stop collection agents harassing them for payments. But this is where people do big mistake. The minimum payment includes interest rates, other fees and only a very small fraction of the balance amount. This means you are paying only interest and other fees.

So, if you pay only the minimum amount, you will be paying much more than you owe to the credit card company. Apart from paying more, it will take a very long period of time to make the complete payment, which becomes unbearable.

Late fee and over due interests
You will probably get sucked more in this credit card issue if you pay your bill in time or have missed a payment. Generally most people suffer paying minimum payment because it includes all the fees that they have incurred such as fine for late payments, missed payments, or exceeding the limit of the credit. They will add up every month until you pay them completely. As this happens month after month, you will find yourself in defaulters list and remember the collection agencies will start harassing you.

When brought down to this situation, most of the individuals often look to bankruptcy as the only option left. They think that it is the easy way to get out of debt. They will be unaware of the terrible consequences of filing bankruptcy.

Take specialist counselor’s advice
If you are in this hopeless situation, making minimum payments and unable to get out of the debts, approach a credit counselor. A credit counselor helps you get out of this awful situation.

He will provide options like lowering the interest rate and a loan to consolidate the loan. Lowering the interest rate would increase the productivity of your monthly payments and a debt consolidate loan can clear the debt over a defined period of time and at a rate you can afford.

Always remember, the credit card company benefits when you simply pay your minimum payments month after month. It’s never late to come out of this situation but it is better to come out as early as possible.

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