Best personal finance software for your needs

personalfinancesoftwareWhat does the best personal finance software look like?

The best personal finance software is the one that you use. Most people have access to a computer and many of them come ready to use with personal finance software. But large numbers of people never look at it or look at it with the intention to use it but then revert to previous money management tools.

Personal money management programs are nothing more than tools and as the old adage goes a bad workman always blames his tools while a good workman makes the best of the tools he has on hand. You can have the best personal finance software, such as Quicken Starter edition on your PC but if you don’t use it on a daily basis to track your income and expenses it is useless.

The best personal finance software can make modern financial management easier and less stressful. There are seven things to consider when seeking the best personal finance software that you will use.

* User friendliness and ease of installation. Quicken comes out top of a user survey on this criteria but Moneydance and AceMoney are not significantly less rated.
* Quicken also comes top in the same survey when it comes to banking and bills. It is way ahead of the competition such as Home Bookkeeping or 3click Budget. The best personal finance software has a great online banking section that lets you do all of your banking for multiple accounts.
* Reporting. The best personal finance software gives you cash flow reports, tax reports and net worth reports, so that you can track where your money is at all times. These reports are essential when planning your future. BankTree personal and RichOrPoor to do this as well as any software and often this comes down to personal style preference.
* If you are into personal investing, say with your 401K IRA then Quicken will not be the best personal finance software for you. It focuses on the other criteria and you are well advised to look at Moneydance or AceMoney.
* Tax options are always going to be something you need to be on top of. Quicken is reported by users to be well ahead of the competition in this regard.
* Only the best personal finance software will include financial calculators in the package. While you may only take out a loan every few years or one or two mortgages in your lifetime it is very important to analyze and understand them before committing to them.

In summary, remember that personal finance software can be a great tool but only if you use it.

Financial Planning for retirement

retiredThere are 3 crucial time periods to do financial planning for retirement.

Financial planning for retirement is all about being proactive. Believe me when I say that nobody is as interested in your income in your retirement years as you are.

Financial planning for retirement is all about being proactive in three key periods of time. The first period is right now, this month. The second is the five years immediately before your retirement date. The third key period is the one from your retirement age to your expected date of death.

Now death may not be something you wish to think about but you cannot do remotely accurate financial planning for retirement without a realistic estimate of how many months you will live in retirement. For example if you expect to live until age 80 you need to plan for 20 X 12 months of X dollars of income.

Right now, this month, you need to gather all available data and estimates of income and expenses for each month in your retirement. A good place to start is with your bank statement. Calculate how your bank statement will look for the month you retire. Go through each item and ask yourself if you’ll get this money or be spending that money when 60.

If you have a Roth or 401(k) (employer sponsored) individual retirement account request an income projection statement from the fund manager. This will enable you to fill in the major income part of your ‘retirement bank statement’. If you are not saving money at the present time for your retirement income then you need to start. Find a financial planning company website with a retirement income calculator. This will guide on how much you need to be saving at each age, in order to have your specified retirement income.

It is your judgment whether you have enough savings to achieve your target income for your full retirement period. If not you should consider buying an annuity or increasing your investments or both.

When it comes to the last 5 years of your work life you need to be proactive about consolidating and protecting your savings. Two things to think about are, what stage of the business cycle is the economy in? (The best time to liquidate assets is at or near the Dow-Jones peak valuations). At what time should you convert riskier investments such as stocks to safer, probably lower-earning certificates of deposit and or bonds?

By all means take the advice of a certified financial planner at all stages of your financial planning for retirement but always remember that it is up to you to make it happen with decisions at the crucial times.

Disability retirement planning: Help for the unfortunate

DisabilityCheck Out Your Disability Retirement Coverage.

A disability retirement plan is a great benefit to have at work. It gives the fortunate employees who are unfortunate enough to become disabled and incapable of working, while in service, a lifetime income. It’s about retirement from work on health grounds rather than normal retirement because of age.

It is good advice to check whether your employer has a disability retirement plan as well as a service retirement plan. You may be eligible for a lifetime income when you reach a minimum age specified in the plan, normally 60 or 65 and if you have completed a specified number of years service with your employer.

It is important to do this because the contributions that you and your employer make to a retirement plan such as a 401(k) or other IRA will cease along with your income, if and when you become disabled. It is also important too to check the small print of your disability insurance policy if you have one.

Check whether your disability insurance policy pays you beyond 65 because this is the worst time for your income to stop. Because you stop putting money into an IRA after your disability retirement, as did your employer, you may not have enough income from age 65 on.

There is an insurance product for just such an eventuality. It is a specific sort of disability income protection. It protects your retirement fund contributions in the event of your disability retirement. This kind of disability policy not only pays you an income but also contributes to a savings fund or special trust with investment options just like a retirement plan. The aim of this fund is to build an annuity from which you can draw income when you reach 65. Death before 65 means this income goes to your beneficiary.

The choice of insurance companies that specialize in protecting your retirement income in the event of disability is large. AIG for example have both a short-term disability policy (employer sponsored) and a long term insurance protection. It is important to go with a company that has proven financial strength so that they will be there to provide your income in retirement. Boston Mutual offers disability income insurance for individuals and has been doing so for more than 100 years. Shop around for the policy that meets your needs and look in detail at Guardian, The Hartford, Mass Mutual and Metlife. A good comparison website is

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Retirement plan basics; steps to help you get started

abc_blocksA Good Retirement Plan Starts With Goal Setting.

All your life you have been both a consumer and a contributor. You’ve been working, earning, spending and hopefully saving for that time when you become just a consumer. The more you have been involved in planning for your retirement the more likely you are to have a successful retirement. People who do not think about their future finance or leave it to their employer, their government or their retirement account fund manager will find themselves in trouble come that retirement time.

Saving money during your lifetime of work is the basic building block of a successful retirement. But how much should you save? How much money will be enough for you to have a comfortable retirement? Clearly the answers to these questions will be different for every person. However, use the following guide to plan your own retirement.

Begin with three aspects of your age. How old you are now, the age at which you want to retire (or stop working full time and begin living off your savings) and the age at which you expect to die. Mortality is a fact of life, if you will excuse the pun and has to be confronted if you are to plan effectively for a comfortable retirement. Answer these questions, how long did your parents live?

You have the same DNA and may well have inherited their health conditions, so start by assuming you will live at least to their age. Do you have a healthy lifestyle? Add years if you don’t drink or smoke and have a healthy diet. Subtract at least five years if you use tobacco and or abuse alcohol. If you do smoke also consider adding to your savings now to cover future medical bills.

Example: A person aged 40 now, expecting to retire at 65 and live a further 20 years to 85 needs to move on to thinking about their money in detail. What is your annual income? In our example let’s assume $50,000. And let’s say you save 10% from now on, making $5000 this year. You will of course earn interest on your savings so let’s assume 9% pre-retirement and 6% post retirement (it is less post retirement because you are spending from the total saved amount). The person in our example will have saved $311,072 by the time they retire.

The next step in planning for a financially secure retirement is to look into a crystal ball and calculate how much money you will spend each year for the 20 years of your retirement. Again in our example let’s assume $40,000. Remember you will get some social security payments and you need to estimate these and subtract them from your expenses figure. So let’s assume around $13,000 per year. Thus total annual spending drawn from savings will be $27,000. For the 20 years of retirement this means our exemplar will need $540,000 in total but only has $311,000.

This means, in our example, that the retiree will run out of money at 79 and face 6 years of poverty when they are in most need of a stable income. Or they will leave over $200,000 of debt in their estate.
The really big question in retirement planning is what are your financial goals in life? For some people, leaving debts behind them is not an issue, while for other people it is an unthinkable situation. Other people may see the best-case scenario as a zero bank balance at the age when they shuffle off their mortal coil. You need to build your financial goals into your life money model. In our example let’s say that this person wants a comfortable twenty years of retirement and a zero balance at 85, they must look at the options to bring this about and they need to act now.
So what options are there when you need to make up a projected shortfall in retirement income? Increase your level of savings now is the first and most obvious option. If you are in a 401k or Roth retirement fund, with your employer contributing and deductions from your salary, you need to find out what the maximum contribution level is and begin making those payments.

A second option is to increase the return on your savings. Many Americans are dealing with large amounts of personal debt coming out of the consumer credit led boom years of this last decade. Unsecured debt, particularly credit card balances are extremely expensive. If you are saving money at the same time as you are making debt repayments you are well advised to make yourself debt-free as a matter of priority and only then get back to saving for your retirement.

A third option, along the same lines as option 2 is to increase your investment earnings by switching to different, higher risk but higher earning investment securities. This involves researching and switching to a self-directed Roth or 401k retirement plan.

Before taking up any of these options it is important to do the retirement plan calculation and retirement life goal setting before implementing a combination of all of the above options.

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Retirement Planner selection tips


How To Get Help In Retirement Planning.

Who are you going to talk to, to have the most suitable retirement plan for you? Retirement plans are big business. Lots of companies want to manage your savings for your retirement, because they make money from doing so. The danger is that commercial companies are more concerned with making money than giving you the best advice, so they push their own specialist services. There are four broad types of retirement plan and only types 2 and 3 may require a retirement planning company.

  1. Government sponsored plans like social security.
  2. Personal plans like the Individual Retirement Agreements or IRAs.
  3. Annuities through insurance companies either fixed or variable.
  4. Employer sponsored plans that either qualify under the IRS tax code or don’t.

If you are a public employee and need help in planning for your retirement you can’t do better than the not for profit ICMA-Retirement Corporation. You can find them at and the advice on the website is good for anybody starting out and thinking about retirement planning.

They have various levels of service and guidance and the choice is with you, as to how much you do for yourself and how much you let them do for you. The five levels of service are:

  • Developing a retirement savings plan.
  • Deciding which types of saving assets to allocate your money too.
  • Choosing the funds that are right for you.
  • Monitoring funds.
  • Managing your investment portfolio completely.

For non-public employees the choice of retirement planning company can be more problematic. There are two decisions that need to be made before shopping around for a retirement planning company. Firstly which type of retirement plan, annuity or personal IRA, is right for you and secondly to what extent do you want to manage your retirement savings yourself. Armed with this information be sure to shop around for the retirement planning company that feels right for you and list out the things you want to know such as minimum opening balance if any, cost of trade commissions, types of funds they deal in and any account administration fees.

Be sure to do your homework before committing to any one company. The best people to listen to are current customers so consider joining retirement blog-site communities where you can discover the experience of real people rather than sales people. When it comes to choice of investment vehicles there are a large number of comparison websites, such as compare-best-annuity-rates where you can look at the performance of both fixed and variable annuities side by side.

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