Retirement Planning: Tips Everyone Can Use

Tax Freedom Day®
Tax Freedom Day, as calculated by the Tax Foundation, a nonpartisan economic research think tank, is the day when the U.S. as a whole has earned enough money to pay off its total tax bill for the year. It provides an easy way for Americans to gauge the total amount of taxes and government fees they pay at various levels of government. By contributing more to a tax-advantaged retirement plan, you can lessen the impact that taxes have on your income. To see when Tax Freedom Day occurs in your state, visit the Tax Foundation’s website: http://taxfoundation.org.

Q&A
Save for kids’ college, or add to the retirement account?
What should be the priority when budgets are tight? Because retirement may be some years away, it may be tempting to put your kids’ education savings on the front burner. But that may be a mistake. For one thing, college students can apply for low-interest loans, work-study programs and scholarships to help pay for their education. But you cannot realistically expect to borrow funds to pay for your retirement. It may sound cold-hearted to your loved ones, but you have to consider your future income needs and not derail your retirement plan.

Quarterly Reminder
Update your estate planning documents
If your life situation has recently changed —if you’ve been divorced or widowed, or have had a child, for example—you should check to see that the beneficiaries on your retirement accounts and insurance policies are up-to-date. You should also periodically review your will, power of attorney, and health care proxy to ensure that they properly reflect your wishes upon your death.

Tools and Techniques: Resources to Help Guide Your Retirement Plan
How much house can you afford?
A conservative rule of thumb states that no more than 36% of your income should go toward paying your debts, and no more than 28% should be allocated for all housing expenses, including mortgage, property tax and insurance. Of course, where you choose to live will have a significant impact on affordability. Try out the home affordability calculator at Realtor.com to determine how much house you can afford:
http://tinyurl.com/homeaffordcalc.

Corner on the Market: Basic Financial Terms to Know
Commodities

A commodity is a basic good in commerce that is essentially interchangeable with other commodities of the same type. When you pour a glass of orange juice or put gas in your car, you are consuming commodities. Other examples of commodities include gold, wheat, corn, beef and soybeans. Commodities can be bought and sold on exchanges in real time or through contracts that fix the price and delivery terms at some point in the future.