Retirement planning requires that you figure out what kind of lifestyle you would like to have. Where will you live, how much money you will need, etc. The current life expectency for men is 74.4 years, and for women, 79.8 years. So you would probably want to have enough money to support yourself and your family after you retire. And I wouldn’t count on Social Security being much help! This is where retirement planning comes in.

401k plan: If your employer offers a 401k plan and you are not taking advantage of it, you are a fool! A 401k is probably the biggest tool you have in your retirement planning arsenal! You can almost double your money instantly! Lets take $100 of you earnings. After you pay taxes, you have maybe $70. You can go and buy some junk you don’t need. If you put that $100 in a 401k plan, you don’t have to pay taxes on it. Not only that, your employer probably offers matching. Let say your employer matches half up to 6%. So in you put $100 into you 401k, you employe may match another $50. Thats $150 into your 401k versus the $70 you would have to buy junk that will most likely go into your garage or closets. Put as much as you can into you 401k! I personally try to max my out every year.

Traditional IRA or Roth IRA: Both of these are very good. If you don’t have a 401k plan, or you are maxing it out, you you want to put money into an IRA. Money goes into a traditional IRA pre-tax, and into a Roth IRA post-tax. If you are maxing your 401k, you may not be able to use a Traditional IRA. I have a Roth IRA. A Roth RIA is cool in that when I reach retirement age, I can take money out TAX-FREE!!! That is because I paid taxes on the money before I put it in there. How cool is TAX FREE?!?!?!?

EE Savings Bonds: Savings bonds suck! They have lousy interest rates, and if you die, your heirs will have to jump though a bunch of hoops just to cash them EVEN IF THEY ARE POD! I had a terrible experience dealing with the EE savings bonds that were in my mother’s estate. Avoid them!

Amazon has many good books on retirement planning.

As far as my own retirement planning, I am maxing out my 401k each year, and Roth IRA’s for both myself and my wife. My wife also contributes to her own 401k plan. I want to retire as soon as possible, and have enough money to travel around the world, and spend a lot of time on cruise ships! Now that’s what I call retirement planning! :)