My Personal Finance Blog

Social security for early retirement is a complicated issue that is not very easy to understand. People should save for their retirement because most countries are not able to give them much of an income after they leave the workforce.

Although most people think that social security was intended to be enough for someone to support himself after retirement, it was not. Therefore, it is important for you to understand the benefits it offers, the rights you have and the limitations, so that you can plan for other pensions to complement your retirement income. Life expectancy has increased a lot over the years, so it is better to start saving as soon as possible. The more you save, the more benefits you will get after you retire.

What To Consider About Social Security For Early Retirement.

When you plan an early retirement for social security, and other pensions, there are some steps you should take in order to make sure you achieve your desired income. To begin with, your goal must be feasible, and you must have lots of time to plan it. If you want to make full use of your income as you retire, you must have time to pay all your debts before you actually retire. You need a good plan to achieve this. This can be done by having a good saving and investment plan.

It is vital to have an aggressive strategy to make sure that you will have enough money to pay for all your debts and have enough investment that will give you passive income by the time you retire.

Social Security for early retirement is not enough if it is the only option you are considering. Therefore, you will have to make other investments to ensure your desired income. It is important to understand very clearly the holding in mutual funds. IRAs, 401k plans, and any other plan you are investing in. Do not forget to check your life insurance, too. Always develop a long-term plan. In order to be protected from inflation, you plan must go beyond your retirement age.

Maybe you do not want to work after you retire. In this case, you must consult an expert who will guide you on the way. It is possible that your plans are unfeasible, and wrong decisions can destroy your retirement. Have a professional check your portfolio so that he can devise a plan that suits you need and objectives.

Cindy Heller is a professional writer. To learn more about social security for early retirement, please visit home retirement plan.

Pension’s Tips: It is said that people either “live too long or die too young”, and nowhere is this more typified than in the Construction Industry, where up to recently, both the safety record and the Pension planning record had been nothing short of appalling.

On the one hand, the fatality and injury record of workers in the Irish Building Industry was one of the highest in Europe (in 2001, 28% of all workplace fatalities were Construction Industry related), while those who were lucky enough to have survived working on Irish Construction sites faced a very uncertain future as they neared retirement.

While the authorities have made some strides in addressing the Construction Industries safety record in the recent past, there is still considerable scope for improvement with regard to adequate and proactive Pension Planning (in an IAPF survey dated October ,2005,it was found that nearly the entire Irish population was dependant on the state pension)While a recent IMPACT Trade Union report found that in Ireland, there are currently 5 people of working age for every person aged over 65, but that figure will fall to 2 to 1 by 2050,causing a huge funding crisis.

The lack of Pension planning is a symptom of a larger Irish malaise, namely their totally reactive nature to nearly everything. This especially applies to Construction Industry Pensions, where despite extensive publicity on the need for adequate Pension planning, the Pension expertise available and the negative effects of no Pensions being in place at retirement, excuses still abound for doing nothing. In an effort to be seen to do something, the Government is even rumored to being looking at making Pension funding compulsory.

In over 25 years of Pensions planning, here are the 7 most popular excuses I’ve come across in the Construction Industry for not planning a Pension.

* I can’t afford it

* I’m too young/old

* “Someone else” will provide for it

* I’ll do it “later”

* There’s a state pension

* I don’t want to think about it

* I’ll be dead by then

I can’t afford it — expansive pension ……ask yourself can you afford NOT to? Waiting until you can afford it will never happen. The minimum monthly premium for a self employed Pension is €25 gross, or with tax relief at 20%, €20per month ……that’s €1.00 per day. Given that the minimum Lottery ticket price is €1.50 per go, and there are absolutely no guarantees whatsoever with that, €1 is a small price to pay for securing your future and security of mind, isn’t it?

Insurance go first! I’m too young/old ….you’re never too young, or old for that matter, to start to proactively secure YOUR future. The earlier you start, the longer your funds have to grow and appreciate in value, while even starting much later in life will give you tax relief and help you to exercise SOME power over your finances.

A plan for my Pension? “Someone else” will provide it …………who, precisely? And why should they? While an employer may contribute to your Pension Plan, ask yourself how much of a benefit you’d expect to get, would it be guaranteed, and if so, for how long? Would you be happy to have “someone else” pick your clothes, choose your car or have any other say in your life – but if you don’t plan for your Pension, “someone else” WILL be deciding your future.

I’ll do it “Later …… look at the cost of delay – to provide a pension of €2,000 per month, a 20 year old would need to pay €270 per month into a pension plan, while a 40 year old saving for EXACTLY the same amount would need to pay €951 per month – FRIGHTENING, isn’t it??

There’s a State Pension …….there is alright. As of Jan, 2007, that stands at the princely sum of €209.30 per week. Now ask yourself, given the ever increasing cost of accommodation, transport, food, communications, entertainment etc., if you were relying on the State Pension ONLY, would you be LIVING or EXISTING?

I don’t want to think about it…….fair enough, that’s your prerogative, but burying your head in the sand on the Construction site won’t make planning for your future go away. Can you imagine a Builder deciding they didn’t want to think about something on a Construction site……would you be happy to work there?

I’ll be dead by then …perhaps you will, but suppose you’re not? Can you imagine HAVING to continue doing manual labor out of dire economic necessity? Or what if you’ve worked all your life and in spite of your best efforts, face 30 years of retirement?

Another alternative the Irish Government are looking at, as pointed out in a recent IBEC report in Feb 2006, is that they may increase the minimum retirement age to 70 or 75.Can you imagine the potential effect this would have on the Construction Industry? So, as an Irish Building worker, why don’t you take control of your future, ignore the 7 most popular excuses outlined above, and make your Pension THE KEYSTONE of your financial future……and if you need another incentive, try living on €209.30, and nothing else, for a few weeks!!!

For general pension’s information, please visit the website of the Irish Pensions Board or for Information relating specifically to Pensions visit Irish Construction Industry Pensions.

Ireland’s premier supplier of Pension and Retirement planning for those contractors, suppliers and sub-contractors who work in the Irish Construction Industry

Anthony Woods T/a Keystone Insurance

There are several options available for NRIs considering opening a account in an Indian bank: Non-Resident Ordinary (NRO) Savings Account, NRO Fixed Deposit Account, Non-Resident External (NRE) Savings Account, NRE Fixed Deposit Account and Foreign Currency Non Resident (FCNR) Fixed Deposit Account. Each of these account types has certain advantages and disadvantages. Understanding them can help you in making a choice. Factors to consider include:

Source of the funds in the account: Are the funds to be deposited in these accounts from sources in India or abroad? Currency in which the account is maintained and associated currency rate risks if you want to convert back into the foreign currency: Do you intend to repatriate the currency back to your country of residence at some point? Repatriability: Can you convert back to the foreign currency? Taxation in India on the principal and interest earned: Do you have to pay taxes for the money in India? Ability for an Indian resident to operate the account with a mandate: Can a family member in India operate the account with a mandate card issued by the bank? Can the account have a Indian resident as a joint account holder? Note that this is different than having a family have the ability to withdraw funds from the account as a mandatee.

Key aspects of NRE accounts are as follows:

NRE accounts are maintained in rupees. This means that the foreign currency is converted to Indian rupees at the prevailing foreign exchange rates when the money is deposited into the account. The primary source of funds deposited into NRE accounts must be from your earnings abroad. In other words, you cannot deposit money from sources in India such as house rent or pensions in this account. The principal amount and the interest are fully repatriable (can be converted to any foreign currency). The conversion back to foreign currency is done at the prevailing forex rates. Interest income earned on the money in a NRE account is non-taxable in India. However, it may be taxable in your country of residence as per that country’s tax rules. You can only have other NRIs as joint account holders on NRE accounts. Resident Indians cannot be joint account holders in NRE accounts with NRIs.

Key aspects of NRO accounts are as follows:

NRO accounts are maintained in rupees. This means that the foreign currency is converted to Indian rupees at the prevailing foreign exchange rates when the money is deposited into the account. The source of funds deposited into NRO accounts can be from India or abroad. NRO accounts are appropriate for NRIs who have had earnings in India earlier and became NRIs later as well as NRIs with income from sources in India such as house rent, pensions etc. You an also deposit money from your earnings abroad or transfer money from a NRE account into a NRO account. Current Income like rent, dividend, pension can be remitted abroad through the NRO account. Funds which can be repatriated from the NRO are subject to a maximum limit of USD 1 million per financial year. Repatriability is subject to conditions. Interest income earned on the money in a NRO account is liable for taxes in India. You can have other NRIs or resident Indians as joint account holders on NRO accounts.

Key aspects of FCNR accounts are as follows:

FCNR accounts have to be opened and maintained in the foreign currency itself. The source of funds deposited into FCNR accounts have to be from sources abroad. They can also be from your other NRE or FCNR accounts. The principal amount and the interest are fully repatriable Interest income earned on the money in a FCNR account is non-taxable in India. However, it may be taxable in your country of residence as per that country’s tax rules. You can only have other NRIs as joint account holders on FCNR accounts. Resident Indians cannot be joint account holders in FCNR accounts with NRIs.

NRE and FCNR accounts have the advantages of not having to pay taxes in India which could be a hassle for NRIs trying to figure out the tax rules in India as well as their country of residence.

People opening NRE accounts and would like to repatriate their funds at some point must consider the foreign currency conversion rates at the time the funds are being deposited versus the time when the funds have to be repatriated. This can carry risks as well as rewards depending on the forex rates trend. For example, if $1000 is converted to Indian rupees at Rs. 50 per dollar and then converted back to dollars at a conversion rate of Rs. 40 per dollar, then you would get back $1250 for a good gain. On the other hand, if the dollar is at Rs. 55 per dollar, you would lose some of your principal when you do the repatriation.

FCNR accounts do not carry any forex rate risk as the accounts are always maintained in the foreign currency.

NRO accounts have the advantage of being able to deposit funds from both sources in India and abroad and having joint account holders in India. Repatriability of funds is a disadvatage for NRO accounts. The key advantage of NRO fixed deposit accounts is the substantially higher interest rates as compared to FCNR and NRE accounts. Check Ratekhoj for latest NRO fixed deposit interest rates offered by various banks in India. The rate of interest offered is different in different banks and also depends on the fixed deposit tenure. So your choice of which bank to open a account in can depend on the interest rates.

FCNR and NRE fixed deposit accounts typically yield much lower than NRO fixed deposit accounts. Check Ratekhoj for latest FCNR and NRE rates. Most banks in India offer the same interest rate for FCNR and NRE fixed deposit accounts. So if you are planning to choose a bank for your NRE or FCNR fixed deposits, interest rates offered is not a consideration.

Both NRE and NRO savings accounts yield 3.5% currently. There is no savings account option for FCNR accounts.

NRE Savings and NRO Savings accounts allow you to have family members in India as mandate holders whereas you cannot have mandatees for the fixed deposit options available in NRE, NRO and FCNR accounts. Mandate holders can withdraw funds from your accounts in India with some type of a card such as a debit card of a ATM card. They can also withdraw funds at the bank locations. Banks such as Citibank allow you to even specify certain conditions on the amounts of withdrawals allowed per month on the operations of the mandatee.

Most banks also provide for taking loans for a certain percentage of your existing balance on your NRE, NRO and FCNR fixed deposit accounts. Check with the banks for details on loans.

Ratekhoj.com is a personal finance comparison website where you can compare and get the best fixed deposits, home loans, credit cards and insurance products from all leading banks and financial institutions in India.