This guest post comes to us from Jack at Darngoodblogging.com. He usually talks about debt and credit cards on his blog. Thanks Jack for writing this guest post. I don’t know much about US retirement accounts and this has helped shed some light on it for me.

Your future essentially depends on how you handle your present. The more prudent decisions you make now, the better your chances for creating a secure future for yourself and your loved ones. Retirement plans form a very crucial part of your future planning. You definitely wouldn’t want to step into your retirement with scanty funds and looking for cheap debt consolidation or debt settlement services to resolve your debt issues. So, it is absolutely important that you get geared to prepare a proper retirement plan to secure your financial future.

Surviving on your retirement income

Surviving on your retirement income is a matter of real concern. Social Security, company pension plans, and the individual retirement investments are the three main sources available for retirement income.

Under the Social Security Administration, Social Security offers about 40% of the fund you require for a pleasant retirement. And pension plans are becoming rare day by day. Most of the companies that offer pension plans require the plan holder to be an employee with the company for a specific span of time. But unlike earlier, they are no more considered a source of substantial retirement income.

The uncertainty associated with the above sources highlights the need for a proper retirement plan that contains the right mix of investment and savings.

Save substantially for your retirement

Substantial savings is the key to a comfortable post-retirement life. Always remember, if at all you work after your retirement, it should be your choice and not a necessity. Often a lot of retired people are forced to work hard at an old age, simply because their savings are not enough to last them throughout their remaining life. The inflation, soaring costs of commodities, tax obligations, rising medical expenses add to their plight and make their living all the more difficult.

Such costs are expected to rise even more in near future, making the baby boomers’ post- retirement lives all the more expensive. So, to begin with, create a new savings account where you can deposit a certain amount every month as a
part of your retirement plan. Save as much as you can.

Consider long term investment plans

Smart investments are very crucial for a fruitful retirement plan. You can consider reliable retirement plans such as IRS Roth conversion and 401K plan to spice up your retirement planning.

It is very important to understand how your plan works and what benefits you will receive. Keep a track of your retirement accounts so that you can retire peacefully. There are different types of retirement accounts you can choose from and it is best to talk to a financial advisor about which account might be right for you and your situation.

Amongst a number of retirement accounts to choose from, 401(k), 403B and IRA are the most common type that people make use of today. Using Roth IRA can also be very advantageous because it offers great tax advantages. If you are confused with the host of options out there, seek the advice of a certified accountant to help you choose the account that is right for your situation. Remember, retirement is not the end of life; with proper planning, you can rediscover the joy of living!

EDITORS NOTE: I agree that we shouldn’t be relying on the government or pension plans for our retirement.  I must admit that it’s hard to think about retirement being so young, but I know it’s necessary.  It’s just that other priorities come into play (like kids, a house, saving up for a wedding etc.)   I definitely do want to work after retirement (when I retire early, of course) but maybe just once or twice a week and just for fun.  Studies have shown that working after retirement can help prolong life (the brain doesn’t get stagnant because you’re constantly working it out).

Readers, what do you think?  Do you think about retirement a lot? Would you want to work after retirement?

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If you haven’t been living under a rock, you might have heard of Mint.  Mint is this start up company founded in no other than San Francisco (where all the beautiful people and geniuses live) in 2007 and had been bought for $170 million by the huge conglomerate Intuit earlier this year.

Mint.com is a free budgeting tool that was initially untouchable by us Canadians because they didn’t have the Canadian banks in list of banking institutions you could add.  This has changed, and I have both the Mint.com log in (you can check your stuff easily online) and the mobile iPhone app (can quickly check transactions, budget etc.)

I’ve been using this Mint.com app and checking online (and receiving their many updates to my email) for about a month or two.  Being the opinionated person that I am, I would like to give my two cents on Mint.com based on my own experience with it.

Before Mint.com, I was using an app called PageOnce that I mentioned in my post on the 6 best free apps that will make your personal finance life better.  I liked Page Once but I was looking for something more comprehensive, something I could manage my budget with.

This is what the budgeting tool looks like (I found this on photobucket )

Pros of Mint.com:

• I like it’s ease of use.  Very. Easy. to Use. (If I can do it, you can!)
• The website design is very pleasing to the eye.  Nice solid colours, soothing lines.. not too busy looking
• It’s free and the app for your Smartphone is free too
• I love how you can show all your saving accounts, chequing accounts, credit card balances, and investments all in one place (more about investments later- in the cons list)
• There is a savings goal tool which encourages you to put your money in a separate account so you won’t be tempted to dip into your savings; this savings goal tool tells you if you are ahead or behind schedule of your goal.  This is probably one of my favourite features of the savings tool.  You can even select a picture to reflect your goal!
• I really like their budgeting tool too- you can keep track of your expenses (and it will be put in automatically based on your labels), because they label everything for you (e.g. if you spent $50 on your cell phone bill, Mint.com automatically categorizes it in the phone bill category, so you can keep track to see if you over spent or not this month.
• They notify you by email about big changes e.g. big purchases, so if something is fishy in any of your accounts- including credit card- you’ll know right away

Cons of Mint.com

• Possible security breach- you have ALL OF YOUR FINANCIAL INFORMATION PASSWORDS in ONE ACCOUNT.  Can be kind of scary.  Mint.com maintains that their website is super secure and safe to use.  But the security measures they take to protect your information seems kind of ambiguous and vague.
• They notify you if you are being charged a bank fee (but my bank fees are immediately credited back to my account), but Mint doesn’t know this and still sends you a notification
• Their notifications can get a bit overwhelming and annoying, but thankfully you can change your notification setting
• Because it’s free, they get paid from advertisers by asking you to sign up for this FREE banking account, or BETTER investment services than what you have now.  I think as long as you stay away from signing up, it’s a useful tool.
• One major drawback is that they don’t have every financial institution listed- for some reason, they don’t have QUESTRADE (which is my favourite investment tool and where all my non-registered stocks are at), so I can’t keep track of how much money I have in those accounts.. which tends to negate the point of showing your net worth on one page.
• Another drawback is that you can input the asset of house/home and car yourself.  You could make up an imaginary number to make yourself feel better and your net worth will appear very inflated with Mint.
• One major issue is that they don’t recognize a “joint account”.  For example, in my joint account with my boyfriend, the mortgage comes out, but we both pay for half.  Mint recognizes it as a full amount and tells me that I am overpaying for my mortgage (which may be a good thing, but it isn’t the case for me).  So with Mint, you might be best to amalgamate everything with your partner if you want an accurate depiction of your money (which I don’t plan to do).
• Another draw back is sometimes they mislabel things, and then it won’t reflect in your budgeting tool, but this can be easily fixed by relabeling it correctly to reflect  your budget labels.

So with all the pros and cons, it’s kind of a mixed bag.  I like the budgeting and goal tools, and I like how everything is updated very quickly.  The cons are easily worked around though, and I personally like using it.  It’s easier to keep track of things, though I wish they would have every financial institution (e.g. Questrade) on their pick list.

A tip if you are planning on signing up for Mint is to make sure you have the CANADIAN institutions, otherwise you’ll be like me and flabbergasted for one week wondering why your password for your credit card or savings account doesn’t work on Mint. So, for example, ING Direct is not just ING Direct, it should be ING Direct CANADA.

Canadian Finance Blog and Money Smarts Blog also give their two cents on Mint.com too, so be sure to check out what they have to say.

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Enough about my resolutions, lets talk about your possible resolutions.  Sorry, I hope you’re not “resolutioned” out, but with a New Year comes new beginnings and fresh starts, so I want to take advantage of this.

Judging from the amount of traffic some of my personal finance blog colleagues received on the first few days of New Years, and how my friends have all been telling me that one of their resolutions this year is to be smarter with their money, I know that people are interested in some financial goals for 2011.   Especially us young people.

So I thought I would share some financial goals that I think are an easy and painless (key words- easy and painless!!) way to start being smarter with your money.

Easy New Years Resolutions that Every Twenty Something should follow:

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You’ve heard of inflation, it’s the general rise in prices of goods and services over a period of time (according to Wikipedia).  Because of inflation, you get less bang for your dollar.  It’s like how on Austin Powers, Dr. Evil asked for a MIIIIILLLLLLIOOOON dollars for compensation, but a million dollars is nothing nowadays.  Good thing our salaries go up too, in accordance.

Or is it?

I can’t argue that having a larger salary is a bad thing (because of course, it is a good good thing).  However, if you get a raise, or if you start earning the big bucks (over $100K a year for example), you have to be careful that lifestyle inflation doesn’t catch up to you.

Lifestyle Inflation (according to moi) is when your lifestyle (your house, your car, your trips, your eating out expenses) catches up and maybe exceeds your salary in order to “keep up with the jones’ ” or to show the world that you are indeed a wealthy individual because of your job and your higher pay.

You may think that some doctors or lawyers must be well-to-do, and they very well may be, but at the same time, they might not be.  I was driving to work one day, and saw a lawyer in a fancy car with the license plate “LTG8TR”.  He probably was well to do, but he probably also had high expenses to pay.  He probably had a lot of debt, too.  Mortgage debt, car loans, you name it (if you think I’m being ridiculous by assuming he had a lot of debt, I often think of this when I see people driving fancy cars to make myself feel better- coping mechanism, you can call it).

If your paycheque upgrades, you should try your very best not to upgrade your expenses too.

I have been getting a small raise every year, but I still budget for it as if it were last year.  So the extra $100 every paycheque doesn’t really exist in my budgeting-eyes.  It’s best to pretend that you’re “now making X amount of money per year”.  Again, it comes down to what your values are- what you really want to spend your money on and what is superfluous.

As we move into our highest paying salary years (our 30′s and 40′s and 50′s), we do get instant lifestyle inflation, be it a home purchase, a baby (they are $$$!), saving for children’s post-secondary education and so on.  I think it’s important to get good spending habits now (our 20′s) to carry us forth into later years, when spending loads of money because you have money is easier to do.

Have you resisted the temptation of lifestyle inflation?  What have you done for yourself to ensure that you don’t spend more…now that you’re making more?

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Welcome to the final Part of the Financial Cleanse (part III).  Guaranteed to detox your financial-bowels to a better and more money-savvy you!  (I’m kidding about the guarantee, but I did use these suggestions for a more money-savvy me!)

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