We all want to leave the office and our bosses behind one day and retire.  Then we will be the masters of our own destiny for once.  What about self-employed people?  One could argue that they are already the master of their destiny.  However, even a self-made person wants to take time to relax and enjoy the good life.  Here are some tips for them to enjoy the full benefits of retirement.

1.  Make a plan.  You have experience with creating plans.  A business plan was needed to get you up and running on your own.  This plan is actually easier.  What do you want to do after you retire?  When do you want to retire?  A person who works for themselves doesn’t have to retire at sixty-five if they want to keep working.  Whenever they desire to pack it in, a solid plan now ensures that the money needed to do so is there.

2.  Set up a retirement plan.  When you work for yourself, you are the employer.  The only person to provide retirement benefits is you.  A Keogh plan is the retirement plan of choice for self-employed individuals.  It allows you to put away tax-deferred savings for retirement.  There are two types of Keogh plans:  defined contribution and defined benefit. 

3.  Contribute the maximum amount to your retirement plan.  Read the fine print.  Depending on the type of Keogh plan you have, the contribution may have a limit per calendar year.  If you can afford it, choose a plan that sets the higher limit on contributions.

4.  Open an IRA account.  You can never have too many retirement accounts.  Your local bank or credit union can give you advice on how to open an IRA account with them.  Choose between a traditional plan and a Roth IRA.  Many people opt for a Roth because the yearly contribution amount is higher. 

5.  Choose a financial planner.  In a company, the financial decisions are made by the company on behalf of their employees.  They consult financial people when looking to offer options for benefits and retirement to their employees.  You have to do this for yourself.  A financial planner can suggest ways to invest the money you receive from your business to secure your financial future.  A diversified portfolio is best to get a sampling of low, medium, and high risk investments with the maximum return.

6.  Talk with your spouse.  You may own the business, but your spouse may have a nine-to-five job.  They also have a retirement plan from their employer.  He or she will want to take advantage of the plan.  Enroll and have as much money funneled into it as possible in order to increase the money available at retirement.

Retirement is a goal for everyone.  Self-employed people can be just as secure in their retirement portfolio as those who work for someone else.

We hear the terms "debit" and "credit" used on a daily basis.  In the context of a conversation they can mean a different thing each time that we use them.  In the context of accounting practices, debits and credits actually mean the opposite of what we would expect.

What do you think of when you hear the word “debit”?  For most people today, they think of a debit card.  The card is used to take money out of our account.  We use it at ATM machines and in the store.  For us, a debit means that we have less money in our account.

Switching to credits, a credit is seen as something that we get.  Finance companies give us credit cards and we go crazy.  It's money that we didn’t work for but can use to buy other things.  In our eyes, a credit is a positive thing.

Now, let’s pretend that we are sitting in an accounting class.  The teacher asks us to explain debits and credits.  Most likely, the explanation above is what the teacher will hear.  However, this answer is wrong - at least partially.

According to accounting textbooks, any transaction that we make has a debit side and a credit side.  This is neither good nor bad but a simple fact.  If we take a second to think about it, the reasoning does make sense.

You go to the store and buy a pair of pants.  You use your debit card to pay for it.  The money is deducted from your account for the transaction.  We understand that.  Now, the money is being deposited as a transaction into the account of the store.  This we also understand.  As such, a type of transaction has taken place in each situation.

A debit is what was received by someone.  A credit is what was used to get the thing that you received.  If you're still with me, then applaud!  Accounting is not an easy thing to understand. 

When you buy something and use a credit card, you receive the item that you wanted to buy.  That is a debit even though you received something.  We think of receiving something as a credit, but not to an accountant.  The credit card company pays the bill, but this decreases their liability to you so it is a credit for them. 

Liabilities are credit accounts.  Putting money in the bank is a credit because it increases their liability.  That is money that they must keep track of for you.  When you remove money, it reduces their liability because your money is back in your hands.  This is debit for them.  We have come to use the bank’s terms for their transactions as our own, but it doesn’t always work that way.

Debits and credits are interesting if not a bit confusing.  Suffice it to say, any transaction is made up of someone getting something and someone losing something. 

It is a fact that people are living longer.  Thirty years ago, retirement may have lasted around ten or fifteen years for the average person.  However, these days retirement can last for twenty to forty years depending on when you are able to hang up your work boots.  To prepare for that eventuality, here are five tips to make sure that your savings are enough to go the distance.

Saving money doesn’t have to be hard.  In fact, the hardest part is letting go of the money in the first place.  We all want to save but we are torn between going to that sale now and planning for a future that is many years away.  Okay, let’s see if we can make it easy enough for anyone to save the money that they need.

1.  Think about your retirement goals.  What do you want to do after you retire?  If you want to travel, chances are travel costs will rise significantly by the time we retire.  If you want to own a beach house or spend half the year in a warmer climate, you will have to have the money to free you up to do just that.  Setting a goal gives your financial expert a place to start.

2.  Contribute all that you can to your employer’s retirement plan.  If you are closer to retirement age than others, you will likely want to contribute more of your income to the plan.  At least contribute up to the maximum percentage that the company is willing to match.  A good way to save more is to increase your plan contribution when you get a raise.  Instead of using the raise for other things, add one or two more percents to the amount deducted from your check for retirement.

3.  Consider your spouse’s retirement plan.  As partners, both of your retirement plans will feed into the amount of money you have to live on after you quit working.  Be sure that your spouse is following the same guidelines so that they are getting the most out of their plan.

4.  Look at the diversity options.  While a savings account type option for your 401(k) is safe and will get you around 3.5% return, a more diversified picture with a mix of high risk and low risk stocks and mutual funds makes the most of your money.  You know what they say about putting all your eggs in one basket.

5.  Look at your Social Security statement.  You get one every year from the Social Security Administration.  It tells you what your benefits could be based on your earnings to date and the amount of Social Security taxes you have paid.

There are ways to save for retirement without it being such a struggle. 

I want to make home improvements.  My home is twenty years old and needs to come into the modern era.  I don’t have the cash it would take to do the work.  Should I refinance my home loan to pay for the costs?

This is a common question.  After a certain time, everyone wants to refresh the look of their home.  If you bought a new home, the yearning will come later rather than sooner.  If you own an older house, home improvements may be a mix of safety issues and wanting a more up-to-date style.

Regardless of what type of improvements you want to make to your home, refinancing could be your answer.  There are a few things to consider first before making a final decision about anything.

1.  Get estimates.  It is hard to know how much money you need if you don’t know what it will cost.  Home improvements that are really home repairs such as wiring upgrades for an older home or putting in energy efficient storm windows can cost a pretty penny.  Go through the process.  Get an idea of what it will cost and choose the most reasonable estimates.  Add up the costs for what you need or want to change and that will determine if refinancing is a good option.

2.  The size of the job.  This hits a little on the first point.  Home improvements that cost around $10,000 to $20,000 can be covered with a refinanced loan.  If your home has appreciated significantly because you live in a popular area, the amount of the cash payout could be enough to cover that amount.  And you will still have one payment to make each month.  Larger jobs that require more cash could be served best by a second mortgage if you have the equity to back up the new loan.

3.  Future plans.  How long will you continue to live in the home?  The time frame is important because if you are planning on moving in the next few years, only make home improvements that will enhance the value of the home.  Putting in hardwood floors or butcher block countertops is okay, but painting may not be a good idea.  The new owners may have other tastes.  Besides, why spend all that money on a second mortgage if you plan to sell the home?  Refinancing can cover the smaller improvements and leave some cash in your pocket.

4.  Can you pay over time?  Many companies offer financing of their own for home improvements.  You can make a lump sum payment and pay the rest over time.  If your credit is good, you will have a low interest rate.  You could even have a deal where you pay no interest for a certain amount of time.  This is a better option than refinancing for the home improvements if you can get it.

Home improvements are a good reason to refinance a home loan.  But do consider the four items above.  There could be other options that are better for your situation.

One day we all will retire.  Retirement is the time when we kick back and enjoy the things in life that maybe we have overlooked earlier in life because of work responsibilities.  But as it happens, some people get bored with retirement.  They want something to occupy their days other than sleeping or relaxing by the pool.

Retirement is looked on favorably by most workers.  After retiring from work, people take up new hobbies, expand the time that they spend on existing hobbies, relax, spend time with family, and travel.  While these things sound exciting to us when we have no time to do them, after a while we may wonder if our lives are still as meaningful as they were when we were working.

Finding another job after retirement seems crazy, but can give us purpose.  Retirement can last as long as twenty or more years.  That’s a long time to fish and nothing else.  The appeal may be that we work for enjoyment and not because we rely on the paycheck for our livelihood.  Here are five jobs that are perfect for those retirees looking for a little bit more:

1.  Consulting.  Why let all of that business knowledge go to waste?  Hire yourself out as a consultant to the company that you retired from and other firms.  The best thing about this job is that you can work as much or as little as you choose.  Companies will pay more for your services because they are catching a break on insurance and other benefits they have to pay regular employees.

2.  Work as a temporary employee.  Temporary employees are in high demand.  Companies that need a worker for a month or two don’t want to hire a regular employee that they will have to lay off in less than six months.  Temps have a variety of skills and work many different schedules.  This is perfect for a retired person who doesn’t want a regular job but occasional work.

3.  Seasonal jobs.  Stores and retailers are always on the lookout for more help around Thanksgiving, Christmas, and the summer.  These are also the times when regular employees want to take their vacation.  Retired workers, as many companies have been finding out, are hard workers who have excellent customer service skills.  People are tired of rude salespeople who are impatient.
 
4.  Teaching the younger generation.  Those who can, teach.  Many professors in college and teachers in middle and high schools may be retired businesspeople or other professionals.  The knowledge that they have gained in their working career is invaluable as lecturers to the younger generation. 

5.  Non-profit organizations.  Retirees can give back and make a little extra money at the same time.  Working as an administrator at a non-profit organization that you believe is helping the community adds another purpose to retirement.  Within these companies you can change policy and petition the state and federal agencies for more money to support your programs.

Retirement doesn’t mean being put out to pasture.  The mind is still strong and is useful to plenty of people.  Re-enter the workforce and make a difference in the life of another.