Web Hunter: Free web resources for retirement planning

Setting up your funds for retirement is an important issue nearly all of us should be thinking about. Executive Editor Russ Kratowicz offers some free Web resources for you to consider when planning for retirement. Remember, we search the Web so you don't have to.

By Russ Kratowicz, Executive Editor

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There are two broad classes of income – earned and unearned. You must exert effort to achieve earned income. The better option is unearned, or passive, income from investments, which keeps appearing in your mailbox each month all by itself. Regardless of the economic system under which you operate, when your passive income is sufficient to cover your living expenses, you’ve achieved financial freedom.

Investments rely on the concept of compounding, which should be of vital interest to those who have quite a few years to go before retirement. Time is a friend that should be embraced for the power it brings. If you’re close to retirement age, however, you should have read this column about 30 years ago.

Everyone is interested in money, especially if the money happens to be in your account. So, be careful out there and consult an independent financial expert before you commit the family savings to anything other than a two-page display ad in this magazine.

With that caveat, I invite you to join me in exploring that morass we call the Web to retrieve practical, zero-cost, noncommercial, registration-free Web resources for plant professionals thinking about retirement, early or otherwise. One Web site gets several mentions this month. If content is king, this one wears the crown. It’s not a matter of bias. Remember, we search the Web so you don't have to.

Can it pay?

The Industrial Revolution decreased the importance of the family farm as the source of old-age security.

Able-bodied rural people migrated to the cities where the paychecks came regularly, as long as one remained young and able-bodied. Patiently, Destitution sat on the sidelines waiting to pounce on workers who lost or gave up that source of income. That made for an unhappy populace, which was part of the motivation for FDR to sign the Social Security Act into law in the mid-1930s. Initially, the ratio of active workers paying in to former workers drawing benefits was large. Now, the ratio is low because there are so many retirees living longer and fewer workers, thanks to automation. So, if you want your share of what you paid in, you’d better know how the system works and how to work the system. To that end, I’d suggest paying a visit to www.ssa.gov/retire2 to take advantage of the “Plan Your Retirement” page. Here’s where you find benefit calculators, facts about eligibility, information about what to do if you’re near retirement, online benefits application, a Social Security FAQ and other resources you’ll need when you lose or give up your source of earned income.

Taking a gamble

For the moment, let’s assume that Social Security benefits actually will exist when we decide to get our share. As you’re aware, those who have spent a lifetime paying into this imaginary trust fund have the option of retiring early, a move that prompts our hired hands in Washington to send us smaller monthly checks. On the other hand, working beyond what is considered a normal retirement age results in a larger-than-normal check. The monetary tradeoff is obvious. You can have either more years of retirement fun with a thinner pocketbook or fewer, perhaps less vibrant, retirement years with more money. If you opt out early and then live for a lot longer than you expected, you will have passed the breakeven point and come out behind financially. Such is the thesis behind an article titled “A retirement mistake Boomers should avoid” by Jeanne Sahadi, a senior writer for CNNMoney.com. The breakeven calculator cited in the article requires you to enter data from the official benefits form the Social Security Administration sends you every few years. So, get your paperwork and pay a visit to http://money.cnn.com, where you should enter the author’s name in the search box in the upper right corner. Be sure it’s configured to search the entire site. When I searched, the article was the 20th entry down.

Neatly aligned ducks

You’ll never get out of this world alive. And, no, you really can’t take it with you. And, you never know when. That single transfer of enormous wealth (relative to the rest of the world) you’re ultimately going to make in the future runs the risk of incurring the rabid interest of the good folks at the Internal Revenue Service. That’s one bulldog you’re not going to shake too easily. So, you might as well start properly arranging things. Only your effective estate planning can protect your worthy heirs from a fiscal onslaught from that most rapacious branch of government. The topic is a bit too complex for a capsule summary here. You’re going to need to see it for yourself at http://money.cnn.com, where you click on “Money 101” that appears in the drop-down menu under “Personal Finance” near the top center of the page. Then, zero in on lesson 21, Estate Planning, a multipart article that strengthens your vault.

While you’re on the site, check out the rest of the retirement section that you can access through the pull-down menu under “Personal Finance” near the top of the home page. I’m not even going to try to highlight the interesting material here. There’s too much to discuss and you’re better off exploring on your own.

Not just for geezers

If you hang around long enough in this society, you learn two things - life is not a dress rehearsal and whatever you’ve saved for retirement isn’t going to be enough. Maximizing your returns from compound interest requires a dwindling asset – time. So, you’d better start building that nest egg sooner, rather than later; younger, rather than older. Speaking of older, consider checking out the financial wisdom coming from the quintessential advocate for seniors, the American Association of Retired Persons (AARP).

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