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Ed Ed slot joining us now the CEO that's flooding company and also an author of the retirement savings time mom and how to defuse it.
Thank you for coming I'm glad to be here.
You know as we're talking about the economy -- where we've gone since 20081.
Of the disturbing trends that we've seen is unemployment super high long term unemployment.
That is an even worse statistic if you look at the numbers.
For those age 55 and up -- 56 weeks that the average unemployment.
Nineteen weeks longer than those under the age of 55 these are the pre retirees sees -- I'm about to retire and -- looking at their nest egg.
And while it -- looks of it.
Right to have to play catch up right patty we're heading well you can't create money in hand but obviously.
You can't expect that the -- thing that might be a different show I don't know -- But obviously you have to have a source of income hopefully from a job and if you do in -- fifties.
Normally people in their fifties even sixties -- in the highest earning years and that's something they can take advantage of him.
And the tax -- helps you take advantage of by allowing catch up contributions.
But the bottom line is -- Regis yeah people who are in their fifties and what are those tax up.
Catchup contributions that you can make what what it when it's elaborate what you could put more effort for a one K you couldn't put it at 5500.
-- your age fifty year old or an IRA a thousand.
But extra extra all -- normal limits and you say everybody should take advantage of that.
Who -- who can afford it.
So if you have the money you have to start spending less and saving more but think -- -- -- right it's easy just say.
But if you don't start every day you delay.
It's going to get harder.
So you have to start start creating the plan looking at what you have what you have potential future sources of retirement income might be.
401K Social Security how much -- is going to pay.
You should also be looking at trying to pay down some debt the last thing you need in retirement is more debt and don't take on new debt.
And then start saving next -- out everywhere you can especially in Roth IRAs -- -- 401 -- that work.
Because that's tax rate.
And the more tax free money you can create the more money -- happen retirement because it won't be eroded by taxis and authoring and making contributions don't realize that.
And -- that's not at the end of the year when you check here for Alan -- Well.
I was back to pay yourself first taken right off the -- that you don't even see it right also convert to Roth IRAs now that takes money but if you have a little extra income -- can you explain that how you take an IRA.
And you turned it into a Roth IRA that you paid tax and the amount you convert.
So cost some money now -- -- building a tax free reserve fund right for retirement he'll have more and retired -- -- attacks in the -- but right and it has traditionally pay when you.
When you take it out at 65 -- government raising these ages.
As the workforce gets older.
You mean for catch -- contribution no firm when you're allowed to take out of here and that's what you can take out with a Roth IRA -- the -- things.
The -- you you can take the money out in retirement to basically just have to have.
Five years of 59 minute and fifteen feet 59 and a half that going up those lands saying as the world I -- I -- hundred -- government is encouraging people to put more money into these things.
And have more tax free money that's why they created ran off.
Right and if you do that even if your age fifty the power of compound -- it's amazing.
If you put 6500.
And a -- which somebody age fifty and over can do they have the earnings.
In twenty years just compound that -- 6%.
That's over 250000.
Tax free she could spend every dime of it at age seventy so it does add up if you get in.
It was really easy and obvious question would be how come not everyone can scramble 6500 dollars a year to put into wonder because like other things get in the way they don't take it out there and say that first you have to -- first.
Because if you don't put money in there won't be anything there later right.
People want not in my fifties if it and I used to contribute to and I carry on every year and I happened -- should be contributing to a Roth.
I have and I don't now because I always at my house and honest much -- you have that you can see -- -- shouldn't -- thing people don't understand about Roth IRAs the contributions.
Can be withdrawn at any time for any reason tax and penalty free so -- commencement.
Okay -- let us why would you put money in a month if you needed for something hopefully not you -- for retirement.
But if you didn't need it there's a great source of tax free income look at that and accept far far someone in their thirties it's up -- -- -- Well you can put in 5500.
Yet if you fifty or over another thousand -- six -- where that the 6500.
At if you just do that religiously if you start earlier.
And that's why I wrote my book called fund your future for people in their twenties and thirties and -- -- to be out there it's called fund your future.
A -- -- because these principles rely on time and the greatest moneymaking asset.
Anyone can possess.
It is time and young people have more of it she should capitalize on it Edison I cannot answer this question -- -- -- -- still -- how much money do you need in time.
F I don't know it depends on each person that's a good question -- you don't have to live big that's the thing.
You know you don't have to live big and that's one of the secrets to happy and it financially secure retirement and.
A -- at nine dollars.
Probably at least it depends what you retire you may be able to continue working.
But I wouldn't even count on that half the people -- say.
They're going to work till -- -- -- -- doesn't happen you have disability illness you might get laid off but that is part of the -- of illness that takes a huge chunk out of.
-- and that's why you have to have your plan protected against life.
That catastrophes that's what you should have disability insurance life insurance.
Homeowners insurance for example flood insurance what happened with.
Hurricane sandy last year a lot of people -- uninsured.
You building up and a valuable last that you have to ensure these things because they can have a dramatic impact on what's left for retirement if these things happen.
You also want to take some of the stock market risk out of your retirement but how can you talk about wanting the stock market going gangbusters this year finally off -- -- happened five years ago right right and nobody's going to bail you out like the banks got bailed out five years ago -- your mind your -- it's a new economy -- he'll -- economy.
Why oh why oh you're on your own.
You are going to have to take charge of this yourself and guarantee some income of maybe moving some of your retirement funds.
Out of the stock market into things like annuities -- life insurance -- have guaranteed sources them cash or -- com.
More even combine some of the things I said like a Roth IRA.
You could have annuities and a Roth IRA not only have guaranteed income for life but guaranteed tax free income for life in a Roth IRA.
Thank you so much and -- that was grader -- thank -- for all of the the tips you are and hiring -- -- we appreciate.
You're nice -- is up on the -- they.
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