Here are some basic rules and tips you can use and some simple definitions of various planning tactics. We will also show how in some cases, insurance type products may be a useful tool for your future life.

In addition, we will touch upon what small business owners might consider to plan for themselves and protect their employees.

A Word About "Doubling"
The most powerful wealth accumulation element is compounding. A measure of this power is an estimate on "Doubling", how long it takes a given amount of money to double in value.

"The Rule of 72" is a mathematic tool that helps you determine this. For example, the long term estimate on stock market growth is an average of 8% per year over the long run. How long would it take your investment to double in value @8%? Divide that into 72 and the answer is 9 years. At a 6% return, it is 12 years.

This matters, why? Bob, age 22, is conservative and invested the IRA maximum $2,000 into a Bank CD paying out 4% interest. By the time he reaches age 65, it has grown to $14,000.
Ted, his twin brother took the same amount of money and invested it at 8% market indexed fund. By the time he was 65, he had achieved 5.375 doubles and his $2,000 had grown to $88,000.
The moral is: Rate of Return and time in the plan are critical to your ability to accumulate for the future.

When You Retire
Hopefully, you will have at least three things going for you; A company retirement plan, Social Security, and personal savings. If you do, you might be OK.

Estimates are that you should have a retirement income equal to 70% of your pre-retirement earnings. Most people don't. Even if they do, it is questionable if that would still be enough.

Do you think you could live today with a 30% pay cut? If that's going to be a fixed income, what do you figure that will be worth in say, 15 years? And, last but not least, 70% of what?   If you and your spouse are knocking down a combined $250K per year, 70% may mean easy street.  On the other hand, if your combined income is $75,000, you still have a mortgage and and plan on doing more than playing cribbage at the kitchen table, you just might find 70% of your current income a rather dismal prospect.   

• Is your mortgage paid off? If not, you'll need more than 70%.
• If you are leaving a company sponsored health plan, even with Medicare, your annual health expenses could increase. In 2007, for a retired couple add Medicare Part B ($97), Medicare Part "D" ($50) Medi-gap Plan J ($128) Times 2 = $550/month PLUS any out of pocket expenses.
• Your income may be fixed, but the rate of inflation is not.
• Own property in NH? How's your tax rate been performing lately? Ugly we'll bet.
• Could you live for another 20 years? Odds are, you will.
• Planning to travel? Unless you are staying with "The kids" your social expenses could increase.

Defined Benefit Plans
The old fashioned company pension plan is becoming obsolete. Most new companies do not offer one. Many older companies have either stopped offering them, or are trying to figure out how to get away from them. Many plans are under funded, that is, current assets are not sufficient to meet future expectations. There is Federal Pension insurance, but that is grossly under funded. In short, these plans are great, but only about 30% of American workers have them and that number is falling rapidly.

401Ks
If your employer is offering a 401K plan, jump in with both feet. You should be using pre-tax dollars, so in essence, you are receiving a federal subsidy to participate. If the employer is contributing, better yet. Consider that as part of your first year return on investment. For example, if you are contributing at 6% and the employer is matching the first 3%, you have instantly gained 50% on your money in the first year. Where can you do better than that?

Simple IRA
401Ks require a great deal of oversight and paperwork. Simple IRAs involve a two page document. For that reason, many small employers go this way. There are restrictions on amounts the employee and employer may invest, and they are lower than allowed for 401Ks. Investments options, services, and user tools are likely to be limited.

IRAs and CDs
Do these two topics belong together? Actually no, except that too many people are using IRAs and are investing in bank CDs for simplicity. The problem is that the current rate of return is just slightly better than burying your money under the old oak tree in the backyard. Combined with the top end limit on what you may contribute, the long term prospects for wealth accumulation are limited with this strategy. In fact, you are just barely able to keep up with the inflation factor.

If the appeal of CDs happens to be security, then consider using Annuities to increase your rate of return, or perhaps even Equity Indexed Annuities (EIA) to give yourself a shot a reasonable growth with no down side risk. Annuities are very secure and even provide greater flexibility for cash access. Furthermore, as you approach retirement age, annuities are perfect for insuring your money lasts as long as you do.