Your Path To Retirement
Many people have goals throughout their lives. Some people want to get married, have kids, and live in a nice big house with a couple dogs. Other people are more driven by business and career goals instead of the home life, so to speak. Either way, much planning needs to be done in order to achieve your goals in either your personal or your work life.
While people often plan for years about their job, family, or other aspect of their daily lives, they often do not think about retirement right away. Instead, they say they will worry about it later and find a way to fund their retirement accounts another day. This is a grave mistake since you cannot afford to make if you want to live a successful life in retirement.
So before you can arrive at your dream retirement home in Alaska, it takes many years of proper planning and some occasional good luck, to get where you want to be. We will start off talking about ways to save for retirement, and then talk about estimating your retirement needs, then talk some about all the great retirement opportunities in Alaska and why retiring in Alaska is a good idea.
Forming Your Retirement Plan
The first thing to do when planning for your retirement is to do just that, form a plan. Many financial planners today recommend saving 12 to 15% of your gross income and put it toward retirement. While that amount may sound like a lot, if you have it deducted from your paycheck without ever having your hands on the money; you never really will miss it. Also, if you get an employer match in your 401(k) plan this would also count towards that percentage. Either way, the goal is to have continued long-term savings toward your retirement.
There are other ways to save money to. If you cannot get a 401(k) plan with your employer, an IRA or Roth IRA is available to most people that fall within certain income limits. Note that these limits are often over $100,000; please check with your CPA to be sure that you qualify for saving money in an IRA.
Also, do not discount high interest savings accounts and CDs as vehicles to save toward retirement. Especially once you get older you want some safe funds that are FDIC insured and will not lose value. Diversification is the goal when a person is within 10 to 15 years of your retirement age. Before that, most people should be invested mainly in stocks, since over the long term they have consistently shown they have the greatest return over a 20 year time frame.
Now let’s think of a problem you may be having. Say you did not think about retirement planning in your 20s, 30s, 40s, or even yesterday. All is not lost, as it is never too late to start saving. Now, you will not have as much money as your buddy who started saving 30 years ago, but you can still find an adequate retirement, especially combining Social Security funds with your savings. If you have not invested money you need to start putting away a large portion and do it quickly. Plan on saving tens of thousands of dollars per year in order to catch up where you should have been. However, you have to start somewhere so even a few hundred a month is a good start.
Another quick point to make, before we start planning about how much money you will need during your retirement years, is more often than not the children are now living with her parents. While this can be good in some ways, it often is the financial strain on the parents. While every parent wants to help their kids, please remember the following statement: you can borrow for college, a house, a car but you can never borrow for retirement. The next time someone’s looking for a handout, be sure that you know your retirement could be at stake and make your choice wisely.
What Are My Retirement Needs?
Now, let us switch gears and assume you’re retired. Many people ask how much should I take out per year in my retirement? Other people ask will I outlive my money? Each of these questions is a very good one. However, there is not one concrete answer. The rule of thumb is to withdraw 3 to 5% of your principal balance each year and live off of that.
The reasoning behind this theory is your investments will gain more than that each year and you will never have a reduction of principle. Therefore, when you die all your money will still be there from your initial retirement investment. Please do not quote this as gospel as this is often not the case. Things come up such as nursing homes, college bills, vacations, cruises, and other retirement dreams that make saving every penny not worth it. The choice is yours though.
Just because you make it to retirement with lots of money does not mean it is time to take all your money out of stocks. While being well-balanced is good, stocks should be able to earn you enough of a return with their gains and dividends so that your principal balance should stay strong. However, a long bear market can really take away your funds.
If you’d rather sleep at night knowing you are in 100% bonds, then do so. You not have to follow the advice of every pro out there, and do what feels right, as long as it makes the least some sense.
You should also be willing to work with a financial planner or retirement specialist is willing to go with your needs and your wants. If they don’t want to listen to you to get someone else. It should be a team effort with you and the advisor and your money.
Places To Invest Your Money
There are three really good retirement planning companies to talk about.
- Edward Jones is known around the rest of the countries providing quality advice for an affordable price. They have the investment offices in Alaska as well. It is hard to do wrong by going with Edward Jones for your retirement needs.
- Outlook Financial Services, based in Anchorage, also has a good reputation for catering to your retirement needs. They offer quality investment advice for people of all ages, and can help you reach your financial goals.
- Another quality bank with national recognition is KeyBank, as they offer all the services that you will need during your banking days. For long-term planning or short-term solutions, KeyBank has what you need and is willing to help you with any questions you have.
Now is that we have talked about the financial aspects of things, let us talk about why retiring in Alaska is a great idea. For those of you that don’t know this, Alaska is by far the largest state in the United States. Many people think Texas is big, but Alaska is more than two or three times the size of Texas.
Retiring In Alaska
So why do people retire in Alaska? Well, it is not for the low cost of living. With Alaska being separated from the continental United States, the cost of food, fuel, and housing can often be more than in other states. Let’s face it, if you want to retire in Alaska you will not mind spending a few more dollars for all the extra enjoyment you will get from this landscape of beautiful views, amazing people, and a quiet relaxing time during your golden years.
Beauty
You will also enjoy the Northern Lights and a tax friendly status of the state just to name a few unique traits Alaska has to offer.
With over 34,000 miles of shoreline ranging from the Aleutian Islands in the South, to Prudhoe Bay in the North, Alaska is truly a beautiful state. From the flat lands to the mountains and volcanoes Alaska has something for everyone. Outdoor lovers can venture around in the thousands of rivers and millions of lakes that the great White North has to offer in Alaska. Also, the best salmon fishing in the world can be found here along with excellent big game hunting for caribou,moose and other large animals.
Privacy
The privacy of Alaska is what you want to make it. With only around one person per square-mile it is one of the least inhabited places on earth. If you want to live alone this is the place to do it. The challenges may be many, but if a person has the heart and courage you can survive here in the middle of nowhere. Some people just want to get away from it all and Alaska is the place for that.
Climate
The climate is another thing of interest in Alaska. While the interior near Fairbanks can have large temperature swings, the oceanic cities of Juneau and Anchorage actually are not as cold as one would think. While the days are short and the nights along the winter, the temperatures are not always 30° below zero as some would think. Some of the interior of Alaska even had a 90° days in the summer. While the growing season is still short, there are some very nice summer days here as well.
If you ever have the opportunity to take an Alaskan cruise it is probably the most beautiful place to view the world. The cruise ship will go along the shores of Alaska and you will see amazing animal life, panoramic views from all angles, and many stories that the natives have to tell about these ancient lands. The cultures are very rich and people here are very proud of their heritage.
Economy
The economy of Alaska is quite strong, on a per capita basis; they are normally in the top 10 states for income per person. Also, Alaska shares their oil revenue with all of its citizens live in the state for at least one year. It is called the Permanent Fund and it cuts a check to each resident based on a percentage of oil revenue for the year. It’s range from a few hundred dollars to over $3000 for each of its residents. That would be a nice bonus check for the rest of the world, but Alaska residents get this on a yearly basis.
While we have discussed many general reasons why Alaska is a great place to retire is now focus on three great cities that offer Alaska residents a place to live.
Great Alaskan Cities
Juneau
Juneau is the capital of Alaska and has nearly 30,000 people in its city limits. It is located right on the shore and often has mild weather in comparison with the rest of the state. It’s weather often stays above freezing in the winter and into a rarely gets below zero. This is a help for the cruise ships as many pass this beautiful town as they travel onward through the waterways of Alaska.
With only 30,000 people you can kind of have the amenities of a big city, but the privacy of a smaller town that knows and cares about its’ residents. Juneau is for the people that like to have enough amenities that they are used to, not the hustler and bustle of the major cities in the United States. Juneau is a great city if you are looking for this type of living.
Anchorage
Anchorage is it is the biggest city in Alaska with nearly 280,000 people. A bit less than half of the people of the entire state of Alaska live in this city. The temperature and the city is also not that bad as they have many summer days and 80° weather range and the winters are cold, but not nearly as cold as the father north regions of the state.
Anchorage has many jobs so if you want to work a part-time as you are retiring, this could be a great place for you. There are many things to do in this city as it has many of the same amenities as the continental United States does.
The best thing about Anchorage is all the wildlife. You will see black bears, grizzly bears, moose, foxes, wolves, and beaver dams, as part of the great nature found in Alaska. If you are a hunter this is an amazing place for you, but be sure to check the local gaming laws before you bring your rifle. Violating such laws carry strict punishment as Alaska really tries to keep its wildlife treasured.
Fairbanks
Fairbanks is in a dead interior of Alaska, but it still has nearly 35,000 people. Here, is where the extreme temperatures take place, as it could be 90° in the summer and -60 and the winner. You really have the own a lot of the clothes if you live in Fairbanks. Its sub arctic climate takes some time to get used to, but the locals have lived here for hundreds of years and love it. It may not be right for you, but is that worth a visit at least.
The really amazing thing about this city as it gets around 3 to 4 hours of sunlight in the winter and almost 22 hours of daylight in the summer. This is really unique and takes some time to get used to, but it makes for great conversation.
Fairbanks has all the transportation you’ll need to get to various places around the state by either railroad, airplane, or boat, but it may take some time. If you venture outside the main highways be very careful on some of the back roads since they are not very well kept.If you get stranded you better be prepared with a survival kit. All the locals will tell you this and it is a smart practice to be aware of it in case you really want to retire in the wild.
An Alaskan Retirement
Overall, favorable tax structures, oil revenue paychecks, and the high per-capita income are all the financial reasons why one would want to retire in Alaska. However, most people do not retire here for the financial reasons.
Alaska offers something no other state can offer. That is over 34,000 miles of coast line views that you can only dream of. If you want to avoid the day-to-day rigors of society Alaska is the place to go. It does not have to be a place you only see on TV, since you can retire in Alaska as well.