Bills.com suggests insurance, planning, getting out ofdebtbefore retiring

San Mateo, Calif. (Vocus) June 17, 2009 -- Recent news has reported that U.S. Social Security and Medicare funds, hit hard by the current recession, are anticipated to be depleted far sooner than previously expected, making it more important than ever for future retirees to get out of debt and plan for retirement, said Ethan Ewing, president of free online consumer portal Bills.com.

"Only about half of Americans have access to any employer-sponsored retirement plan," said Ewing. "To compound the situation, a recent study found that baby boomers have saved a median amount of just $100,000 for retirement."

To assist workers who plan to retire within a decade, Bills.com created this 10-year retirement planning countdown:

1.   10 Years to Go: Put affairs in order. Carefully evaluate assets and debts. Consult a financial planner, or at least an online retirement calculator, to determine how much money you need for retirement. Have you saved enough? Do you have excessive debt? Compare where you are with where you need to be.


2.   9 Years to Go: Be sure disability insurance is in place to protect income during your working years. Most employers provide this coverage, or individuals can secure their own insurance until retirement age.

3.   8 Years to Go: A mortgage-free home can be a tremendous asset for retirement: It eliminates the need for a housing payment, and, for some individuals, can provide a resource for cash flow through a reverse mortgage. (Reverse mortgages allow qualified homeowners over age 62 to borrow against the value of their home, with the borrowed amount repaid from equity after the owner's death.) Plan to accelerate paying off a mortgage, if possible, by applying any available funds to the principal.

4.   7 Years to Go: Focus on building a financial cushion, including fully funding retirement plans. All Americans can contribute up to $16,500 annually to employer-sponsored, tax-deferred 401(k) retirement plans. Individuals over age 50 can save $5,500 more in "catch-up" contributions. Those without an available 401(k) plan can save $5,000 per year in an IRA (individual retirement account), or $6,000 for people over age 50. Also, build an emergency fund of six months' expenses in an accessible account.

5.   6 Years to Go: Consider purchasing long-term-care insurance coverage. This insurance covers expenses, at home or in a care facility, that are not covered by health insurance or Medicare. Consult a financial planner or do research to find the right policy. Rates are lower for younger applicants.

6.   5 Years to Go: Fully understand retirement income options. Get a current estimate of anticipated Social Security income. Check with your employer's human resources department to be sure you clearly understand your pension, if any. Review all investments, including pensions from former employers.

7.   4 Years to Go: Pay off all debts, including credit card debt. Repay consumer debt, whether personal loans, educational loans or car loans.

8.   3 Years to Go: Evaluate life insurance needs. Often, a large life insurance policy is no longer necessary for retirees who are not supporting dependents.

9.   2 Years to Go: Plan your retirement lifestyle. Will you work part-time, travel or pursue a hobby? Create a retirement budget. Begin living on your anticipated post-retirement income. A good starting rule of thumb is 75 percent to 85 percent of current income. Save remaining income or use it to finish paying off debt.

10.   1 Year to Go: Apply for Medicare. Recipients must sign up for Medicare as close to their 65th birthday as possible. The Social Security Administration recommends applying for Medicare three months before turning 65, as some benefits decrease if the coverage is not selected as early as possible.


"Remember that these assigned years and action items are simply guidelines," said Ewing. "Each task is an important step along the road to retirement. By following this road map, you can plan for your own financial security, no matter what the future holds."

About Bills.com

Based in San Mateo, Calif., Bills.com is a free one-stop portal where consumers can educate themselves about complex personal finance issues and comparison shop for products and services including credit cards, debt consolidation, insurance, mortgages and other loans. Bills.com holds the No. 257 spot on the Inc. 500 list for 2008, and the No. 3 spot on Entrepreneur Magazine's Hot 100 list of the fastest-growing U.S. companies.

Bills.com and its sister companies, Freedom Debt Relief and Freedom Tax Relief, are wholly owned subsidiaries of Freedom Financial Network, LLC. The company has served more than 50,000 customers nationwide since 2002 while managing more than $1 billion in consumer debt. Its RSS feed is available here.

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