How can online banking help me manage my retirement?

Online banking can help with some of the problems associated with planning for your retirement and managing those funds. You just have to know how to use the tools.

So, what can online banking actually do for you? First, it can make it easier to overcome one of the most difficult hurdles in planning for retirement -- getting started. With retirement planning, procrastination is a very real and dangerous problem. It's easy enough to put off worrying about something that's going to happen next month, but try extending that to a year -- or 30. The hardest part about saving for retirement is to get moving, and online banking can make that a much simpler process.

Convenience is online banking's strongest asset. What once involved long phone conversations, piles of paperwork and driving back and forth from the bank now can be done with only a few clicks. With fewer hoops to jump through, it's easier to get over that procrastination hump and start saving. Money can be shuffled among accounts in an instant. And when tax time rolls around, data can be downloaded directly from your bank into tax and accounting software. All your retirement information can be accessed simultaneously, making it a snap to see the big picture of your retirement plan anytime, day or night.

Another advantage of online banking is how much faster research can be done. It's absolutely vital to research thoroughly when establishing a retirement plan, but aside from the usual pages and pages of advice about which IRAs to use and which bonds to buy, good online banking options have retirement calculators to let you know just how much you'll be needing to put away every month in order to hit that goal of retiring with a million dollars. By entering a bit of information about your income, you can see exactly how much money you have and how much you need. The data is presented straightforwardly and succinctly, and you don't have to wade through dozens of confusing documents. In short, online banking alleviates a good deal of the headache that comes from planning your retirement.

Next up: You've got the money online now, so what are you going to do with it?

OK, so you know that the tools you need are available with online banking, but just what should you do with them? How do you choose what to put your money into? Let's take a look at a few of the options:

Now that you've got a nest egg warming nicely in cyberspace, how do you protect it? Next up, we'll take a look at a few precautions for online banking.

How likely is it that hackers can break into online bank accounts? The truth of the matter is that online banking is as safe as conducting transactions at a brick-and-mortar bank. The money is there, it's accessible to you, and in case anything happens, it's insured.

But moving your money around electronically may still feel strange, even a little disturbing. Hold on to that feeling. Online banking services go to extraordinary lengths to safeguard their customers' information and finances, but the weak link is the account holder. Though it's unlikely that some super-genius hacker is cracking your account password (you picked a strong one, right?), there are plenty of other ways that thieves will try to get their hands on your funds. In most cases, the best and easiest way to get into an account is through real-world information -- rifling through your garbage and happening to find a Social Security number, stealing your credit card data or even tricking you into revealing it yourself. Protecting your confidential information is your first responsibility.

Sending fake e-mails is one of the most common ways that thieves try to access your online accounts. By pretending to be your bank, thieves can coerce or trick you into giving away your personal information, usually by offering a hyperlink to a Web page where you can update or verify your information. Sometimes, these e-mails will include a seemingly innocuous attachment, which, after you open it, will allow a hacker access to your computer. It's easy enough to make an e-mail look like it's coming from your bank, even if the e-mail address looks real. Real banks never, ever ask customers to verify sensitive information by e-mail. You can protect yourself by never opening attachments in e-mails (unless you know exactly what the file is), never following unsolicited links and keeping your antivirus software updated.

This may make online banking seem dangerous, but online banking can actually make it a lot simpler to protect yourself. Having a continuous flow of information allows you and your bank to monitor your accounts. The key is to make sure that if there is a problem, you and your bank catch it quickly and rectify it. Checking for any irregularities in your statements and accounts means that you can stop identity thieves quickly, when the damage can still be reversed. Keep an eye out for any strange changes to your credit report, or any changes to your bank statements that you didn't make yourself.