Retirement Planning

SS98_004_0570_09ARRetirement used to be simple.  Traditionally you could hold down a job, work hard, and after years of working for the same company or union, you had a guaranteed income stream coming to you during your retirement years. You had the certainty of Social Security benefits and perhaps some individual savings from the bank or credit union.

Not anymore! The future of Social Security is uncertain and most pension plans have gone away. Many people have lost money as a result of the “Great Recession”, which depleted their personal savings and retirement plans. Even now most people just starting to recover what they lost six years ago. This means you, individually, bear the responsibility to save enough money for retirement.

If you are like most people, you may have been saving your money in 401ks, IRAs, or personal savings accounts.

When the economy melted down in 2008, there was a corresponding loss of money that was saved in accounts earmarked for retirement. Many people have lost as much as 30 – 40% of their principal. This created a possibility that individuals could outlive their savings during retirement, or that retirement years may actually be spent working when they would rather be enjoying their leisure time.

What can you do to protect yourself?

  1. Start planning today.
  2. Save more! Many people can expect to live as much as twenty years or more in retirement. You want your money to last as long as you do.
  3. Take advantage of legitimate tax strategies to grow your nest egg as quickly as possible. This is a more effective strategy than trying increase returns on risky investments.
  4. Prepare for unexpected events, like health issues or company imposed early retirement. You may not be able to work as long as you thought to accumulate the nest egg you anticipated.
  5. Plan to deal with medical costs, long term care issues, leisure activities and the effects of inflation.

If you are close to or already retired, you need to figure out how to make your money last. Here are some tips:

  1. Inventory your retirement assets and anticipated expenses.
  2. Decide if you want to leave a legacy to heirs or charity.
  3. Determine your present comfort level with your present investments. Do you worry about losing principal?
  4. How much will the cost of living increase?
  5. Plan for certainty. Make sure you don’t run out of money. Create a plan for guaranteed lifetime income.