Category: Retirement

  • Prioritizing Your Retirement Needs, Part I

    When you take the time to ponder your retirement picture, how much do you see and how well ­focused is the image? A comprehensive retirement plan is, in a manner of speaking, a picture of your future — a future in which an alarm clock won’t likely figure very prominently, if at all, since you’ll no longer be going to work every day.  Having a fruitful retirement is the postscript to the American Dream — and the ideal is to spend those proverbial golden years in comfort and calm, spending your time and money when and where you will. But in order for that to happen, you must carefully think about several retirement concerns and how much value you place on each before you can really see the full picture. It all comes down to prioritization, but oftentimes there’s just so much to consider that the task becomes daunting. To guide you down this crowded planning path, the Insured Retirement Institute (IRI), a not-­for­profit organization with a focus on insured retirement income, developed the “Retirement Expectations Checklist,” an extensive list of retirement concerns you should address when formulating your plan. To give you the resources and perspective you need to start developing a clearer view of it all, we’ll discuss a few of these important considerations as well as how other baby boomers generally feel about them so you can measure your concerns against those of your peers. The next step? Take your list of prioritized retirement needs to your advisor to discuss what you must do to meet your expectations and paint  your perfect — and complete — retirement picture. Your Retirement Number: How much money will it take for you to retire? If you haven’t started thinking about this all ­important figure, like almost half (46 percent) of your boomer counterparts, now’s the time to do so. Once you have a general idea of how much you’ll need to save in order to enjoy a comfortable retirement, talk to your advisor or planner about which strategies and tools you can use to make it happen. And don’t forget to plan for a long post­work life — the chances that you or your spouse will survive at least to age 90 are pretty darn good, so plan with an eye toward never running out of income. Investment Product Criteria: Combine long life expectancies with an unsteady stock market and an uneasy economy, and many Americans start craving safety. There’s certainly nothing wrong with that. More and more boomers are becoming aware of the importance of guarantees — guarantees in both principal protection and income generation. In fact, one­-third (33 percent) of boomers cite these guarantees as the most important criteria an investment or savings product must meet. What criteria are most important to you? Your Retirement Age: How long do you think you’ll want to — or have to — work before you retire? When it comes to determining a retirement age, 39 percent of boomers don’t have a target age for when they will retire. But before trying to decide how old you’ll be when you leave the workforce, it’s a good idea to assess your situation with a qualified planner., as he or she can work with you to develop a realistic goal. If you already have an age in mind, your advisor will be able to tell you whether your goal can be achieved or if you’ll need to put a bit more — or maybe less — time into your career before you can put your feet up for good. We’ve scratched just beyond the surface of what goes into crafting a beautiful retirement picture, and it should leave you with plenty to think about. Whatever you do, don’t lose sight of that image! In Part II of this article, we’ll discuss a few more common concerns you should take into account before retiring.

  • 4 Common Retirement Blunders

    The prospect of finally retiring can be an exhilarating one, and saying goodbye to the daily grind can be immensely gratifying. But that’s only if you do it right. Overlooking even just one key component of a well­rounded retirement plan can create a hole that’s difficult to fill. Don’t make any plans on quitting before considering these four common retirement regrets and blunders. 1. Failing to establish a health insurance plan: If you plan on retiring before age 65, there are a number of things to consider, as that’s the age at which you become eligible for Medicare. If you plan on retiring more than a couple of years early, it’s worth looking into being added to your spouse’s company­sponsored health insurance plan (provided he or she isn’t retired as well). Other options include exploring self­insurance and whether you might be eligible to join a state insurance pool. And come next year, you’ll be able to buy health insurance from a state insurance exchange, and you could be eligible for a tax break on the cost if this coverage if your income is comparatively low or moderate. You may also turn to your employer for short­term health care solutions. For example, even though it’s not as common as it once was, some companies do offer retiree health benefits to employees. What’s more, you should be able to retain the benefits of your employer’s group medical plan by using COBRA; however, you can usually only keep COBRA in play for 18 months. To avoid a health care nightmare, make sure you’ve determined how much time between your retirement and Medicare you need to cover, and put those plans in place now. 2. Overlooking required minimum distributions: If you have a traditional individual retirement account (IRA) or 401(k), then you also have an obligation to take required minimum distributions (RMDs) by age 70 ½. Check your account disclosures to verify when you’re required to take your first minimum withdrawal and how much that minimum is. Failing to take your RMDs on time or not withdrawing enough funds from the account will have serious punitive repercussions. In addition to paying income tax on the amount of money you should have taken, you could also be slapped with an additional 50­percent tax penalty. This is not an auspicious way to kick off retirement, so stay on top of your RMDs! 3. Leaving before becoming fully vested in your retirement plan: The time it takes to become fully vested in your company’s retirement plan, such as a 401(k) or if you’re lucky, a pension, differs widely from employer to employer, so do a little research to find out precisely when you are fully vested. If you only have a few more months to go, it’s worth sticking it out until you’ve hit that magic date, or risk losing out on extra money. If you leave your job before you’re fully vested, you may not be able to exercise stock options, maintain all of the 401(k) contributions your employer may have made, or be eligible for payouts from a pension. 4. Overspending on retirement hobbies and travel: Odds are good that you’ve been dreaming of the day when you’ll be free to travel whenever you like and finally have the time to indulge in your hobbies and passions. Unfortunately, travel and hobbies can consume cash faster than you might anticipate, and having more free time may compel you to find ways to fill that time with things such as meals out, shopping trips, home improvement projects, or entertaining — activities that often include spending money. Your spending habits and needs will change once when you retire, so begin planning a budget now that includes the little extras like travel, rounds of golf, buying items for your hobbies, gifts for spoiling the grandkids, etc. Retirement should be an exciting time — after all, you’ve worked your whole life to get there. So why risk slogging your way through common retirement challenges that can easily be avoided? Don’t take any chances with your retirement future. As you plan and prepare for your grand exit, remember to keep these four key considerations in mind.

  • How Retirement is Changing

    Fast Forward: How Retirement is Changing Predicting the future is a rough sort of business to find yourself in, particularly with a world that’s begun changing more and more rapidly with every passing day. Unfortunately a lot of people on all sides of retirement find themselves having to do this very thing, having to try…

  • Tips to Maximize your Social Security Benefits

    Maximize Your Social Security Benefits You have worked hard all of your life. You have raised a beautiful family that you are proud of, and you and your spouse are finally ready to enjoy your golden years together. And yes, you have also planned and saved for these future retirement years. Maybe you planned many…

  • Matson on Investor Courage

    Trying to play God with the financial markets is highly destructive. So don’t try it. In the end, you will guess wrong. Instead, have the long-term courage to take the long view and stick to your plan. Know that courage doesn’t meant the absence of fear. Courage means feeling the fear and doing the right…

  • Planning for the Retirement Dream

    Many of us picture our retirement years spent enjoying life without working, but have you planned for everything? Will you be able to live the golden years as you envision them? Here are some unexpected and often underestimated expenses and tips to consider when planning for the golden years. 1.  Medical expense:. How long do…

  • IRAs/401(k)s/403(b)s

    Could An IRA, 401(k), Or Any Other Qualified Plan Be Your Only Retirement Savings Solution? Absolutely not, here is the problem… The money in your IRA/401(k) or other qualified plans is not all yours!  As much as 40% of it (maybe more) belongs to the government because your invested money is ONLY tax-DEFERRED, not tax-EXEMPT. …

  • 2012: New Year, Same Advice

    We have all been conditioned by the financial services industry to ask the question, “What will the markets do in the new year?”  There is always someone in the financial services industry who will attempt to answer that question with some prediction.  Sometimes they guess right, but more often than not they guess wrong.  Our…

  • Five Basic Tips for Creating a Solid Retirement Plan

    We all know what the retirement picture is supposed to look like.  We spend our whole life working toward that magical retirement age when your golden years begin–the hobbies, the travel, spending time with your grandchildren.  However, with a rocky economy and volatility in the markets your picture might not be so clear. Consider these…