you dreaming about retiring and having more time with your
children and grandchildren, playing more golf, gardening or
traveling? When can you afford to retire and what will that new
stage of your life look like?
to the Employee Benefit Research Institute, a growing number of
baby boomers say theyíll retire after age 65, and 70% of all
workers now plan to labor at least part time after quitting their
careers. Furthermore, current economic conditions will force 2.3
million U.S. households to delay retirement in more than a 20%
increase from 2002, according to a recent survey by Intuit Inc.
how much money you will need in retirement and when you can afford
to stop working can be complicated and confusing. Here
are some tips to help you plan your retirement wisely and stay on
track with your retirement goals.
are many reasons why people are delaying retirement.
Recent market downturns, the weak job market and the
dwindling number of traditional pension plans are all factors,
according to Consumer Reports.
However, working longer as you live longer (and in better
health, thanks to modern medicine) offers some basic advantages
you should factor into your timing of retirement.
of all, delaying retirement allows your nest egg to continue
growing and insurance benefits, such as health coverage, can pick
up expenses that Medicare wonít.
Secondly, if you can delay withdrawals from tax-deferred
benefit plans, your money has more time to grow tax-free.
In addition, Social Security benefits increase a certain
percentage for every month past your full retirement age that you
keep working, with certain restrictions.
you retire, itís important to develop a comprehensive financial
plan and know how much you will need and when you will need it.
The sooner you have a plan, the sooner you can work
realistically toward your goals.
specific -- Set your retirement goals, including when you
would like to retire, your housing plans and other lifestyle
considerations, such as travel and vacation plans. Be as specific as possible to create a clear picture of where
you are heading.
savings -- Stretch savings by withdrawing from taxable savings
accounts. This allows
any tax-deferred accounts you have to grow.
Consider cutting expenses, such as downsize your housing,
insurance -- Consider buying long-term care insurance, which
you may need if you become unable to work before you reach your
goals and require special treatment such as nursing home care.
in balance -- Rebalance your portfolio to create the right mix
of stocks, bonds and cash.
your IRAs -- Donít over-invest in traditional IRAs because
these accounts require withdrawals starting at age 70 Ĺ.
Instead consider investing in Roth IRAs you wonít have to
take a distribution in your lifetime -- and 401(k)s -- no
distributions are required as long as you are working.
Options - Consider working part time or easing into retirement
slowly, which may help you adjust to your new stage of life, both
financially and emotionally.
is the right time for you to retire?
do you know if you have saved enough so your assets can stretch
through your lifespan? It
takes some careful planning.
For example, consider a 60-year-old working man who has
retirement assets of $411,440.
He is saving $24,000 per year, with an estimated average
investment return of 8%. Assuming
his retirement goal is $4,000 per month, with Social Security
kicking in at age 65 ($1,640 per month), this is how he will fare:
he retires at age 62, this manís assets will be depleted at age
77. If he retires a mere three years later at age 65, he is
covered until the age 90. If
he retires at age 67, his assets will not be depleted until he is
102 years old. A few
additional years of working can make a big difference in providing
coverage throughout your lifetime.
your retirement requires many considerations.
A financial advisor can help integrate your retirement
strategy in a comprehensive financial plan to help you best meet
your long- and short-term goals.
example provided for illustrative purposes only.
Does not take into account transactions fee's or expenses. Past performance does not guarantee future results.
This information is provided for informational purposes
only. The information
is intended to be generic in nature and should not be applied or
relied upon in any particular situation without the advice of your
tax, legal and/or your financial advisor.
The views expressed may not be suitable for every
American Express Financial
Advisors Inc. Member NASD. American Express Company
is separate from American Express Financial Advisors Inc. and is
not a broker-dealer.
This communication is published in the United States for residents of
North and South Carolina only; and this advisor is licensed only in
the states of North and South Carolina."
Roy P. Janse
Financial Advisors, Inc.
IDS Life Insurance Company
1150 Haywood Road
Greenville, SC 29615
Phone: (800) 554-0805 x141
Fax: (864) 234-7139