Retirement planning may feel like game of ‘Twister’

21 Mar

As you near retirement, you may feel as if you’re playing Twister at times, except that planning for retirement is not a game and the decisions you make have lasting consequences.

You will encounter some balancing acts as you proceed with your plan: inflation risk, market risk, longevity risk. Notice we seldom hear about standard of living risk.

The National Retirement Risk Index published in 2009 by the Center for Retirement Research at Boston College measures the share of American households who are “at risk.” Based on the study, more than half of all households are at risk of having their standard of living decrease in retirement.

Declining asset values, declining interest rates and an increase in full retirement age for Social Security benefits will impact your retirement.

Because each decision you make is important to your future well-being, you may want to consider talking with a financial professional.

The good news is: there are some steps you can take now to determine what your retirement lifestyle will be able to accommodate. Write down sources of income you expect to receive in retirement.

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Next, estimate your annual cost of living in retirement. Don’t forget to plan for larger unplanned expenditures that might pop up after retirement such as a new roof or appliances.

We suggest you chart those items so you can build in a fund to cover replacements.

A helpful retirement planning tool is to conduct a “retirement dress rehearsal.” If you know what your retirement income is going to be, begin living on that amount now and save the difference.

For example, if you currently earn $65,000 a year and will receive at total of $42,000 as a retiree (including social security and pension) you could store away up to $23,000 per year.

On the other hand, if you earn $65,000 and spend $65,000, you will obviously encounter a serious decrease in your standard of living assuming as in the example that your retirement income is $42,000. You may find it necessary to postpone retirement or cut expenses.

The winner of Twister is the last person standing. With the help of a Certified Financial Planner, you can be a winner at the game of retirement.

Now is a great time to assess your preparedness for retirement. Visit a Certified Financial Planner„¢ soon and learn how you can win at retirement.

 

visit jettab.com for the new JETTAB 2.0 Android tablet

http://www.shreveporttimes.com/article/20120314/NEWS05/203140322/Retirement-p…

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