Preparing for Retirement

From their mid-fifties and up, many individuals become increasingly concerned about retirement.

  • "Will I have enough savings?"
  • "Can I take early retirement, or will I need to keep working?"
  • "Will I maintain my current standard of living?"
  • "What if I outlive my money?"

Fear usually comes lack of knowledge. You can overcome your concerns about retirement if you take the time to get the facts and create a plan for your situation.

Start Early

Time is your friend when you plan early for retirement, and it will become your worst enemy if you procrastinate. As soon as you begin your career, you should regularly contribute to a qualified retirement plan. At JFA, we recommend that individuals set up automatic contributions of 10% of their income into savings or investments.

Catch Up

During your peak earning years (45-65) you should contribute as much as possible toward both qualified and non-qualified investment accounts. This is especially important if you did not set-aside much in earlier years. To see how much you should have saved at this point in your life, use the financial calculator at right to see where you stand.

Make your needs a Priority

Often parents will put their own financial security second to their child's college educations or other family expenses. Experts warn, however, that a child can take out student loans if needed, but no one will come to your rescue if you lack funds for retirement.

Likewise, be very cautious about "rescuing" adult children who have credit card debt or who ask you for a loan. Your retirement savings should be considered "hands-off!" Although your loved ones may be well intended, in most cases that money will not be repaid, nor will it correct the problem.

Budget for Health-Care Costs

Even with Medicare coverage, expect to pay a significant amount out of pocket for health care. A recent study showed that the typical couple retiring in 2010 would incur $250,000 in health-care costs during their retirement years, outside of their Medicare benefits.

Time your Social Security Payout

Opting to receive your first Social Security check at 62, the minimum age, reduces your payout. Someone born in 1954 who decides to retire at age 62, for instance, would get 25 percent less than he or she would get by waiting until the full-retirement age of 66. If you're tempted to begin your benefits early, be aware that each year you delay, up to age 70, earns you up to 8 percent more in income depending on your age, a respectable guaranteed return.

Seek Professional Advice

At JFA, we specialize in pre-retirement planning. Whether you are two years from retirement or twenty, we can help you:

  • Set up qualified retirement plans
  • Select appropriate investment portfolios
  • Make retirement projections
  • Evaluate employer plans
  • Select retirement options
  • Evaluate health-care costs and coverage
  • Purchase long-term insurance

There is no charge for an initial consultation and we would be happy to assist you in any way.