Real World Retirement

© 2005, Financial Planning Association

Real World Real World Retirement PlanningRetirement Planning


Real World Retirement PlanningReal World Retirement Planning

I. The personal issues of retirementI. The personal issues of retirement

II. The financial issues of retirementII. The financial issues of retirement

III. You’re retired – now what?III. You’re retired – now what?



"Before everything else, "Before everything else, getting ready is the secret getting ready is the secret of success.“of success.“

-- Henry Ford-- Henry Ford

American Automobile ManufacturerAmerican Automobile Manufacturer



What do you want to do?What do you want to do?


This is This is notnot your parent’s retirement your parent’s retirement

More dependence on personal savingsMore dependence on personal savings

Fewer pensionsFewer pensions

Uncertain Social SecurityUncertain Social Security

Longer life expectancyLonger life expectancy

More options about what to do with your timeMore options about what to do with your time



Rehearse Your RetirementRehearse Your Retirement


Practice makes perfectPractice makes perfect

Tend your gardenTend your garden

VolunteerVolunteer

Start painting or Start painting or writingwriting

Get a part-time job in Get a part-time job in a new fielda new field

Travel to places Travel to places you think you you think you might want to live might want to live (be sure to go in all (be sure to go in all seasonsseasons))


Changes in Life ExpectancyChanges in Life Expectancy

In 2002, men who retire at 65 can expect to live In 2002, men who retire at 65 can expect to live another 15.9 yearsanother 15.9 years

In 2002, women who retire at 65 can expect to In 2002, women who retire at 65 can expect to live another 19.5 yearslive another 19.5 years


Rehearse Your RetirementRehearse Your Retirement

The earlier you start, the better The earlier you start, the better off you’ll beoff you’ll be


Working on itWorking on it

30s and 40s30s and 40s

Be aggressiveBe aggressive

At least 10% of At least 10% of incomeincome

Weigh priorities, but Weigh priorities, but save for retirementsave for retirement

50s and 60s50s and 60s

Be a little more Be a little more cautiouscautious

20% of income20% of income

Invest any Invest any inheritanceinheritance

Keep some stocks Keep some stocks for long haul.for long haul.


Savings OptionsSavings Options

Employer-sponsored 401(k) plansEmployer-sponsored 401(k) plans

Individual Retirement AccountsIndividual Retirement Accounts

Simplified Employee Pension (SEP Accounts)Simplified Employee Pension (SEP Accounts)

Variable annuities, stocks, mutual funds and Variable annuities, stocks, mutual funds and other investmentsother investments


The 7 Most Common The 7 Most Common 401(k) Mistakes401(k) Mistakes

Failure to participateFailure to participate

Failure to maximize contributionFailure to maximize contribution

Poor diversification within planPoor diversification within plan

Not enough assets invested outside of the planNot enough assets invested outside of the plan

Constant changes within planConstant changes within plan

Borrowing from the planBorrowing from the plan

Cashing out earlyCashing out early


Annual IRA ReviewAnnual IRA Review

Review your Review your investmentsinvestments

Consider converting Consider converting to a Roth IRAto a Roth IRA

Review your Review your beneficiariesbeneficiaries

Consider all options Consider all options before rolling over before rolling over 401(k)s into your IRA401(k)s into your IRA

Don’t forget to Don’t forget to begin withdrawals begin withdrawals by 70-1/2by 70-1/2

Make sure you Make sure you withdraw enough withdraw enough to avoid penaltiesto avoid penalties


Other IssuesOther Issues

Long-term health Long-term health carecare

Part-time workPart-time work

Wills and Living willsWills and Living wills

Estate planningEstate planning

Inheritance taxesInheritance taxes


Getting close?Getting close?

Reduce expenses and invest your savingsReduce expenses and invest your savings

Increase income with a second jobIncrease income with a second job

Maximize retirement contributionsMaximize retirement contributions

Invest aggressively, but not recklesslyInvest aggressively, but not recklessly

Postpone retirement or retire “part-time”Postpone retirement or retire “part-time”

Be careful with withdrawals after your retireBe careful with withdrawals after your retire


Getting HelpGetting Help

Summit Financial Services Group, Inc.Summit Financial Services Group, Inc.

845-427-7017845-427-7017

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Real World Retirement