How Much Will You Need to Retire?

There are levels of preparedness when it comes to looking down the road at your retirement and how much you will need when you get there.  The basic level of retirement planning is to sign up for your 401k at work, support legislation to keep Social Security intact, buy some life insurance and let it go at that.  This system will work so there is reason to call this bad retirement planning.  After all, if you began preparing for retirement in your early adult life and stayed with it, you will have a resource to retire on and that’s a good thing.

But there is a way to take it to the next level and that is to actually start putting some flesh and bones on your vision of your retirement and get a feel not only for the fact that you will retire but how you expect to live in retirement.  Very often, we have idealistic visions of retirement life based on media images or the fantasy life of living in luxury and having little to do but golf in the morning and drink campaign and eat caviar all afternoon.  So if you can get a realistic view of what you have as your expectations for retirement, you can start making adjustments to your retirement planning package right now.

Start with how you see your retirement lifestyle working.  If you want little more than a manageable retirement apartment, a cat and the chance to knit or watch ESPN without interruption, that is a fairly modest retirement lifestyle to prepare for.  But other people have adventure and high living in their retirement dreams.  So if world travel or living in a luxury setting is part of that dream, only one person is going to make that dream a reality and that is you.  Read more...

June 23rd, 2009 by admin
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Getting a Professional into the Act

Do you see planning for your retirement as your responsibility or something someone else should do for you?  That is a pretty shocking question isn’t it?  It is the kind of question that makes it sound like if your retirement funds are under the care of your employer, that you are not being a responsible person.

Of course that is not the purpose of the question.  If you have taken the step of participating in your employer’s retirement program or 401K, then you are definitely showing plenty of personal reasonability for your retirement planning.  But when you think about it, what happens to your 401K funds once they are given to your employer?  Most of us don’t know.  We know that we get statements that show that what we invest is gaining in value and that the principle is safe and for us, that is often enough.

But it is easy to trust your employer that the funds are being managed well and that it all will be there when the time comes for you to use that 401K for retirement.  The truth is that your employer probably has nothing to do with how well your retirement portfolio performs once the funds are taken out of your paycheck.  In most cases, your employer hires a professional retirement planner who invests those funds to give you at least a modest return on investment.  And that service is also taking a fee from your funds which is something that is done without giving you the chance to evaluate if they deserve the money they are making.

You have some rights when it comes to your retirement funds.  So part of your rights is to see that people that work for you, such as a retirement planner, know what they are doing and are held accountable on a regular basis for the outcome of their financial management of your retirement funds.  At the employer level, you probably won’t fire the financial planner.  But you can demand to meet with them and communicate your financial plans.  You can get a name of is responsible for what happens with your money.  And if you find out who they really are, you will have more success in getting them to be accountable to you.  Read more...

June 7th, 2009 by admin
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