Tags: Brooks | retirement | savings | plan

USA Today: If You're Behind in Retirement Savings, Start By Making Plan

By    |   Thursday, 26 March 2015 07:00 AM

Multiple studies show that many of us are far from where we should be in retirement savings to guarantee an enjoyable lifestyle in our golden years.

So what can we do to rectify the situation? USA Today retirement columnist Rodney Brooks offers several tips.
  • Set up a plan and budget. "Planning is the first thing," Nancy Coutu, a financial planner with Money Managers Financial Group, tells Brooks. "I tell them in order to see if you've saved enough, we have to first see how much you spend." And be aware, "going through expenses is sometimes painful," she said. Obviously the plan should include steps to increase your savings.
  • Dump your grown children from your payroll. The dicey jobs market has many parents providing financial support for their grown children. "Stop putting the needs of kids ahead of their own needs," Paul Saganey, president of Integrated Financial Partners, tells Brooks. "People are still doing things for their children instead of saving for retirement."
  • Don't take huge investment risks to make up for your deficient savings. "The myth is if you have waited too long, you have to take bigger risks to catch up," Rick Foster, president of Guardian Financial Management, tells Brooks. The more risk you take, the bigger the chance that you will lose your nest egg.
Meanwhile, with life expectancies continually increasing, more and more of us are living to the age of 100. So how should we plan our finances, so we aren't broke if we reach that milestone?

Joanne Cleaver of U.S. News & World Report has a few ideas.
  • "Don't take cues from how your parents managed their retirement resources and time," she writes. They probably retired at age 65 and lived comfortably on the income from a fixed-benefit pension, Social Security and a small investment portfolio. Nowadays, you may well have to work past 65, and most of us don't have a fixed-benefit pension.
  • "Treat your portfolio like an endowment." Jan Blakeley Holman, director of advisor education for Thornburg Investments, recommends to Cleaver that you follow "smoothing" rules that calibrate each year's combination of withdrawals and hopeful portfolio growth so that you don't draw down your principal.

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Multiple studies show that many of us are far from where we should be in retirement savings to guarantee an enjoyable lifestyle in our golden years.
Brooks, retirement, savings, plan
362
2015-00-26
Thursday, 26 March 2015 07:00 AM
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