Retirement Planning

Cessation of work is not accompanied by cessation of expenses. Cato Roman statesman

Many people believe they will only need a small amount of income to live comfortably in retirement because their mortgage will be paid off, their children will be grown and on their own, and they will no longer have the work-related expenses of clothing, commuting, and lunches. Most financial planners will suggest, however that your optimal retirement income is 70-80% of your pre-retirement income.

If you've delayed saving for retirement because you think you have plenty of working years left, or you're counting on Social Security, it's time to get serious about retirement planning and examine what steps you need to take to begin saving for your future financial security.

Tip #1: Save enough to fund a long retirement.

People are living longer, healthier lives – which means you could spend 20 or more years in retirement. Are you saving enough to fund a long retirement without sacrificing your current lifestyle?

Tip #2: Account for inflation.

Don't forget about inflation – assuming a 4% rate of inflation, $10,000 today will have the spending power of less than $5,000 in 20 years. Consider investments that will grow faster than the rate of inflation to protect the purchasing power of your savings.

Tip #3: Don't depend too heavily on Social Security.

Economists predict that in a few years, Social Security will be paying out more money than it takes in. Reform is likely and will probably include benefit cuts. Social Security may provide a small percentage of your retirement income, but don't depend too heavily on Social Security in your overall retirement plan.

 

If you're unsure how much you should be saving or wondering if your investments are properly diversified, contact our Wealth Management Division. Let us help you create a comprehensive retirement plan so you can feel secure about your financial future.

Did you know?

Class has been in session at W&J College since 1781, the year Washington County was formed.

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