Retirement Adjustments
The thought of retirement should be filled with excitement as you enter your golden years. But with recent stock market issues and economic downturns, we worry if we have enough money to live on when we eventually retire, as we will not want to have to take cash advances during this period. One of the biggest retirement fears is that we may outlive our money. Now that things have changed in the economic environment, it is time to also change our retirement planning to adjust for what has happened. There are a few ways to help us save for our retirement to alleviate any concerns about outliving our income.
Previously, it was thought that we should save about 10% of our income for retirement. That thinking has been adjusted and many experts believe that 20% is a safer bet. With the fear of inflation, we may need more money during our retirement years. Another important factor is knowledge and we must know where our current assets are allocated. We want to make the most after tax wealth, so adjustments may have to be made to our retirement accounts to assure this of happening. Guaranteed investments are also necessary as we see fluctuations in stocks and bonds. These investments are a safety net and include CD’s and Treasury Inflation Protected Securities, which have principal amounts that rise and fall with inflation and deflation.
Review the fees that you are paying for the management of your retirement accounts. Although 2.5% seems like a small price to pay for a managed account, a savings of 40% of that fee can result in an extra $100,000 over 10 years with a $500,000 portfolio, which is certainly nothing to scoff at as there are many firms that will compete for your business. If you can learn enough, you may be even able to manage your accounts for yourself, which will truly save a lot of money for you and your loved ones.
This entry was posted on Monday, August 31st, 2009 at 11:02 am and is filed under Retirement. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
