Retirement, Let's See!

So are you ready for retirement? Think so?  Let's give it a go!  Here is how we are going to do it!

First, you must figure out what your retirement payment would be.  That means you will need to speak to someone from the Social Security Administration to determine what your social security payments are projected to be.  You can use this url to estimate your social security payments also: https://www.ssa.gov/retire/estimator.html.

If there is a pension or other retirement funds available you should speak with someone from those areas also to estimate what your retirement payments would be on a monthly basis.

Calculate the monthly amount is for the Social Security projected payment and the projected payment from the other retirement sources.  Whatever total you come with, select a month within the next three months to live on that total amount.

So for instance Jane uses the estimator at www.ssa.gov and it is determined that she would receive $1,600.00 per month.  Jane then contacts her benefits coordinator from her current employer and determines that she would receive an estimated $750.00 per month during retirement. She has additional retirement funds in other places which would cause her to receive a projected $350.00 per month.  Therefore Jane's projected retirement income is $2,700.00 per month.  With that Jane will decide to use the month of September to live off of $2,700.00 per month.

The goal of an exercise like this is two fold: (1) to help the participant understand that there lifestyle maybe impacted severely in retirement and (2) to help the participant see that saving for retirement should be a high priority.  Try the exercise and see how it is.  Once you tried it for a monthplease let me know your thoughts on retirement!

Your Retirement's Life or Death

During this time there are many who will retire within the next two to three years.  This a great thing but I ask this question, are you prepared to retire?  Before you answer think about this -

1. The US is slowly increasing the minimum eligibility age to receive full social security benefits.

2. Many employer sponsored retirements plans have yet to earn its losses back from the downturn we began to experience about six years ago.

3. The US economy, and the world's economy, has not reached a TRUE bottom yet.

4. Many of us have not experienced nor considered another factor known as inflation inflation.

What is inflation?  In simple terms inflation is the rate the prices for goods and services rise and the purchasing power for the same things falls.  Perfect example is that a little over six years ago the average price was $2.23 per gallon, today that average is $3.62 per gallon.  

This means with $20.00 in 2006 you and I would have been able to buy just under 9 gallons of gas.  Today we would only be able to buy 5.5 gallons.  Imagine a spike in inflation while you are on a fixed income, exactly it could be the death of your retirement, especially if the rate of inflation is rising faster than the rate of your investment.

Is there any relief from this possibility?  Of course there is, the relief is building assets.  Assets have the unique ability to increase in value even in tough economic times.  What asset can you build?  There are several including real estate, businesses, collection items, etc.  Look to build assets into your retirement.

Money on The Table

This year put your money to work for you more efficiently than you have done in the past. This is one of the best things you can do. We consistently work for money. However, for many of us, money never works for us.  It doesn’t matter how much or how little money you have, invest it wisely and watch it work for you.

With the unemployment rate reaching record highs, the stock market seemingly on a recovery run and a little fear in the market, it is a great time to invest.  Invest what do you mean?  Try some alternate investments with the cash you have laying around. 

Who has cash lying around?  More then likely you do! If you have been separated from an employer that offered a retirement plan that you were apart of, then you have money lying around.  Let me show you how to move some of those funds from simply lying around to working for you.  You have the power and opportunity to do some great things this year with the money you have on the table.  Contact me at info@frederickotowles.com. 

Retirement Thoughts

As you probably know if you were born after 1960 the retirement age to receive for full Social Security benefits was raised to 67. What you may not know is that on average Americans live until age 78. This means on average people live about 11 years after their retirement date. So what, why is this important? It is important so you can develop a retirement plan early.

Eleven years after retirement is equivalent to 4,018 days. Let’s take that number (4,018) and multiply it by 100. This would result in 401,800. Why is this number important? I suggest that this is a good starting point for the target amount you and I will need for retirement. Does $401,800 seem like a lot of money? It would unless you begin to plan for your retirement today. As I said this number is simply a starting point for the amount you and I will actually need. Speak to your financial professional today to begin planning for your retirement.

Yes We Can?

A recent radio address from President Obama suggested that Americans need to save more for retirement. Treasury Secretary Timothy Geithner also disclosed “working Americans should be able to retire with dignity and security,, but nearly half o the nation’s workforce has little or nothing beyond Social Security benefits to get by on in old age.”

One of the new incentives on the table to counteract this is to allow tax refunds to be directly deposited into retirement accounts or used to buy savings bonds.

This is something we all may want to consider during this upcoming tax season. Don’t let Social Security be your only source of income when you retire. In like fashion, don’t allow your job to be your only source of income now either.