How to Afford aLong, Happy Retirement

Advice from CPAs

Procrastination…

• There’s only one side to waiting and that’s the downside– Don’t hold off planning for your retirement:

it cannot wait!– Put your money where it counts--in savings!

Making the Case

• Advocate for your future financial security

• Understand why you have to start NOW

• Plan to save

– It is NEVER too early

– It is NEVER too late

• Get an advisor to pinpoint strategies

• Make the retirement of your hopes the retirement of your reality

Why You Have to Take Charge

• Hard to ignore reasons to start saving for your retirement now– You will need 2/3 to 3/4 of current income for

financial stability during retirement years– If you start saving in your 20’s or 30’s you can

possibly be a millionaire by retirement age

A Successful Retirement

• Step 1: Pinpoint your major sources of retirement income

• Step 2: Take a realistic look at your retirement costs and goals

• Step 3: Close the gap between income and goals

Pinpoint Your Major Sources of Retirement Income

• Inventory all of your anticipated sources of retirement income

• Consider which ones you have, which ones you don’t, and which ones you should consider adding

Pinpoint Your Major Sources of Retirement Income

• Social Security– Provides retirement income and basic financial

support• Employer Pension Plan

– Retirement income - must be fully vested with a company to make this worthwhile

• Employee Contribution Plans (401K)– Highly effective approach to putting money

away for retirement (403B)

Pinpoint Your Major Sources of Retirement Income

• IRAs– Tax-advantage retirement option that can be

set up through your banker• Traditional IRAs • Roth IRAs

– Consult a CPA to learn more about which IRA is best for your retirement planning

Pinpoint Your Major Sources of Retirement Income

• Private Investments• Consider a second career…

– Out of necessity – To pursue a passion

• Look at the tax consequences– Higher tax bracket?– Affect your Social Security?

Take a Realistic Look at Retirement Costs and Goals

• The operative word here is REALISTIC. You need to be honest with yourself NOW so you are protected from unpleasant surprises when entering retirement.

Take a Realistic Look at Retirement Costs and Goals

• Questions to consider when evaluating your retirement expenses and financial responsibilities– Will you keep or sell your current home? Do you

have a mortgage?– Do you want to duplicate your current lifestyle?– Will you be paying to educate children?– Which of your medical expenses will be covered?– Do you plan to travel?

Take a Realistic Look at Retirement Costs and Goals

• Be sure to take inflation into account when calculating your retirement expenses

• Most pension plans and Social Security factor in a cost of living increase to account for inflation

• Being on a fixed income as a retiree can be devastating if you don’t plan for inflation

Close the Gap Between Your Projected Income and Your Retirement Goals

• Turn plans of actions and ideas into reality• There is a gap between your retirement goals

and the money you’ll need to support them• Close the gap and see the results…

Close the Gap Between Your Projected Income and Your Retirement Goals

• Common excuses for avoiding saving for retirement– I’m too young – It’s too late – I don’t have enough money to put away– There are other expenses

Close the Gap Between Your Projected Income and Your Retirement Goals

• There are no excuses not to start NOW• One point to attack all arguments – The Power of

100– There is amazing power in putting away $100

a month towards your retirement

• The Power of 100 – How powerful is it really?– After 5 years earning 6% you’ll have $6,977– After 20 years $46,204– After 30 years $100,452

• It’s NEVER too early and NEVER too late

Close the Gap Between Your Projected Income and Your Retirement Goals

Close the Gap Between Your Projected Income and Your Retirement Goals

• Consider individual investments

• Investments are proven pivotal in closing the retirement income gap

• Remember to consider

– Your current age– Your desired

retirement age– Your tolerance for

risk– Tax implications

now and at retirement

Close the Gap Between Your Projected Income and Your Retirement Goals

• Tax-Advantaged Retirement Investments– U.S. Treasuries– Municipal Bonds– Annuities

Close the Gap Between Your Projected Income and Your Retirement Goals

• Taxable Retirement Investments– Certificates of Deposit (CDs)– Corporate bonds and stocks

Beware of Common Pitfalls

• Get rich quick schemes• Over-caution• Not enough diversification• Tapping into your retirement investments

Protecting Yourself in Retirement• Put aside $100 extra a month• Diversify• Take advantage of anything and everything

your company offers• Use tax advantaged vehicles• Start right NOW