Planning For Retirement:
Tips To Help Insure Your Golden Years
If you are not financially ready to retire, you may find it more difficult to enjoy your retirement than you expected.
“Don’t assume that your lifestyle or cost of living will become less expensive after retirement,” says New York Life Insurance agent J. Len Hale, C.L.U., C.H.F.C., L.U.T.C.F., C.A.F.L.
To help you avoid this problem and others, Hale offers the following advice:
 1. Set a goal and start saving early.
“You’ve got to set up some kind of goal,” Hale says. “A 28 year old who saves at least $2,000 a year for 40 years can accumulate a fund between a half-million dollars and $800,000, and that’s based on either an eight or 10 percent growth rate.”
2. Make sure your portfolio is diversified.
“The only people who generally get hurt are the people that aren’t very diversified,” Hale says. “Usually their timing is just the opposite, usually they buy in when the market is high and sell when the cost is low.”
3. Participate in employer-sponsored retirement plans. Also, make sure to make the most of any matching funds offered by the employer.
4. Don’t get scared by market fluctuations and other bumps in the road.
“I don’t believe in changing ships,” Hale says. “Do your homework, stay diversified, and stay the course and then gradually expand. The greatest risk to any investment is the short term; the younger people are, the more they can be aggressive. If they’re contributing monthly, the dollar-cost averaging concept mitigates the risk.”
5. If you are eligible, consider a Roth IRA as a supplement to your primary retirement plan. The advantage of a Roth IRA is that the contributions you make into the plan are made with after-tax dollars, meaning you will pay taxes on those funds now as opposed to later when it comes time to make withdrawals.
6. Don’t get too conservative. When you do retire, consult with an advisor and, if you have the option, don’t be afraid to consider keeping some funds invested in stock.
“I have retired people who I don’t overly pull away from stock funds, and that’s OK,” Hale says. “I think it’s a misconception to think that while you’re accumulating you want to be aggressive, but when you retire you’re going to go totally conservative. You don’t know how long you’re going to live, and the stock market and real estate are still the only investments that generally stay ahead of inflation.”
—JKW
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