" CONTENT="" />" CONTENT="" />Planning For Retirement
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Smart Savings: Retirement Planning

 


Regardless of your age, retirement planning should be on your radar. Many young professionals think planning for retirement is something they can do later, but strategizing early is the best thing you can do to ensure a solid savings plan. Whether you’ve been working for two years or twenty, there are things you can do to think ahead.

Retirement planning is constantly changing, making it necessary to have a solid retirement strategy. In the past, many could rely on pension plans and Social Security benefits, but pension plans are increasingly rare and Social Security benefits should not be used as a sole source of retirement.

Many Americans are at risk of running out of money in retirement. According to a recent Employee Benefit Research Institute study (EBRI), nearly 47 percent of early baby boomers (ages 56 to 62) are at risk of outliving their retirement savings. "To develop a sustainable strategy that meets your specific needs, some important considerations would be your age at retirement, life expectancy, living expenses and the rate of return you expect from your investments," notes Tom Thornton, vice president, and regional sales manager covering St. Louis for BMO Harris Financial Advisors, Inc.

Here are a few tips from Thornton on planning for retirement.

Withdrawal Strategy: Knowing how much money should be withdrawn from your retirement savings each year is a critical factor in building a retirement plan. Withdraw too much and you are likely to outlive your assets; take too little and you may unnecessarily sacrifice your standard of living, especially in the early years of retirement.
Asset Allocation: As individuals seek increased income upon entering retirement, they often shift their holdings more toward bonds and cash. This may or may not be a good move, as there are other key investment considerations beyond having a need for income. Confer with your financial advisor to determine the appropriate allocation for your needs, investment objective, risk profile and timeframe.
A Core of Guaranteed Income: In retirement, your focus will need to shift to using your savings to generate income to meet your ongoing expenses. One possible option is to allocate a portion of your savings to an annuity. Annuities are an investment tool that can provide guaranteed income for the rest of your life, no matter how long you live.

Said Thornton: "Whatever your specific plans, it's crucial that you enter retirement with a strategy for turning your savings into a retirement 'paycheck' that will allow you to live retirement on your own terms."

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