Get Ready for a Secure Retirement

Category: Financial and taxes in retirement

November 22, 2011 — A survey by the Employee Benefit Research Institute found that only 13% of workers felt very confident they would have a secure retirement. To help get you into that elite group, here is a short roundup of the best “how to” articles on planning for your retirement we’ve seen in recent weeks.

12 Steps to Take in Your 60’s
From MSN/Money, this article is genuinely helpful. Among its top tips: Get long term care insurance, figure out where you are going to live, draw up a retirement budget, and consider an annuity. There’s more good advice, check it out.

Our Financial Smarts Erode After Retirement
We’ll all have a hard time believing this, but the proof seems there: starting at age 60 we start to lose our ability to make smart investment and financial decisions. According to Michael Finke, a professor at Texas Tech University, our scores on a financial literacy test tend to go down about 2% each year after 60. That’s bad news because that’s just about when we need all the wisdom we can get. Robert Powell and MarketWatch.com have devised their own financial literacy test – take it and see how you do!

How Much Do You Need to Save for A Secure Retirement?
The Center for Retirement Research at Boston College has put together a very detailed look at the question of how much people need to save for a secure retirement. The authors start with an 80% replacement assumption – retirees will need to replace at least 80% of their pre-retirement income to enjoy a financially secure retirement. Knowing how much you will receive from social security and pensions is the first step in the process. Savings rates to get to the 80% replacement level will differ by income group and age that one starts savings. Higher earning individuals will need to save much more than lower income individuals because social security will provide the bulk of the latter’s income. Likewise those who start saving earlier will have an advantage.

Great Places to Retire and Find a Job. Finally, here’s an article from the Wall Street Journal that picks out some great places for those who plan on working in retirement. To come up with their list they looked for towns with low unemployment rates, and some of them are very attractive. The authors liked Santa Fe, NM; Portland, ME; Jupiter, FL; and Lincoln, NE.

Comments: What financial advice would you give your fellow members? Any mistakes you would like to avoid, and successes to repeat? Let us know in the Comments section below.

Posted by Admin on November 22nd, 2011

5 Comments »

  1. Keep working if possible – especially if you have no pension and rely on SS and investments – the market is to difficult and in one year you can loose
    10-15% or more of your investment.

    by Jerry — November 22, 2011

  2. Market devaluation is highly over-rated and used as an excuse for poor planning. For example – a $100,000 401K would yield $4000 in income during the first year at the commonly accepted 4% withdrawal. If the account lost 15%, it would have a value of $85000 and a yield of $3400, 15% less. If this account makes up 1/2 of your retirement income, you have to reduce your expenses by 7.5%. This shouldn’t be a big problem if you keep in mind it is short term. The market will come back in the near future.

    by Bruce — November 23, 2011

  3. Just had to LAUGH at the cities named in the “low unemployment” bracket.
    Santa Fe: So expensive to live that anyone living there will have to work to afford it! I’m not talking about the wealthy folks because these people employ the minimum wage folks to do all the work–gardening, cooking, housekeeping, etc.
    I don’t know about the other cities listed, but when I think about unemployment, I also think about the numbers of jobs that are there. Many people just MOVE AWAY when they can’t find work in their field. OR, they have been unemployed so long that they are no longer on the rolls of the welfare and are effectively “off the radar”. How can one canvas homeless people who are out of work and lost their homes? Gee, where are you sleeping tonight?
    Advice? Pick any place you like, where you have family, or have dreamed about, and GO THERE.IF there are no traditional jobs, MAKE ONE. You can be a Walmart Greeter if push comes to shove. What is so generic about these TR blog topics, is that they have to be so generic as to cover large bases of incredible variables in the retirement world.
    We’ve all managed to make it to this age, and so we have the resources to really DO what we want. Top Retirements is nice for additional ideas, but to point at a handful of cities as being places to go for the reasons cited is laughable.

    by Elin — November 24, 2011

  4. The “12 Steps to Take in Your 60’s” article looks like a 12-step program leading to personal insolvancy for the benefit of insurance banksters.
    Be careful from whom you get your advice. Be eyes wide open. 😯

    by Carey Mebach — November 28, 2011

  5. Thanks for your comments everyone, very useful to get your perspective. Came across another article of the same ilk today – seems like good advice to me. We baby boomers are having a lot of trouble being prepared for retirement so we sure don’t need to risk what little we might have!
    http://money.msn.com/retirement-investment/10-things-not-to-do-with-your-money-mainstreet.aspx

    by John Brady — November 28, 2011

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