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Retirement a Horizon That Can Be Ably Planned For

Some of us look forward to it, while others rue the day— but few get out of retirement. And given that it is pretty much a certainty, there are a number of things that can be done to be ready for it.

While scores of calculators, spread sheets and pie charts promise to pinpoint just how much money you will need, and can definitely offer assistance, a comfortable retirement is also based on having been a good saver, mapping out a retirement lifestyle within your means and taking into account that you may live longer than you expected.

“For most members, considering retirement is both exciting and scary” said Brett Marchand, vice president of Tower Wealth Management.

“The fear of outliving your savings is an on-going concern that most members have when contemplating retirement,” Marchand said. “Having a structured retirement plan will serve as a roadmap and allow members to retire with confidence.”

Retirement is no longer about sitting on the back porch and drinking a glass of lemonade. It’s about embracing the next horizon and that takes sound financial planning.

Financial planners advise taking stock of what you currently have—and what you owe—and crafting a savings program around those factors.

The good news is that if you have a mortgage, are paying your children’s’ college tuition or are helping with the long-term care of a parent, those commitments are going to end, although for the latter it is an unfortunate reality.

That will give you free cash flow that can be combined with what you already have, as well as money coming in through your paycheck, to begin building toward retirement. Or, if you are already on the way with your retirement preparations, you will have more money to work with.

While cash savings should definitely factor into a retirement program for day-to-day living and emergency needs like a new car or a large appliance like a refrigerator, many financial planners strongly recommend you turn to the stock and bond markets because they can do some long-term heavy lifting for you.

You may want to invest in products that give off an income stream, like annuities and bonds. At the same time, the goal is to protect your savings from inflation and you may be able to do this by investing at least some of your money prudently in the stock market, using vehicles like large and small cap stocks, mutual funds and annuities.

A good approach is to be a disciplined saver. Make saving for your retirement the first thing you do with each paycheck.

A number of financial advisors recommend devoting at least 10% of what you net to your retirement planning program.

Also, consider behavioral changes. Look at your lifestyle. Just because you have excess now doesn’t mean you need to spend in excess. Be humble with your money.

And don’t forget income streams that will come into play once you retire. If your company provides a pension, call the human resources department and find out how much it will be.

To determine how much you will get in Social Security benefits go to the Social Security Administration’s website and use its retirement estimator link.

And to maximize Social Security benefits, have—upon mutual agreement—the spouse who makes the most money work for a longer period of time.

When it comes to time, you have a strong probability of being in retirement longer than any other generation.

People are living longer. The life expectancy for women is 81.2 years, according to the Centers for Disease Control and Prevention. That compares with 78.9 roughly 25 years ago. Men have a life expectancy of 76.4 years, the CDC says. Twenty years ago it was 78.9.

What you are trying to do is create a permanent cushion for when you are no longer working. Starting, or continuing to contribute to, a diversified savings program is considered the best approach, as well as looking at how you live now and perhaps making some adjustments.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Investing involves risks, including the loss of principal and no strategy can assure a profit or protect against loss. The prices of small cap stocks are generally more volatile than large cap stocks. Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.

Securities and financial planning offered through LPL Financial, a Registered Investment Advisor, Member FINRA and SIPC. Insurance products offered through LPL Financial or its licensed affiliates. Tower Federal Credit Union and Tower Wealth Management are not registered broker dealers nor affiliated with LPL Financial. The Tower Wealth Management Website is for U.S. Residents only. LPL Financial’s U.S. Investment Representatives may only conduct business with residents of states for which they are properly registered.