Living Longer, Active Retirement and Rising Healthcare Costs Increase Importance of Retirement Planning
Tips for Retirement Planning Through the Ages
OAK RIDGE, N.J., October 22, 2013
—While 70 percent of workers age 50 and up say they will have enough money to pay for basic expenses during retirement, they are much less confident that they will have enough money to live comfortably, take care of their medical expenses and pay for long-term care, according to a 2013 AARP survey.
“It used to be that job longevity meant retirement security, but today’s business climate is very different,” noted Jeffrey Buonforte, CERTIFIED FINANCIAL PLANNERTM, Lakeland Bank. “People rarely keep the same jobs during their careers, and even if they do, there are significantly fewer pensions. Couple that with longer life spans, active retirement lifestyles and rising healthcare costs, and it’s more important than ever to prepare adequately for retirement.”
Buonforte offered the following tips to prepare for retirement at any stage of life.
In Your 20s: Starting your first job, income may be low and debts high, but time is your ally and this is the best period to start saving for life’s big events. The most common recommendation a financial planner will make is to participate in your employer’s 401(k) plan, and with good reason. This gives you an immediate tax deduction, tax-deferred growth on your savings, and usually a matching contribution from your employer. If cash flow is tight, start by contributing a small amount, such as $100 a month, and plan to gradually increase your contributions over time.
In Your 30s:
With nearly 30 years to save for retirement, you still have time on your side. Now it’s time to create a true retirement plan. Think about variables like your ideal retirement age and questions such as: What other major expenses, like paying for a wedding or buying a home, could throw your retirement plan off for several years? Use tools, such as retirement calculators
, to figure out how much you need to save each year. Your savings strategy is still basically a two-option approach: employee sponsored retirement plans and individual retirement accounts like a Traditional or Roth IRA.
In Your 40s and 50s: This is a critical time to meet with your financial advisor because you’re most likely at your peak earning years and accumulating the most retirement assets. If you've worked for several employers through the years, and you have a plan with each employer, it’s time to consolidate your retirement plans. The benefit of consolidating is that it allows you to gain a better picture of what's happening with your total portfolio and makes managing it easier. Your 50s is also a good time to evaluate the asset allocation of your portfolio. Are you taking more risk than you're comfortable with by investing too heavily in stocks or mutual funds?
In Your 60s: People are working longer and retiring later. If you’re among them, you can benefit by deferring your Social Security as long as you can. For each year that you defer, you receive an 8% increase in your annual allotment. This is the decade to zero in on a retirement date and plan accordingly.
The Golden Years: Managing your income becomes more important during retirement.
Create, and stick to, a budget. When you start to receive Social Security or income from a pension, 401(K) and IRA, you’ll face a new set of tax rules. Meet with your financial advisor to make sure that you understand them. Your financial advisor also can help you with Medigap insurance, estate planning and other financial concerns during your golden years.
How to Prepare to Meet with a Financial Planner
Having a sound overall financial strategy requires you to recognize that your financial needs change as you shift through different stages of life. A Financial Planner
can help you make the best financial decisions for your family and your future. For tips on how to choose a financial advisor, watch this video.
To get the most out of your first meeting, it’s helpful to do some preparation. Following is a list of suggested items to bring.
- Gather your financial documents. These include your tax return, bank statements, credit card balances, pay stubs, mortgage or loan payment booklets, life insurance policies, and any other assets or liabilities.
- Make a list of your dependents.
- Create an initial budget showing your income and expenses on a monthly basis.
- Determine your retirement goals (travel, lifestyle, etc.) and the approximate monthly income that would make that possible.
- Prepare a list of questions to address your specific concerns.
- Bring a notebook, laptop or other method to take notes on your adviser’s suggestions.
The Lakeland Financial Services team offers a free retirement plan consultation. Contact Jeffrey Buonforte, CERTIFIED FINANCIAL PLANNERTM
at (973) 208-6214 or firstname.lastname@example.org
About Lakeland Bank
Lakeland Bancorp, the holding company for Lakeland Bank, has $3.3 billion in total assets with 52 offices spanning eight northern New Jersey counties: Bergen, Essex, Morris, Passaic, Somerset, Sussex, Union and Warren. Lakeland Bank, headquartered in Oak Ridge, offers an extensive array of consumer and commercial products and services, including online and mobile banking, localized commercial lending teams, an expanded residential mortgage lending platform and 24-hour-or-less turnaround on consumer loan applications. For more information about the full line of products and services, visit LakelandBank.com
*Securities are offered through Essex National Securities, LLC, member FINRA & SIPC. Insurance products are offered through Essex National Insurance Agency, Inc. Neither are affiliated with Lakeland Bank. Products are not guaranteed by the bank, not FDIC insured, not a deposit, not insured by any federal government agency, and may lose value including loss of principal.