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Jim Lentini: Maintain a comfortable retirement

Business Commentary

Posted: August 9, 2010 9:58 p.m.
Updated: August 10, 2010 4:55 a.m.
 

When you are trying to figure out how far you will have to stretch your retirement, saving is much easier if you are able to make a reasonable educated guess about how long you will live.
You can find online life-expectancy calculators, such as the one available at livingto100.com. Also take into account diet and exercise habits, as well as family history, in estimating how long you might be expected to live. A rule of thumb I learned a few years ago from actuaries was that of a couple aged 65 and non-smokers, one was expected to still be alive at age 92.

Reallocate assets
As you approach retirement, you gradually shift portfolios from more aggressive allocations to more conservative ones. The old saying made famous by Will Rogers in the 1930s still holds true: “I’m not so much concerned about the return on my money, as I am about the return of my money.”
With some of the events affecting our economy and our retirement assets lately, this saying still holds true. With the creation of lifestyle portfolios for 401k plans, IRAs and annuities, it is much easier to maintain a balanced portfolio in saving toward retirement and during retirement.

Make a budget

Your budget in retirement may differ from your pre-retirement spending depending on what your idea of retirement is. If your ideal day during retirement includes spending the day sitting by the lake or river fishing, your budget will obviously be lower than if you plan on traveling extensively.

Adjustments
According to the shortfall or surplus in your calculations, you may need to increase your savings, push back your retirement date or retire earlier. You want to be doing this adjusting while you are employed, earning and saving, and have the financial flexibility affected by life events and economic changes.

Make a plan
The final anecdote is: “Make a plan, and work the plan.” The sooner you start, the more you save and adjust your retirement planning according to your changing needs and economic conditions, the more successful your plan will be. Meet regularly with your financial advisor, review your plan and adjust according to your goals and needs.

Jim Lentini, CLU, ChFC, IAR is president of Lentini Insurance & Investments Inc. His column reflects his own views and not necessarily those of The Signal.

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