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Taking the Mystery out of Retirement Planning. Financial Planning for Women September 2006 Presented by Jean Lown, Tiffany Smith, & Karissa Berndt. September is College of Education & Human Services month. Who is affiliated with the College? Give away personal finance books

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Taking the Mystery out of Retirement Planning

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Taking the Mystery out of Retirement Planning

Financial Planning for Women

September 2006

Presented by Jean Lown, Tiffany Smith, & Karissa Berndt

September is College of Education & Human Services month

  • Who is affiliated with the College?

    • Give away personal finance books

  • Who is here for first time?

    • Welcome packet

  • Who brought someone new with them?

    • PF book

Personal Finance Action Plan handout

  • Make a commitment to yourself to take action as a result of today’s program

  • Anyone want to share about a personal finance action they took recently?


  • for people who are 10 years from retirement, but still excellent for anyone to work through.

  • With this workbook you can stop worrying if you have enough saved and start planning to get to what you need.

    • If you don’t have enough saved now, you still have time and options to make it up.

Planning for a Lifetime

  • Start NOW

  • Pensions are a thing of the past.

  • Prepare now for retirement.

  • You don’t want to out live your savings.

Chapter 1: Tracking Down Today’s Money

  • Did any of your previous jobs have a 401(k) or pension that remained with the company?

    • You might have retirement investments you forgot about.

Tracking Down Today’s Money

  • Get statements from:

    • Your financial institution

    • Any place that you have money invested.

Tracking Down Today’s Money

  • Figure out your Home Equity (largest asset)

    • Current Market Value

    • Current Mortgage Balance

    • Home equity debt

  • Consult an Appraiser for current market value or look at sale prices of comparable homes in your neighborhood.

Ch. 2: Tracking Down Future Money at Retirement and After

  • Use the information from Ch. 1 to fill out worksheets to calculate how much your current investments will grow in 10 years.

  • The 10 year information will help you figure out a 30 year estimate.

    • Will you live more than 30 years?

    • Utahns live long lives!

Tracking Down Future Money at Retirement and After

  • Look at where your money is now.

    • Are you earning very low interest for guaranteed security?

    • Would you fare better in the long run with a higher risk investment for higher return?

  • These depend on your goals and how close or far away your retirement is.

  • Would you do better with a different asset allocation? (see FPW website for PPT)

Tracking Down Future Money at Retirement and After

  • Investing too much of your assets in one investment can be very risky.

    • If you’re invested in your employer’s stock what happens if the company goes under?

      • Remember Enron, WorldCom & Adelphia

Long-term Average Annual Returns

  • Stocks = 10%

  • Bonds = 6%

  • Cash (CDs, Treasury bills) = 3%

  • Inflation = 3.1%

Chapter 3: Tracking Down Future Expenses

  • What are your day-to-day expenses and how they will change over time?

    • Determine if the money you have saved will be enough to last through retirement.

  • Inflation is one of the biggest factors.

    • Historically the average inflation has been 3.1%

    • Use a higher number, 3.5% - 4% to be conservative

Tracking Down Future Expenses

  • Medical costs are an exception.

    • Medical expenses have risen faster than inflation for more than 20 years.

  • Medicare will not cover everything.

    • Currently additional Medicare part B insurance runs about $79 a month and will continue to rise.

  • Consider long term care insurance ONLY if you have adequate assets to cover estimated expenses.

    • 40% of 65 and older spend some time in a nursing home (mostly women)

Chapter 4: Comparing Income and Expenses

  • Now it’s time to compare!

    • Will your estimated income meet your estimated expenses?

  • Most people don’t have enough invested.

  • If your expenses outstrip your income then it’s time to make some changes.

Comparing Income and Expenses

  • Max out your contributions to your IRA.

    • See FPW website

  • Cut expenses.

  • Contribute as much to your 401(k) as your company will match; more if you can afford it.

  • You may have to work longer than anticipated

  • Figure out when to begin Social Security.

  • Invest to stay ahead of inflation!

Comparing Income and Expenses

  • Set up a budget for before & after you retire

  • 3 phases of retirement (Prosperous Retirement)

    • Go-go (expenses > income)

    • Slow-go

    • No-go (living expenses very low UNLESS long term care is needed)

  • Medical & LTC expenses are the BIG unknown

Chapter 5: Making Your Money Last

  • The whole point is to discover any gaps in your savings now, while you still have time to do something about them.

  • DON’T Take unsolicited advice on where to put your money.

    • If you want advice consult a financial professional that you choose.

    • Don’t be a target for scams!

  • Don’t forget about taxes.

Making Your Money Last

  • Choose what you want to withdraw from which savings vehicle.

    • Roth IRAs: you’ve already paid taxes so it is a good place to leave your money to grow.

  • Reverse Mortgage to stretch your money

    • essentially a bank loan based on the amount of home equity.

    • It can provide a monthly check, but at a cost. You are spending down the value of your home.

    • The loan does have to be repaid if your heirs want to keep the house.

Chapter 6: Tracking Down Help for Retirement Resources

  • In the past there weren’t a lot of choices in retirement, but that has changed dramatically.

  • It is up to you to choose how you want to live in retirement & work toward your goals.

  • Redo these worksheets at least once a year to make sure that you’re still on track.

Tracking Down Help for Retirement Resources

  • The workbook has a large list of resources to help you plan and save for retirement.

  • Late Savers Guide to Retirement

    • www.nefe.org/latesaver


  • October 11 FPW: Who gets grandma’s yellow pie plate? A guide to passing on personal possessions.

    • Presented by Dr. Barbara Rowe, USU Extension Specialist

      • 12:30-1:30 Family Life 318

      • 7-8:30 p.m. at the Family Life Center, 500N 700E

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