Retirement     Planning
Download
1 / 95

Retirement Planning at Any Age - PowerPoint PPT Presentation


  • 243 Views
  • Updated On :

Retirement Planning at Any Age. Marsha Goetting Extension Family Economics Specialist. Revised May 2009. Retirement has different meanings. 20s. 30s. 50s. 60s. 40s. Generations. Greatest Generation-- already retired Baby Boomers-- retiring Generation X-- anticipating

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Retirement Planning at Any Age' - Roberta


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
Slide1 l.jpg

Retirement Planning at Any Age

Marsha Goetting Extension Family Economics Specialist

Revised May 2009


Slide2 l.jpg

Retirement has

different meanings

20s

30s

50s

60s

40s


Generations l.jpg
Generations

  • Greatest Generation--already retired

  • Baby Boomers--retiring

  • Generation X--anticipating

  • Millennials- Generation Y—?????


Retirement confidence survey l.jpg
Retirement Confidence Survey

  • January 2008

    • Only 18% of workers are very confident they’ll have enough for retirement

      • Compared to 27% in 2007


Slide5 l.jpg
2009 ??????

“The American People have no confidence at all ”

5


Most pressing financial issue l.jpg
Most Pressing Financial Issue

6


Question l.jpg
Question

How do I plan for retirement?

7


Question8 l.jpg
Question

How much should I save for retirement?

8



Finding answers l.jpg
Finding Answers

Financial Planners

Investment Advisors

Life Planners

10


Resources to help you find answers l.jpg
Resources to Help You Find Answers

“Do it yourselfers”

Financial calculators via the Web

11


Choose to save org l.jpg
Choose to Save.org

Employee Benefit Research Foundation Institute (EBRI)

Gazillion “Saving & Retirement Planning” Web Based Financial Calculators

12


Web resources l.jpg
Web Resources

Ballpark Estimate

American Savings Education Council (ASEC):

www.asec.org

13


Aarp web based financial calculators l.jpg
AARP Web Based Financial Calculators

Retirement Nest Egg

Retirement Shortfall

Retirement Income

Required Minimum Distribution

401(K) Savings

Reverse Mortgage

14


Web calculators l.jpg
Web Calculators

Investment firms

TIAA - CREF

T. Rowe Price

15


Different results l.jpg
Different Results

Complexity

Number & type of questions asked

Underlying assumptions

16


Wall street journal l.jpg
Wall Street Journal

Five Sites

Questions 10 to 63

Amount needed:

$669,714 to $1.1 million shortfall

17


2008 retirement confidence survey l.jpg
2008 Retirement Confidence Survey

51% of workers who calculated retirement needs changed behaviors

59% saved/invested more

18


2008 retirement confidence survey19 l.jpg
2008 Retirement Confidence Survey

44% changed other aspects of their retirement planning

Changed investment mix 20%

Reduced debt/spending 7%

Enrolled retire/savings plan 5%

Decided to work longer 3%

Researched ways save for retirement 3%

19



Decision 1 l.jpg
Decision # 1

  • Age at retirement?

    • How many more years to work?


People are retiring later l.jpg
People are retiring later

  • Age 62 in 1996

  • Age 65 in 2006 - 2008


Today s workers l.jpg
Today’s Workers

32% expect to be retired prior to reaching age 65

23


Gap expectations vs reality l.jpg
Gap: Expectations vs. Reality

  • 72% of today’s retirees retired by age 65


Current retirees l.jpg
Current Retirees

  • Half retired early than planned (51%)

    • Health reasons 54%

    • Downsizing 33%

    • Caregiving 25%


You retire at age l.jpg
You—Retire At Age?

55?

60?

62?

65?

70?

26


Decision 2 l.jpg
Decision #2

  • Years in retirement?


How long are you gonna live l.jpg
How long are you ‘gonna’live?



Years in retirement l.jpg
Years in Retirement

  • Workers Expect:

    • 20 – 24 years (27%)

    • 25 – 29 years (10%)

    • 30 + years (17%)


What about you l.jpg
What about you?

Your anticipated years in retirement?

31


Decision 3 l.jpg
Decision #3

  • Amount of “designated” retirement savings?


22 of workers say they have no savings of any kind l.jpg
22% of workerssay they have no savings of any kind

Retirement Confidence Survey


Workers saving investments l.jpg
Workers’ Saving & Investments

  • 49% have saved less than $25,000


Ira contributions l.jpg
IRA Contributions

  • 2009

    • $5,000 under age 50*

    • $6,000 age 50 & older*

      * indexed to inflation


Tax deferred plans 2009 401 k 403 b 457 l.jpg
Tax-Deferred Plans 2009 [401(k) , 403(b), 457]

Under age 50 $15,500*

Age 50 & $20,500* older

* indexed to inflation

36


What about you37 l.jpg
What about you?

Value of your current “designated” retirement savings

37


Decision 4 l.jpg
Decision #4

  • Income needed during retirement?


Financial planners l.jpg
Financial Planners

  • Income sources should provide 60% to 80% of pre-retirement income


Other financial planners l.jpg
Other Financial Planners

  • 100% + of pre-retirement income


Others say l.jpg
Others Say

  • 130% + of pre- retirement income


Marsha goetting l.jpg
Marsha Goetting

  • “It depends!”

    • Lifestyle

    • Health

    • Caregiving for parents


Tiaa cref l.jpg
TIAA-CREF

  • 55% of retirees expected expenses to decline

    • But, only 30% of found that to be true


Tiaa cref44 l.jpg
TIAA-CREF

  • 20% of retirees said their spending ROSE during retirement


Prosperous retirement guide to the new reality michael stein l.jpg
Prosperous Retirement: Guide to the New Reality -Michael Stein

  • Go-go years

  • Slow-go years

  • No-go years


Consumer expenditures 2006 bureau of labor statistics l.jpg
Consumer Expenditures--2006Bureau of Labor Statistics

Age Monthly Yearly

55 – 64 $4,232 $50,789

65 – 74 $3,413 $40,960

75 + $2,409 $28,904


Can you l.jpg

Can You?

Live on 50%, 60%, 70%, or 80% of current income?


Practice l.jpg

Practice

Take income cut now

Put difference in retirement savings

48


Decision 5 l.jpg
Decision #5

Income sources & amounts during retirement?

49


Income sources stool l.jpg
Income Sources “Stool”

Pension

Savings

Social Security


Income from social security l.jpg
Income from Social Security

Pension

Savings

Social Security

51


Average social security benefits 2008 l.jpg
Average Social Security Benefits 2008

IncomeMenWomen

Worker $1,216 $935

Spouse $308 $536


What about you53 l.jpg
What about you?

What will be your Social Security benefit?

53


Social security l.jpg
Social Security

Retirement Planner Calculators

Quick

On-line

Detailed

54


Social security55 l.jpg
Social Security

When to take benefits??????

Age 62

Age 65

Full retirement age (FRA)

Calculator to assist with decision

55


Income from pension l.jpg
Income from Pension?

Pension

Savings

Social Security

56


Income from pension57 l.jpg
Income from Pension?

59% of workers expect income from pension

57


Supplemental pension sources l.jpg
Supplemental Pension Sources

403 (b)

401 (k)

State Deferred Plan (457)

IRA

Other?

58


What about you59 l.jpg
What about you?

  • What will be the amount of your pension?


Income from savings l.jpg
Income from Savings

Pension

Savings

Social Security

60


Income from savings61 l.jpg
Income from Savings

Workers Expect 74%

Retirees Reported 48%

61


Those not saving could you save 20 a week l.jpg
Those not saving “Could you save $20 a week??”

  • 62% yes


Those saving could you save an additional 20 a week l.jpg
Those saving“Could you save an additional $20 a week?”

  • 70% yes



Why save for retirement slide card blue l.jpg
Why Save for RetirementSlide Card (Blue)

  • Growth Calculator

    • Find your age

    • See how large your weekly/biweekly investment can grow by age 65


Slide66 l.jpg

Growth & Savings

Assuming 8% rate of return

66


Slide67 l.jpg

Growth & Savings

Assuming 8% rate of return

67


Slide68 l.jpg

Growth & Savings

Assuming 8% rate of return

68


Slide69 l.jpg

Growth & Savings

Assuming 8% rate of return

69


Cost of one year delay l.jpg
Cost of ONE YEAR delay

  • Find your age

  • Look under weekly/biweekly amount to invest

  • See how much less


Slide71 l.jpg

Cost of One Year Delay

Assuming 8% rate of return; Pay Increases 3%

71


Slide72 l.jpg

Cost of One Year Delay

Assuming 8% rate of return; Pay Increases 3%

72


What about you73 l.jpg
What about you?

  • How much income will you receive from your designated retirement fund?


Income from job l.jpg
Income from job

Savings

Pension

Job(s)

Job(s)

Job(s)

Social Security

74


Work after retiring l.jpg
Work After Retiring

  • 63% of today’s workers expect to


Retirees 25 work l.jpg
Retirees--25% work

  • Stay active 87%

  • Enjoy working 79%

  • Financial 79%

    • Make ends meet 78%

    • Money for extras 78%

    • Keep health insurance 77%


What about you77 l.jpg
What about you?

  • Do you anticipate income from work after retirement?

    • If yes, how much?


Decision 6 l.jpg
Decision #6

Investment Rate of Return?

Before retirement?

During retirement?

78




Diversification l.jpg
Diversification

Stocks & Bonds

Mutual Funds

U. S. Savings Bonds

Real Estate

Certificates of Deposit

Money Market Certificates

81


What about you82 l.jpg
What about you?

What do you “think” will be your investment rate of return?

82


Decision 7 l.jpg
Decision #7

Inflation rate??

Before retirement

During retirement

83


Recent inflation rates l.jpg
Recent Inflation Rates %

2003 2.3

2004 2.7

2005 3.4

2006 3.2

2007 2.9

2008 (Aug) 3.8

85


Inflation l.jpg
Inflation

3.4% average1913 - 2007

86


Consumer expenditures 4 232 monthly l.jpg
Consumer Expenditures $4,232 monthly

3.4%

inflation

  • 5 yrs $5,002

  • 10 yrs $5,912

  • 15 yrs $6,988

  • 20 yrs $8,260

  • 25 yrs $9,762

  • 30 yrs $11,539


What about you88 l.jpg
What about you?

  • What do you “think” the average inflation rate will be?


7 key decisions l.jpg
7 Key Decisions

  • Age at retirement

  • Years in retirement

  • Current retirement savings

  • Income needed

  • Income sources/amounts

  • Investment rate of return

  • Inflation rate


Results of web financial calculators l.jpg
Results of Web Financial Calculators

How much you need to save, (if any) by your targeted retirement date

90


Slide91 l.jpg

When can

I afford

to retire?


Slide92 l.jpg

Well…..at your current rate of savings, you can retire 3 days before your 106th Birthday!!!!!!!!


General tradeoffs l.jpg
General Tradeoffs

Save More (spend less) BEFORE retirement

Spend Less AFTER retirement

Combination

93


Revisit decisions l.jpg
Revisit Decisions

Age at retirement

Years in retirement

Current retirement savings

Income needed

Income sources/amounts

Investment rate of return

Inflation rate

94


Slide95 l.jpg

Best wishes as you make key decisions & adopt strategies for:Retirement Planning Regardless of Your Age Marsha

95