Retirement Planning at Any Age. January 26, 2012. Question A: What best describes your reaction about retirement?. Looking forward to it Dreading it Ambivalent Don’t want to think about it . Question B: Have you talked to a retired person about what retirement is like?. Yes No.
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January 26, 2012
Where to live?
Type of activities?
24/7 with spouse?
Children (boomerang kids)
Age at retirement
Years in retirement
Current retirement savings
Investment rate of return
Fewer years to provide retirement income
Before age 60 7%
Age 60-64 16%
Age 65 26%
Total planned to retire before age 65 49%
Life Expectancy Calculator
45% chance that one spouse in a 65-year old couple will live to 95
Your anticipated years in retirement?
Amount of “designated” retirement savings?
For every $1,000 in monthly income you need $300,000 in savings
Only 24% of workers said they are very confidentthey’ll have enough for retirement
2010 average was 19%
Have you calculated how much money you need to save by retirement?
42% workers report they have tried to calculate how much money they need to save by retirement
Benefit of Calculation
59% of workers who calculated retirement
saved and invested more
Changed investment mix 19%
Reduced debt/spending 16%
Researched ways save for retirement 7%
Decided to work longer 5% Enrolled retire/savings plan 3%
“Do it yourselfers”
Financial calculators via the Web
Social Security calculators
Roth IRA calculators
Work & Retirement Tools
AARP Retirement Calculator
401(k) Savings Calculator
403(b) Savings Calculator
Pension Plan Retirement Options
TIAA - CREF
T. Rowe Price
Reveals how much you need to save by your targeted retirement date
Care giving for parents
55% of retirees expected expenses to decline
But, only 30% of found that to be true
20% of retirees said their spending ROSE during retirement
Age Monthly Yearly
55 – 64 $5,632 $67,586
65 – 74 $3,255 $39,054
75 + $2,606 $31,272
Income sources should provide 60% to 80% of pre-retirement income
100% + of pre-retirement income
Live on 50%, 60%, 70%, or 80% of current income?
Take income cut now
Put difference in retirement savings
Question H: What % of present income do you think you will need during retirement?
Income sources & amounts during retirement?
Workers Expect 65%
Retirees Reported 50%
Investment Rate of Return?
Question K: What was the average rate of return for large common stocks from 1926 – 2010?
Stocks & Bonds
U. S. Savings Bonds
Certificates of Deposit
Money Market Certificates
Question L: What do you “guesstimate” will be your investment rate of return during retirement?
Death of spouse?
Mortgage paid off?
Plan for uncertainty
Spend less, now & later
Withdraw retirement savings
Work during retirement
Convert assets to cash
Needed Income $5,971
Social Security H $1,162
Social Security W $ 573
IRA Withdrawal $ 478
Other Retirement Fund $ 956
Job (Part Time) ($7.25) $1,160