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Making Retirement Funds Last. Making Retirement Savings Last About the PICPA The Pennsylvania Institute of Certified Public Accountants (PICPA) is a professional.

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Presentation on theme: "Making Retirement Funds Last. Making Retirement Savings Last About the PICPA The Pennsylvania Institute of Certified Public Accountants (PICPA) is a professional."— Presentation transcript:

1 Making Retirement Funds Last

2 Making Retirement Savings Last About the PICPA The Pennsylvania Institute of Certified Public Accountants (PICPA) is a professional association of more than 22,000 members working together to improve the profession and serve the public interest.

3 Making Retirement Savings Last Reality Check Many are unprepared for the reality of retirement Life expectancies are going up—retirement may last longer than you expect (25-30 years) How much you withdrawal early on in your retirement will greatly impact your later finances

4 Making Retirement Savings Last Delay Taking SS Payments If you delay receiving your Social Security benefits until after your retirement age, your check will increase – If you wait until 67, there’s an 8% increase – If you wait until age 70, there’s a 35% increase You must start collecting at age 70 ½

5 Making Retirement Savings Last Balance Your Portfolio Put money into a diversified portion of stocks, bonds, and real estate that pays dividends Ladder your bonds – In your portfolio, ensure that your fixed income securities have significantly different maturity dates

6 Making Retirement Savings Last Immediate Annuities Put money in an insurance contract that pays a fixed rate of return Comparison shop! Annuities tie up your money—you’ll have no access to it for a certain period of time

7 Making Retirement Savings Last Other Options Reverse mortgages Only collect the interest from certain retirement plans Longevity insurance

8 Making Retirement Savings Last Tips Get good, objective advice Monitor your funds yearly Try to live on non-retirement assets to let your 401(k) and IRAs grow as long as possible

9 Making Retirement Savings Last Early 401(k) Withdrawals There is a 10% penalty for early distributions – Early is anything before the age of 59 ½ – Regular income taxes must also be paid on amounts withdrawn Some exceptions: – You die and bequeath the account, you become disabled, you terminate employment and are 55+ years old

10 Making Retirement Savings Last Early 401(k) Withdrawals Things to consider: – Many employers only allow early withdrawals in cases of financial hardship – You lose the potential investment growth on the money you withdrawal – You may not be able to reinvest your full withdrawn amount because of contribution limits

11 Making Retirement Savings Last Be Wary Of Fraud Pyramid Scheme: claims to turn small investments into large returns Ponzi Scheme: a central fraudster collects money from new investors to use as “returns” on other investors R x Drug Scam: unsolicited discount drug cards offered Audit Scam: unsolicited review of documents containing personal information offered Plus many more!

12 Making Retirement Savings Last Fraud Red Flags Guaranteed performance on an investment Unregistered individuals selling unregistered securities Overly consistent returns No prospectus, no offerings, no stock symbols on stocks being sold Pushy sales people or high pressure situations

13 Making Retirement Savings Last Avoiding Fraud Are your investment professionals licensed? – Check to see if the license was ever suspended or revoked Ask questions! – Scammers count on you not bothering to investigate Be wary of unsolicited offers! – s, phone calls, letters, and more If it sounds too good to be true, it probably is!

14 Making Retirement Savings Last Resources The PICPA: Social Security: AARP:

15 Making Retirement Savings Last Questions?


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