How to Afford a Long, Happy Retirement Advice from CPAs

Procrastination… There’s only one side to waiting and that’s the downside –Don’t hold off planning for your retirement: it cannot wait! –Put your money where it counts--in savings!

Making the Case Advocate for your future financial security Understand why you have to start NOW Plan to save –It is NEVER too early –It is NEVER too late Get an advisor to pinpoint strategies Make the retirement of your hopes the retirement of your reality

Why You Have to Take Charge Hard to ignore reasons to start saving for your retirement now –You will need 2/3 to 3/4 of current income for financial stability during retirement years –If you start saving in your 20’s or 30’s you can possibly be a millionaire by retirement age

A Successful Retirement Step 1: Pinpoint your major sources of retirement income Step 2: Take a realistic look at your retirement costs and goals Step 3: Close the gap between income and goals

Pinpoint Your Major Sources of Retirement Income Inventory all of your anticipated sources of retirement income Consider which ones you have, which ones you don’t, and which ones you should consider adding

Pinpoint Your Major Sources of Retirement Income Social Security –Provides retirement income and basic financial support Employer Pension Plan –Retirement income - must be fully vested with a company to make this worthwhile Employee Contribution Plans (401K) –Highly effective approach to putting money away for retirement (403B)

Pinpoint Your Major Sources of Retirement Income IRAs –Tax-advantage retirement option that can be set up through your banker Traditional IRAs Roth IRAs –Consult a CPA to learn more about which IRA is best for your retirement planning

Pinpoint Your Major Sources of Retirement Income Private Investments Consider a second career… –Out of necessity –To pursue a passion Look at the tax consequences –Higher tax bracket? –Affect your Social Security?

Take a Realistic Look at Retirement Costs and Goals The operative word here is REALISTIC. You need to be honest with yourself NOW so you are protected from unpleasant surprises when entering retirement.

Take a Realistic Look at Retirement Costs and Goals Questions to consider when evaluating your retirement expenses and financial responsibilities –Will you keep or sell your current home? Do you have a mortgage? –Do you want to duplicate your current lifestyle? –Will you be paying to educate children? –Which of your medical expenses will be covered? –Do you plan to travel?

Take a Realistic Look at Retirement Costs and Goals Be sure to take inflation into account when calculating your retirement expenses Most pension plans and Social Security factor in a cost of living increase to account for inflation Being on a fixed income as a retiree can be devastating if you don’t plan for inflation

Close the Gap Between Your Projected Income and Your Retirement Goals Turn plans of actions and ideas into reality There is a gap between your retirement goals and the money you’ll need to support them Close the gap and see the results…

Close the Gap Between Your Projected Income and Your Retirement Goals Common excuses for avoiding saving for retirement –I’m too young –It’s too late –I don’t have enough money to put away –There are other expenses

Close the Gap Between Your Projected Income and Your Retirement Goals There are no excuses not to start NOW One point to attack all arguments – The Power of 100 –There is amazing power in putting away $100 a month towards your retirement

The Power of 100 – How powerful is it really? –After 5 years earning 6% you’ll have $6,977 –After 20 years $46,204 –After 30 years $100,452 It’s NEVER too early and NEVER too late Close the Gap Between Your Projected Income and Your Retirement Goals

Consider individual investments Investments are proven pivotal in closing the retirement income gap Remember to consider –Your current age –Your desired retirement age –Your tolerance for risk –Tax implications now and at retirement

Close the Gap Between Your Projected Income and Your Retirement Goals Tax-Advantaged Retirement Investments –U.S. Treasuries –Municipal Bonds –Annuities

Close the Gap Between Your Projected Income and Your Retirement Goals Taxable Retirement Investments –Certificates of Deposit (CDs) –Corporate bonds and stocks

Beware of Common Pitfalls Get rich quick schemes Over-caution Not enough diversification Tapping into your retirement investments

Protecting Yourself in Retirement Put aside $100 extra a month Diversify Take advantage of anything and everything your company offers Use tax advantaged vehicles Start right NOW