1. 1 Ballpark E$timate http://www.choosetosave.org/ballpark/ Financial Planning for Women August 2006 Presented by Jean Lown & Tiffany Smith

2. 2 Actions or Progress to Report? Please share your actions, successes, or progress resulting from FPW

3. 3 Why Plan? For security, comfort, peace of mind To be responsible –Don’t be a burden on children or government Babyboomers are NOT $ prepared for long retirements Poverty isn’t fun, especially in old age Median net worth of 75+ age cohort (excluding home equity) = $19,000

4. 4 What is the Ballpark E$timate? An easy-to-use two-page worksheet Helps you quickly identify approximately how much you need to save to fund a comfortable retirement.

5. 5 How to use the Ballpark E$timate Interactive (on-line) All of the calculations are done for you You just enter the numbers Need to be on-line Non-interactive print the sheets from the web site fill in data & do the calculations on your own.

6. 6 Data Needed for the Ballpark E$timate Current income Age & expected longevity –Planning for a Secure Retirement module 1 –http://www.livingto100.com Planned retirement age Percent of income to replace in retirement Health care in retirement Amount of pension –Contact HR office 401(k), IRA balances Estimated Social Security benefits –From annual statement Other retirement income –Work? –Rental income?

7. 7 Social Security Annual S.S. statement (via mail) Full Retirement Age (FRA) no longer 65! –persons born 1943-54: 66 years –1955-1959: 66 + 2, 4, 6, 8, or 10 months –persons born 1960 & later: 67 years 62 is earliest age for SS retirement Benefits are permanently reduced for early retirement

8. 8 Decisions… Percent of income to be replaced –How much of your current annual income will you need in retirement? 70% or higher living on a lot less in retirement isn’t what most people want Health & long term care costs are the BIG unknown

9. 9 More Decisions… How long are you likely to live? –Based on family history and health how long do you expect to live? –Web-based longevity calculators Planning for a Secure Retirement http://www.ces.purdue.edu/retirement/ http://www.livingto100.com

10. 10 Tips for Couples Each spouse should fill out own worksheet –Divide joint assets each $ resource can be used only once –If one spouse’s SS benefit is less than 50% of other spouse’s; increase the lower annual benefit to 50% of higher earning spouse’s If John $12,000; Mary $4,000 –Increase Mary’s benefit to $6,000 (50% of spouse’s)

11. 11 What % of Income? When determining your goal, you need to think about the type of lifestyle you would like in retirement. –Do you want the cruise-of-the-month retirement or are you planning to spend your time in the garden? Plan on health care (LTC) costing far more than you can imagine!

12. 12 Planning Jane’s Retirement http://www.choosetosave.org/ballpark/www.choosetosave.org/ballpark

13. 13 Ballpark E$timate Note the title: a rough estimate –Re-calculate each year –Individuals with less than 10 years from retirement need more than an estimate. They need a comprehensive plan based on their individual situation.

14. 14 More detailed on-line calculators Monte Carlo simulation estimates a range of likelihoods of outliving your resources –http://www.moneychimp.com/articles/volatility/montecar lo.htm http://www.dinkeytown.net/ Mutual fund companies –http://www.troweprice.com –http://www.vanguard.com Personal finance magazine websites –http://www.kiplinger.com –http://money.cnn.com/magazines/moneymag/

15. 15 Useful Resources AnalyzeNow.com –inexpensive retirement planning tools –to better educate people about the realities of retirement planning Planning for a Secure Retirement –On-line course to help you plan your retirement –http://www.ces.purdue.edu/retirement/

16. 16 Questions?

17. 17 September 13 FPW Taking the Mystery out of Retirement Planning –Targeted at persons about 10 years from retirement BUT suited for all ages –Free 60 page workbook for each participant College of Education & Human Services month