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You have waited 40 years for this day.
You’ve cleaned out your desk, received the obligatory retirement party
and the gold watch. You’re ready to walk out the door and begin
enjoying the good life—retirement. And, you have determined how
you are going to afford retirement, right?
According to the recent
2007 Retirement Confidence Survey by the Employee
Benefit Research Institute (ERBI) and Matthew Greenwald
& Associates, nearly half of all workers saving for
retirement have savings that fall below $25,000.
Forty percent of survey
respondents said they are not currently saving for
retirement and 25% said they have no savings at all,
retirement or otherwise.
According to ERBI, men
should have accumulated a nest egg 12 times their income
by the time they retire. A woman, because of higher
life expectancy, should have 14 times her income.
That’s more than $1 million for a woman earning $82,000
a year.
In addition to financial
planning, be sure to take care of the practical issues.
Even though you have years of living ahead of you, you
also need to prepare for the inevitable. Hopefully,
you’ve already prepared your will, but just in case you
have not, take care of this situation now! You don’t
want the state to decide what happens to your estate.
It would probably be wise to hire an attorney rather
than rely on one of the do-it-yourself
fill-in-the-blanks computer software programs. While
the computer method may appear to be cost-effective, the
forms may be out-of-date and may not conform to the laws
of your state.
While you’re at it, go
ahead and have a professional prepare a durable power of
attorney and why not throw in a medical power of
attorney as well. Both will allow you to designate a
family member or friend or other person of your choice
to act on your behalf should you become mentally or
physically incapacitated. Without those designations,
your family may have to go to court and pay needless
court costs and fees to settle your estate.
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Most
all of us have life insurance policies to help ease the
financial burden on our loved ones in the event
of our death. Now that
you’re retired, you may want to reconsider whether you
need all of that life insurance protection. The kids
are grown and living on their own. You want to ensure
that your spouse has plenty of money to live comfortably
and that there is enough insurance to pay debts and
funeral expenses. Unless you just want to leave large
sums of money to your survivors, you may want to think
of keeping a life insurance policy that provides minimum
coverage.
When seniors are seeking
financial advice, they should secure the services of a
Certified Financial Planner rather than individuals
representing themselves as financial counselors. Anyone
can become a financial counselor by taking an
inexpensive correspondence course and passing a
multiple-choice exam, making them less qualified to
dispense sound financial advice. Certified Financial
Planners, on the other hand, have had years of
coursework, passed difficult tests and extensive
background checks. Be sure you trust your financial
advisor and do not succumb to abusive sales techniques.
While financial planning
is essential to a great life after retirement, personal
planning is also important. For the past 30-40 years,
you’ve awakened to that obnoxious alarm clock blaring in
your ear every workday. Now that you’re retired, you
don’t have to get up at a certain time each morning.
You don’t have to get up at all and that might be a
problem. You will need something to fill your life.
Whether it be traveling, spending time with family and
friends, pursuing your hobbies or volunteering in the
local community, you need a plan to fulfill your days.
You’ve worked hard and now it’s time to relax and live
life to its fullest!
CONSUMER TIPS is provided as a public
service by the Missouri Independent Bankers Association
AND
Community Bank of the Ozarks
P.O. Box 43
Sunrise Beach, MO 65079
(573) 374-5245
1-800-927-4314
www.cbobanker.com
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