Wednesday, January 2, 2013

Retirement planning in a time of uncertainty

Women tell me all the time that they don't have enough saved for retirement and expect that they never will be able to retire. With that they turn to other topics...out of sight, out of mind.
It is never too late to save for retirement if you resolve to do it.
Retirement planning is really a combination of several elements - reducing your debt, cutting living expenses and chucking as much money as possible into tax-deferred savings programs such as a 401(k) or IRA or a tax-free Roth IRA. Don't count on any one else to do this.
This week I learned of a woman, age 70, who is splitting with her husband after 40-plus years of marriage.The separation is his idea. She's not worked out of the house for most of that time. If it comes to it... what will life on her own look like financially? She doesn't really know.
Ball park planning for retirement (or being on your own) is not a big deal. Give yourself an hour to get started. Go to Social Security and find out what your monthly benefit will be if you start drwaing at age 66, 67 or 70. Look at your savings, where is it invested and how much it will produce in dividends and interest a year. That's money you can live on without tapping the principle.
Can you work part-time? Will you inherit anything from an elderly parent?
Add all this up and you've got a pretty clear idea what your financial life in retirement or semi-retirement will look like.
Michelle Singletary, among my favorite money columnists, writes in a recent colukmn about how disconnected we are when it comes to long-range financial planning. Maybe it's because few of us think we earn enough money to worry about it.
"It's worth setting New Year's resolutions for your financial life," Singletary says. "If you are not happy about how you handle your money, make a change. It's also not enough to just focus on one area such as getting out of debt or starting the emergency fund. Your financial New Year's resolution should entail looking at getting your financial house in order," she said.
Singletary suggests that we should think about financial planning as we might think about getting a personal trainer. Find someone who is there to coach us and encourage us to stick with a routine of saving, managing and planning. There are plenty of fee-based advisers eager to serve, if you don't think you can do it alone. Here at I shared 10 questions to ask when choosing a financial planner.
I've pretty much been a self-starter because I have a mother who trained me from age 5 to think about the long term. The $10 Christmas check from grandma went into my college savings fund. The money I received from selling my 4-H steers at market went into the same fund. I came out of college debt-free with a good understanding for the power of long-term planning and the rewards of investing. Thanks mom.
Now that we've avoided the fiscal cliff, let's all get started with planning our financial futures.
"In periods of financial uncertainty a financial plan can be the basis of sound personal financial management," says Roger Wohlner writing at Now that we have a tax bill, we can look at income strategies, estate planning and rebalancing investments.
If you visualize the financial future that you want, you are much more likely to get there.
Additional helpful Web sites:
Want to Retire, Ever? click here.
5 Retirement Planning Tips for Single Women, click here.
"The Single Woman's Guide to Retirement Planning," click here.

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