It’s Never Too Late to Put Your Retirement Savings World in Order

Do the current economy, saving for retirement, not saving for retirement and the never-ending litany of financial ‘to-dos’ have you turned upside down? Are you part of the 52% of Americans who have not saved or are not currently saving for their retirement?

If you answered ‘yes’ to either or both questions, you are in luck. Now is always a good time to pick yourself up and begin putting your financial world in order. Currently, many Americans are going through an economic rebuilding of their personal economies. They are in the same situation (or a more challenging one) than the one that you’re in. So, you are definitely not alone.

The good news is that financial planning is a process. I liken it to a turtle’s race. You know that no matter what your financial challenges are -slow and steady wins the race. Many of us get knocked down or knocked back several times during our financial lives. No matter. Figure out where you are and begin or begin again. Remember to always keep going forward. Run the entire race with your eye on the goal. That is what’s important.

Some of the financial basics are:

Budget

• Live within your means –If you can’t pay for it, don’t buy it
• Have a written household budget
• Stick to your written household budget
• Pay off your credit cards ‘in full’ every month (See bullet #1)

Begin saving and keep saving

• Set aside 3 to 6 months of savings for your rainy day(s)
• Invest money using a 401(k), 403(b), IRA, Roth IRA, SEP etc.
  • If available, invest enough to get your full employer match
  • Raise your savings rate every year by at least 1%

It’s okay not to know

• Know what you don’t know
  • No matter where you are with your financial life, when needed seek the advice of professionals 

It is never too late to add some (more) gold to your golden years. And, with ‘all things financial’, now is always the best time to start.

Jane Nowak is a Financial Planner with Kring Financial Management located in Atlanta, Ga. Jane’s practice focuses on Women’s Retirement Planning and Financial Planning for Women. Her articles have been published on line at NASDAQ, Financial Planning Association and Womenetics.com. Follow Jane on Twitter at: http://twitter.com/moneygal2020

How to plan ahead for a long term care need | RetirementRevised

via How to plan ahead for a long term care need | RetirementRevised.

Baby Ka-Boomers:Their Three-Legged Stool for Retirement Income Is Crumbling

The Three Legged Stool Is  Crumbling Under the Weight of the Baby Ka-Boomers

The three-legged stool is the picture that has been used to illustrate the three potential streams of  income that Americans will have when we retire. These three traditional income streams are:

1. Social Security
2. Pension 
3. Personal Savings

Pension

Guess which one is disappearing? (Hint: Pension)  80% of Americans do not have a pension. And, large corporations are not offering pensions to new employees and are freezing the pensions that they do have for currently enrolled workers.

Personal Savings

Now, guess which leg of the stool has been an illusion for many of us? (Hint: Personal Savings) Many Americans can’t or won’t save to set up an emergency fund, let alone save for retirement. That’s why the Federal government recently mandated that company workers be ‘automatically’ enrolled into their company 401(k) unless the employee specifically ‘opts out.’

Social Security

So, with one broken leg and one leg that is an illusion for many, I think it’s safe to say that many of us are thinking that Social Security will be enough to live on while in retirement, right?  If you are thinking that, you are wrong. At best, you should expect Social Security to provide for about 25% – 30% of your retirement income. Depending on you point of view, if you are pessimistic about the future of Social Security, all you’ll have is your own savings -not a pretty picture.

Current Facts About Ka-Boomer Retirement

Remember those pictures about an older, grey- haired couple walking hand in hand down the beach? Those pictures were used to signify our ‘happy’ retirements. For many of us, we’ll need to erase those images completely from our minds. Our ‘retirements’ will include at least some part-time paid work.

Why?

• Americans are saving a meager 3.5% of every dollar 
• We are living longer and have not factored that into our retirement planning
• Medical costs continue to rise
• Low interest rate environment
• We are expecting the stock market to bail us out

So, the bad news is that many “Baby Ka-Boomers” are ill-prepared to fulfill their visions of ‘happy’ financial retirements. And, some of the critical portions of sustaining the ‘older’ Ka-Boomer generation during retirement will fall to our younger workers.

Jane Nowak is a Financial Planner with Kring Financial Management located in Atlanta, Ga. Jane’s practice focuses on Women’s Retirement Planning and Financial Planning for Women. Her articles have been published on line at NASDAQ, Financial Planning Association and Womenetics.com. Follow Jane on Twitter at: http://twitter.com/moneygal2020

Ka-Boomers Have Retirement Funding Chasm, Not Gap

I think that I’ve just heard enough about the Ka-boomers (my name for the baby boomer generation because we are like a ticking time bomb) retirement shortfalls being referred to as a retirement funding gap. For many Americans, their retirement savings shortfall is not a gap it is an absolute and utter chasm! Can you say the size of the Grand Canyon?

Just the Facts

Why do I say that the retirement savings shortfall is a chasm? I will refrain from writing a litany of whys and I will try to limit myself to 3 salient points.
• 47% of Americans do not know how much money they will need to support themselves in retirement -just dandy! Let’s close our eyes and when we open them maybe the problem will have solved itself. If you don’t know how much you’ll need, how can you know how much to save for retirement?
• The savings rate for America over the last 20 to 30 years has been around 3%-5%.
And, a couple of years ago we even had a negative savings rate. Tell me how can you have a negative savings rate?
Also, how can you fund a decent retirement by saving just a few pennies on the dollar? That is if you even leave it in your retirement account. For some reason, we Americans feel like our necessities include like a fancy cars, speedboats, 4 wheelers, vacations, clothing and more pairs of shoes then a millipede could wear! I digress…
• For those Americans over age 55, 51% have saved less than $50,000. And, 58% have saved less than $100,000. With the median income around $50,000 per year, even $100,000 doesn’t sound like enough to fund a 15 to 20 year retirement for two people.

The Cure

Quit living on credit. Pay you credit cards in full every month. Defer gratification. Curb your need ‘to have to have’ more things. And, give the consumer (you) a rest from excessive spending.

Take care of your personal economy. Let another segment of the economy pull us out of recession. I think the American consumer needs to fuel his/her own financial security by saving more, more, more.

Jane Nowak is a Financial Planner with Kring Financial Management located in Atlanta, Ga. Jane’s practice focuses on Women’s Retirement Planning and Financial Planning for Women. Her articles have been published on line at NASDAQ, Financial Planning Association and Womenetics.com. Follow Jane on Twitter at: http://twitter.com/moneygal2020