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Retirement Planning > Retirement Investing

Retirement planning made simple

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Many people looking towards retirement are finding how much things have changed through the years. Clients’ time horizon until retirement is just one of the factors they need to review along with estimating how much they may need to retire.

Comparing today’s retirement outlook with that of your client’s parents and grandparents helps with a long-view of their upcoming retirement. People generally didn’t “job hop” 20 – 30 years ago as they do today. Staying with the same employer was the traditional way their parents built a hefty pension and health benefits to have a financially secure retirement, along with Medicare and Social Security.

With shorter life expectancies health care costs may not have been seen as much of a concern as it is in today’s environment. Changing jobs is more common than not in today’s’ business environment, either because of the economy or as a by-product of technology advances that has changed the traditional business models.

Consequently many “Baby Boomers” are finding their retirement benefits lacking or void of the previous “guaranteed” from previous generations. Health care and long-term care costs seem to continue to create havoc in retirement planning, depending on what part of the country clients choose to retire in.

Lifestyle choices are also impacting retirement planning with many caring for grandchildren or going back to school, starting a business or volunteering. With people living longer finances may have to last as long in retirement as many careers endured.

How Much Do Clients Need to Retire On

History shows that inflation has varied considerably through the years, with recent average hovering around 2.9%, with historical average of 4%, however inflation can spike or dip substantially. Many financial experts often say people could need between 60% and 80% of their final working year’s salary each year during retirement.

When considering the lifestyle they want to live a need to cut back expenses or continue to work, at least part time are factors many are now considering. Setting a reasonable savings goal and viewing extra income as a bonus could be prudent.

All clients should go to and get their earning history and estimated Social Security income to understand their baseline income projection for planning purposes. An average annual benefit is $15,132 for a single person and up to $24,576 for a retired couple. Women, many times, are far less likely than men to receive income from an employment-based pension plan or retirement annuity, while those who may be eligible for pension benefits often receive a smaller annual pension benefit than men. Taking extended periods of time off work, for example to raise a family, affects Social Security and pension benefits, sometimes substantially in retirement.

So about three months before your client’s birthday they should receive a statement estimating their Social Security benefits. Their employee benefits administrator, if they have a pension plan, should be able to provide an estimate of their annual pension benefit. They should make sure they have been credited for the correct salary and number of working years.


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