Financial plans key to enjoying retirement

Posted July 19, 2010, at 12:06 a.m.

When are you planning to retire?

You’ll likely get as many different responses as people you ask. Whatever the answers, one trend is clear: The length of time most of us plan to work is longer than we would have guessed just a few years ago.

A survey released in March by the Employee Benefit Research Institute, or EBRI, showed that in 1991, 11 percent of us expected to retire after age 65. The figure rose to 19 percent in 2000; today, fully one-third of us expect to work past age 65.

For many, delaying retirement is one result of the recession. Confidence is rebounding a bit as the economy appears to strengthen, but Americans still wonder whether they will have the funds they will need later in life.

Another finding by EBRI is that nearly two-thirds of workers who earn less than $30,000 a year will run out of money within 10 years of retirement. Of those earning $30,000 to $70,000, one in three will run out of money after 20 years.

Even those making more than $70,000 aren’t exempt; one in 10 won’t have enough money at some point in their post-work years. Of all “early baby boomers” (ages 56-62), fully one-half are at risk of running out of cash after retirement.

Smart consumers are those who plan their purchases; the really smart ones plan all the way to retirement and beyond. The sad truth is that many of us don’t know how well prepared we are (or are not) to deal with general living costs, medical costs and uninsured expenses that can crop up when we least expect.

To get a handle on all this, we urge consumers to take a serious look at their finances and ask themselves some tough questions: How well prepared am I to retire? Can I retire when I want to? Will my resources be enough to meet my needs?

For do-it-yourselfers, a simple worksheet may give you the answers you need. Choose To Save is a national program promoting financial security. It promotes financial planning and offers consumers several handy tools to plan their strategy.

At its website, www.choosetosave.org, you will find a planning worksheet called Ballpark E$timate. You can use the interactive version, or print out a worksheet and keep your information offline, whichever meets your comfort level. We like the worksheet approach since it helps you ask yourself the right questions while giving you a look at the bottom line.

For those with more complicated finances or who may be within 10 years of retirement, it may make sense to hire a financial consultant. The State of Maine’s Office of Securities (1-877-624-8551 or www.investors.maine.gov) licenses investment advisers and investment adviser representatives; make sure an adviser is licensed before giving them your financial information.

Do some checking before you accept an invitation to dinner from people who may be more interested in earning fees than helping you create workable plans. There’s a lot at stake, so make plans that can help take the guesswork out of your financial future.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s membership-funded, nonprofit consumer organization. Individual and business memberships are available at modest rates. For assistance with consumer-related issues, including consumer fraud and identity theft, or for more information, write: Consumer Forum, P.O. Box 486, Brewer 04412, or go to http://necontact.wordpress.com.

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