Plan Your Way to a Secure Retirement

With life expectancy in the United States currently at 78 years of age, people are living longer than they ever have before. In addition, Social Security benefits are expected to be significantly reduced in years to come due to rising costs of medical technology and increased longevity—there's simply more funds going out than coming in. That's why a solid financial plan is essential to having all you want during your retirement years.

What Do You Want in Retirement?

Whether you want to relax, travel, play golf or simply live a comfortable life without having to worry about money, you'll have to create a retirement plan that will help you meet your goals. The first step is to identify your goals and determine how you want to live your life upon retiring. You'll also need to figure out how much this lifestyle will cost and what you need to save to achieve it.

Some factors to consider are:

• When you want to retire
• How many years you expect to live in retirement
• What you want to do in retirement
• The number of years you have to save
• What monthly income you'll need to maintain your desired lifestyle
• How you will achieve your required income

Now You Know What You Want. How Do You Get There?

Saving for retirement is a lifelong commitment. It takes patience, consistency, sacrifice and know-how. The most effective way to increase your retirement dollars is to create a plan. Your plan should include strategies based on the factors mentioned above. There are many financial products available in retirement planning, so you'll need to gain a reasonable amount of knowledge about the options available to you and choose products that best suit your situation and goals.

Some of these options may include:

401(k), 403(b) and 457 Plans: These are employer-sponsored plans where contributions are deducted from your paycheck on a pre-tax basis, thereby lowering your taxable income. Because of the significant tax advantages and potential employer contributions (many employers match a percentage of your contributions), you should participate in an employer-sponsored retirement plan if one is available to you.

IRAs: If you earn compensation and are under age 70 ½ you can most likely contribute to an Individual Retirement Account (IRA). There are a number of different types of IRAs, which may be either self-provided or employer-provided plans. Some self-provided plans include the Traditional and Roth IRA. Traditional IRAs offer tax-deferred savings, while the Roth IRA offers tax-free withdrawals. There are also SIMPLE and SEP IRAs that allow business owners to provide retirement benefits for the business owner and their employees.

Stocks, Bonds and Mutual Funds: A stock is a small piece of ownership in a company. When the company does well, the stock's value will usually rise. On the flip side, when it falters, the stock usually does too. Stocks are known as "equities" or "shares," and are considered riskier investments than bonds. A bond is a fixed-income investment in which an investor loans money to a company or government entity. When you buy a bond, the issuer agrees to pay interest and return the principal back to you after a certain period of time. A mutual fund is usually a combination of stocks, bonds and/or cash that is professionally overseen by a fund manager. Rather than researching many individual stocks yourself, you can invest in one or more mutual funds to be diversified into many investments. Mutual funds are intended to be long-term investments and are not meant to be traded on a frequent basis.

Money Markets and Share Accounts: These are considered the "safest" accounts since they offer low-interest rates and a guaranteed rate of return. Unfortunately, they may or may not keep up with inflation. If this is the case, after taxes you may be able to buy less with your money when you retire than you can today. These accounts are not usually recommended for retirement savings.

Need Help Building Your Plan? We Can Help.

Retirement planning can get complicated. Consider calling a professional to review your goals, income potential and the retirement tools available to you. Financial planners can help you calculate the amount you need to save each month and determine.