For some of us, retiring may seem a long way off but it is never too soon to start planning. Planning for retirement is getting more and more difficult. People are living longer, which means we need retirement income over a longer period. Also, as the talks continue in Washington about the budget deficit, social security benefits and the retirement age are likely to get modified. In addition, the markets have not been kind over the last several years to our retirement accounts. So what do we do? If you will be relying on social security as your primary source of income in retirement, educate yourself on social security benefits and how they work. There are many nuances that are not commonly known. Stay current on the changes that come out of Washington and modify your retirement plans accordingly. If your employer offers a retirement plan, contribute what you can to the plan; at a minimum contribute up to what your employer will match. Understand what tools your plan sponsor offers to assist you with managing your retirement plan. Often there is an investment advisor that can review your investment selections and allocations with you. They can also help you understand how much you need to save to support a certain income level at retirement. Said another way, be proactive, don’t just close your eyes and hope everything will work out.
By Christine Brueser, CPA