Tips for a Secure Retirement

by Bill Reddy, BS, MS, LAc

Time seems to be accelerating, don’t you think? Twenty-five years old seems to be yesterday. For those of you who are consistently contributing to your 401K or individual retirement account (IRA), I commend you, but still recommend you discuss your retirement goals with a financial advisor. For those of you who are NOT contributing to an IRA, I strongly suggest you waste no time in getting it started immediately.

My sister has a spotty employment history. She’s 44 years old and has roughly $40K in her retirement account and is considerably behind the power curve. A lot of people would agree that $250,000 is a significant sum of money set aside for retirement, but before we pop the champagne corks let’s do the math. This amount will provide an income of $50,000 per year for five years. Uh-Oh. You plan on living longer than 5 years after retirement?

You’re not alone. The average American today lives to the ripe old age of 78, (source: www.cdc.gov) and you’re a healthcare professional, which puts you in the upper reaches of that statistic. Your choices are to hold off retirement until your mid-to-late 70s…or start saving early. If your previous occupation was in corporate America, you’ve been getting funds matched by your employer (free money!)

Now you’re probably on your own and must consider your financial future now rather than later. The beauty of talking with a financial advisor is that they will get an idea of what your retirement desires are in today’s dollars (such as $50K per year income), the age you’d like to retire, and how long you think you’ll live. Based on that information, they’ll “guesstimate” the annual inflation rates and average return on investment to project a $50K income and work backward to identify a monthly contribution required for you.

There are a myriad of savings options from traditional IRAs to SEP and ROTH IRAs and simple IRAs to 401Ks and 403Bs. Your financial advisor will walk you through your options describing the tax benefits and investment strategies with regard to where you are in life and the level of risk you’re willing to take. Words to live by are “Save early and often.” Set up an automatic withdrawal from your bank account with the largest sum you can live without at this time. Too many people put off thinking about retirement planning until its too late. Don’t delay. IRAhelp.com is a great website to help you navigate your way through this. Investment options and websites such as www.mint.com and www.wesabe.com can assist you in budgeting and they’re free. And remember, the foundation for any financial plan is a budget.