Retirement strategies

Plans help address the changing concept of retirement

The concept of retirement is changing. And so are the ways that people prepare for it. For some, retirement means lots of leisure time to pursue hobbies and interests. For others it means a change to part time work, and still others will spend their new found free time with family members or as a volunteer in the community.

Whatever your plans for retirement may be, you can prepare financially for what could be the most rewarding part of your life.

Three retirement savers
Sid Saver, 25, has a long way to go before his golden years. With an income of $25,000 in the early stages of his career, Sid's working with an eye to the future. If Sid defers just 4.7 percent of his annual income to his 401(k), he could retire with 80 percent of his annual salary*, adjusted for inflation. And, Sid's tolerance for risk is high, given his long time horizon. He'll allocate his money into an aggressive portfolio made up of equity investments.

Debra Due Diligence, 35, hasn't started contributing to her pension plan, opting instead to save $25,000 in an IRA plan, and that may help offset possible foregone earnings. She'll have to put more than 12.1 percent away in order to enjoy 80 percent* of her $35,000 income at retirement. Deb will put her money into a moderately aggressive portfolio with 20 percent in fixed income and 80 percent in equity.

Pete Procrastinator has waited even longer. At age 48, he's earning $50,000 per year as an editor for a small publishing company. But he has only saved $5,000 in an IRA. Pete would have to save more than 30 percent of his before-tax income in order to retire with just 80 percent* of his current income. That's more than the law allows, so Pete would have to use another savings vehicle, as well. Pete's not too worried, though. He plans to continue working part time after age 65, and will invest 12 percent into a moderate portfolio, with 40 percent of funds going to a fixed income group and 60 percent going to an equity group.

No matter where you are in your career, a retirement program offers a wide range of investment options.

The most important thing you need to do is use it. Here's a review of the three hypothetical retirement examples:

*Assumes a 3.5 percent inflation rate, investment growth of eight percent before and six percent after retirement, no employer-contribution pension plan and standard calculated Social Security income. These are hypothetical examples for illustrative purposes only and are not indicative of any particular investment.

Developing a strategy for a financially secure retirement is no simple task. That's why an experienced professional's knowledge and objectivity can make this important challenge more manageable.

Securities and Investment Advisory Services are offered through:
Securian Financial Services, Inc.
400 Robert Street North, St. Paul, MN 55101-2098
Securities Dealer, Member FINRA/SIPC
A Registered Investment Advisor
1-888-237-1838

» Return to top