Bill Losey Retirement Solutions

A new study released this month reveals that financial New Year’s resolutions are gaining popularity in 2010 as the focus will be more on money due to the economic climate (source: Fidelity Investment):

• 88 percent of those considering a financial resolution said they believe the economic events of the past year will give them impetus to stick to them in 2010
• 7 in 10 people (71percent) hope to increase their confidence in their finances with their resolutions
• 51 percent said that saving money was their primary focus
• 8 in 10 (83 percent) said they are likely to learn more about financial topics in the New Year, with the two most mentioned subjects being setting financial goals (47 percent) and saving for retirement (43 percent)
• As Americans appear to be proactively seeking more financial and retirement education in 2010, retirement strategist and financial coach Bill Losey can reveal to your readers the 2010 financial and retirement resolutions – sound tips targeted to people in their 20’s through 40’s and 50’s through 60’s, allowing anyone, no matter what age, to get on the fast track to financial and retirement security in the new year.

Please review Bill’s resolutions below.

Thank you,

Erin MacDonald-Birnbaum
856-489-8654 x302
erin@smithpublicity.com

Financial/Retirement Resolutions for 2010
By Bill Losey

If the stock market and your declining 401k balance are making you feel like you’ll never be able to fully retire or become financially stable…you’re not alone. As the market is still on a rollercoaster and much is out of your control, there are some important things you SHOULD be doing. The below financial and retirement resolutions are steps you should be aiming for in 2010:

IN YOUR 20’s, 30’s 40’s

1. If you haven’t started already, open an IRA and/or fund a 401k. These are generally the years when it’s toughest to scrape together the cash for investing, but starting young and having decades for tax deferred growth could provide a nice six or seven figure portfolio in retirement. At a minimum, save enough to get your full company match.
2. Since you will likely have 2-4 decades before you’ll need this money, consider investing 70%-80% in equities/stocks. Do not be too conservative with your allocation.
3. Remember that your ability to earn an income is your greatest asset so go back to school, continue your education, network and do your best to make sure your job/company/career offer growth potential to carry you into your 60’s and 70’s. To navigate the employment landscape you will need to be nimble, be constantly learning and continually reinventing yourself to stay employable.
4. Like people in their 50 and 60’s, you too should reduce and pay down your non-deductible debt such as credit cards and auto loans. Try to be debt free, perhaps with your mortgage being the only exception, by the time you retire.
5. Finally, if you haven’t done so already, meet with a qualified estate planning attorney to have basic estate documents drawn up including wills, health care proxies, living wills and powers of attorney. Additionally, make sure you have adequate life, disability, homeowners, and umbrella liability insurance to protect you and your family.

IN YOUR 50’s and 60’s

1. If you haven’t maxed out your 401k/403b contributions at work, you are eligible to take advantage of what is known as the catch-up provision. In essence, if you haven’t saved as much as legally possible every year you’ve been working, you are able to contribute an extra $5,500 per year (over and above the legal limit – $16,500) into your retirement plan in 2010.
2. If you have a spouse, family and assets to protect, I think you should investigate long-term care insurance. Long-term care protects you and your family from the emotional, physical and financial pain that a health issue can have on them. Take advantage of 10-pay plans which allows you to pay the entire cost of the policy off in 10 years, while you still have earned income, a job.
3. Start paying down your non-deductible debt such as credit cards and auto loans. Try to be debt free, perhaps with your mortgage being the only exception, by the time you retire. If you can pay off your mortgage too, more power to you. This can free up a lot of cash flow and keep your expenses low in retirement.
4. Review your investments and asset allocation. Make sure you’re NOT too heavily invested in equities (no more than 50% to 60%) or your own company stock (no more than 10%).
5. Consider accumulating up to three years worth of income in savings, CDs, money markets or treasury bills. This is where you should start taking money from when you retire. I use this “safe-money” benchmark strategy with my retired client so the money they need is in the safest yet lowest yielding investments where their principal is protected. It helps to weather the ups and downs of the stock/bond markets where the rest of their long-term money is allocated and diversified properly.
6. Finally, review your estate plans with an estate planning attorney and consider reducing and eliminating unnecessary insurance coverage to free up cash flow for income in retirement.

TOP TWO STEPS TO MAKE RESOLUTIONS STICK

1. Automate the savings process either directly through payroll deduction or monthly deduction from your checking/savings account.
2. Hire a fee-based advisor to coach you, keep you on track, and keep you accountable for achieving your goals.

About Bill Losey:

Website: www.BillLosey.com