how to afford a long, happy retirement
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How to Afford a Long, Happy Retirement. Advice from CPAs. Procrastination…. There’s only one side to waiting and that’s the downside Don’t hold off planning for your retirement: it cannot wait! Put your money where it counts--in savings!. Advocate for your future financial security - PowerPoint PPT PresentationTRANSCRIPT
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How to Afford aLong, Happy Retirement
Advice from CPAs
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Procrastination…
• There’s only one side to waiting and that’s the downside– Don’t hold off planning for your retirement:
it cannot wait!– Put your money where it counts--in savings!
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Making the Case
• Advocate for your future financial security
• Understand why you have to start NOW
• Plan to save– It is NEVER too
early– It is NEVER too
late
• Get an advisor to pinpoint strategies
• Make the retirement of your hopes the retirement of your reality
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Why You Have to Take Charge
• Hard to ignore reasons to start saving for your retirement now– You will need 2/3 to 3/4 of current income for
financial stability during retirement years– If you start saving in your 20’s or 30’s you can
possibly be a millionaire by retirement age
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A Successful Retirement
• Step 1: Pinpoint your major sources of retirement income
• Step 2: Take a realistic look at your retirement costs and goals
• Step 3: Close the gap between income and goals
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Pinpoint Your Major Sources of Retirement Income
• Inventory all of your anticipated sources of retirement income
• Consider which ones you have, which ones you don’t, and which ones you should consider adding
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Pinpoint Your Major Sources of Retirement Income
• Social Security– Provides retirement income and basic financial
support• Employer Pension Plan
– Retirement income - must be fully vested with a company to make this worthwhile
• Employee Contribution Plans (401K)– Highly effective approach to putting money
away for retirement (403B)
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Pinpoint Your Major Sources of Retirement Income
• IRAs– Tax-advantage retirement option that can be
set up through your banker• Traditional IRAs • Roth IRAs
– Consult a CPA to learn more about which IRA is best for your retirement planning
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Pinpoint Your Major Sources of Retirement Income
• Private Investments• Consider a second career…
– Out of necessity – To pursue a passion
• Look at the tax consequences– Higher tax bracket?– Affect your Social Security?
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Take a Realistic Look at Retirement Costs and Goals
• The operative word here is REALISTIC. You need to be honest with yourself NOW so you are protected from unpleasant surprises when entering retirement.
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Take a Realistic Look at Retirement Costs and Goals
• Questions to consider when evaluating your retirement expenses and financial responsibilities– Will you keep or sell your current home? Do you
have a mortgage?– Do you want to duplicate your current lifestyle?– Will you be paying to educate children?– Which of your medical expenses will be covered?– Do you plan to travel?
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Take a Realistic Look at Retirement Costs and Goals
• Be sure to take inflation into account when calculating your retirement expenses
• Most pension plans and Social Security factor in a cost of living increase to account for inflation
• Being on a fixed income as a retiree can be devastating if you don’t plan for inflation
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Close the Gap Between Your Projected Income and Your Retirement Goals
• Turn plans of actions and ideas into reality• There is a gap between your retirement goals
and the money you’ll need to support them• Close the gap and see the results…
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Close the Gap Between Your Projected Income and Your Retirement Goals
• Common excuses for avoiding saving for retirement– I’m too young – It’s too late – I don’t have enough money to put away– There are other expenses
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Close the Gap Between Your Projected Income and Your Retirement Goals
• There are no excuses not to start NOW• One point to attack all arguments – The Power of
100– There is amazing power in putting away $100
a month towards your retirement
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• The Power of 100 – How powerful is it really?– After 5 years earning 6% you’ll have $6,977– After 20 years $46,204– After 30 years $100,452
• It’s NEVER too early and NEVER too late
Close the Gap Between Your Projected Income and Your Retirement Goals
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Close the Gap Between Your Projected Income and Your Retirement Goals
• Consider individual investments
• Investments are proven pivotal in closing the retirement income gap
• Remember to consider– Your current age– Your desired
retirement age– Your tolerance for
risk– Tax implications
now and at retirement
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Close the Gap Between Your Projected Income and Your Retirement Goals
• Tax-Advantaged Retirement Investments– U.S. Treasuries– Municipal Bonds– Annuities
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Close the Gap Between Your Projected Income and Your Retirement Goals
• Taxable Retirement Investments– Certificates of Deposit (CDs)– Corporate bonds and stocks
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Beware of Common Pitfalls
• Get rich quick schemes• Over-caution• Not enough diversification• Tapping into your retirement investments
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Protecting Yourself in Retirement• Put aside $100 extra a month• Diversify• Take advantage of anything and everything
your company offers• Use tax advantaged vehicles• Start right NOW