Retire On Track

Retire On Track LLC.

In the years since World War II, the United States has seen an incredible growth in affluence as a nation.  But, most Americans are still not investing enough toward their retirement.  From author Ron Blue's book Master Your Money "... In the world's most affluent society in all of history very, very few individuals ever achieve a position of being able to live off the resources they have accumulated.  The vast majority are dependent on government, relatives, charity, or they must continue to work in order to have enough income to meet their needs."

Mr. Blue's statement has been confirmed by a study conducted by the U.S. Department of Commerce - the devastating reality is 75 percent of Americans rely on Social Security, family and friends as their only sources of income. Additionally, the Department of Commerce's study found that, sadly, only 5 percent of Americans have saved and invested enough money to be financially independent at age 65.  All is not lost. You can change your retirement future.

Your secure retirement future starts with a solid financial plan. Always keep in mind that the earlier you start planning the better, but it is never too late to start planning for your retirement. Start with the creation of a complete financial plan, which includes:

  1. Determination of your ideal asset allocation,
  2. Consideration of the impact of management fee has on your portfolio,
  3. Management of tax liability,
  4. The impact of inflation has on your portfolio, and
  5. Calculation of the appropriate withdrawal rate.

(1)    You can help determine your ideal asset allocation by taking a short quiz found here.

(2)    Through use of Bob's free retirement calculator, you can view the impact that management fees have on your plan.  Usually, management fees account for roughly a one percent loss of your portfolio each year. One percent may not sound like an insignificant amount, until you consider that on a $500,000 portfolio, that means you will have to make $5,000 a year to just breakeven.

(3)    You can manage your tax liability by first investing in tax-deferred and tax-free investments.  These include - 401(k)s, 403(b)s, 457s, IRAs, municipal bonds, and annuities (use extreme caution here - most are not worth the tax savings benefits they claim).

(4)    Do not underestimate the withering affects of inflation on your purchasing power.  Historically, the inflation rate has been about 3 percent.  Thus, with just the average inflation rate of 3 percent, your costs double every twenty-four years.   You can expect to spend as much time in retirement as you did when you worked.  Therefore, you can expect to see your expenses double during your retirement years.  Ouch.

(5)    Calculation of your appropriate withdrawal rate is extremely important.  You need to make sure you follow the government's minimum distribution requirements for retirement accounts.  This is another item that can easily be projected with the help of a good retirement calculator 

You are the best person to manage your money.  But, that does not mean you have to depend solely on your own financial talents.  Even the most seasoned investors need some professional retirement planning help.  To start building a financial plan, try a FREE subscription to Financial Tips & Hints

How do I keep up-to-date on the latest news impacting my retirement?

Try Financial Tips & Hints newsletter along with Bob's free retirement calculator - The retirement calculator was featured on 'The Saturday Early Show' by CBS' top financial analyst just click the blue button below. Take control and reach your retirement goals and connect to a trusted financial advisor near you.


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