Retirement Planning Tips

  • By:  L. Lori Irwin
No matter who we are, how we manage our daily financial decisions determines whether we survive or thrive in our retirement years. Knowing whom to trust for financial wisdom can be intimidating and make us feel vulnerable.

Women in particular have special needs when it comes to planning for retirement, so we recently asked L. Lori Irwin, CFP®, community outreach director of Financial Planning Association (FPA) of Hampton Roads, a few questions about what women need to know as they plan for retirement.

Q: How much should I save for retirement?

A: Women are often so busy investing in their family they don’t prioritize saving for their retirement needs. The amount that needs to be set aside depends on factors like how much time you have until retirement, what other sources of income you have in retirement, your expected standard of living, inflation, your health, and expected longevity.

Time is your best friend when it comes to investing for retirement. The more time you have to save, the less it will hurt your monthly cash flow. If you have not saved in your early years, there is no time like the present to begin and take advantage of investment growth to help you meet retirement needs.

Q: Where should I invest my retirement money?

A: Take advantage of employer retirement plans that offer tax-advantaged retirement savings. Some employers even match a portion of retirement savings giving you an added boost to funding retirement. If you are saving outside your place of employment, consider an IRA or Roth IRA account through a reputable provider.

Within your investment account, you should select investments that are both diversified and appropriate for your risk profile. To decide what investments are best for you, begin by taking advantage of any consultations offered by your employer’s plan provider. If you do not have employer provided resources or have questions specific to your special circumstances, Financial Planning Association offers a “find a planner” tool (www.plannersearch.org) to help connect to financial advisors with the highest standard of ethics.

Q: How much will I receive in Social Security benefits?

A: Social Security provides an annual statement on their website detailing your available benefits in retirement; it is a great starting place. Your Social Security benefit is reduced if you take your monthly payment prior to your full retirement age. For people born between 1943 and 1960, that age will be somewhere between 66 and 67 years old. While you can draw reduced benefits as early as age 62, your benefit can also be reduced if your earnings exceed $15,720 for 2015. You can delay drawing from Social Security and allow your benefit to grow until age 70. For most people Social Security will not offer sufficient resources to fund your lifestyle in retirement, but it is a nice supplement to your retirement savings.

Q: Should my investments change as I get older?

A: As we age, our time available to invest grows shorter. Because we may live many years into retirement, we do not want to abandon investing, but we should migrate a larger portion of our investments to less risk and more liquidity as we begin to draw on our retirement accounts. A good advisor can reduce the stress of managing investments in retirement years and free you up to enjoy the fruits of your labor.

Q: How can I find good financial advice?

A: The Financial Planning Association is organized to promote the use of Certified Financial Planner™ professionals. Certified Financial Planner™ professionals complete a rigorous education and certification process, maintain ongoing continuing education, and maintain the highest ethical standard available: the fiduciary standard.

FPA has partnered with the City of Virginia Beach to offer free one-on-one consultations and educational workshops at Virginia Beach’s 5th Annual Financial Planning Day on November 7th, 2015 at the Virginia Beach Convention Center. Many local CFP® professionals will volunteer their time with no strings attached. Nationally, more than 20 cities are offering similar events thanks to sponsorship from the Foundation for Financial Planning, the CFP Board of Standards, Financial Planning Association, and the U.S. Conference of Mayors. To register for this free event, visit www.vbgov.com/fpd.

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