SEPTEMBER 2013
THE BERNARDS-RIDGE CONNECTION
PAGE 43
Retirement Readiness: Time for A Financial Checkup?
By Chris Schi9er, CPA and Peter Needham, CFP®
AEPG® Wealth Strategies
As Anancial planners one of our most important objectives is planning for our clients’
retirement. Here are some fundamental factors to consider as you prepare for retirement.
Will I have enough for retirement?
Start Saving Today.
The longer you wait, the harder it will be. As a general rule of thumb,
people in their 20’s should try to save 10% of their gross income. More is required the longer
saving is delayed. Even if you put a little bit away today, the power of compounding will
build your nest egg. Many of us tend to spend what Bows through our paychecks. By put-
ting your retirement savings on “auto pilot” through regular contributions to a retirement
plan such as a 401(k), you can avoid this temptation.
Save Pretax.
Pre-tax savings will reduce the amounts payable to the IRS, state and, possibly,
city. Familiarize yourself with the maximum allowable deductions for 401(k), 403(b) and IRA,
and take advantage of pretax savings where you can.
Save Post-tax.
Post-tax savings into a Roth 401(k) or an IRA is often attractive, especially for
younger savers at lower income levels who can take advantage of compounded growth over
many years.
Invest Wisely.
You need a portfolio that you are comfortable with. The number of years until
your retirement and your risk tolerance are two major factors in how to deploy your invest-
ments. As Anancial planners, we utilize a risk tolerance survey to determine your tolerance
for risk. Market timing and “big bets” are dangerous.
What Lifestyle Do YouWant in Retirement?
In retirement you may be able to downsize and
move to a location with a lower cost of living. Regardless of your current income level, you
need to plan for the lifestyle you desire in retirement. You don’t want to outlive your nest
egg when you do retire with an “outsized lifestyle” and outlive your means.
Will I Outlive My Money?
“
Longevity risk” increases as people are living longer with increased medical expenses while
not su@ciently saving for their retirement. There are fundamental factors that should be
considered to ensure that you don’t outlive your money.
Life Expectancy and Family Longevity:
The current average life expectancy is 76 for men
and 81 for women. Your personal health and family longevity are factors determining
whether you will surpass the average life expectancy.
Spending Level in Retirement:
While one should enjoy retirement with travel, family and
friends, it is important to know that your income is reduced in retirement. Your expenses
need to be carefully budgeted against your remaining sources of income such as investment
portfolio interest and dividends, social security, and other sources. Any shortfalls will require
withdrawing funds from your nest egg. The withdrawal rate should be carefully monitored
to ensure your nest egg is not depleted.
In<ation
may signiAcantly impact future spending by increasing your expenses beyond
your original budget. As a result, you may have to tap into your nest egg to make up the
di?erence.
Medical Care:
Healthcare costs are on the rise, and Medicare is projected to cover approxi-
mately half of retirees’ expenses.
Investment Rate of Return
is inBuenced by a number of factors over time. It is important
that a portfolio be constructed to last across multiple market cycles.
Retirement Su:ciency Analysis:
There are a number of methods to project savings and
cash Bows before and during retirement. It is important to utilize di?erent methodologies
and multiple scenarios to “stress test” a retirement plan. Everyone’s situation is unique and
there are many variables that should be considered to help you maximize your retirement
savings and preserve your nest egg in retirement.
If you don’t know where to begin or ;nd it di:cult to start, contact us to arrange for an
introductory meeting at no cost to you.
Contact Suzanne Morella
908.757.5600
or
smorella@aepg.com
We Cordially Invite You to Attend
Our Fall Financial Education Series
Social Security Maximization
Wednesday, September 18th 6:00 to 7:30pm
Retirement Sufficiency Planning
Wednesday, October 2nd 6:00 to 7:30pm
Retirement Sufficiency Planning
Wednesday, October 16th 6:00 to 7:30pm
Eldercare Planning
Wednesday, October 30th 6:00 to 7:30pm
Year End Tax Planning
Wednesday, November 6th 6:00 to 7:30pm
AEPG
®
Wealth Strategies
25
Independence Boulevard, Suite 102
Warren, NJ 07059
Conveniently located right off of Route 78 (Exit 33)
Food and Beverages will be served
Please RSVP to Suzanne Morella
908.757.5600
or
smorella@aepg.com
Or call to schedule a one-on-one review at no cost to you
These Seminars Will Address These Questions and More:
•
Will I have enough to live on in retirement?
•
How can I maximize my retirement savings?
•
How can I maximize my social security benefits?
•
Will eldercare issues impact my retirement?
About AEPG® Wealth Strategies:
For over 30 years, AEPGWealth Strategies clients have beneAtted from personalized, com-
prehensive wealth management and Anancial advisory services. Our mission is to educate,
guide and protect our clients through life events. Our services to individuals, physicians,
business owners and corporations include: Financial Planning, Investment Management,
Individual and Group Insurance, 401(k) and Retirement Plan Solutions. If you are a physi-
cian, please contact us to learn about our specialized services for doctors. AEPG is a SEC
registered investment adviser.
Please visit our website to learn more about us:
www.aepg.com
Consistently Good Advice in a
Constantly Changing World
®
The information, analysis, and opinions expressed herein are for general and educational
purposes only. This article is not a substitute for personalized advice from AEPG Wealth
Strategies and nothing contained in this presentation is intended to constitute legal, tax,
accounting, securities, or investment advice, nor an opinion regarding the appropriateness
of any investment, nor a solicitation of any type. This information is current only as of the
date on which it was sent. The statements and opinions expressed are, however, subject to
change without notice based on market and other conditions.
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