BELLEVUE, Wash.–(BUSINESS WIRE)– Tax season is just around the corner – the perfect time to review your financial portfolio and make sure your retirement plans are on track.
In a recent survey of Puget Sound-area residents, nearly 63 percent of pre-retirees (age 45 and older) said they would not or were not sure they could retire at their ideal age.1 In the same survey commissioned by Symetra Financial, Gallagher Benefit Services, Inc., and Senior Services, 42 percent of pre-retirees said they have not calculated how much income they will need to last throughout their lifetimes.
“While there are signs of economic recovery in the region, sticking to a plan, managing personal expenses and saving for retirement should be an ongoing priority, as market conditions can change quickly,” said Bridget Burgess, CFP, president of Symetra Investment Services and board chair of the Puget Sound Financial Planning Association. “Retirement is meant to be enjoyed, not feared due to financial concerns. There are basic steps each of us can take to achieve a secure retirement.”
1. Create a plan.
Begin by calculating what income you will need in retirement.Experts say that many retirees require at least 80 percent of their pre-retirement income to live comfortably. Estimate basic living costs and other expenses that may come into play, such as traveling, a new hobby, increased medical bills and, of course, inflation. Also estimate potential income from rental properties, other investments, inheritances, pensions, etc., and incorporate these estimates into your financial plan.
2. Manage and reduce your expenses now, before retirement.
To help offset future costs, manage expenses before retiring. One of the best ways is to cut down credit-card debt. The average household’s outstanding credit-card debt was $10,679 at the end of 2008.2 When regular paychecks come to an end, large credit card bills can be a real burden.
3. Diversify your investment portfolio.
After you decide how much you need in retirement and you’ve reduced expenses, develop a financial goal and begin investing now.
As we’ve seen in the recent economic downturn, investing in securities incurs market risk. The best way to help cushion a portfolio against market volatility is to diversify – to divide your money among different types of investments, also known as asset allocation. Allocating assets among various investments and across investment styles is important because each investment responds differently to economic events and other market conditions. Diversification does not, however, assure a profit or prevent a loss.
4. Continually evaluate your investments.
Changes in family, health and job benefits can affect how much income you will need for retirement. Make the most of the financial plan by reviewing investments regularly. Ensure they are still appropriate for your goals, timeline and risk tolerance. These life events also trigger the need for an insurance review to make sure your life insurance coverage is in line with changing needs.
5. Consider creating a guaranteed income stream during retirement.
Creating a stream of guaranteed income, such as an income annuity, can fulfill income needs during retirement, especially if you don’t have a pension. People are living longer, and the prospect of outliving your lifetime supply of money is very real. Using a portion of your retirement portfolio for guaranteed income will help ensure that your money lasts as long as you do. This guaranteed income is based on the claims-paying ability of the underlying insurance company sponsoring the annuity.
For more information, visit http://media.symetra.com/retirementtips.
About Symetra Financial
Symetra Financial Corporation (NYSE:SYA) is a diversified financial services company based in Bellevue, Wash. In business since 1957, Symetra provides employee benefits, annuities and life insurance through a national network of benefits consultants, financial institutions and independent agents and advisors. For more information about Symetra, visit www.symetra.com.
1 Retirement Planning and Savings Survey, http://media.symetra.com/images/20011/RetirementAbstract.pdf
2 Nilson Report, April 2009
Jennifer Whitman, 425-256-5361
Source: Symetra Financial Corporation