autumnfinances

People close to retirement need more sophisticated planning

and older also need to consider how their expenses will change. You can expect work-related expenses-commuting, professional clothes, etc.-to drop. However, travel and entertainment expenses will rise considerably, as will healthcare costs.

The general rule of thumb is that retirees need about 80% of their pre-retirement income to live at a level to which they’ve grown accustomed.

Finally, people in their 50s should also be certain to have a durable power of attorney and a living will. It’s important to review your will annually, both to check for mistakes that may have been made in any codicil, or change, and to make sure that it remains up to date in terms of beneficiaries listed and other matters that express your final wishes.

With some smart planning you can retire in comfort and with peace of mind. So don’t leave it to chance and just hope that everything will work out. Establish firm financial goals, then work to achieve them. “I’ve never met anyone who was on track to meet their goals if they haven’t done some kind of financial planning,” Grady asserts. Saving money for retirement, or any other goal, “is just like taking a vacation: you don’t just jump in the car and start driving south. But with saving, most people don’t have an end in mind,” Grady adds.

Cassel, the early retiree in Florida, agrees that it’s crucial to set your goals-and the sooner, the better. “Young people don’t think of retirement,” she says. “But it’s never too early and you’re never too young to start planning.”

ASSET ALLOCATION – 50S & 60S
Female o married o 57 o early retiree o former provost o lived in Philadelphia o now retired in Pompano Beach, Florida
She is still relatively young. At her age she could spend more years in retirement than she worked. She still needs a significant growth component in her portfolio. An investment of 60% bonds would also provide supplemental income if it is desired. Forty percent should be strategically invested in stocks. Large cap stocks like GE, AT&T and IBM are worth investing in.
Source: Mark spradley, Legg Mason Wood Walker

TO-DO LIST
Prepare for retirement by moving some of your assets into less risky investments
Review your financial plan and determine if you have enough money for retirement
Make sure you have adequate insurance, such as disability and medical

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