Smart Retirement Planning For Every Age

Solid planning and the right safety net will ensure that you enjoy your golden years

a budget. A large portion of the money they lay out is spent on daughter Ashley, who is 2 years old. White suspects that they spend around $1,500 a month on each family member: “The baby has everything—a closet full of toys and clothes. And we eat out a lot.”

The Whites want to have enough money to send Ashley to a top school. So far they’ve saved about $1,000 in savings bonds and a savings account. They plan to open a 529 plan for her soon. White believes the temporary pain of cutting back will be worth the future gain. He’s estimating that the franchise will generate about $15,000 in positive cash flow a month, $5,000 of which can be socked away for future real estate transactions. “We want to get into real estate developing,” says White. Between his wife’s construction know-how and his real estate finesse, they plan to build an empire for their retirement by buying, building, rehabilitating, reselling, and keeping properties.

White is optimistic about the family’s future: “We’re going to be alright. I see myself semi-active in retirement, spending 20 to 30 hours a week handling my financial affairs and managing my companies. And as for the rest—relaxing, traveling, golfing, and exercising.”

Finances in your 30s:
The Whites aren’t alone in trying to get it together in their 30s. This is a time when people start to get serious about retirement. Their 20s have flown by and, after some time in the workplace, they are certain of one thing: They don’t want to work the rest of their lives. “One of the first questions you should ask yourself at this point is what you need to do differently,” says Jocelyn D. Wright, a financial adviser at Wealth Development Strategies L.P. in Houston. It could be that you need to stop spending haphazardly or go back to school to put yourself in a position to get a better job. There could be any number of things you need to do to change course.

Do a reality check. Self-assessment is important. Once you enter your 30s, it’s important to have greater clarity about your goals, taking into account your current income and asset base. You may be married at this point and it is equally important to make sure you and your spouse don’t have competing goals, says Wright. “Talk openly, before marriage, about your goals, how much debt each of you have, and how you will manage the money—separately, a joint account, or a combination of the two?”

Catch up on saving. When it comes to retirement, it’s about catching up. A career change, marriage, the birth of a child, or other seen and unforeseen events may occur that may set you back financially. When this happens, set new spending controls, says Wright. For instance, if you’ve started your own business, establish a retirement plan in order to set aside tax-deductible, tax-deferred monies. Start with an IRA, which has an annual contribution limit of $4,000. As your business grows, consider other

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