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Medallion Financial Group

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There’s an old saying, “The best time to plant an oak tree was 20 years ago.” Unfortunately, 20 years has passed, so the next best time to plant an oak tree is today.

Poor Planning and a Poor Attitude

We recently had a visit from a 58-year-old gentleman who had been through a nasty divorce that left him broke. However, he did have a very high-paying job. He told us that if he really tightened his belt, he could save $1,000 a month toward his retirement at 65. We did some fast calculations and said,

“Good, assuming a 3% annual return, by the time you retire you will have about $93,342. That will provide $2800 dollars a year in extra retirement income for the rest of your life.”

“Is that all,” he declared, “just $2800 a year? It’s not even worth the effort! To heck with it, I’ll just have a good time now and live on Social Security when the time comes.”

Folks, many of us have fallen for that attitude in some subliminal way or another. Don’t fall into that trap. Your Social Security alone may not be sufficient. Save now and save often.

Statistically, you could be retired for the same number of years that you worked. You do not want the last third of your life to be spent in poverty due to poor planning.

Let’s look at this month’s question, which a reader sent to us sometime back:

Hi Dan and John:

I am a Seattle, Washington, resident turning 50 next year. My husband and I have not prepared for retirement and are curious about what lies ahead. We have been reading senior publications, and we can hardly imagine that we are already at this place in life. My husband has 25 years on the job and is considering retiring in three to five years.

We have four children, but only the 17-year-old is still living at home. I have been a stay at home mother and haven’t worked for years. However, for the past several years I have attended University of Washington and will graduate next year with my B.A. Then, I plan to join the workforce. We own a house, but we have no investments, and no real savings.

I’m writing to you because I’m concerned that we won’t be ready for retirement. Do you have any suggestions for a program or a person in our area that can guide us through the retirement planning process? For example, should my husband take an early retirement? How do we find out the sources of our retirement income? How do we maximize pension benefits? Basically, how do we plan? You two have friendly faces and seem reliable.

Thanks in advance for your help.

A. C., Washington State

Dear A.C.,

Thank you for your question. Your problem reflects the predicament of many millions of baby boomers. Generally, boomers just don’t save much money. In your case, I applaud you for thinking about it before you and your husband retire. The more time you both have, the easier it will be to meet your goals.

save every last after-tax dimeWe have a couple of ideas you may want to consider. First and foremost, your husband could visit his company’s personnel department and gather his pension information. With that information, you can both think hard about if early retirement is the best choice. Next, you should both make a call or visit your local Social Security Administration office and get the details of your future Social Security benefits.

Unlike most Baby Boomers, you have an “ace in the hole.” You are about to graduate with a B.A. (Congratulations!) and enter the workforce. Furthermore, you have both been living on your husband’s income alone for 25 years. Therefore, a good idea would be to get a good job, and then save every last after-tax dime you make until your husband’s retirement.

If you do this, you set yourself up to have a good chance of retiring comfortably. Of course, if it turns out that he has a pension that you don’t know about, you can make adjustments accordingly. We don’t know his age, but you may have to work after he retires.

Finally, as to finding sound financial help, you should interview several financial planners in your area, and ask them how many clients they have of your age and how much experience they have in helping couples in your predicament. Pick the one with whom you are most comfortable.

Good luck, and remember: Start saving now!

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At Medallion Financial Group, we believe financial planning is about Family. We have been helping families invest in the future since 1987 through a holistic planning approach. We recognize there are a variety of needs when it comes to retirement planning, plan rollovers, annuities, college planning, life insurance options, and investment management. It is easy to get lost in a sea of choices. Our financial advisors help with the basics and beyond to enable our clients to get the education, advice and management they need to retire with confidence.

Our focus is twofold: first and foremost, we are fiduciary advisors. We stand against any violation of laws, values, and ethics. Second, we treat our clients as part of our family, not only those who call Maryland and Georgia home, but clients across the US who have benefited from our reputation of personal service, integrity, and expertise.

We strive to exceed client’s expectations – because we have high expectations of ourselves.

post icon in Retirement by Medallion Group Jul 15, 2021