Article on retirement planning. Client: Allianz Life.

1. Thursday, 2009 Lifestyle
The ABCs of
Retirement
Planning
FAMILY FEATURES
A
not alone.
re you financially ready for retirement?
If you’re feeling concerned about your
standard of living after retirement, you’re
Only 13 percent of workers say they are confident
about having enough money for a comfortable
retirement, according to the 2009 Retirement
Confidence Survey conducted by the Employee
Benefit Research Institute (EBRI).
Yet only 44 percent have taken the time and effort
to complete a retirement needs calculation, the basic
planning step for determining how much money they
are likely to need and how much they need to save to
meet that goal.
Why is that? “It can be an overwhelming process,
and people often don’t know how to start,” says
Spokesperson Name, of Allianz Life Insurance. “And
especially in the current economy, many people may
feel they just can’t afford to set aside any more
immediate income.”
But, no matter what your age, it’s important to take
the time to look beyond today’s uncertainty in order
to build a sound financial future for yourself and
your family.
The Basics
A: Ask yourself these questions
Where do I want to be, financially? Financial goals
can include secure retirement income, a home or a
financial legacy for your family. Think about what
kind of retirement lifestyle you want. Write down
Basic Tools
your financial goals, and be specific.
Do I know how much I’ll need in order to achieve
You Can Use
those goals? According to the EBRI: There are a number of online tools to help
you decide how much you’ll need to save
42 percent of all workers think they need to for various needs.
accumulate at least $500,000 by the time they
retire to live comfortably in retirement. The Ballpark Estimate, a single-page
worksheet created by the American
19 percent feel they need between $250,000 Savings Education Council, can help
and $499,999, while 28 percent think they need you calculate what you’ll need to save
to save less than $250,000 for a comfortable each year for retirement. You can find
retirement. it at www.choosetosave.org.
Workers who have performed a retirement needs The Financial Industry Regulatory
calculation are twice as likely than those who Authority has a college savings calcu-
have not to expect they will need to accumulate lator, at apps.finra.org.
at least $1 million before retirement.
The Social Security Administration
B: Be mindful of your risk tolerance. has a benefits calculator to estimate
Each investment strategy has its own level of risk. What kind of retirement lifestyle do you want? Be specific and write down your goals. your potential benefit amounts at
Generally speaking, the higher the risk of losing www.ssa.gov.
money, the higher the expected return. Less risk will get The Securities and Exchange Commission has a
you a smaller return. The U.S. Securities and Exchange roadmap tool that will help you work through the
Commission (SEC) recommends that you look at these Earned Income. If you want a predictable stream of income, basics of investing for the future at www.sec.gov.
factors to help you determine your risk tolerance: investing in bonds or bond mutual funds can earn you income
from the interest payments.
Financial goals — how much you want to accumulate.
Growth. Investing in companies through stock mutual funds can
Current financial position — can you afford to invest in riskier help grow your money, depending on the performance of the
options right now? You should take less risk if you cannot afford stocks.
to lose your investment or have its value fall.
“Finding the right balance is key to reaching your financial goals,”
Time horizon — how long can you leave your money invested? said Spokesperson. “A professional financial planner can help you
If you will need your money in one year, you may want to take find that balance that will help you accumulate enough assets to “With variable annuities, you have the chance to buy additional
less risk than if you won’t need it for 20 years. retire the way you want and have enough income to maintain a protection benefits that help minimize your risk,” said Spokesperson.
“In very basic terms, with options like income, accumulation and
C : Choose an investment strategy. comfortable lifestyle.”
One investment option that has the potential to offer protection, death benefits, you’re guaranteed a certain amount of payment,
Once you know what your goals are and what your risk tolerance is, income and growth is a variable annuity. regardless of the current value of your initial investment.”
you need to choose a strategy to achieve those goals. There are three “A variable annuity is a contract between you and an insurance
basic strategies involved in investing: protecting your money, earning company,” said Spokesperson. “In exchange for your payment, the The Bottom Line. You owe it to yourself and to your family to plan
income and growing more money. The best strategy is a balanced insurance company provides you income, starting immediately or at for your future. It’s not as hard as you might think. A professional
combination of the three. some time in the future.” financial planner can help you work through the ABCs and get you
Protection. If you’ve saved enough for a house or car and you Variable annuities have two phases, one in which they help you on your way to a more secure retirement.
want to be sure the money will be there when you need it, a build up your assets and another in which they help you turn those For more information on variable annuities and other investment
savings account or money market securities will keep that assets into a stream of growth. products, visit www.allianzlife.com.
money safe.
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