Issue link: http://read.dmtmag.com/i/141342
Special Advertising Section In Your 50s: It's Your Future— Adjust and Plan Wisely The 50s are a time to free yourself from debt—but still take a few calculated investment risks "Consider the things you want to enjoy in retirement and the standard of living you want to maintain when making your savings plan." Statistics show that 90 percent of women will be solely responsible for their own finances at some point during their lives. Women in their 50s are motivated to save for retirement, maybe because it's in closer view than in earlier decades. "Consider the things you want to enjoy in retirement and the standard of living you want Maureen Lokrantz, wealth to maintain when making your savings plan," says Maureen Lokrantz, wealth management management advisor at The Private Client Reserve of U.S. Bank advisor at The Private Client Reserve of U.S. Bank. She recommends women plan to reduce or eliminate debt by the time of retirement. Lokrantz says it's equally important to consider ways to increase savings, such as utilizing the IRS's "catch up" contribution limits, which allow those age 50 and older to save more as they near retirement. Taschek and Lokrantz recommend women in their 50s: Michelle Taschek, CFP, a senior portfolio manager at The Private Client • Maximize retirement savings during these highestReserve of U.S. Bank explains that every investor's risk tolerance is earning years. The tax laws allow larger IRA or 401(k) different. She says that asset allocation—the way a person divides up contributions once you reach age 50. savings between stocks, bonds and cash—"helps you strike the best • Tolerate some investment volatility now, and reduce balance between the return you want and the risk you're willing to take." risk when retirement is five years away. She and Lokrantz call asset allocation the foundation of prudent • Plan to pay off your mortgage prior to retirement. Refinance to a lower rate and shorten the term to investing, making it easier to stick to a financial plan, even when there match your retirement date, or sooner, to reduce are losses in slow years. As women age and approach retirement, "The interest expenses and living costs. focus changes from growing wealth to preserving it," says Taschek. • Track your actual expenses and consider what will "Don't become too conservative in your investments just yet—you have change in retirement—health care, commuting a long life expectancy ahead and need your money working hard for that expenses, etc. Because we tend to spend more than long-term goal and to offset inflation, living costs and health care during we think, this ensures an accurate sense of current retirement." spending for considering both positive and negative Taschek warns women not to lose sight of the fact that they may need future changes. retirement money for a longer period because of their increased life. • Plan to live on 4 percent of your retirement investments to help ensure the greater probability that your money lasts for your lifetime. This number is the starting point to knowing if you are on track to meet your retirement goal or not. Do you have the funds for retirement? ‹ 50% of women feel financially prepared to live to age 75 37% feel living to age 85 is financially feasible ‹ 33% can live in financial comfort to age 95 54 BRAVA Magazine July 2013 Source: Northwestern University research