Ken Dolans: You know, Daria?
Daria Dolans: I love this guy
Ken Dolans: Why?
Daria Dolans: He gives me the ten deadliest sins of retirement then says, “But we have to do it quickly.”
Ken Dolans: Who wants to do an obituary?
Daria Dolans: You have to do it quickly.
Ken Dolans: So now, so quickly but it’s very, very important because during the financial uneasiness we’re all feeling now and we’ll probably will for sometime. Plan it for the time that is even more important with lots of survey.
Daria Dolans: And more difficult.
Ken Dolans: And more difficult when I'm setting it up, when I’m planning well enough so let’s do this. Sometimes, the best advice can be the some of the things to avoid like in retirement planning, like procrastinating. It’s a long way off. It’s two years or three years or ten years.
Daria Dolans: 30 something and 20 something, talk to your parents and find out how fast that time really go through for them. You’d be surprised. You can’t procrastinate. Every dollar you put away now is going to be that much better for you’re going down the road.
Ken Dolans: Did you say dollar put away?
Daria Dolans: Yes.
Ken Dolans: Retirement, pre-retirement boomers are very, very bad savers like really bad. I know it’s difficult. I know it’s difficult to put money aside but you’ve got to start saving. You’ll also have to start taking advantage of the company retirement plan. A lot of people things are tough. What I'm going to do is I'm going to stop contributing to my 401K or my 403B because the market is so unpredictable so put it in and then put it in something safe. Don’t stop it.
Daria Dolans: Especially not if your employers matching and especially not since there are rumors afoot that with the new administration, they might take that entire tax adoptability away from the 401K.
Well, you never know but while you’ve got it, use it. It may not be there somewhere down the road.
Also if you are figuring well, I've got Social Security, so that’s enough for me. Think again, Social Security was never meant to be your income in retirement only insist—
Ken Dolans: Supplement. And yet there are 1/3 of people on Social Security only have Social Security. Don’t be statistic. Speaking of statistics, do not underestimate how much you’re going to need in retirement. Well, we’ll get by. We’ll have 50% or 60%. Nowadays, it used to be like 80% to 85% and 80% to 90%?
Now, if you’re going to maintain any kind standard of living because one of the things you have to worry about is underestimating inflation.
Daria Dolans: Right!
Ken Dolans: Just to look at a 100% near a 100% of your pre-retirement income in retirement to maintain your standard living. That’s the scare we think for a lot of people.
Daria Dolans: Another thing that is a no-no is to avoid tax advantage investments particularly if you’re in the upper income brackets would seem like municipal bonds.
Ken Dolans: Treasuries.
Daria Dolans: Outside of your retirement accounts, the less the taxman gets his hands on your savings, the more you have it at the end of the day so look at the tax advantage investments and use them outside those tax advantage IRA’s and 401K.
Ken Dolans: Too scary word you want to hear.
Daria Dolans: Yes
Ken Dolans: Estate planning
Daria Dolans: Uh-hum.
Ken Dolans: Nobody wants to talk about dying. Nobody wants to talk about incapacitation. Well, how about when you talk about having an orderly distribution of the asset that you work so hard for the people that you loved most?
So if you don’t even have a basic will, 30% of Americans don’t, you’re asking for so much trouble. If you don’t even have a basic will, then you ask your estate, not your state, your estate when you are no longer here to just make it up for you. Be careful. A estate planning even the basis
Daria Dolans: Well, and this may not be so much of a problem anymore for people but it could be again. There are a lot of people that have way too much company stock as part of their retirement plan
Ken Dolans: We had to call them up last week on radio.
Daria Dolans: And it is a sure trip to the red lines and only Social Security. You never know what the effect of that company is going to be going down the road. Do not expect your company to provide your daily bread in away of your pay check and your retirement future.
Ken Dolans: Have you checked the prices of Ford and GM label?
Daria Dolans: No.
Ken Dolans: Okay also, run asset allocation when you start talking about investing and start even thinking of pre-retirement. You have a very delicate balance between stocks and bonds and cash. We’re saying right now that in fact cash is keying and it will be keying for some time. But asset allocation in a reasonable distribution or the allocation if you will of stocks, bonds and cash though you can balance that risk and reward.
Daria Dolans: And for heaven’s sake if you don’t know which way to go on the road, get some buddy with some knowledge on the topic to lend a helping hand. Seek financial advice with the caveat that you do nothing that you don’t understand first.
Ken Dolans: What you may want to do is go to NAPFA. That’s a National Association of Personal Financial Advice. It’s this bunch of associations. We shouldn’t mention one but this is a pre loan financial plan which you go to NAPFA.org and you can put in your zip code and I’ll give you some financial advises that you can interview in your area.
Daria Dolans: But for the best information stay right here at Dolans.com
Ken Dolans: We have lots of retirement work association retirement information right here. We’re glad you joined us. We’re Ken and Daria.
Transcription by:
Scribe4you Transcription Services