Retirement Needs Analysis and Timeline

Your Retirement Needs Analysis & Timeline

It's never too early to speak to a retirement advisor. According to statistics obtained from the National Institute on Retirement Security show that:

  • 45% of American working age households do not have any retirement income assets.
  • 46% of Americans reported that they and/or their spouse have tried to calculate how much they need to save for retirement.
  • The U.S saving deficit is between $6.8 and $14 trillion.
  • The median retirement account balance in $3,000 for all working age households and $12,000 for near-retirement households.
  • 92% of working households do not meet conservative retirement savings targets for their age and income.
  • 86% of Americans agree that there nation faces a retirement crisis.
  • 74% of Americans are concerned about their retirement outlook.
  • 80% of women are more likely to be impoverished at age 65 and older.
  • Only 2% of workers and 4% of retirees identify saving or planning for retirement as the most pressing financial issue facing most American workers today.
  • Debt is a major factor standing in the way of retirement.
  • Retirement savings are taking a back seat to more immediate financial concerns.
  • Worker confidence has declined in the areas of affordability of basic expenses, medical expenses and long-term care expenses.
  • Workers cite the poor economy, lack of faith in Social Security or the government and the inability to afford retirement as reasons for postponing retirement.
  • 70% said Social Security is their major source of income in retirement.
  • Only 23% of workers and 28% of retirees have obtained advice from a financial advisor.

How well you enjoy your retirement depends on how well you prepare for it now. You need help in analyzing various factors that relate to your retirement such as:

  • Current and past income
  • Number of years to your expected retirement
  • Current amount in savings and savings rate
  • Income sources (social security, military, state or company pensions)
  • Current debt
  • Upcoming expenses (children, college, special needs, aging parents)
  • Current insurance
  • Future salary increases
  • Retirement Plan contributions
  • What you want to do when you retire

We can help you determine what those factors mean and project the type of savings you need to cover your retirement needs.

Retirement needs analysis addresses different scenarios by adjusting the funding requirements of the plan to align what you want with realistic goals. Different scenarios can be run with modified assumptions like retiring later or funding for a lower retirement income goal to create a viable plan with realistic goals tailored to your needs.

A retirement needs analysis will help show you the difference between the income you can realistically expect to receive from Social Security, a company-sponsored pension, and personal savings/investments compared to the income you think you will need during retirement to maintain a specific lifestyle. In 2012 the average monthly Social Security benefit for a retired worked was $1,230.00. If your combined income from these various sources does not equal enough, you could be faced with a retirement-income gap.

You need to think about what your long-term goals and what you would like to do in retirement to start understanding the costs as well as how much you really need to save.

How You Can Retire?

Invest in your future and start participating in your company's or an individual retirement plan. Social Security will not provide enough to maintain the lifestyle you want through your retirement years. It is only estimated to provide about 40% of the average retiree's income. With your employer's tax-deferred plan, use valuable pretax dollars to help build your retirement savings. This way, the full amount goes to work for you right away, which can help you build your savings faster. With a tax-deferred account — such as a traditional IRA, a nonqualified variable annuity or your workplace 403(b), 457(b), 401(k) plan — all taxes on interest and earnings are deferred until withdrawal, usually at retirement. Over time, the difference can be substantial.

Understand the types of available investments and your risk tolerance. There are a variety of investment types and retirement plans to meet individual needs. We have tools and charts to help you understand your feelings about investment risks and the returns you want to see that are associated with them. Investment risk is simply the possibility that an investment's value will go up or down. Your ability to accept risk is based partly on your personality, current financial situation, need for immediate cash, investment preferences, time horizon and other factors. Understanding those two factors will help us in determining a plan that is right for you.

Select investment options that are available and appropriate for you. Your employer's plan may offer a variety of mutual funds among the different asset categories and classes. We can help you create a mix of investments for your retirement plan goals.

Start investing early and pay yourself first. Obviously, the longer you save, the more money you will have for retirement. Generally, the more time you have, the more aggressive you can afford to be with your investments. Pay off your debt and stay out of debt so you can afford to do the things you really want to do down the line. One of the best strategies for retirement planning is to start planning and saving early.

Develop an individual plan that suits your needs. People are different and have different needs and lifestyles. Someone out of college has drastically different needs and debt than someone closer to retirement. We can help customize your plan by helping to choose investments that are appropriate for your goals and/or family. By setting clear and attainable goals, you will have a plan for funding those goals, you will know how to invest appropriately and you will know you have begun accumulating the money you will need during retirement.

Studies show that the key to investing is asset allocation; the science of selecting the right types of investments in the right amounts. If you also diversify your investments by spreading the risk around by investing in more than one thing, you can potentially minimize risks and maximize your returns. Keep in mind that neither asset allocation nor diversification can ensure a profit or protect you against market loss. A combination of investments, some more risky and some less risky, can help.

Invest For the long term. By buying and selling investments or try to “time” the market, can potentially destroy your retirement savings. In addition, you could get hit with capital gains taxes or penalties that apply to early withdrawals on tax-deferred accounts. It is smarter to take a long-term view when you are investing for retirement. Call us today to speak with a certified retirement advisor.


Analyze your current situation, risk tolerance, time horizon, and goals


Implement your plan


Monitor and rebalance investments