1. Managing Your Money During Retirement (for everyone who hopes to retire someday)

2. The Estes Valley Library is providing this program through a grant from the Financial Industry Regulatory Authority (FINRA) Investor Education Foundation and the American Library Association (ALA). The grant is distributed as part of the library® initiative, an ALA program. This project is in its sixth year of educational partnership with libraries across the country
Marsha Yelick CFA(retired)
Financial Programs Consultant
Ext 831

3. If you ever needed a plan for your money, you need it in retirement!
You earned it. You saved it. Now it’s time to keep it safe and spend it well.
The simplest choices are the best.
Major themes du jour
When you retire, you have to figure out how to make you existing money last for the rest of your life.
It’s never too late.
Spend only what you have!

4. Is the Average American Ready for Retirement?
Average amount saved..
Retirement Readiness
Personal savings rate...

5. Percent of US population by age and sex,
The boomers changed everything…
Retirement Redefined
Percent of US population by age and sex,
1970, 1990 and projections for 2010

6. Retirement Challenges
What are the Current Challenges of Retirement in 2010?
Bear Market of 2008
Real estate depreciation
Rising Taxes
Fixed income yields decline
Possibility of inflation
Living longer
Rising medical costs
Complex financial products
Etc………
Retirement Challenges

7. What are the BASIC retirement planning needs?
Gather your
information

8. Seminar 1 You need to... 1. Update your current Net Worth Statement
2. Create a New Budget –
Using PROJECTED Retirement Needs
(You will need this for the calculators!)
Seminar 1

9. 3. Readjust your Allocation INCOME or CONSERVATIVE
(Use allocation rules of thumb with the funds necessary to support your budget.
Use simple investing for this part of your money.)
50-year-old 50% BONDS (7.5%)
60-year-old 60% BONDS (7%)
70-year-old 70% BONDS (6.5%)
80-year-old 80% BONDS (6%)
Seminars 2&4

10. Spending in Retirement
Put it together…
How long will your money last?
Spending in Retirement

11. Work on an estimate...
Paper & Pencil

12. The 3% Solution...
Paper & Pencil

13. How Long Will the Money Last?
This chart depicts the average rate of annual withdrawals that a hypothetical portfolio of 60% U.S. stocks and 40% bonds was able to sustain during a series of 30-year holding periods since The average sustainable rate for all 30-year rolling periods from 1926 was 6.21% when adjusted for actual consumer price inflation.
Source: Standard & Poor's.
Why 3-4% is Safe 3%

14. The Calculators Online Calculators
Play with many scenarios until you get a sense of
How inflation changes things
How withdrawal rates can extend or shorten your nest egg
How supplemental income enhances the life of your money
How total return damages or enhances your money
The Calculators
Revisit the calculators when the market – or your circumstances – change, so you can make necessary adjustments to your budget.

15. Use the Calculators Common ASSUMPTIONS…
What about 50% of retirees saved…
$100,000
Living in retirement (age 60 to 90)…
30 years
Inflation rate - historic…
3.5%
Earnings rate of conservative... 5%
Use the Calculators

16. Seminar 4 Remember MUTUAL FUNDS (Seminar 4) THE ADVANTAGES:
Diversification
Economies of scale
Convenience
Professional management
THE DISADVANTAGES
Limits opportunity for a “home run”
Limits control of taxable gains/losses
Can only sell at close market
EXPENSES (front end, back end, annual…)
Seminar 4

17. Seminar 1 & 4 Remember BOND Mutual Funds
(an economical way to own bonds)
Buy some short, medium, and long term bond funds
Look for lowest fees
Consider inflation-
protected bonds for a
portion of retirement funds
Reinvest interest (dollar cost average until you need the income)
Seminar 1 & 4

18. Are You Ready? Are you Ready to RETIRE? Emotionally ready?
Financial Nest Egg size?
Income Stream analyzed (budget)
Health Insurance evaluated?
No debts outstanding?
Children secure financially?
Are You Ready?

19. Spend the income to enjoy a well-deserved retirement!
Manage your retirement IN COME
Know how much you have to spend each year (IN COME).
(Use a draw down strategy and budget)
Spend the income to enjoy a well-deserved retirement!
Have sufficient liquidity
(emergency cash)
Watch inflation
(stock allocation helps you keep pace)
Monitor (and consolidate) your accounts
(allocation and returns)
Use the calculators once a year to check your position
Protect and grow any unused income
Income Management

20. Stretch your retirement OUT GO
Exemptions
Discounts
Low Fees
Comparison
Negotiations
Barter
Review
All things free...
Ask your friends
Spending Management
Small things ADD up and make a BIG difference!

21. Major Changes And if that doesn’t work... Move Get rid of Stuff
Get a Job
Lose a Car
Decrease vacationing
Share shelter
Find FREE things
The Peace Corp
Major Changes
Big changes make HUGE differences!

22. Be a happy, money-wise SENIOR
Happy Retirement

23. Thank you for attending
Be Money Smart for Life
Thank you for attending