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Financial planning: Making the most of your retirement years

co-financial-planning.jpgRetirees appreciate and enjoy the free time available once the mandatory 8-5 work week responsibility is over. It is interesting that the Army retirees I have been connected with are so busy with volunteer work. Army retirees are redeeming their free time for service to the community.

Not everything as a retiree is peaches and cream, though. There is the challenge of making ends meet economically; freedom from financial worries in retirement is possible but necessitates proactive financial planning and the establishment of priorities if working from a fixed or reduced income. Enjoying retirement requires long term planning and a bit of luck mixed with savvy decisions.

One serious challenge is the coaxing of enough income from savings to maintain a healthy standard of living. As we prepare for retirement, we had been advised to change our investment strategy by going to conservative funds, CDs, and money market funds, which are safer. Today’s financial planners are taking a second look at this advice.

Jim Stone of the College for Financial Planning gave this creative advice:

“Age 62 isn’t time to batten down the hatches. You can have a significant amount of money conservatively invested, but you also need to be in the market to maintain your standard of living. So while preserving and protecting your principal are important, you need to keep investing for growth as well.”

In this stage of retirement and at the age of 70, I am following Jim’s advice. I am still contributing monthly to aggressive funds that I started 30 years ago. I have conservative investments too. As they say in Missouri, “don’t put all your eggs in one basket.” Diversification, even in retirement, is rewarding.

There are strategies for maintaining a desirable standard of living that are popular with retirees.

  • Earmark part of your nest egg from years of investment and saving for relative safe harbors of CDs and bonds in a laddering strategy. For more information on “laddering” contact your financial adviser.
  • Annuities are not popular with me and do not meet the goals and needs in my financial plan. However, an annuity with a fixed and guaranteed return and interest is beneficial to some. Annuities haven’t merited the bad rap they’ve received. My parents, through annuities accrued a huge endowment for their children. Again, consult a professional financial adviser before plunging into such a program.

A major cause for concern among retirees is the nightmarish thought of running out of money; living on social security is available throughout those years, but living on it is a challenge.

Most financial consultants are teaching that a retiree can take out 4% of their assets in a well-diversified p0ortfolio annually without exhausting the account balance. This guidance generates enough cash for our later years.

As we say in Tennessee, “aging isn’t for sissies.” There will always be challenges and stresses as we age. Retirement is not always a bed of roses.

By integrating these strategies in our retirement plans, we can live more successfully and continue to be financially independent.

A last word: It is never too late to consult a financial planner on retirement.

Rev. Charles Moreland
Rev. Charles Moreland
Rev. Charles Moreland, retired, has lived in Clarksville for seven years and holds great pride in his adopted city and its people. His one objection in Tennessee is the Hall law of taxes on dividends and savings. Charles served in the U.S. Army Chaplaincy from 1966-1986, retiring to serve as a United Methodist pastor near Fort Leonard Wood, Missouri. He serves on the Boards of Directors for the ARP, Roxy Theater and MCDP. Though retired, he is a regular speaker at the Unitarian Universalist Fellowship. His five grandchildren, ages two to thirteen years, live in Evansville, Indiana. He is a veteran of the Vietnam War and served in Germany and Korea while on active duty.

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