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Are todayRetirement planning is an
emotional subject. Many people fear
they are not saving enough. Others are
confused about their investment
options or unsure if their savings are
invested aggressively enough. Still
others may be saving and investing
wisely, but are concerned they simply
started too late.
But for everyone, there is a 10-year
period of time - the five years before
and the five years after retirement -
that is especially critical. Prudential
Financial has dubbed this time period
the "Retirement Red Zone," and has
issued a recent research study bearing
the same name.
"Retirement planning is all about
managing risks - such as the risk of
inflation eroding retirement savings,
the risk of a market downturn depleting
needed assets, the risk of a major illness
or disability, or longevity risk - the risk
of outliving your retirement assets,"
says David Odenath, president,
Prudential Annuities. "The
Retirement Red Zone is a particularly
important time when it comes to man-
aging risks, because, for many, it's the
time they can least afford them. It's
also especially significant for women,
who tend to have fewer retirement
resources of their own, and who are
more likely to be on their own at some
point in their retirement years."
Key Retirement Red Zone survey
findings include:
* Sixty three percent of participants
were not aware of the long-term impact
of investment losses experienced in the
Retirement Red Zone.
* If faced with an investment loss
just before or early in retirement, 41
percent said that they would expect to
keep working or return to work.
* Nearly seven in 10 said they need-
ed to rethink how conservatively or
aggressively they should invest.
* Over half wondered if they should
be seeking out better financial advice.
* Fifty one percent will decide
whether to purchase products that gen-
erate retirement income during this
timeframe.
What You Can Do to Prepare
* Seek advice. Whether you are
just starting out in the work force or
halfway to retirement, the most pro-
ductive thing you can do is seek profes-
sional advice. Meet with a financial
professional to analyze your current
investment strategies and to become
educated on products and services,
which can offer you long-term retire-
ment security.
* Consider long-term care needs.
Inevitably, many of us will need some
type of long-term health care as we
approach our retirement years. The
right long term care insurance plan can
help you protect your retirement funds
and give you the flexibility to be
involved in decisions about your future
care. The cost of long-term care insur-
ance depends on your age, the benefits
you choose, the length of coverage and
other factors.
* Consider life insurance. Take
stock of everything you do for your
family so you can understand the value
of what you provide in addition to your
income. You work hard to help your
family have a comfortable life. Life
insurance can help ensure your family
will be taken care of and continue to
let you be part of their future if you
were no longer around.
* Create a cash reserve. Cash
reserves are sometimes an overlooked
component in the retirement plan. It's
a good idea to set aside cash that can
carry you for several years, while invest-
ing the remainder in your growth port-
folio. Review your accounts every six
to 12 months to maintain a healthy
balance between investments and cash
reserves.
* Investigate Annuities. An annu-
ity with a guaranteed lifetime annual
payout can help insure you against poor
returns on other investments, and help
protect you against the risk of outliving
your assets. As with every other poten-
tial scenario, there are many personal
variables, but in general, the combina-
tion of delaying Social Security and
purchasing an annuity can be a power-
ful planning solution to manage
longevity and investment return risks.
* Consider a Reverse Mortgage. If
your home is paid for when you retire,
and you choose to stay in it, you may
consider a reverse mortgage. Reverse
mortgages pay you a monthly income
out of your equity and the money does
not have to be repaid as long as you are
living in the home. Upon your death,
the loan would be paid out of the pro-
ceeds from the sale of your home.
Meeting with a financial advisor can
help you determine if this is a viable
option for you.
Unfortunately, there is no one-size-
fits-all solution for retirement plan-
ning. Most of us will need professional
support to determine a plan that will
maximize and protect our retirement
assets. Meeting with a qualified finan-
cial professional now can help you map
out your intentions and safely navigate
the "Retirement Red Zone" when the
time comes. For more information, visit
www.prudential.com.
Courtesy of ARA Content
Winter weddings are magical. The
bride's gown reflecting the color of
fresh snow, the bridesmaids dressed in
shimmering velvet with satin trim, and
the groom and groomsmen handsome
in their black tuxedos.
To get to this point, the bride and
groom will spend months working out
every tiny detail to create their memo-
rable day - color scheme, music, food
for the reception, and gifts for the wed-
ding party. During those months, the
happy couple is likely to spend quite a
sum of money - $25,000 or more for
some.
But chances are that even in the
midst of all the budgeting, check-writ-
ing and credit card swiping, the bride
and groom will never discuss their indi-
vidual approaches to spending and sav-
ing money or their current financial sit-
uation. As awkward as it might be, this
is a talk every couple should have as
soon as possible.
As you start your married life, you
probably have specific financial goals.
Some of these may involve the pur-
chase of big-ticket items such as a car,
new furniture or major appliances. You
also may want to move, either to a big-
ger apartment or your own home.
Because most lenders rely on credit
scores during their evaluation of a cred-
it application, your credit history will
affect your ability to realize all these
goals. Now is the time for both you and
your future spouse to request copies of
your credit reports and scores and set
aside some time to review them togeth-
er to help ensure your future financial
health.
Credit scoring is almost always used
when you apply for a credit card, auto
loan, auto insurance, a mortgage, or an
apartment lease. It is sometimes even
used by prospective employers. "Credit
scoring is a way for lenders to evaluate
a person's credit worthiness based on
their demonstrated ability to manage
credit and debt as reflected in their
credit report. Scoring models compare
the past credit performance for con-
sumers with similar credit reports to
predict who is most likely to repay a
debt," explains Maxine Sweet, vice
president of consumer education for
Experian. "In most models, a higher
number indicates a lower credit risk.
Having your credit report scored for
your personal review is an important
tool for helping you understand what
you are doing right in managing your
credit and what you can do to improve
your credit habits and reduce your
risk."
Credit Tips for Newlyweds
Taking a few minutes to check your
credit report and credit score gives you
the knowledge you need to plan for
your future together. As you merge your
lives and your finances, here are a few
things to keep in mind:
· Notify creditors if you change
your name. They will update your
name with the credit reporting agen-
cies when they next report your
account information.
· Share your credit reports with
each other. If either you or your spouse-
to-be has had trouble getting credit
alone, try setting up a joint account to
capitalize on your shared income and
the other person's stronger history. The
joint account will be reported in each
name so each credit history will benefit
from a positive account paid as agreed.
*Check your credit scores.
According to Experian's National
Score Index
(www.NationalScoreIndex.com), the
national average credit score is 675; for
men the average is 673, for women 680.
NationalScoreIndex.com also lets you
compare your credit score to the aver-
age in your state and local area.
· If you discover that your credit
history is not as good as you would like,
you can take steps, such as paying your
bills on time or paying down debt, to
make it less risky.
· Keep in mind that your credit
report is always changing based on
information provided by creditors. It is
important to check your credit report
regularly, so you can stay on top of
changes before they impact your credit
rating. Consider signing up for a credit
monitoring product, such as Experian's
Triple Alert (www.TripleAlert.com),
which provides daily monitoring of all
three of your national credit reports
and sends email alerts that report key
changes.
These simple steps will ensure that
your credit history will speak in your
favor when you need it.
Learn more about credit at
www.NationalScoreIndex.com.
Courtesy of ARA Content
The Citizen. Auburn, New York
Secure Your Future
Wednesday, January 31, 2007
5
8
Wednesday, January 31, 2007
Secure Your Future
The Citizen. Auburn, New York
Money Management Tips for Newlyweds
~ Member Benefit #65 ~
CONSULTING
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Dean Macris is certified by New York State to sell and
market New York State Partnership Long-Term Care
Insurance. Members interested in NYS Partnership Long-Term
Care Insurance should call Dean Macris at (315) 253-2934 or
e-mail dmacris @royalaa.com.
Dean Macris, LUTCF, Royal Alliance Representative at
Auburn Community FCU
253-2934
65 Wright Circle
Auburnm, NY 13021
www.auburnfcu.com
Are You Prepared for The Retirement Red Zone?
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