What you need to know about retirement planning in 2009

Last fall, fall I bought Kiplinger’s Retirement Planning 2008 magazine. With articles such as "Retire Worry-Free," "Protect Your Nest Egg," "Plan Now," and "Live the Dream," I thought there would several articles I could blog about.

However, when I picked up the magazine a few weeks after I purchased it, I was disappointed. The information didn’t fit the current financial crisis. I know the deadline for magazine articles is often three months before publication date. Kiplinger’s Retirement Planning magazine certainly was out of date.

This year’s Kiplinger’s Retirement Planning 2009 magazine is much better.

Helpful articles for boomer consumers include: “Rebuild Your Savings,” “Rethinking Retirement,” “Get Back on Track,” “The Best Financial Advice,” “New Rules for Investing Your Money,” “In Search of Health Insurance,” “Life After a Layoff,” and “Reverse Mortgages Keep Getting Better.”

Here are five ways the magazine suggests for consumers to rebuild after the Great Recession:

1. Contribute at least enough to your 401(k) plan to capture your employer’s match – assuming you still get one – and bump up future contributions automatically.

2. Make additional “catch up” contributions – up to $5,500 in 2009, if you’re 50 or older.

3. Don’t raid your retirement accounts early. You’ll lose the benefits of compounding and could lose as much as 40 percent of your distribution to taxes and penalties.

4. Plan to work a few years longer to fatten your retirement savings and your Social Security check.

5. Reduce your annual withdrawals until the stock market bounces back, if you’re already retired.

Other retirement tips include:

• Plan for a retirement that could last 25 years or more.

• Don’t forget inflation’s impact on your future buying power.

• Keep some of your assets invested for growth, even in retirement.

• Limit withdrawals from savings to 4 percent of your balance during the first year of retirement and adjust for inflation in later years.

• Anticipate rising health care costs, especially if you aren’t eligible for Medicare of if you don’t have employer-provided retiree health benefits.

Resources to help consumers in retirement planning offered in the magazine include:

• See how much income your retirement savings will generate by using the free calculator at www3.towerprice.com/ric/ric/public/ric.do.

• Calculate your Social Security benefits at www.socialsecurity.gov/estimator.

• Locate a financial planner at www.napfa.org.

• Check out financial professionals or report investment fraud at www.helpforinvestors.org.

• See www.callan.com/research to see how different kinds of securities go from winners to losers every year.

• Go to www.medicare.gov to compare your options and the costs in your area, including medigap policies, prescription-drug plans, and the all-in-one Medicare Advantage programs.

• Get advice on choosing the best Medicare plan for you from the State health Insurance Assistance Program in your area at www.shiptalk.org or the Medicare Rights Center at www.medicarerights.org.

• See www.medicarenewswatch.com to get estimates of your out-of-pocket costs for Medicare, HMOs, and PPOs that include drug coverage.

• Check out www.escapeartist.com, www.internationalliving.com, www.liveabroad.com, and www.livtopia.com for information on retirement abroad.

To get a copy of Kiplinger’s Retirement Planning 2009, see newsstands, bookstores, or libraries.

Or you can order the magazine through Kiplinger’s Web site.

It’s worth the $5.95 price.

Copyright 2009, Rita R. Robison, Consumer Specialist

Comments

[investing your money]

Before investing your money in the stock market, make sure you do your homework! Otherwise, you'll lose your money.