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Gary Boatman: Retirement requires some sound planning

| Wednesday, March 27, 2013, 12:01 a.m.

A recent study by the Employee Benefit Research Institute found that 36 percent of workers 55 and older only had $10,000 in savings and investments.

This is a major concern for several reasons..

Financial Planners used to talk about the three-legged stool for retirement planning, with company pensions, Social Security and personal savings making up the legs.

Most Baby Boomers will not be getting company pensions of any size unless they worked for some government entity.

Half of all people start their SS at 62.

This means that they only receive 75% of what they would have had at full retirement age.

All of these factors could lead to a less enjoyable retirement life.

As a result of these factors, 28 percent of workers approaching retirement are not confident that it will as fulfilling as possible.

Other factors are increasing medical costs, inflation in daily living expenses, low interest earnings, a volatile stock market and too much debt.

Another recent survey found that seniors are holding more debt.

The median debt level for households headed by someone 65 or older has doubled since 2000.

They now have roughly $26,000 of debt

Also, more people are now in retirement while still paying a mortgage on their home.

The Federal Reserve's policies are hurting seniors more than any other group.

This is because they often invested in CD's and Treasury Bonds.

The interest rates on these investments are not keeping up with inflation.

Investors naturally get more conservative as they get older.

Boomers have experienced two bear markets in the last ten years. The S&P is at a level it first reached in 2000.

Many seniors have tapped 401k's early to keep from losing their houses to foreclosure.

We are witnessing poverty move from the urban areas and rural areas to the suburbs.

What can we do about this crisis?

Younger people need to start planning for retirement earlier.

There are some supplemental retirement saving solutions that will out preform 401k's.

People should consider not taking Social Security until full retirement age and to stop taking benefits at age 62, if possible.

To do so, you need a good income plan.

SS is one of the few retirement income options that has cost-of-living increases.

This is very important when dealing with inflation.

Many people will have to work a few more years than they originally planned.

If you are at your earnings peak, why not continue to pay off debt and build savings?

This can also help you save on health care costs.

You should work with a senior health care specialist to determine ways to minimize out-of-pocket costs depending on your personal situation.

Work with a planner who is a Social Security expert. They can help you consider all of your options.

This is especially important for a married couple. Proper planning could yield $10,000s of more income.

If you are tired of only earning low rates of interest, study some of the alternatives that can increase your income.

There are many choices that you may not be aware of. Understand the benefits and limitations of each choice.

To help you with your decisions, we are offering a free 14-page Life Guideā€¦ Retirement & Social Security.

To get your copy, e-mail your name and address to

Gary Boatman is a certified financial planner and local businessman who serves as president of the Monessen Chamber of Commerce.