DON'T BELIEVE THE OLD MYTHS
Let's knock down one of the old myths of financial planning. The myth encourages you not to worry; you're only going to need about 80% annually of the money in retirement that you actually earned during your working years.
I'm here to tell you; don't believe it. It just doesn't make any sense. Your expenses may change somewhat, but just as costs for clothing may decline, those costs will be replaced by something else, say, health care or entertainment. That is, unless you plan to spend your retirement in front of the television for 16 hours a day. I don't think so.
The point is, in retirement, your spending habits really aren't going to change that much. You're going to want to maintain the standard of living you've had throughout the years. You're going to want to shop at the same stores, eat at the same restaurants, and enjoy nice trips. My partners and I tell our clients to count on spending roughly the same amount of money as before.
That people learn to get along on less isn't the point. Sure, if the money isn't there you'll figure out a way to get along on less. But why construct a plan that forces you into a lower standard of living?
The three elements of successful retirement are; first, save the money. Don't count too much on government help. Second, don't be too conservative. Most of the people that come to see my partners and me have enough money to get the job done-but, the money is in the wrong places. And third, get yourself a full service investment professional. Despite the popular propaganda of the day, your retirement is too important to be left to a do-it-yourself project.
In these tight labor markets, what does the American worker really want? Well, a recently completed survey of 1,300 individuals conducted by Survey Site for carreerpath.com, may surprise you.
First of all, 44% of the workers just flat out said they want a new job! That's right, a new job! Beyond that, those who are more or less resigned to staying with their current positions say additional "goodies" like an espresso machine, or even more nap time, would help. I'm not kidding. Here's the breakdown to the question "What perks would you like at work?": 67% said flex hours, 56% said casual dress, 51% wanted unlimited Internet Access, 41% said they would like telecommuting, 28% actually said naptime, 24% said daycare, 23% want that espresso machine, and believe it or not, 11% want to bring their pets to work. Some of this may seem a little silly, but on the other hand, maybe there are some halfway decent ideas on the list.
I'd also like to put a plug in for a good retirement program at work. 401(k)s, 403(b)s or SEP-IRAs are important benefits that will both attract new and better people to your company, in addition to keeping your already valuable employees happier.
In these tight labor markets, a good retirement plan can be a big asset to any business.
For the fourth straight year, ReliaStar Corporation has published a list of the nation's 125 best and worst cities to earn and save money in. For the second year in a row, Ann Arbor, Michigan tops the list as the best city in the country to earn and save in. Also repeating on last year's list, but at the other end of the spectrum, in 125th place is Jersey City, New Jersey as the worst place to earn and save money. The report uses 15 factors to measure financial plusses and minuses. The best places to make money are those that have high household income, high job quality, low unemployment, and high participation in retirement savings programs. Conversely, the worst cities have a high cost-of-living index, high cost of community services, and a high crime rate. If you'd like more information on this subject, or to order a complete copy, you can visit ReliaStar's Website at www.reliastar.com.
(Tom Butenhoff is a First Vice President with J. E.
Liss & Company in Milwaukee. The views are his and not necessarily
those of Liss Financial Services or the Job Connection/Hiring
Network.)