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Show Volume I , Issue XII Page 5 The OGDEN VALLEY NEWS September 1999 How To Harvest The Rewards Of Retirement First in a four-part series before age 65. Retirement involves making changes — to schedules, priorities, activities and finances. One of the major transitions many people experience at retirement is going from the predictability of receiving a paycheck to the relative unknown of relying on pension checks, Social Security and personal savings and investments. · The IRS will impose a 10 percent penalty tax on pension distributions made before age 59-1/2 (unless you qualify for certain limited exceptions). Information in this article and the next three issues will help minimize the stress of entering that unknown by outlining the decisions you’ll be making at retirement and offering some general advice about retirement planning. Step 1 Determining how Much Money You Will Need The amount of money you’ll need for your retirement depends in large part on two factors: 1. The number of years you will spend in retirement. This estimation is a function of your age at retirement and your life expectancy. Of course, people who retire at 50 will need a larger nest egg than those who wait until age 65. But too often, people tend to focus on their age at retirement (I’ll retire when I’m 62” rather than the length of time they’ll be retired). With today’s life expectancies, you may spend 15-20 years in retirement, on average. And many of us will live longer than that. Why is this fact important? The longer you live, the more money you’ll need. This issue is of special concern to women, who tend to live longer than men. A note about early retirement Many people dream of retiring early (before age 62 or 65). From a financial standpoint, early retirements must be planned very carefully. Make sure you have all the information you need to make a well-informed choice. If you’re thinking about early retirement, keep the following things in mind: · No benefits are available from Social Security prior to age 62, and benefits are reduced between ages 62 and 65. · People born after 1937 face an increased age at which they are eligible for full Social Security benefits. For those born in 1960 or later, that age has been increased to 67. · Many defined benefit pension plans also reduce benefits for people retiring OGDEN VALLEY REAL ESTATE SPECIALISTS PLEASE CALL FOR A NO OBLIGATION MARKET ANALYSIS ON YOUR HOME · Enrollment in Medicare is usually prohibited before age 65. 2. Your anticipated standard of living during retirement. Your lifestyle will affect the amount of income you’ll need in retirement. Do you have expensive hobbies or extensive travel plans? Will you want to make higher or lower contributions to charity? Are you planning to buy — or sell — a second home? 745-4663 Dick Dixon Branch Broker 745-3119 Don’t forget inflation It’s not enough just to preserve what you have now — you need to make your money grow just to stay even with the rising cost of living. Over the past 30 years, inflation has eroded the purchasing power of the U.S. dollar by 75 percent. In other words, something you could buy for $25 in 1964 would cost $100 today. Even a modest rate of inflation can erode a retirement nest egg over time. So make sure you take inflation into account when you’re planning for retirement. Ken Turner Realtor 745-4222 We Make It Happen! WARDLEY IS #1 IN UTAH! WE SELL A HOME EVERY 11 MINUTES! MORE THAN OUR NEXT TWO COMPETITORS COMBINED! 30 OFFICES AND 1600 SALES EXECUTIVES TO SATISFY ALL OF YOUR REAL ESTATE NEEDS! It’s generally assumed that a person’s income during retirement doesn’t need to be as high as his or her pre-retirement income. Why? Many living costs will decrease during retirement (including transportation and clothing). On the other hand, some expenses will increase (such as travel or health care). One rule of thumb is that retirement income should be 70-80 percent of current income, adjusted for inflation. It’s important to note, however, that income needs during retirement are highly individual — there’s no “right” answer for everyone. DICK OR KEN EDEN OFFICE 745-4663 2595 NORTH HIGHWAY 162, EDEN UT Picture of the Month Next time... Step Two: Reviewing your Financial Resources This information has been provided to you courtesy of Calvin Welling and Ascend Financial Services, Inc., Securities Dealer, member NASD/SIPC. 98-0227-85002R Subscriptions available for out of area residents at $15.00 annually. Send payment with mailing address to: The OGDEN VALLEY NEWS P O BOX 130 EDEN UT 84310 Double Rainbow photograph taken from the N. Ogden Divide by Randy Dalton of Liberty. The Ogden Valley News would like to print a “Picture of the Month” in each month’s newspaper edition. At the end of the following year, we would like to print a Valley calendar using the winning pictures. The calendar will be made available for sale. So get your cameras ready and start shooting! Or, if you already have a favorite photo, send it in. Your pictures may be black & white or color, and should depict a Valley theme. The pictures may also be historical photos of the Valley. Send your picture to: THE OGDEN VALLEY NEWS PO BOX 130 EDEN UTAH 84310 Be sure to include your name, address, telephone number, and the name of the person – if known – who took the picture. Also, we would like to know something about the picture, possibly the approximate date, and the who, what and when about it. Please note, collected pictures will become the property of The Ogden Valley News, so be sure to keep a copy for yourself! |