Questions to ask during your personal pension plan checkup
January 07, 2013Most of us take our health very seriously. We get regular checkups, try to keep our bodies in good shape and take medicine to fix a problem.
Just like we care for the health of our bodies, we also need to take care of our savings for retirement. And, if your retirement plan is based on a pension, it may not be doing very well.
Nevada's public pension system was labeled a "serious concern" by the Pew Center on the States; public pensions in Nevada are only 70 percent funded.
This crisis isn't limited to the Silver State. All across the country, states are considering major changes to pension plans to help cover deficits, including higher taxpayer contributions, limits to cost of living adjustments, benefit cuts and raised retirement ages.
Private pensions aren't immune either, as employees of large companies like Bank of America and American Airlines face pension freezes.
If you have an ailing pension, or if your retirement savings aren't as fit as they should be, it's time you took steps to secure your future retirement income by creating a personal pension plan.
Below are three questions to ask yourself when evaluating your retirement plan:
Am I saving enough?
Building wealth that will last 20 years, 30 years or more is no small feat, and how much you will have then depends on how much you save now.
Identify what percentage of your income you can save now, and continue to increase that amount as you get closer to retirement.
Try automating your savings, so that you're less likely to spend that money. You'll be surprised how much easier it will be to set and achieve specific saving goals.
Are my savings growing?
Pensions rely on investment returns to create enough money to provide a secure income stream in retirement. Your retirement savings needs to be positioned to grow
Keep in mind, interest from a savings account will hardly outpace the rate of inflation, let alone grow enough to provide a dependable income source in retirement.
Investing is key, but make sure your investment strategy is in line with your retirement time line and risk tolerance.
Will my retirement income be dependable?
The strongest retirement plans work to provide an income source in retirement that's reliable. In order to replicate the steady payment of a pension plan, consider financial products such as fixed annuities. These products turn your savings into a monthly income stream, and can be set up any number of ways to fit your needs.
Just like you work with a doctor to stay healthy, a qualified financial professional can help make sure your retirement is in the best shape possible.
If you have questions about how much you should be saving, how much risk you can take or how to build an income source for retirement, consult the expertise of a qualified financial professional.
When it comes to your retirement savings, regular checkups are necessary. You might find that your pension isn't as robust as it should be, but you can take matters into your own hands.
Creating a personal pension plan will put you on the path to a healthy and happy retirement.
Bradley Zucker is the financial educator, president, and chief financial advisor of Safe Money Advisors Inc., a Henderson-based independent financial advisory firm.
Zucker specializes in comprehensive financial and retirement planning including conservation of capital, preservation of principal, tax-advantageous distribution of a life-saving and competitive asset growth with little or no downside risk.
Zucker, a Registered Financial Consultant, an investment advisor representative, licensed life and health insurance professional, has more than 25 years of experience in the financial industry.
He also is a member of the Ed Slott Elite IRA Advisor Group, International Association of Registered Financial Consultants, National Ethics Association and the Better Business Bureau.
For more information about Zucker or Safe Money Advisors, visit SafeMoneyAdvisorsNV.com.