DREAMING OF RETIREMENT: PART ONE OF SIX
KEYSTONE IS HEALTH |
Even for those who enjoy working, thinking about retirement can be seductive. But understanding how to make the dream a reality can be daunting even at the best of times. And when the airwaves are full of sobering news about the economy, sometimes retirement starts to seem like an unattainable fantasy.
Paul Hansen, senior vice president of finance and profitability at Zions Bank, offers some practical advice about turning your retirement dream into reality.
The keystone for a successful retirement, according to Hansen, is thinking about health. Retirement planning requires consideration of one’s own health, the health of one’s loved ones, the health of the economy, the health of one’s retirement portfolio, and for business owners, the health of the business.
When news on the business pages is negative, Hansen says, clients tend to focus on the nation’s economy rather than their own. But many would do well to concentrate on the areas where they have control.
Some aspects of personal health are out of one’s control, of course. But in retirement planning, one’s current health status should always be taken into consideration, as well as its long-term outlook. Is longevity likely, given family history? Hansen says he can’t count the times he’s heard the sentence, “I never expected to live this long” from retired clients. If you outlive your own expectations, can your retirement plan handle it?
If you have a partner or spouse, you’ll need to know his or her answers as well. What is the current state of your partner’s health? What kind of longevity can he or she expect?
Another consideration is whether one has any permanent dependents, such as a disabled relative. Relationships with elderly parents and adult children also need to be taken into account. What is the situation for one’s parents and in-laws? Are they in good health? Is their retirement plan? Is anything about their financial situation as they age likely to impact yours?
Some of these questions also apply when considering one’s adult children. If, like many parents, you’ve offered your children the occasional financial helping hand even after their education was complete, are you prepared to scale back after retirement? Are they prepared for such a change?
For business owners, a key retirement question is what will happen to the business. Will you sell or liquidate? Are you hoping for a merger? Will the business be transferred to a relative?
Finally, there’s the question of one’s investment portfolio. Hansen recommends that his clients supplement their 401(k) and other employer-sponsored retirement plans with an IRA. “I tell them, ‘Start early and contribute often,’” he says.
Zions Bank offers both traditional and Roth IRAs. Investments in both types can be spread across asset classes to manage the risk inherent in today’s volatile economic climate. Beyond that, both types have different advantages. A Zions representative can review the options in relation to your situation. Your retirement plan should be as tailored to you as are your retirement dreams.
Featured in the January/February 2009 issue of Zions Bank’s Community magazine.
*Artwork from Felipe Skroski under Creative Commons license at Flickr.com.
