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A successful retirement doesn’t just happen; you’ve got to plan for it. Preferably, your retirement planning has started, but it’s never too late to start. The long ramp toward retirement focuses on saving and investing, but once retirement starts emphasis shifts to spending and safeguarding. Even though the greatest challenge in retirement, and probably your greatest fear, is outliving your money, most Americans spend less time planning their retirement than they do planning a vacation.

What does retirement planning involve? Here are the steps: First, determine what you’d ideally like to do in retirement. Will you spend your time traveling, enjoying hobbies, helping others, working part-time or what? Second, estimate the retirement income you’ll have from savings, Social Security, pension and all other sources. Third, estimate your expenses, making sure to take into account inflation, taxes and health care costs which are likely to be an increasing part of your budget.

Fourth, if you have more income than needed, you only need to safeguard your investments to make sure they’re not lost or shrunk by bad decisions. If you have insufficient money for retirement (expenses exceed income), then you’ll need to postpone retirement, work part-time or possibly use a reverse mortgage to access the equity in your home. Either way, it is highly recommended that you minimize your exposure to loss and maximize the full potential of your financial resources by working with a financial advisor. I can help you determine the risk you can afford, investment options and how to position your money for best results without sacrificing safety. Don’t worry about having too little to justify a financial advisor or so much that you can ignore risk: Retirement is going to be very long, filled with uncertainties, including emergencies, and going it alone is one of the greatest risks you can take.

Be realistic in your planning. For example, be aware that for a couple age 65 there is a 50 percent probability that one will live beyond age 90. Acknowledge that even a low rate of inflation can make a big difference in prices over the 20 to 30 years you’ll be in retirement. Since 78 million boomers are entering retirement over the next two decades, the price of everything related to retirement, especially health care, is likely to rise faster than overall inflation. Inflation is a cruel tax for those on fixed incomes, and the chances are your income in retirement will increase a lot slower than prices.

Edward Fusco can be reached at Harbor Village Professional Center, 18 Main St., Townsend, MA 01469. Call (978) 597-9177 or take a look at what everyone is raving about at www.sbr.retirerx.com.

This information is provided for informational purposes only and may not be suitable for every situation.

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