Making Retirement
Funds Last
Making Retirement Savings Last
About the PICPAThe Pennsylvania Institute of Certified Public Accountants (PICPA) is a professional association of more than 22,000 members working together to improve the profession and serve the public interest.
Making Retirement Savings Last
Reality Check• Many are unprepared for the reality of retirement• Life expectancies are going up—retirement may last
longer than you expect (25-30 years) • How much you withdrawal early on in your
retirement will greatly impact your later finances
Making Retirement Savings Last
Delay Taking SS Payments• If you delay receiving your Social Security benefits
until after your retirement age, your check will increase– If you wait until 67, there’s an 8% increase– If you wait until age 70, there’s a 35% increase
• You must start collecting at age 70 ½
Making Retirement Savings Last
Balance Your Portfolio• Put money into a diversified portion of stocks,
bonds, and real estate that pays dividends• Ladder your bonds– In your portfolio, ensure that your fixed income
securities have significantly different maturity dates
Making Retirement Savings Last
Immediate Annuities• Put money in an insurance contract that pays a fixed
rate of return• Comparison shop!• Annuities tie up your money—you’ll have no access
to it for a certain period of time
Making Retirement Savings Last
Other Options• Reverse mortgages• Only collect the interest from certain retirement plans• Longevity insurance
Making Retirement Savings Last
Tips• Get good, objective advice• Monitor your funds yearly• Try to live on non-retirement assets to let your
401(k) and IRAs grow as long as possible
Making Retirement Savings Last
Early 401(k) Withdrawals• There is a 10% penalty for early distributions– Early is anything before the age of 59 ½– Regular income taxes must also be paid on amounts
withdrawn• Some exceptions:– You die and bequeath the account, you become disabled,
you terminate employment and are 55+ years old
Making Retirement Savings Last
Early 401(k) WithdrawalsThings to consider:– Many employers only allow early withdrawals in
cases of financial hardship– You lose the potential investment growth on the
money you withdrawal– You may not be able to reinvest your full
withdrawn amount because of contribution limits
Making Retirement Savings Last
Be Wary Of Fraud• Pyramid Scheme: claims to turn small investments into large
returns• Ponzi Scheme: a central fraudster collects money from new
investors to use as “returns” on other investors • Rx Drug Scam: unsolicited discount drug cards offered• Audit Scam: unsolicited review of documents containing
personal information offered• Plus many more!
Making Retirement Savings Last
Fraud Red Flags• Guaranteed performance on an investment• Unregistered individuals selling unregistered securities• Overly consistent returns• No prospectus, no offerings, no stock symbols on stocks
being sold• Pushy sales people or high pressure situations
Making Retirement Savings Last
Avoiding Fraud• Are your investment professionals licensed?– Check to see if the license was ever suspended or revoked
• Ask questions!– Scammers count on you not bothering to investigate
• Be wary of unsolicited offers!– Emails, phone calls, letters, and more
• If it sounds too good to be true, it probably is!
Making Retirement Savings Last
Resources • The PICPA: www.picpa.org/moneyandlife• Social Security: www.ssa.gov• AARP: www.aarp.org
Making Retirement Savings Last
Questions?
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