Whether you’re a 20-something just starting a career or a 60-something on the brink of retirement, it’s essential to understand the basics of saving and planning for life beyond the working world.

Planning for retirement involves so much more than deciding at what age you want to take the leap. Money, investments, wills, healthcare options and other factors play a huge role in your future intentions. If you’re not sure where – or when – to begin, financial advisors, estate planners, accountants and attorneys are more than willing to lend a hand.
Here, David Bowman Jr. of The Bowman Group, SunTrust Investment Services, breaks down some retirement planning elements to get you started.

Financial Planning

The younger you start saving for retirement, the better, Bowman says. “But it can be difficult to get young people to sign up for a retirement plan,” he adds. “They may not be making a lot of money, so they aren’t thinking about retirement yet.”

Typically, people start saving for retirement through company-sponsored plans. “If you’re lucky enough, your company will offer a match to what you contribute,”
Bowman says. “You want to try to contribute as much as you can, and at minimum, the same percentage your company will match.”

In addition to, or instead of a company plan, IRAs are a great option. In traditional IRAs, your money is tax deductible and grows tax deferred. When you’re ready to take the money out, Bowman says, you will have to pay an income tax. With Roth IRAs, money is contributed after taxes and upon people to sign up for a retirement plan,” he adds. “They may not be making a lot of money, so they aren’t thinking about retirement yet.”

Typically, people start saving for retirement through company-sponsored plans. “If you’re lucky enough, your company will offer a match to what you contribute,” Bowman says. “You want to try to contribute as much as you can, and at minimum, the same percentage your company will match.”

In addition to, or instead of a company plan, IRAs are a great option. In traditional IRAs, your money is tax deductible and grows tax deferred. When you’re ready to take the money out, Bowman says, you will have to pay an income tax. With Roth IRAs, money is contributed after taxes and upon taking the money out, you will not have to pay taxes on it or the earnings acquired over time.

If you plan to invest, Bowman suggests an FDIC-insured savings account or high yield checking account. He also says invested funds should be diversified.

“Count all of your assets (home, land, investments) and have a third party look at it to determine what it’s worth and what you can expect from it,” he advises.

At a younger age, you can be more aggressive with investments, Bowman says, because you have more time to allow funds to grow. As retirement approaches, it’s a good idea to become more conservative because you’ll no longer be able to deal with major drops.

Estate Planning

Contrary to popular belief, estate planning is not just for the wealthy. In fact, says Bowman, it can be as simple as ensuring you have a will and that it is consistently updated to reflect your wishes.

You also want to remember to list beneficiaries for your 401Ks, IRAs and other investments, Bowman says. If no beneficiaries are listed, the court system decides how to distribute your assets.

Life insurance, another aspect of estate planning, helps heirs take care of needs such as funeral costs and credit card payments upon your death.

“And if you’ve had the (life insurance) policy for years, it’s good to have it reviewed and check the beneficiaries,” Bowman explains. “Terms and conditions could have changed and may no longer fit your current wishes.”

Other objectives of estate planning to consider: deciding who will manage your assets, selecting a guardian for minor children and – if you own a business with a partner – drawing up a buy/sell agreement.

Long-Term Care

“There’s a good chance that one person in a marriage will need a form of assistance as a senior,” Bowman says, “which is where long-term care comes into play.” This covers a broad range of aid, such as help getting dressed or living in a nursing home for round-the-clock care.

Long-term care policies can be obtained at any point in life, but most people don’t think about it until retirement is approaching. It’s a good idea, Bowman explains, to look at options before your health declines or you have a life-altering accident. While straight long-term care policies are available, it’s also possible to add long-term care riders to life insurance policies or investment vehicles, such as annuities.

Funeral Pre-Planning

Though not always a pleasant topic, preplanning for your funeral not only takes the expense burden off your loved ones, but ensures your wishes are known as well. It’s best to either put your wishes in writing and keep the document in a safe place, or make plans with a funeral home. Pre-financing also is available if you prefer your life insurance to be used elsewhere.

How Much Money Will You Need?

Typically, David Bowman Jr. says, you will need 70 to 80 percent of your pre-retirement income. As you develop a plan for retirement, there are several questions you should ask yourself to help determine how much money you should save. Be sure to keep inflation in mind as well.

• What are my living expenses (bills, groceries, etc.)?
• How much do I want to set aside for extra expenses (shopping, dining out, entertainment)?
• Will I want to travel? Where and how often?
• What expenses will I cut out (less on gas, paying off house, etc.)?

Financial advisors agree it's smart to think about retirement.

Plan early… plan now. Financial advisors agree it’s smart to think ahead about retirement. Follow these 10 recommendations from Terry Vandelinde, president of VIP Planners Inc., and Christine Smith, a financial advisor with Ameriprise Financial Services Inc. in Daleville, to ensure proper financial and estate planning. You’ll be right on track for worry-free retirement years.
1. Talk to an independent, fee-only financial advisor and discuss both short-term and long-term financial goals.

2. Assess your present situation, including income, expenses, assets and liabilities.

3. Estimate your expected annual retirement income: Social Security, pensions, savings and investments (IRA’s and retirement plans), job earnings and other sources.

4. Estimate retirement expenses (food, clothing, insurance, health care, travel and others), keeping in mind that those expenses may change from year to year.

5. Review your life, health, disability and long-term care policies to see if they meet your future needs.

6. Try to pay off significantly larger bills now, especially those with higher interest rates, to eliminate them before retirement.

7. If a retirement shortfall is anticipated, estimate how much must be saved each year to bridge the gap.

8. Review your retirement goals annually.

9. Determine appropriate beneficiaries for employer-sponsored plans, IRAs, annuities, life insurance, etc.

10. Execute valid wills, including durable power of attorney and advanced medical directives.

Vacation can seem like a treat without added expense.

These days, everyone is seeking ways to save money: clipping coupons, dining at home more often and cutting out a few luxuries. With these 10 budget travel tips, vacation will seem more like the treat it once was and less like an added expense.
1. Pick your destination, then prepare a budget. Break it down by how much – or little – to spend on transportation, dining, sightseeing, shopping and other activities. Then stick to the plan!

2. Bundling is best. Through websites such as orbitz.com, hotels.com or travelocity.com, booking your flight, hotel (and sometimes car rentals and tickets for attractions) is cheaper than booking each separately.

3. If renting a car, choose a compact or sedan. You most likely don’t need the extra space in larger cars, and you’re sure to save on gas.

4. Visit the websites of the activities/attractions that interest you and check for special discounts or coupons. You may even stumble upon some freebies.

5. Pack light when taking to the skies. Many airlines now charge luggage fees, so try to fit your belongings in your carry-on. Review the regulations on how to properly pack liquids.

6. Renting a condo or a hotel with a kitchen? Take advantage of the luxury and cook for yourself. You’ll save a ton on dining expenses.

7. If you don’t mind a few extra miles, consider booking a hotel outside of your primary destination. Typically, accommodations in adjacent towns have cheaper rates.

8. Off-season travel will save a few bucks. Ski trips in spring or beach getaways during the off season almost guarantee discounted rates.

9. If an attraction is far away, get there via public transportation or car. But take a walk to the activities close to your accommodations. You’ll save on transportation costs and have the added bonus of enjoying the sites along the way.

10. Discounts are common for group travel. Gather up your friends and family for a fun – and cheaper – trip. *

A Hop, Skip and a Jump

Air travel can sometimes be a hassle. Delays, cancellations and layovers can eat into your precious vacation days. Here are five fun getaways within a five-hour driving range, giving you more time to enjoy your destination.

Virginia Beach – Sandy beaches; a boardwalk complete with shops, restaurants and other attractions; and numerous hotels to choose from, make this shoreline location a hot spot for travelers.

Asheville, N.C. – Pair gorgeous mountain vistas with a thriving downtown, art scene and dining options and that just brushes the surface of what makes Asheville a great escape.

Williamsburg – Must do’s in this history-rich town: Colonial Williamsburg, outlet mall shopping, Busch Gardens and indulging at local restaurants.

Gatlinburg, Tenn. – Big-city amenities meet small-town charm in Gatlinburg. Attractions include the Great Smoky Mountains National Park, Ripley’s Aquarium, specialty shops and outlet malls.

Greenville, S.C. – Mountain scenery and the Reedy River draw visitors to Greenville. Not to mention the waterfront restaurants, The Little Theatre and Greenville Museum of Art.

HELPING HANDS

Aging is not always easy. Everyday tasks often become difficult in the latter years of life. But you don’t have to lose your independence. Assisted living facilities and nursing homes certainly are options, but with assistance provided by home health providers, you can remain in the comforts of your own home.

Generally, notes the Carilion Clinic website, home health care is provided to patients that have become disabled, or are recovering from an illness, undergoing treatment, chronically ill or terminally ill. Home health providers offer a wide range of services, which include bathing and dressing, serving home-cooked meals according to dietary needs, reminding clients about medicine and transporting to a doctor’s appointment.

Caregivers vary from physicians and nurses to volunteers and companion providers. Michelle Belton, owner of Companion Home Care, Inc., says her business offers non-medical and homemaking services, such as cleaning house and doing laundry, accompanying clients to social functions, and serving as a companion for leisure activities such as gardening, playing cards or taking a stroll through the park.

LASTING BENEFITS

According to State Farm Insurance’s website, there is a one in two chance that when you reach 65, you will need extra care down the road, so it’s best to prepare for that possibility. You can avoid leaning on family members or using your retirement savings to help cover the costs of home care by purchasing a long-term care insurance policy.

The product helps you pay the expenses of an in-home caregiver, private duty nurse or therapist (as well as nursing homes, assisted living facilities and adult day cares). Such services commonly are not covered by health insurance, Medicare or Medicaid.

If you’re considering a long-term care policy, keep in mind that the earlier you buy, the better. The cost of premiums, according to State Farm, depends on your age when you purchase the policy. And if you wait too long, you’ll face a higher premium or become ineligible due to changes in your health.

Currently, the average cost of home health providers in Roanoke is $19/hour, but health care costs are on the rise. Remember to weigh all of your options, and consider inflation and the possible amount of time you’ll need long-term care.

Financial advisor Erin Dooley says for some of her clients that have expressed concerns about their financial situation, she’s been able to map out a new plan. After reviewing their goals, she has suggested either working a couple more years or cutting down on expenses to help get savings back on track.

According to Erin Dooley, a financial advisor for Edward Jones in Moneta, seven out of 10 people are not adequately saving for retirement. It’s a scary statistic. Whether your retirement is five years or five months from now, do you know if you’re ready?

“Eighty percent of what you make now is likely what you’ll need to live on,” Dooley says. “Most people don’t usually plan to change their lifestyles drastically,” but keep in mind that inflation will lessen your buying power over the years.

Websites such as Charles Schwab (schwab.com) and AARP (aarp.org) offer retirement savings calculators to help you find a more accurate account of how much money you will need by crunching the numbers of your current income, how much you are saving annually and how much you plan to spend annually during retirement.

Remember, Dooley says, life expectancy has risen, so you should plan for at least 20-30 years of retirement savings.

PLAN AHEAD

It’s never too early to begin mapping out your retirement, Dooley and other financial planners emphasize. Sort through bills, mortgages, social security and retirement plans with a financial planner to determine what you need to do to live a comfortable life in your latter years.

“It’s all about looking at where you are today, where you want to be and how you’re going to get there,” Dooley says. “We recommend meeting annually or semi-annually with an advisor to make sure nothing major has happened in your life that could affect your savings.”

As for investments, Dooley says she doesn’t push a particular type, as the right venture for a person varies by age and how much risk you are willing to take. Start early, and your investment is likely to withstand the ups and downs of the market.

BEFORE THE GOODBYES

You’ve announced your retirement and the farewell party at the office is planned. Before you go, don’t forget to consider the options for your 401K.

The Charles Schwab website recommends talking with your employer about arranging a direct rollover of your account balances into an IRA. You also may have the choice of keeping your 401K through your employer. Dooley says rolling over into a Traditional or Roth IRA is ideal because you can keep better track of the funds instead of relying on your former employer.

PRESERVE YOUR ASSETS

Financial planning and estate planning seem to go hand-in-hand. Once you have created a plan for your retirement funds, says Scott E. Gardner, an attorney in Salem, you should consult an attorney to discuss an estate plan to preserve those funds.

“It’s never too early to start estate planning,” Gardner says. “All clients needs are unique, and they should customize an estate plan accordingly.”

Attorneys will review investment statements, insurance policies, titles to properties and other financial documents to ensure an adequate plan is made. After evaluation, attorneys prepare the proper documents, which include a will, trust, power of attorney and living will. Other assistance available, Gardner explains, include transferring property, creating business agreements and amending accounts or insurance policies.

Upon completion (which could take a few days to a few months), clients execute the documents with the attorney. The cost of estate planning ranges from a hundreds to thousands of dollars, depending on the circumstances.

IMPORTANT QUESTIONS TO CONSIDER

According to Gardner, people should ask themselves the following questions (depending on your personal situation) before making estate plans:

How will my assets be divided and distributed?

Do I need long-term care insurance?

Can I create a trust or make a donation to a charity or university?

Should I start making gifts to relatives now?

Who should I appoint as my executor, trustee, guardian?

How will my debts be paid?

LATE-IN-LIFE PLANNING

If you have delayed estate planning or are thinking about making changes to your plan, attorneys may require you to undergo an independent medical evaluation to determine your decision-making capacity.

Dr. Gary Oberlender of Roanoke, a consultant in geriatric medicine, offers in-home evaluations for folks facing such situations. The evaluations, according to his website (seniorevaluations.com) include – among other factors – a brief review of medical history, assessment of general physical health and functional independence, and a mental status examination. Oberlender will prepare a written report of his findings and upon request, mail the report to the client’s attorney.

Thinking Ahead

It’s not a pleasant topic, but funeral and burial arrangements are something everyone must endure. But you can reduce the stress on your loved ones at the time of your passing by handling as much of this task as you can beforehand. Here are a few things to keep in mind:

Pre-planning ensures you get the type of service and arrangements that you prefer. Also be sure to inform your family of the decisions you make.

A funeral director can guide you through the necessary preparations and help you choose the merchandise that suits your needs and desires.

According to Oakey’s Funeral Service & Crematory, “when you prepay, you pay tomorrow’s cost at today’s price. More of your assets and life insurance proceeds go directly to your family.” Payment plans typically are available, and your money goes to a bank trust or funeral insurance fund that cannot be released until after your funeral.

The average cost of arrangements, says Bob Burger, managing partner for Lotz Funeral Home, can range from about $2,000 for a simple cremation to $7,000-$8,000 in this area for a traditional or complete funeral service, which includes services, casket, vault or outer burial container.