financialforum
Retirement Ready
Despite the meltdown of the U.S. economy, all is not lost in
securing your fi nances for retirement. Phil Dyer, CFP, offers
some tips to help you prepare in these uncertain times.
F
or those keeping score, the retire- Second career: With private-sector pen-
ment “game” is changing drastically. sions rapidly drying up, don’t ignore supple-
Many saw their 401(k) plans turn mental retirement savings. Max out your
into 201(k) plans as the 2008 market melt- employer-sponsored plan [401(k), 403(b),
down caused a 30-percent to 40-percent 457(k)], and consider using the Roth 401(k)
drop in value. Only about 10 percent of to- option — if offered by your employer — for
day’s nongovernment workers are covered at least part of your retirement savings to
by a traditional defi ned benefi t pension start building a tax-free retirement income
plan, and the percentage of retirement stream. (I regularly see military retirees
needs covered by Social Security is ex- whose income from all sources is greater
Tips For Your
pected to fall from about 42 percent today in retirement than it was in their working
Retirement
to 30 percent by 2030 as rising Medicare years, so Roth funds can be very helpful.)
a73 To get more advice on premiums take their toll. Fully retired: With at least two COLA-
how to plan for retire-
Throw in that the average worker near adjusted sources of guaranteed income
ment, check out the
Spring Retirement Guide
age 55 only has about $50,000 in retirement (Social Security and military retired pay),
beginning on page 53.
savings, according to the Employee Benefi t you should be in relatively good shape.
Research Institute, and the retirement tab- If you had subsequent federal service or
leaux for baby boomers and generations fol- worked for a private-sector company with
lowing looks pretty bleak. a pension, then you probably are in really
All is not lost, however. Consider these good shape and might be in a position to
tips for various stages of life: assist children or grandchildren with their
Active duty: Don’t rely on just your own retirement savings. Why not offer
military retired pay to support you in to match them — dollar for dollar — on
retirement. Take advantage of a Thrift anything they put into a Roth IRA or their
Savings Plan and Roth IRAs to build re- company-sponsored retirement plan?
tirement assets while you are on active Remember, absent the Survivor Benefi t
duty, and let the power of compound in- Plan (SBP), your military retired pay stops
terest work its magic. when you die, so fully evaluate your SBP
If you are at the mid-career point, decision when it comes time to retire so you
think long and hard about abandoning the can plan adequately for your spouse. MO
military for the private sector. The value
of the COLA-adjusted military retired pay
— Former Army Capt. Phil Dyer, CFP®, is
income stream is huge. A retiree receiving
deputy director, Benefi ts Information and Finan-
$60,000 in military retired pay at age 65
cial Education. To fi nd a fi nancial planner near
would need an investment portfolio of $1.5
you, contact Garrett Planning Network at
(866) MOAA-GPN (662-2476) or
www.moaa
million to provide the same benefi t (as-
.org/garrett, or visit
www.moaa.org/fi nancial
suming a 4-percent withdrawal rate). center for other resources.
4 8 M I L I T A R Y O F F I C E R M A R C H 2 0 0 9 PHOTO: SEAN SHANAHAN
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48ar_forum.indd 48 22/9/09 7:10:38 PM/9/09 7:10:38 PM
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