Financial Focus/Don’t Come Up Short in Your Retirement Savings

If you’re like many people, you may not enjoy participating in surveys, but you’re curious about the results - particularly if they contain information that touches on your life. For example, if you’re concerned about saving for retirement, you may be quite interested in some of the findings from the Employee Benefit Research Institute’s 2003 Retirement Confidence Survey:

* Fewer than four in 10 workers say they have calculated how much money they will need to have saved by the time they retire.

* Three in 10 workers say they have not saved for retirement.

* About 33 percent of workers are not confident about having enough money to live comfortably throughout their retirement years.

Unless you’re involved in making public policy, the overall impact of these statistics may have little impact on you. But if any of these numbers are telling your story, you’ve got something to think about.

Crunch the Numbers...

What do you want to do when you retire? Travel around the world? Buy a vacation home? Open a small business? Whatever your goals, you’ll have a better chance of achieving them if you know how much they’ll cost. Until and unless you’ve done this, you won’t know how much you need to save and what investment strategies can help produce those savings. Don’t be one of the four in 10 who haven’t done the necessary “number crunching.’’

Boost Your Savings...

If you’re one of the three in 10 workers who either haven’t saved for retirement or haven’t saved enough to feel confident about their savings, you need to take action - right away. But even if you’re among those who have saved something and feel pretty good about what they’ve done, you can almost certainly benefit by boosting your retirement savings. Here are a few ideas for doing just that:

* Contribute as much as you can to your 401(k) - If you’ve got a 401(k) or other tax-advantaged retirement plan at work, put in as much as you can afford. If you’re self-employed, open up a SEP-IRA or other suitable plan.

* “Max out’’ on your IRA - Each year, put in the maximum amount to your traditional or Roth IRA. For 2004, you can contribute up to $3,000 to your IRA, or $3,500 if you’re 50 or older.

* Consider an annuity - If you’ve “maxed out’’ on your 401(k) and IRA, consider investing in a fixed annuity. Your earnings grow on a tax-deferred basis, and you can contribute virtually as much as you want. (However, be aware that withdrawals before age 59-1/2 may be subject to a 10 percent early withdrawal penalty, plus other charges.)

* Invest for growth - The further you are from retirement, the more you can afford to be aggressive. Still, your growth stocks will need to be part of a diversified portfolio that reflects your risk tolerance, time horizon and long-term goals.

By determining how much you’ll need for retirement, and by increasing your savings and investments, you can greatly enhance your prospects for enjoying the type of retirement lifestyle you’ve envisioned. Then, the next time you see a retirement confidence survey, you can relax.

This article was submitted by the financial representatives of Edward Jones in Hagerstown: Greg Garner, AAMS, 301-733-9465; Dave Walker, 301-766-7300; Joan Bowers, 240-420-8514; John R. Pullaro, 301-824-7726; and Todd Streett, 717-762-0911.