By Edward Leone Jr. DMD MBA RFC
Contact information: leonee@vzw.blackberry.net
There is much concern over this slow economic recovery which we are experiencing. Mc Kinsey Quarterly tells us that it will take up to 2016 to replace the 7 million jobs lost in this current recession. Through the 1940s to the 1990s it took on average, six months for employment to recover after a rebound in GDP. After the 1991 recession, it took 15 months and after the 2001 recession, it took 39 months. There are many theories and opinions on the factors which influence this dynamic. What do you think?
It has been reported that many individuals retire early due to illness, disability and job loss. The Employee Benefits Research Institute tells us that those age 55 and older have not been dedicated savers for retirement to a great extent. 58% of that cohort have saved less that $100,000 towards retirement. How should an individual approach retirement savings?
I suggest dividing retirement planning into 4 phases: early career, mid-career, advanced career and retirement living. Yes, during retirement, planning is still necessary. Since retirement savings is a function of deferring current consumption to a later time in life along with the observation that more and more, retirement planning is becoming the individual’s responsibility, those engaged in early career status should make the commitment to savings as early as possible in their work life. This can be accomplished by funding as aggressively as possible an IRA, 401k, 403b or other retirement program if available. The mid-career individual needs to continue to build retirement assets, but must also seek the help of a qualified financial planner to advise on tax planning, estate issues, risk mitigation and investment disciplines such as asset allocation and portfolio rebalancing. During the advanced career time frame, all of the above efforts are maintained. In addition, creating a vision of the desired retirement life style and examining associated cost is important. Reduction of debt and other liabilities along with periodic review of the financial plan to better time retirement is essential. Being organized and investigating available health care coverage, Social Security and other retirement benefits is timely. During retirement, life should be secure and comfortable, but one must constantly be vigilant for factors which may change the course of retirement living and adjust for those factors.
For the Record:
DOW 12,582.77
NASDAQ 2,816.03
S&P 500 1,339.67
Suggested Reading:
“Common Stocks and Uncommon Profits” by Phillip A. Fisher
Leonesmoneymonitormonthly's Blog 
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