Realizing the New ROI in Your Golden Years; Financial Advisor Helps Investors Ensure Reliability of Income During Retirement

The Baby Boomers are beginning to retire -- but many have not saved enough to stop working permanently. Veteran advisor Jim Coleman provides six tips to help Boomers ensure that their income lasts as long as they do.

Waterbury, CT (PRWEB) July 21, 2007 -- Most Americans can expect to live to be at least 78 years old, according to the National Center for Health Statistics. And with many Americans retiring well before the age of 62 (and with many having not saved enough to stop working permanently without risking their financial security), that means the money they saved for retirement has to last longer. According to Jim Coleman, a Waterbury-based financial advisor, instead of just looking for ROI in business transactions, investors need to look for ROI from their retirement accounts.

"Most people think that ROI means 'return on investment,' which is true, but what people planning for retirement need to look for is the new ROI: reliability of income," says Coleman. "What that means is developing a solid plan to ensure that your money doesn't run out before you do."

According to Coleman, investors have gotten pretty sophisticated about accumulating wealth. "What many investors don't understand is that accumulating wealth for retirement is vastly different

than distributing that wealth to provide a comfortable lifestyle for themselves." Coleman offers six tips to ensure that your income lasts as long as you do.

SIX SEGMENTS TO INCOME PLANNING

"Putting your assets into six segments will help investors plan for lifetime income," says Coleman. "The most conservative segment receives the largest deposit while the successive five segments receive varying lesser percentages, totaling 100% of deposits." Under the Income for Life™ model, as the deposit gets smaller, the asset class gets more aggressive. This means that a smaller amount of their portfolio is held in riskier investments, thus helping to provide a more stable source of income, from the most conservative portion of their portfolio.

IN RETIREMENT, THERE ARE SOME GUARANTEES

"It is possible to create a guaranteed income stream by utilizing a single premium immediate annuity or FDIC Insured banking products for a five year period," advises Coleman. According to Coleman, for every subsequent five-year period, one of the other five segments will be converted into a guaranteed income strategy with sixty monthly payouts. "If the projected rates of return are realized, sufficient money will be available to provide guaranteed income in amounts capable of providing an increasing level of retirement income." Guarantees are backed by the claims paying ability of the issuer.

CAUTION: WITHDRAWAL AHEAD

"Once you retire, your nest egg will likely seem like a never-ending supply of cash that you've been waiting to spend since you started accumulating it," says Coleman. "But you have to still pay attention to what the market is doing. If you are withdrawing from a growth investment in a down year, you'll not only be drawing down your nest egg, but your portfolio won't be able to recover because it's losing value both from market conditions and your need to meet living expenses."

LESS CAN MEAN MORE

"The most important advice I can give clients is first and foremost to pay attention to volatility. During your distribution years less can truly equal more. The benefits that volatility can provide during your accumulation years--like dollar cost averaging, a technique that allows you to accumulate more shares when the price is down and provides more shares moving up as the market recovers--might actually have the opposite effect during the distribution phase of the portfolio. Secondly it's smart to take less income when beginning to draw from a retirement account," advises Coleman.

"By taking less at the beginning, you're allowing more of your investments to grow, theoretically leaving you more money for your later retirement years." This also allows more dollars to be available to cover any unforeseen events.

DON'T FORGET ABOUT INFLATION

Inflation is a naturally occurring economic event, yet most investors fail to plan properly to allow for it. "Just because you live on $3,000 a month today, doesn't mean you can live on the same amount 15 years from now," advises Coleman. History shows that inflation can make $3,000 in theory turn into significantly less than that in practice."

DON'T BE AFRAID TO GET HELP

A financial professional can help map out a strategy designed to generate income that outlasts your lifetime needs, including inflation estimates and income distribution scenarios.

ABOUT JIM COLEMAN AND COLEMAN ADVISORY GROUP

Jim Coleman has been in the financial services industry for over 20 years. He founded Coleman Financial Advisory Group, a Waterbury-based financial services firm, in 1990. He specializes in providing comprehensive financial planning, asset management and estate planning services.

Listeners in Connecticut rely on Coleman to deliver sound, accurate financial advice as host of All About Money, a radio talk program. He writes a financial planning column for a local newspaper, the Prospect Pages, and recently authored a book titled Educated Investing: Your Guide to Surviving and Thriving in the Fast-Paced Global Markets of the 21st Century.

Call Coleman's office at (203)756-7526 or visit www.ColemanAdvisoryGroup.com to learn more.

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