Irvine, CA (PRWEB) September 20, 2007
Many Baby Boomers are waking up to the reality that this ain't their father's retirement. With Americans living longer and healthier lives and still retiring at 62 (or many times younger) they're finding that a gold pen and pension aren't getting them as far as they expected. Many Baby Boomers have discovered that the money they saved in retirement accounts may not outlast their lives. But according to Arthur Cooper, an Irvine-based CERTIFIED FINANCIAL PLANNER™ professional, a few simple steps can help investors build a nest egg for their golden years.
"Most people believe that saving more money is the only way to rectify their fear of running out of money during their retirement years," says Cooper. "While that is always a smart option, developing a withdrawal plan with the help of a financial professional may be a better way to go. You certainly do not want your money to run out before you do."
According to Cooper, accumulating money for retirement is the easy part -- it's distributing that money that often creates problems for retirees. "Many investors think that once they've reached retirement age, it's time to kick back and simply withdraw the money they have accumulated. That's simply not true. Even in retirement, they will likely still have to budget to ensure their money lasts as long as they might."
Cooper believes these six tips can assist investors preparing for their golden years:
SIX SEGMENTS TO INCOME PLANNING
"Putting your assets into six segments will help investors plan for lifetime income," says Cooper. "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 Cooper. According to Cooper, 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.
SYSTEM OF SURVIVAL
According to Cooper, "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. But you still have to pay attention to how the market is performing. 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 living expenses. Developing a systematic withdrawal strategy will allow you to take pre-determined periodic withdrawals from a portfolio of stocks, bonds, or mutual funds and still potentially have income for life."
LESS NOW CAN MEAN MORE LATER
"The most important advice I can give clients is to take less income when they begin drawing from their retirement accounts," advises Cooper. "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."
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 Cooper. "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 for generating income that outlasts your life including inflation estimates and income distribution scenarios.
About Arthur Cooper
Arthur Cooper has been in the financial services industry for 20 years and founded Cooper McManus, an Irvine-based financial advisory and wealth management firm, in 1999. He specializes in providing comprehensive financial planning, estate planning and asset management services.
Mr. Cooper attended California State University, Fullerton and went on to fulfill the requirements to become a CERTIFIED FINANCIAL PLANNER™ professional. He has been a regional vice-president and district manager for three financial services companies, training other financial advisors and overseeing their careers, ethics, and performance. Cooper's passion is finding solutions to financial problems and further educating his clients.
Call Cooper's office at 800-516-5333 or visit http://www.coopermcmanus.com to learn more.
When you need a knowledgeable professional to speak on complicated financial topics in a clear and concise manner, call the advisors at Cooper McManus.
Securities offered through Securities America, Inc. a registered Broker/Dealer. Member FINRA/SIPC. Arthur Cooper CA Insurance Lic #0798385, Registered Representative. Advisory services offered through Cooper McManus, and SEC registered Investment Advisory firm. Cooper McManus and Securities America, Inc. are not affiliated.