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Jim Lentini: Do some replanning to retire soon

Posted: February 17, 2009 12:39 a.m.
Updated: February 17, 2009 4:55 a.m.
If you are anticipating retiring within the next few years, you may need to do some careful re-planning.

With the current financial crisis causing most retirement plans to lose values, especially if you are currently receiving income, you need to review, recalculate, and revise your options.

You may need to take a closer look at your original analysis of your retirement income needs and see if there are any expenses that can be reduced or adjusted.

Look at all the income sources you are likely to have, and re-evaluate whether they will be sufficient to get you through the early years of your retirement.

If your retirement portfolio has taken a substantial loss, you will need to take some time to build it up again, which may mean postponing your original retirement date if you can.

n Rebalance portfolio if necessary - If the weighting of asset classes in your portfolio has shifted due to differences in investment performance, the risk/reward relationship of the portfolio also shifts.

So you may want to rebalance back to your original target to make sure your strategy stays on track.

n Accelerate your contribution - If your portfolio has suffered a loss, fight back by saving for the future, as you shouldn't depend on returns alone to get you to your goal.

You also want to save as much as possible, so see if you can step up your regular contributions to help build a bigger retirement nest egg.

n Consider a guarantee income rider - Only a variable annuity with a guarantee income rider can protect your principal, guarantee growth, step up if the market outperforms the minimum deferred growth rate, and guarantee a lifetime income that you cannot outlive.

As professed many times, most retirement plans should have some portion of assets in one of these plans.

Also, as noted, these riders defer from one company to another.

Discuss options with your financial advisor familiar with them so you make the right decision if an annuity fits your goals and desires.

Remember, investing for retirement can be challenging, particularly during a very volatile period (like now.)
Don't try to figure it out all alone.

Discuss your situation with a financial advisor to help you understand your retirement plan, its investment choices, and assist you with making any adjustments to your saving and investing strategy.

Jim Lentini, CLU, ChFC, IAR is President of Lentini Insurance & Investments, Inc. He can be reached at (661) 254-7633. His column reflects his own views and not necessarily those of The Signal.


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