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Plan and prepare to reap the rewards of retirement

Making the transition from the working world to retiree life requires careful attention to your finances. If you want to enjoy a comfortable retirement, the need to plan and save for the future is critical — even if you’re getting a late start.

Experts suggest that to maintain your current lifestyle, your income in retirement should be between 60 and 90 percent of your pre-retirement income. If you have an annual salary of $100,000, your sources of income in retirement — Social Security, pensions, retirement accounts and any other sources you may have — should provide between $60,000 and $90,000 annually.

Plus, you’ll want to pad your savings to factor in unexpected medical expenses and the potential costs of long-term care.

Consider the following financial tips as you hit certain ages if you want your nest egg to keep you comfortable in retirement for years to come.

Bring in a professional

Your financial planner will help you create strategies to reach your financial goals at any stage of life. Enlist an advisor to help you review your retirement savings and future plans. Your advisor will let you know how much you need to be saving and help you allocate your assets to achieve growth at a risk level you’re OK with.

Ramp up contributions at 50

Individuals 50 and older can make catch-up contributions into eligible tax-advantaged accounts — up to $6,000 more in a 401(k) or other eligible employee plan, and up to $1,000 extra in a traditional or Roth IRA account. Take advantage of the tax-advantaged growth these accounts provide to beef up your savings.

Tackle debt at 55

When you’re retired and living on a fixed income, the last thing you want is to pay a large portion of your pension or Social Security check to loan companies.

According to Bankrate, 13 percent of baby boomers still have student loan obligations, and reports that baby boomers are increasingly carrying credit-card debt into retirement.

Start paying down your debts while your earning potential is at its highest. Your future self will be grateful to have more income to fund living expenses, travel and time with family instead.

Build a cash cushion at 60

As you get closer to retirement, your asset allocation will likely shift from a majority of high-growth stocks to safer, less volatile investments such as bonds. It’s a good idea to approach retirement with at least two years’ worth of liquid savings in a short-term CD or money market fund, so you can ride out any market fluctuations without having to sell your investments.

Transition at 65 (or later)

Depending on your savings, lifestyle and a variety of factors, you may opt to delay retirement or continue working part time, which will help you continue to build your funds without having to draw your Social Security benefits too early.

Once you’re retired, you should make sure your annual withdrawal rate isn’t greater than four to six percent of your portfolio. Consult your financial advisor to help you make the most of your hard-earned money and to help ensure your senior years truly are as golden as their name.

David Kimura is the investment program manager for Hawaii State Investment Services at Hawaii State Federal Credit Union providing investment, retirement and financial planning services to members through CUSO Financial Services LP. He can be reached at or 447-8083.

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