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You
wake up one morning to your telephone ringing. It is early
and you cannot imagine who would be calling at this hour…
UNTIL, you answer and a friend wishes you a Happy Birthday…
your 55th birthday, to be exact. Yeah, you are excited
alright… not!
Along
with these good wishes comes a healthy dose of introspection.
You remember opening that piece of mail earlier in the
week from your Credit Union urging you to buy life insurance
before it’s too late …too late for
what, dying? Well, we are all going to do that sometime,
right?
And,
what about those notes and letters you get from your bank
reminding you to save for retirement? What retirement?
You go to Wal-Mart and smile graciously at the greeter,
because you figure someday that might be you.
Truthfully,
death is less feared than retirement for many people.
When you are dead, you are dead. But, when you retire,
well, things are just not the same, because you are still
here and are not very happy about it. According to the
Los Angeles Times, July 1996, 74% of the elderly
poor are women, yet only 46% of women have begun to save
or invest for retirement. Ten years has not made a great
deal of difference in these statistics. Your money seems
to be operating on a different mortality table than you
are… in fact its expiration date might be sooner
than the milk in your refrigerator. No, not really, but
you realize that you will likely outlive the resources
you currently have.
Then,
you realize that you are still asleep and this is a dream….
or, nightmare. It is reality, though. The shuttering fear
jolts you out of bed, even though your employer has given
you the day off for your birthday.
This
is good. Your fear is creating ACTION. You spend the morning
rifling through the drawers in the kitchen looking for
those statements you get every month. You look for the
box that you collect for the accountant. You wonder where
your 401K statements are and then you remember….
you chose not to participate. You are foregoing that generous
employer match of 3%, which really increases your potential
to earn. You always thought that retirement was decades
away and now you are on the threshold of that decade.
Oh,
and this is your apartment, not your house. What have
you been doing since you finished college and got a job
or jobs? You have made choices and decisions that are
irrevocable…. High-end furniture, snazzy sports
car, trips to the Mexican Riviera, etc. But, you pat yourself
on the back because you watch the financial news on your
52-inch HDTV. Cannot turn them in for retirement funds,
can you? And, the credit card bills for these wonderful
things are still coming.
Now
that you have gathered your pieces of paper and realize
that your assets are few, what are you going to do? Here's
a seven-point plan:
1. Gather your wits about you and call the Human Resource
office at your company. Make an appointment and
find out how to sign up for the 401K.
2.
If need be, make an appointment with a Credit
Counseling Service and get help structuring your
debt and debt repayments.
3.
Make a budget that you can live with
but that has retirement in focus.
4.
Analyze your spending habits. You should
look at your check book and your credit card bills to
determine your pattern of spending. Ask yourself why you
buy the things that you buy.
5.
Enroll in a night course to educate yourself on investing
OR, hire a financial planner.
6.
Determine, realistically, what amount of money you are
likely to need during retirement and how long
you will live in retirement. You will need to
consider your rent, your health insurance, your car expenses,
etc. This list is long. Do not think that when you retire
your expenses will go away. In many cases they will expand.
There are many factors to consider including longevity
in your family, your health, inflation, other resources
such as inheritance that might be available and how long
you plan to work or can work.
7.
Most important of all, learn to save.
Recently I heard a news report that said if one bought
a double latte every day for a year, it would cost over
$4000.00. Think about the ways in which you spend a few
dollars here and there, with no real purpose or plan.
Do not carry extra cash with you. If you do, you
will spend it.
ABOUT
THE AUTHOR: RUTH R. PETTY, CLU ChFC
Ruth Petty spent her first seventeen years in North
Carolina. After graduating from Wheaton College in Wheaton,
Illinois, Ruth left the South and did not return until
1987. Now a resident of Boston, she has lived on both
coasts of the U.S. and in Germany. Ruth entered the Financial
Planning and Advisory arena quite by accident -- responding
to a blind ad in a newspaper. Finding it very enjoyable,
she dug into school and obtained her second and third
Masters Degrees -- in Financial Services and Management.
Her first Masters was in Sociology. Ruth has one son who
lives in San Diego.
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The
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