Boomers on the Brink: Issues Affecting Participants as They Consider Retirement Planning
Will you still need me when I’m 64—or is it 65?
Some birthdays are more important than others when it comes to retirement planning. Here are some milestones to remember.
| Age 50 | More money can be placed in your retirement plan this year. Put an additional $6,000 into your 401(k) and an extra $1,000 into your Roth or traditional IRA. |
| Age 59-1/2 | There is no longer an early withdrawal penalty for taking money out of your tax-advantaged retirement plan. |
| Age 62 | You can claim Social Security, but your benefits will only be 75% of what you could collect at full retirement (age 66 for people born between 1943 and 1954). |
| Age 65 | Time to enroll in Medicare, Part A, which covers hospitalization and costs nothing. |
| Age 70 | You qualify for the maximum Social Security benefits—there is no advantage in delaying any longer. |
| Age 70-1/2 | This is when you must start annual required minimum distributions from your 401(k) and IRAs. |
Q&A: Common Questions Plan Participants Ask
How do I boost my credit score?
Your FICO score helps determine the amount of money you will be allowed to borrow and the interest rate you likely will pay. These results, which lenders use to qualify loan recipients, attempt to identify which borrowers are likely to repay on time. Having a healthy (high) score could help you lower your payments on a car or house purchase by hundreds or even thousands of dollars over the life of the loan. A low score from late payments on loans and credit cards can result in hurting your ability to qualify for loans in the future.
You can easily improve your FICO score. Spending less on your credit cards and paying off balances each month can improve your score in as little as one payment period. Making these ritual actions can not only strengthen your ability to manage other debts—car loans, mortgages—but also can build your credit history over time.
FICO Score Chart
| Score Range | Credit Rating |
| 760–850 | Excellent |
| 700–759 | Very Good |
| 660–699 | Good |
| 620–659 | Below Average |
| 580–619 | Poor |
| Below 579 | Very Poor |
Tools and Techniques: Resources to Help Guide Your Retirement Plan
Rule of thumb for gauging retirement income
Check your retirement progress by adding up all of your savings and applying a 4% annual portfolio withdrawal rate, equal to $4,000 a year for every $100,000 saved. This is a conservative way to project the annual income that your savings will produce. Should you be saving more?
Corner on the Market: Basic Financial Terms to Know
Longevity risk
Longevity risk is the chance that you could outlive your life savings. The best way to protect yourself from this unknown is to save enough to be financially secure in retirement, taking into account your health and spending needs. To estimate how long you are likely to live based on the latest medical and scientific data, check out the Life Expectancy calculator at www.livingto100.com.
Next Step: Request a free consultation with Erick
Disclosure: This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. LPL Financial and its advisors are providing educational services only and are not able to provide participants with investment advice specific to their particular needs. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material.
Kmotion, Inc., 412 Beavercreek Road, Suite 611, Oregon City, OR 97045; www.kmotion.com
© 2015 Kmotion, Inc. This newsletter is a publication of Kmotion, Inc., whose role is solely that of publisher. The articles and opinions in this newsletter are those of Kmotion. The articles and opinions are for general information only and are not intended to provide specific advice or recommendations for any individual. Nothing in this publication shall be construed as providing investment counseling or directing employees to participate in any investment program in any way. Please consult your financial advisor or other appropriate professional for further assistance with regard to your individual situation.
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