Equip Yourself for Retirement Confidence

February 1, 2011

Did you know that just over half (53 percent) of workers saving for retirement report total savings and investments of less than $25,000 (not including the value of their primary residence or any defined benefit plans)? Twenty percent say they have less than $1,000 in savings, according to the nonprofit Employee Benefit Research Institute (April 2009 Retirement Confidence Survey). According to a 2007 Investment Advisor Magazine, fewer than half of all Americans have an IRA and only 37 percent of IRA owners contributed money to their accounts in 2006.

These are startling statistics which highlight the drastic need for retirement planning in America.

Simply participating in an employer-sponsored retirement plan may not be sufficient. An Individual Retirement Account (IRA) is another option for you to save for retirement. There are several different types of IRAs and it’s important to choose the one that best fits your retirement needs.

When starting or supplementing your retirement plans, establish goals that not only address accumulation, but also address distribution. While it is just as important to have a plan for distributing your income in retirement, it gets far less attention. Less than 20 percent of plan sponsors (company plans, etc.) have income replacement goals for their qualified plans. Of the ones that do, the average replacement level set is 62 percent, which is well below the recommendations of most financial experts (Metlife, “Qualified Retirement Plan Barometer,” January 2011).

Income replacement goals should address the five issues we all face in retirement; longevity, health care expenses, inflation, asset allocation, and excess withdrawals. Equip yourself for retirement confidence by learning how to take your distributions; lump-sum versus periodic, tax issues associated with distributions, and when to begin taking Social Security benefits. Finding a trusted financial advisor will help you identify goals, assess current investments, and establish a plan so when you are ready to retire, you are financially confident. You’ve worked hard for your money. Planning for retirement allows your money to work for you.

With employer pensions becoming a thing of the past and annuity options being eliminated in many defined-contribution plans, it is vitally important that anyone investing for retirement have access to information, tools, and support that will help them invest sufficiently. Equally as important as accumulating money for retirement is having a plan for how you will turn those savings into a lifetime income stream when you enter your retirement years.

Dennis Jarabek, Investment Representative, Hometown Investment Services, a wholly-owned subsidiary of Home Federal Bank.

Investment and insurance products are offered through Fintegra Financial Solutions, an independent registered broker dealer, member number FINRA/SIPC, OSJ phone 763-585-0503. Hometown Investment Services and Fintegra are not affiliated. Investment and Insurance Products offered through Fintegra: • Are NOT Bank Deposits • Are NOT FDIC Insured • May Lose Value • Are NOT Insured By Any Government Agency • Carry NO Financial Institution Guarantee

Home Federal offers Personal Banking, Business Banking, Ag Lending , Home Loans, Trust and Asset Management, and Investments. With so much to offer, learn what Home Federal can do for you.

Community. Driven. Banking.
800-244-2149 | www.homefederal.com
Member FDIC | Equal Housing Lender | A subsidiary of HF Financial Corp | NASDAQ: HFFC