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Kim Butler

Partners for Prosperity, Inc.

City:Mt. Enterprise

State: TX

I have 20+ years of handling alternative investments in cash, growth and income for clients nationwide.  I strive to help my clients with all things financial in every way possible over the phone and the web.  I own an alpaca farm which I enjoy working during my downtime.  I also enjoy gardening, writing and reading books.  I also train other advisors on Prosperity Economics.

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Five Simple Steps to Retirement Planning

Learn the basics of retirement planning and begin building a nest egg for your golden years. Find out more.

| BY Adriana Reyneri

It’s never too soon – nor too late - to begin saving for retirement, according to Department of Labor officials who outline the following steps for successful retirement planning:

1.       Set Financial Goals: How much money will you need in retirement? A common rule of thumb is 70 percent of pre-retirement income, though lower-income investors may need up to 90 percent, according to the DOL, and the average American spends 20 years in retirement. How many years do you have to reach your retirement goals? Calculating your need and time horizon is the first step in retirement planning.

2.       Contribute to Your Employer’s Retirement Plan: “If your employer offers a retirement savings plan, such as a 401(k) plan, sign up and contribute all you can,” the DOL advises. Benefits include tax-free growth of retirement assets, automatic savings and a possible employer match. “Don’t leave money on the table,” urged Phyllis Borzi, head of the DOL Employee Benefits Security Administration, in a recent webinar on new 401(k) disclosure rules. Half the employers in the U.S. today offer some kind of matching contribution, said Borzi, and employees should contribute enough to get the full match. Employer-sponsored retirement plans are becoming the main ways workers save for retirement, making 401(k)s one of the most important aspects of retirement planning.

3.       Master Basic Investment Concepts: “Financial security and knowledge go hand-in- hand,” according to the DOL. “How you save can be as important as how much you save.” Strategies, such as diversifying assets across a variety of investment products can reduce risk and improve return, the DOL says. It’s important for workers to understand how their retirement assets are invested and the types of risk the various investments pose. Good retirement planning depends on a high level of financial literacy.

4.       Save with an IRA: An Individual Retirement Account or IRA allows workers to save even more for retirement. Like a 401(k), IRAs offer tax advantages and automatic savings. Investors can chose between two options, a traditional IRA or a Roth IRA, depending on their current income levels and expected income in retirement. IRAs can play an important role in retirement planning by supplementing 401(k) funds.

5.       Learn about Social Security Benefits: Social Security benefits figure into retirement planning for the vast majority of Americans. Most retirees depend on social security income and receive, on average, benefits equivalent to 40 percent of their pre-retirement income, according to the DOL. When do you plan to begin taking your Social Security benefits? Under current rules, if you delay benefits you will receive a higher monthly payment.

Some investors incorporate other tax-sheltered strategies, such as annuities, trusts and 529-college saving plans into their retirement planning.