January 22, 2008: Retirement Savings and Income in New York

We are seeing the beginning of a large shift in financial planning in New York. The past 10 years have been a period of major ACCUMULATION of investment assets by baby boomers in New York, while the next 20-30 years will see a DE-CUMULATION of investment assets. In other words, New York baby boomers have been saving up for retirement. Once they retire, they will need to start shifting their nest eggs to generate income from their retirement investments.

How do you do that? Well, some people retiring today have pensions which will support them. However, most people who are soon to be entering retirement in New York will have to work with a financial planner to create their own "retirement paycheck". This often means a combination of Social Security, having a plan to sell and spend a portion of their investment accounts, and the purchase of annuities which can provide a guaranteed lifetime income.

Your current age, your spending, and your planned retirement age have a dramatic impact on the financial plan for supporting your retirement. A New York financial planner or investment advisor can work with you to analyze your current position and financial plan. After meeting with their advisor, many people realize they should change part of their plan, like working a little longer or spending less. Others will be happy to hear their advisor tell them their income should last. Younger savers can also benefit, by looking at the various savings "buckets" (401k, 403b, IRA, Roth IRA, taxable accounts, etc) you are using for retirement income.