Investor Education: Retirement

 
 
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Retirement planning
The cost of procrastination
Tax-advantaged investing
IRA rollover opportunities
IRAs at-a-glance
IRA FAQs
Order your 2012 IRA kit

 

More and more people are looking forward to retirement as a challenge and an opportunity. The challenge is to maintain the lifestyle to which you've grown accustomed. The opportunity is to try new things, travel to places you've only dreamt of before, and indulge in the little luxuries you've earned after a lifetime of hard work. And, while new tax legislation has opened up new retirement planning options, it has also made planning for retirement more complex than ever before.

Retirement planning
The cost of procrastination
Taxable vs. tax-free investing
IRA rollover opportunities
IRAs at-a-glance
IRA Q&As
Order your 2010 IRA kit


Investing For Your Long-Term Goals

Whatever your dreams might be, you may have many years to enjoy them. That's because:

Life Expectancy
 

Life expectancy of Americans is increasing (up to nearly 78 years, according to the Federal Centers for Disease Control and Prevention (CDC) in 2007*

Retirement Age
 

The average American retires at 62 and spends 18 years in retirement (U.S. Census Bureau)

So if you want to get the most out of the proverbial Golden Years, you need to plan ahead carefully.
Taking a few common-sense steps can help put you on the road to the kind of retirement you envision.


STEP 1

Know your retirement needs and be realistic
 

Retirement may be expensive. It's easy to underestimate what your expenses might be when you stop working. For example, you might not need a work wardrobe any more, but your travel and entertainment expenses may go up considerably. Make sure your retirement goals are specific and measurable. Get a handle on how much income you'll actually need and remember, you may need it for quite some time.
 

STEP 2

Find out about your Social Security benefits
 

Do you know exactly how much you can count on from Social Security? Social Security benefits were never intended to be the only source of income for you and your family when you retire. You may need to supplement your benefits with income from an employer-sponsored plan, as well as personal savings and investments. Call the Social Security Administration at 1-800-772-1213 or log onto their website www.ssa.gov for a free Personal Earnings and Benefit Estimate Statement.
 

STEP 3

Learn about your employer's pension or profit sharing plan
 

If your employer offers a plan, check to see what your benefit is worth. Request a statement of your individual benefits. Know what will happen if you change jobs.
 

STEP 4

Contribute to a tax-sheltered savings plan
 

If your employer offers a tax-sheltered savings plan, such as a 401(k), experts recommend taking full advantage. You make pre-tax payroll deductions, which grow tax deferred. According to Profit Sharing/401(k) Council of America in Chicago, 80% of employers match employee contributions, in amounts ranging from 1% to 100%.

If you're self-employed, you might want to think about funding a Keogh plan, which lets you shelter self-employment income. Depending on the size of your company, you may be able to take advantage of a Savings Incentive Match Plan for Employees IRA (SIMPLE-IRA).
 

STEP 5

Consider an Individual Retirement Account
 

As an individual you should strongly consider funding an Individual Retirement Account (IRA). Since 1998, two different types of IRAs, the Traditional IRA and the Roth IRA, offer different benefits to qualified investors. To learn more about IRAs please visit our IRAs At-A-Glance section.
 

STEP 6

Get advice and personal attention from a registered representative
 

Through a detailed Personalized Financial Analysis, your investment representative can help you build a sound financial retirement plan based on your goals, risk tolerance and time horizon. This analysis will assess your current financial situation and assess how prepared you are for retirement. It should detect any shortfalls. Based on the results of this analysis, your Representative can help tailor a strategy that's right for you.
 

STEP 7

Review your Progress

 

It's important to review your retirement plan regularly to ensure that it still meets your needs.

 
 


Planning for retirement.

What are your hopes and dreams for retirement? Chances are the lifestyle you envision will require you to draw on more than pension plans and Social Security. What you do today to take advantage of tax-deferred savings options, like IRAs and investing your money wisely, may make all the difference.

Do you know:1

Retirees are living longer, staying more active and are likely to spend 30 years or more in retirement.

Studies have shown that retirees will need at least 70% of their pre-retirement income to maintain their standard of living and keep up with inflation, which continually drives up the cost of living.

Thanks to longer life spans, soaring costs and dwindling employer coverage, healthcare will be one of your highest expenses in retirement.

Company pensions are becoming less dependable.

Eight out of 10 retirees have to work full- or part-time after retiring just to be able to maintain their standard of living.


If you have to work are you really retired?

Sources of Retirement Income

   


Enjoy the retirement you deserve.

To ensure a more comfortable lifestyle during retirement, it is important to consider alternatives that can help bridge the gap between the income needed to retire comfortably and the income Social Security and pensions provide. Individual Retirement Accounts, or IRAs, that invest in Huntington Funds can be a smart way to potentially build your assets and help you reach your retirement goals.

1Source: AARP 2007.
2Pension includes all defined benefit and defined contribution plans. Estimates are not guaranteed. Source: Employee Benefit Research Institute, 2007. Tax-deferred IRA contributions may be subject to a 10% penalty for withdrawal prior to age 59½. Investment may be taxed upon withdrawal.


How Much Will You Need to Retire Comfortably?

Financial experts generally agree that you'll probably need at least 70% of the income you currently make to maintain your current lifestyle after retiring. To figure out how much you should be investing to provide that much income,
click here to begin using our retirement planning calculator.


The Power of Compounding

Once you establish a foundation for your investment, you can help its potential growth by reinvesting any interest, dividends and capital gains your mutual funds pay you right back into the market. Compounding may produce dramatic results over time. The sooner you begin investing, the more time you'll have to take advantage of the power of compounding.

Click here for more detailed information on compounding in our Investing Basics section.


Neither Huntington or any agents or representatives are authorized to give legal, tax or accounting advice and this information is not intended to be considered legal, tax or accounting advice. We suggest you consult your attorney, tax advisor or accountant on specific points of interest to you.