Brian Ripp Legacy Real Estate & Associates Agent

Brian Ripp

CRS, GRI CalBRE #00886348
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Planning & Protecting


Protecting Your Nest Egg In Uncertain Economic Times
One of the most common recommendations given to clients when discussing retirement and long-term financial security is to start planning as soon as possible. The sooner you start to invest in your retirement, the longer your contributions and the potential growth and income of those contributions can increase. Even modest amounts can compound to sizable sums over time. The longer your money has to grow, the better you will be able to weather the ups and downs of the economy.

But it’s not enough just to start early. As with any journey, unless you have a destination you’ll probably never arrive. So you must also set retirement goals.

Know Your Retirement Needs
Depending on your current income and standard of living, plan on saving between 60 and 80 percent of your pre-retirement income. Once you’ve set your income goal, try to estimate how much Social Security you may receive (you can find calculators to assist with this on the Social Security Administration website, www.socialsecurity.gov). Fortunately, it is rare that Social Security benefits are enough to fund a retirement. It is a good idea to research other vehicles for retirement savings.

Explore Options for Gathering Your Nest Egg
Find out if your company has a pension or profit sharing plan and check to see what your benefit is worth. Learn what benefits you may have from previous employment and before changing jobs, find out what will happen to your pension.

If your employer offers a tax-sheltered savings plan, such as 401(k), sign up and contribute all you can. Your taxes will be lower, your company may offer contribution matching and automatic deductions make it easy. With 401(k)s you can invest money that you haven’t paid income tax on yet, which means your money works for you as your investment grows. Income tax is due later, when you finally use the money for retirement and may be in a lower tax bracket. Over time, deferral of taxes and compounding of interest make a big difference in the amount of money you will accumulate.

Retirement accounts can be set up by an individual, not only employers. The two most common types are the traditional Individual Retirement Account (IRA) and the Roth IRA. In both cases, it is up to an individual to set up an account and make contributions. IRAs have significant tax benefits – so much so that many people set up IRAs in addition to employee-sponsored plans. Refer to IRS Publication 590 for more information on IRAs.

Additional retirement income can also come from personal, non-retirement investments such as stocks (ii) , bonds (ii) , mutual funds (ii) , savings accounts, annuities (iii) , real estate or businesses. When choosing personal investments for retirement, consider these factors:

  • how much risk is involved with the investment
  • potential growth value
  • how long you will own the investment
  • the yearly cost of maintaining the investment
  • potential income flow from the investment during retirement
  • how easy you can liquidate the investment if necessary
  • costs involved in converting the investment into cash
  • tax benefits or costs involved with owning and selling the investment

Protect Your Nest Egg
Finding the right investments and managing them isn’t easy. Review your retirement plan periodically to monitor the performance of your investments and ensure you’re still on the path to meeting your retirement needs. Become familiar with income tax and estate tax consequences and benefits available to you.

Keep in mind that investing to meet your retirement needs is a lifetime pursuit. The sooner you start saving and having your investments grow in value, the longer your money can work for you. Remember, time is a great ally to help you meet your retirement goal – if you plan for it now. Make retirement savings a high priority, devise a plan and stick to it.



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