Charting a course for retirement

Published 4:15 pm Monday, April 19, 2010

Days of retiring with a gold watch, pension income and even Social Security checks seem numbered. Today, it’s truly not your father’s retirement for nearly a million employees who have lost funds due to eliminated pensions.

What can a person do to guard assets, save and plan for the future in our fragile economy?

Red Mountain Bank in Inverness is hosting seminars to inform the community of tax and investment changes, which may affect their bottom line. I attended one titled “Retirement and Taxes” presented by Wealth Management Vice President Hal Holland, who represents both Red Mountain Bank and ProEquities, a subsidiary of Protective Life. Holland spent the last 17 years working with investments. He said, “People are living longer, especially women, whose biggest fear is outliving their money. They need to educate themselves on finances, investments and tax laws.”

Holland explained how becoming debt-free is essential to long term financial security. Having a mortgage payment after retirement will be a grave concern. Planning ahead, prioritizing needs and keeping a budget are foundational work. When deciding how much you’ll need for retirement, consider your familial longevity, personal health, inflation, tax increases, interest income variations and your choice in lifestyle. “I’ve seen three major dips in the market since 1993,” said Holland, pointing out a major factor in the equation.

Holland held up a book, “Parlay Your IRA into a Family Fortune,” by Ed Slott. “This books offers IRA strategies, such as investing in a Roth IRA, setting it up as a legacy to go to your grandchildren as tax free income for life. Roth IRA conversions have new and favorable tax laws in 2010, but those will expire in 2011.” He showed a table indicating the potential return for a modest investment becoming millions of dollars over the lifetime of a young child beneficiary, and told how the 2006 Pension Protection Act introduced an annuity provision for long term care.

Social Security will only meet a portion of your needs. Many choose to work longer, getting out of debt. Understanding employer’s pension payout options and planning wisely are key elements to success.

Red Mountain Bank offers other seminars. See and click on wealth management or call 313-8100 to contact Hal Holland.

Gladys Hodge Sherrer can be reached by e–mail at