Jeanette A. Tucker | 4/30/2005 12:14:13 AM
Each of us will face key financial decisions that will dramatically affect the resources we have to enjoy in retirement, according to LSU AgCenter family economics professor Dr. Jeanette Tucker.
The family economist cites strategies developed by the Women’s Institute for a Secure Retirement (WISER) to understand the financial benefits and consequences of life’s important financial choices.
• Begin planning early. The most important step for a secure retirement is to begin planning early. Each decision you make, from choosing a job and career to buying a home and finding money to save and invest has an enormous impact on whether you have the resources for a comfortable life after leaving the working world.
"The earlier you start and the more knowledge you have at the beginning of your financial journey, the smoother your journey will be," Tucker says, adding, "Begin planning early for long- term goals, such as buying a home, financing your children’s education and planning for a secure retirement."
• Jobs and careers. Not everyone has benefits provided through a job. You can, however, make it a goal to find a job that provides good benefits. If your employer provides health insurance, a pension or retirement savings plan, make it a priority to understand how the plan works.
• Marriage and family. If you get married or cohabitate with someone, stay actively involved in financial decisions. Understand the financial consequences of divorce, and carefully protect your interests if you should leave a marriage. If one spouse decides to stay at home to care for children or other family members, it is important to think through the family finances and how your decision will affect retirement resources.
• Home ownership, debt and credit. Avoid accumulating credit card debt if at all possible. If you are already in debt, take steps to pay it off. Keep your credit record in the best possible shape that you can to qualify for the lowest interest rates on home and auto loans. Check your credit report annually for errors. The Fair and Accurate Credit Transaction Act (FACTA) allows consumers to receive one free credit report from each of the major credit reporting agencies each year.
Tucker says this provision will allow Louisianans and citizens of other southern states to request their free credit reports beginning June 1, 2005. The credit reports may be requested online at www.annualcreditreport.com.
• Plan for retirement. Personal savings are a very important component of retirement income, and the sooner you begin saving, the longer these savings can grow. Begin by making a rough estimate of the retirement income you will need and what you have so far.
Tucker says The American Savings Education Council’s Ballpark Estimate http://www.asec.org/ballpark is an easy-to-use, one-page worksheet that helps you quickly identify approximately how much you need to save to fund a comfortable retirement. It takes complicated issues like projected Social Security benefits and earnings assumptions on savings, and turns them into language and mathematics that are easy to understand.
• Invest for long-term goals. Whether you are saving in a company retirement savings plan, an IRA or other personal investment vehicle, learn some of the investment rules of the road.
Tucker recommends a home-study course, Investing for Your Future, developed by the Cooperative Extension System for beginning investors with small dollar amounts to invest. It is available online at http://www.investing.rutgers.edu.
• Insurance. Insurance provides a measure of security for you and your family to manage risks and protect your assets from many of the bumps in the road. Having insurance protection is valuable even though you may never expect to use it.
For information on related family and consumer topics, visit the FCS Web site at www.lsuagcenter.com/Inst
/Extension/Departments/fcs/. For local information and educational programs, contact an extension agent in your parish LSU AgCenter office.