Planning Briefs

Retirement Is No Longer What It Used To Be

Published Thursday, July 2, 2009 at: 7:00 AM EDT

Currently, about one in seven Americans is old enough to retire. For members of the baby boom generation who are approaching the traditional retirement age of 65, retirement is unlikely to follow the pattern of their parents and grandparents.

For one thing, advances in medicine mean tomorrow’s retirees will live longer. A 65-year-old today has a better-than-even chance of living another 20 years; one in three will live to age 90. As the length of the typical retirement stretches out, retirement assets will have to stretch to ensure that you don’t outlive your money just when you might need it the most.

Meanwhile, the very definition of retirement is changing. Today’s seniors are enjoying lifestyles that break the sedentary mold of previous generations. Instead of sitting at home reflecting on memories of past exploits—not that there’s anything wrong with that!—, they’re making new memories through travel, active hobbies, and philanthropic work. Naturally, all these pursuits cost money, but many members of the 65-plus crowd are staying in the job market as well, some to earn the extra income, but many simply find the work rewarding.

Retirement planning isn’t about retirement anymore. It means planning to keep busy with leisure activities and maybe even planning to work through your 60s and 70s. We’re here to help you plan that kind of retirement.

This article was written by a professional financial journalist for Preferred NY Financial Group,LLC and is not intended as legal or investment advice.

An individual retirement account (IRA) allows individuals to direct pretax incom, up to specific annual limits, toward retirements that can grow tax-deferred (no capital gains or dividend income is taxed). Individual taxpayers are allowed to contribute 100% of compensation up to a specified maximum dollar amount to their Tranditional IRA. Contributions to the Tranditional IRA may be tax-deductible depending on the taxpayer's income, tax-filling status and other factors. Taxed must be paid upon withdrawal of any deducted contributions plus earnings and on the earnings from your non-deducted contributions. Prior to age 59%, distributions may be taken for certain reasons without incurring a 10 percent penalty on earnings. None of the information in this document should be considered tax or legal advice. Please consult with your legal or tax advisor for more information concerning your individual situation.

Contributions to a Roth IRA are not tax deductible and these is no mandatory distribution age. All earnings and principal are tax free if rules and regulations are followed. Eligibility for a Roth account depends on income. Principal contributions can be withdrawn any time without penalty (subject to some minimal conditions).