07/27/06 — Money is biggest concern for many future retirees

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Money is biggest concern for many future retirees

By Kenneth Fine
Published in News on July 27, 2006 1:47 PM

As the baby boomer generation ages, more and more seniors are looking towards retirement, and at the same time, coping with the uncertainty the transition will bring.

While some contemplate ways to live out their golden years, others hope their financial plans will hold up throughout them. Officials say money is the biggest concern for soon-to-be retirees and suggest that people plan for their retirement as early as possible.

Some people choose to set up individual retirement accounts, a concept originally established by the federal government to encourage people to save for retirement. Others accept jobs from companies that offer their employees 401(k) plans, a device that allows people to choose a percentage of their salary to tuck away each month.

The 401(k) concept was designed to allow people the opportunity to transfer money into an account without severe tax implications. Once the money is in your account, under most circumstances the money is untouchable until just over the age of 59. The plan works because it reduces the amount of taxable income you are held responsible for, officials said.

Once employees reach retirement age, most should have the option to roll over their funds into an IRA, officials said. To find out more about IRAs, many seniors seek advice from local investment planners.

At the Wayne County Services on Aging office, officials said employers don't answer many financial questions these days. Director Yvonne McLamb said the reason is simple -- more newly designated seniors began planning for their retirement long ago. Some even have existing IRAs before they reach the end of their career, she said.

"In the past, the Social Security Administration is what they've relied on," she said. "But now, a lot of seniors have portfolios and use independent financial planners."

The baby boomer generation is no different, she said.

"The baby boomers who are starting to come of age have already planned a portfolio," Mrs. McLamb said.