The Tribune Democrat, Johnstown, PA

November 24, 2012

SAM CARPENTER | How much savings will you need to retire?

Sam Carpenter

JOHNSTOWN — Where do you want to be during your golden years? Do you want to see the world, buy that sports car you dreamed of or how about that retirement beach house?

To start planning, write down your goals for retirement. Once you have decided, think about cost and what it may take to get there.

Many American workers anticipate an enjoyable retirement after years of the daily grind and commute. Traveling, golfing and relaxing by the pool ... the possibilities seem truly endless.

But as workers daydream about the world of retirement, few venture to guess how much their retirement lifestyle might cost.

Every year a Retirement Confidence Survey is conducted by the American Savings Education Council.

If you do not know your retirement goal amount, you are not alone.

According to the 2011 survey, many workers may not realize how much income it could take to provide their desired standard of living in retirement.

Only 42 percent of respondents report that they or their spouse has tried to calculate how much money they will need in retirement.

If you do not know your retirement goal amount, you are not alone. Your retirement finances are dependent on length of life, medical expenses, your retirement lifestyle and what you might need during those years.

Savings options could be available for your retirement nest egg. Many employers offer a savings plan such as a 401(k), Roth 401(k), 403(b), Roth 403(b) or SIMPLE IRA.

Another savings option is an individual retirement account (IRA). For 2010 and 2011, an individual younger than 70 ½ with earned income can contribute a portion of his or her income (up to $5,000 if younger than age 50 or $6,000 if age 50 or older) into a traditional IRA.

Contributions may be deductible, depending on your adjusted gross income and whether or not you are covered by an employer-sponsored plan. Are you maximizing both of these savings options?

Whatever savings method you choose, the important thing is to start saving or increase your saving now. The earlier you save money, the more time your money has to potentially grow.

Samuel G. Carpenter is a partner with Carpenter Financial Services, a comprehensive financial services firm in Johnstown.

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