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Have a plan for retirement

June 03, 1999|By LYNN F. LITTLE

How far away is your retirement - 30 years? ... 20? ... 10? ... 5? Many people wonder what the future will hold for their retirement. The good news is healthier lifestyles and improved medicines have significantly lengthened life expectancies. The bad news is you'll need more money to support a longer, more active retirement.

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Whether your retirement is a few years away or a few decades away, estimating how much you should be saving for retirement will help you choose a plan for making retirement happen. You will need to play an active role in planning for retirement. The key is a well-thought out plan of action.

As a beginning, think about the type of lifestyle you would like for retirement. How much money will you need to support it? Experts suggest that 60 to 80 percent of pre-retirement salary, adjusted for inflation, is a good estimate.

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You also will need to determine your major sources of retirement income - Social Security, pensions and tax-deferred plans and other accumulations you already have earmarked for retirement. Once you have this information, you can put pencil to paper and figure out your retirement needs. You may find that, in addition to some of the traditional retirement saving accounts, you need to save more. The magic combination of time and compound interest means that even small amounts of savings and retirement contributions can make a big difference. The key is to start now.

For a worksheet to help you estimate the amount you need to save for retirement, send a self-addressed, stamped (33 cents) business-size envelope to Maryland Cooperative Extension, Washington County Office, 1260 Maryland Ave., Hagerstown, Md. 21740. Mark the envelope, "Retire." This worksheet can help you make your "best guess" about the amount of income you need for retirement.




Maryland Cooperative Extension programs are open to all citizens without regard to race, color, sex, disability, age, religion or national origin.

Lynn F. Little is a family and consumer sciences extension educator for Maryland Cooperative Extension, Washington County - University of Maryland.

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