Article: Excerpts from research paper published in the journal of personal finance,volume 4 issue 3,2005 international association of registered financial consultants-catch-up strategies for late savers;authored by barbara o'neillo,cfp crpc,afc,chc,cfcs;rutgn

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Puthan(VJ) Vijayan is the Principal member of PMV Investment Advisors, LLC. The firm is a Registered Investment Advisor. VJ is a Certified Estate Planner and Registered Financial Consultant, with over 15 years of planning and investment experience.

ABSTRACT:

'IN RECENT YEARS, THE PREPAREDNESS OF BABY BOOMERS(PERSONS BORN BETWEEN 1946 AND 1964,AGE 41 TO 59) FOR RETIREMENT HAS BECOME AN INCREASING CONCERN TO POLICYMAKERS AS THE LEADING EDGE OF THIS GENERATION APPROACHES AGE 60 AND IS BEGINNING TO LEAVE THE WORK FORCE.' MANY ARE BEING DESCRIBED AS LATE SAVERS.THIS TERM DESCRIBES  THOSE WITH MODEST AMOUNTS OF RETIREMENT SAVINGS,IN THEIR 40'S AND 50'S AND NEED TO MAKE UP FOR LOST TIME IN ORDER TO MAINTAIN THEIR LIVING STANDARD IN LATER LIFE.'

THE RESEARCH PAPER 'BEGINS WITH A DESCRIPTION OF THE CHALLENGE FACING LATE SAVERS.''IT THEN BRIEFLY DESCRIBES OVER A DOZEN CATCH UP STRATEGIES FOR LATE SAVERS AND RESOURCE MATERIALS DEVELOPED BY THE NATIONAL ENDOWMENT FOR FINANCIAL EDUCATION.'

INTRODUCTION:

1)ABOUT'76 MILLION PEOPLE BORN IN THE U.S. BETWEEN 1946 AND 1964,AGES BETWEEN 41 AND 59-THE MOVEMENT OF THIS POPULATION BULGE THROUGH VARIOUS LIFE STAGES HAS BEEN DESCRIBED AS"A PIG MOVING THROUGH A PYTHON''THE PREPAREDNESS  OR LACK THEREOF ,OF BABY BOOMERS  FOR RETIREMENT  HAS BECOME AN INCREASING CONCERN.'

2)ANOTHER AREA OF CONCERN-'THE BABY BOOMER'S LARGE NUMBERS ,HAVE PUT PRESSURES ON FUTURE HEALTH  CARE SERVICES,SENIOR HOUSING,SOCIAL SECURITY SYSTEM.'BOOMERS WILL CONTINUE TO WEILD CONSIDERABLE IMPACT FOR YEARS TO COME, ON THE NATION'S HOUSING,FINANCIAL MARKETS,HEALTH CARE SYSTEMS AND ECONOMY.'

3)MANY OF THE BOOMERS FACE A' PERFECT STORM OF FINANCIAL CHALLENGES-INCLUDE LONGEVITY,DECLINE IN BENEFIT PENSIONS,BEARING GREATER RISK FOR THEIR RETIREMENT SAVINGS,LOW SAVINGS RATES AND ASSET ACCUMULATION,SOCIAL SECUIRTY INSTABILITY AND HEALTH EXPENDITURES

4)'STATISTICS-'THERE ARE SOME 25 MILLION WELATH POOR BOOMERS, WHO HAVE AN AVERAGE OF LESS THAN $1000 OF MONTHLY INCOME';AND JUST $146,OOO OF NETWORTH INCLUDING HOME EQUITY'.

5)'BASICALLY THREE TYPES OF SAVERS-1)PROCRASTINATORS WITH LITTLE OR NOT SAVINGS 2) SERIOUS 'LATE BLOOMERS' WHO HAVE STARTED TO SAVE BUT NEED TOI MAKE FOR LOST TIME,AND 3) THOSE WHO INVESTED ,BUT SUSEQUENTLY LOST SOME OF THEIR RETIREMENT SAVINGS'.PROCRASTINATORS EXIST FOR A NUMBER OF REASONS-OVEREXTENDED CREDIT,POOR SPENDING HABITS,LACK OF FINANCIAL DISCIPLINE ETC.'

6)'ACCORDING TO AMERICAN SAVINGS EDUCATION COUNCILK-5DISTINCT RETIREMENT PERSONALITY PROFILES: DENIERS,STRUGGLERS,IMPULSIVES,SAVERS,AND PLANNERS

7)RERGARDLESS  OF THE REASON FOR THEIR LATE SAVER STATUS,BOOMERS STILL HAVE TIME TO TURN THINGS AROUND;'BOOMERS' INVESTMENT HORIZON IS THE REST OF THEIR LIFE, NOT THEIR RETIREMENT DATE.' "47 YEAR OLD TODAY WHO LIVES TO AGE 92 HAS 45 YEARS TO GROW HIS OR HER MONEY WITH COMPOUND INTEREST.'

8)'STRATEGIES FALL INTO TWO CATAGORIES-1) ACTION TAKEN TO INCREASE RETIREMENT SAVINGS AND 2) ACTION TAKEN TO DECREASE THE AMOUNT OF SAVINGS REQUIRED TO LIVE ON.'INCREASING RETIREMENT SAVINGS-INCREASED IRA CONTRIBUTION LIMITS;AND SAME APPLIES TO 401K,403B AND 457 TAX DEFERRED PLANS.'

'CLOSELY LINKED TO ACCUMULATING MORE MONEY FOR RETIREMENT IS THE PROCESS OF PREPARING A SAVINGS NEED CALCULATION.'

SECOND STRATEGY-'TO INCREASE RETIREMENT SAVINGS ,ACCELERATE DEBT REPAYMENT.'

THIRD STRATEGY-MOONLIGHT FOR ADDITIONAL INCOME WITH A SECOND JOB,CONSULTING WORK OR SIDELINE SMALL BUSINESS

FORTH STRATEGY-AGGRESSIVE INVESTING BY PLACING STOCK S IN THE PORTFOLIO BEFORE AND AFTER RETIREMENT.'

STRATEGY FIVE-MAXIMISE TAX BREAKS AND REDUCE INVESTMENT EXPENSE SO THAT LATE SAVERS KEEP AS MUCH OF THE THEY EARN.'

SIXTH STRATEGY-BUILD RETIREMENT SAVINGS THROUGH DOLLAR COST AVERAGING

SEVENTH STRATEGY-INVEST IN MULTIPLE SAVINGS PLANS.

BUILD WEALTH-'PRESERVE LUMP SUM DISTRIBUTIONS WHEN WORKERS CHANGE JOBS.''STRETCH RETIREMENT ASSETS-EXAMPLE DELAYING YOUR RETIREMENT;REDUCE LIVING COSTS;RELATED TO HOUSING COSTS-RELOCATE TO LESS EXPENSIVE LOCATION IN THE U.S. OR EVEN ABROAD.'

'EXTRACT HOME EQUITY WITH REVERSE MORTGAGE ARRANGEMENT.'

'THE FINAL WAY TO STRETCH RETIREMENT ASSETS IS TO DRAW DOWN RETIREMENT INCOME IN A TAX EFFICIENT MANNER SO THAT THE MONEY LASTS LONGER.'

'THE FAC THAT MANY WORKERS AR NOT SAVING ENOUGH FOR A SECURE FUTURE HAS BEEN CALLED A 'RETIREMENT SAVINGS CRISIS' WITH MANY PEOPLE HAVING TO SCRAMBLE AT A TIME OF THEIR LIVES WHEN THEY SHOULD HAVE SOME SENSE OF SECURITY.'THIS PAPER ATTEMPTS TO DESCRIBE OVER A DOZEN STRATEGIES THAT CAN BE EMPLOYED TO EITHER INCREASE RETIREMENT SAVINGS OR STRETCH RETIREMENT ASSETS.''ALL HOPE IS NOT LOST FOR LATE SAVERS,BUT  IT IS IMPORTANT TO START PLANNING AND TAKING REQUIRED ACTION AS SOON AS POSSIBLE.'

PUTHAN(VJ) VIJAYAN CEP RFC MBA,PMV INVESTMENT ADVISORS,LLC,FIDUCIARY ADVISORS,INDEPENDENT FEE BASED CAPITAL & NWEALTH MANAGEMENT,20720 WATERTOWN ROAD,SUITE 106,WAUKESHA,WI  53186,262 754 1672.

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