Financial Planning
Most of us wonder if we are saving enough to support ourselves through 10, 20, or even 30 or more years of retirement. Whether you are approaching your prime earning years or nearing retirement, proper planning can help you make the most of your retirement assets. By using some simple calculations, you can get a good idea of how much income you will need to live comfortably in retirement and what steps are necessary to reach your goals.

Retirement Planning
Whatever your goals, your top investment priority should almost certainly be retirement. You can borrow to help finance a house or a child's education, but no one is going to lend you money to finance your retirement.

How much should you save for retirement? Many people assume the answer to that question is zero because their retirement money will come from an employer-sponsored pension plan and Social Security, if eligible. Unfortunately, both these options combined may not provide a sufficient retirement income.

Retirement Costs
Retirement today does not mean just sitting in a rocking chair. It can mean having the freedom to live your life the way you want to, enjoying:

• Leisure activities
  
• Time with family
  
• Living where you want to
  
• Helping others
  
• Travel

But having an active retirement takes planning. An active retirement that includes leisure activities, such as travel, costs more than one that does not. So you will need to save more for this.

One of the most important steps you can take as a retirement saver is to figure out how much money you will need. Many people do not know - or significantly underestimate - the amount of money they will need to live comfortably in retirement. Make an estimated retirement budget by writing down all your expenses and adding them up for each year of expected retirement.

Income Sources During Retirement
How much of your retirement income will come from your Police and Fire Pension benefit, your Spouse's benefits, Social Security, and from other sources, such as a retirement nest egg? Estimate how much retirement income will come from the following sources:

• Your pension
  
• Employer-sponsored retirement savings plans
  
• Social Security benefits from other employment
  
• Savings and investments
  
• Other sources of income, such as salary from work that you continue after retirement

Set Your Savings Goals
Basically, you must look at how much you expect to spend in retirement and compare that to your income sources. Then you will find out if you have enough money to last through retirement or not. To make a nest egg calculation:

• Estimate how long you will live—possibly until age 90 or longer.
  
• Estimate your annual expenses in retirement.
  
• Estimate your total retirement savings (nest egg)—Assume that you will continue to save at the same rate you are currently saving until retirement.
  
• Estimate your savings surplus or shortfall.
  
• Estimate your annual savings needed—if you need more money to fund your retirement, calculate how much you need to save per year.

Start Saving More Today
You are responsible for making your future happen. Start saving now, whether you are age 24, 34, or 44, even 54! One of the easiest ways to save money is to take advantage of account builder programs that automatically withdraw funds from your paycheck or bank account and invest them automatically. Do not wait until you can "afford it" to save for retirement. Start now, even if you can only set aside small amounts. Your savings will add up faster than you think—and you will have a tremendous feeling of accomplishment!

Educate Yourself
Sign up for the Pension System' training programs, PREP (Pre-Retirement Education Program), Financial Plannning seminar, and Pensioner's Financial Planning seminar. For more information, see the Education section of this Web site. To make reservations, contact the Pension System office.