Put yourself in control of your retirement

You’ve learned to pump your own fuel, navigate voicemail mazes and book your own airline reservations. Given the vanishing act of company pension plans, it should come as no surprise that you’re going to need to take a more active role in saving for retirement.

“The percentage of money coming from the traditional three legs of retirement – employer contributions, government programs and personal savings – is changing dramatically,” said Peter Bock, a certified financial planner with the Spokane-based Pacific Rim Financial Group.

“People are living a lot longer and that not only coincides with employers dropping traditional pension plans, it also relates to the fact that Social Security was never meant to be a person’s total retirement source,” Bock said.

Don’t despair. Area experts agree there’s a multitude of options and generous new provisions to help you hatch and nurture a nest egg.

Still, Greer Gibson Bacon, a certified financial planner with Financial Planning and Investment Management Services in Spokane, said: “The cold hard reality is people need to be very, very serious about their savings.”

The first step, no matter what your age, is to get in the game, said Rial Moulton, a registered financial consultant as well as an attorney and certified public accountant.

The trio of professionals offered up these tips to help you establish your own retirement savings plan:

“ Clarify your vision. “Set the stage with your personal expectations,” said Bock. “Determine what you want retirement to look like. Do you want a snowbird lifestyle? Vacations in far-away places? Do you want to stay home, perhaps work part-time or are you going to want to volunteer?

“ Start saving. “You have more opportunities, more doors available to you down the road if you start saving early,” said Bock.

“ First and foremost, if your company offers a 401(k) plan, take advantage of it. Many employers will match part or all of your contributions, which is essentially free money.

“If you don’t invest there, you’re leaving money on the table,” said Moulton. “Put as much money as you can in the 401(k).”

“Open an Individual Retirement Account, or IRA. Moulton said he gives this advice to folks whose companies don’t offer a 401(k) or who are fully funding a 401(k) and still have additional money to sock away. Do some homework and learn the basics of traditional IRAs and Roth IRAs, he said. They differ in many ways.

“If possible, max out your contributions to tax-deferred plans and then start building your own portfolio of stocks and bonds, said Moulton.

“ Keep abreast of your investments with at least an annual review and make adjustments if necessary. Consider the three stages of your nest egg’s development. Accumulate and grow your savings in your younger years. Preserve capital in your middle years. Begin taking financial distributions in your senior years. Good financial planners can help you properly balance your holdings and adjust risks.

“Buy long-term-care insurance. It can help preserve personal wealth in the event of an illness or a long stay in a nursing home or assisted-living facility. The younger you are when you buy your policy, the cheaper the premiums. Plus, many employers now offer group plans that may help to lower premiums, too.

“Use the many tools at your disposal. Web sites offer worksheets, calculators and articles to guide you through various planning processes. Read financial magazines. Consider using a planning professional to help you establish and reach realistic goals. Attend free savings seminars held by trustworthy companies.

Remember, you can’t start saving too soon.

“The percentage of total income young people need to save for retirement is very small, compared to someone in their 40s or 50s. The percentage of income (older) people need to save looks like a house payment — it’s very large,” said Bacon.

For late savers, there is a bright spot. New legislation allows older savers to pump more money than ever into such savings programs as 401(k)s and IRAs.

And companies can now automatically enroll employees in 401(k) plans. The idea is to encourage people to get in the habit of saving and continuing to contribute to their retirement accounts. Employees can choose to opt out of the plans.

“I encourage people to start somewhere. Anything they can save is better than nothing,” Bacon said.