January 23, 2008: Retirement Savings in Arizona

We are seeing the beginning of a major shift in financial planning in Arizona. The past 10 years have been a major build-up of investment assets designed for capital gains in Arizona, while the next 20-30 years will see a shift of investment assets toward income. In other words, Arizona retirees have been saving up for retirement. Once in retirement, they will need to start generating income from their nest eggs.

How do you make that change in your financial plan? Well, some people retiring today have pensions which will support them. However, most people who are soon to be entering retirement in Arizona will have to work with a financial planner to create their own "retirement paycheck". This often means a combination of Social Security, having a plan to shift more of their asset allocation to income investments, and the purchase of annuities which can provide a guaranteed lifetime income.

Your current age, your spending, and your planned retirement age have major impacts on how much you will need to support your retirement. An Arizona financial planner or investment advisor can work with you to analyze your financial plan. After meeting with their advisor, many people realize they should modify part of their plan, like working a little longer or spending less. Others will be happy to hear their advisor tell them their income should last through many more Arizona summers. Younger savers can also benefit, by looking at the various savings "buckets" (401k, IRA, Roth IRA, taxable accounts, etc) you are using for retirement income.