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Three Steps for an Annual Retirement Tune-Up

Conducting an annual review of your retirement goals and strategy is an ideal way to ensure that your plans for your financial future remain realistic and on track. With that in mind, taking the three easy steps outlined below will help you conduct your retirement tune-up.

Step 1: Review Your Retirement Goals

Your first step should be to review your retirement savings goals and assess whether anything significant has occurred during the past year that might affect either your outlook for retirement or your current strategies to prepare for it.

For example, have you decided to change the date when you'll retire? Or have you experienced any new milestones such as getting married, divorced, or having a child? Any of these events may affect how much you will want to save to fund the retirement you envision.

Step 2: Take a Fresh Look at Your Retirement Strategy

Your portfolio's specific mix of stocks, bonds, and cash, known as your asset allocation, should complement your financial goals, risk tolerance, and time horizon.* If you haven't taken a fresh look at your investments in a while, don't assume that your old asset allocation is still appropriate for your current needs.

Even if your personal outlook hasn't changed, keep in mind that uneven returns provided by different investments may have caused your portfolio to shift from your intended asset allocation. Given the market volatility that has occurred since October 2007, if you have not reviewed your asset allocation since that time, there may be a good chance that uneven returns have caused it to change. If your asset allocation needs to be rebalanced, now may be the time for action.

Step 3: Consider Saving More

None of us know what the future may hold. A good way to improve the odds that you have saved enough for retirement is to save more, no matter how prepared you may already be.

If you have not already done so, consider funding an IRA. For the 2009 tax year, you can contribute a maximum of $5,000 and those aged 50 and older can make an additional catch-up contribution of $1,000. These limits are set annually by the IRS. More information can be obtained at www.irs.gov.

Conducting a retirement tune-up is always a great idea but don't forget to consult with your financial advisor to discuss what else you can do to help achieve retirement security.

*Asset allocation does not ensure a profit or protect against a loss. 


This article is not intended to provide specific investment or tax advice for any individual. Consult us, your financial advisor, or your tax advisor if you have any questions.

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