As us “Baby Boomers” move toward retirement, we have to be thinking about how we’re going to take care of ourselves.

Keep in mind, Social Security was really designed to be about a 1/3rd supplement to other forms of retirement income. Initially it was figured you’d have a pension covering about a third of what you need, your personal savings would cover a third and Social Security would take up the slack and cover the final third.

Unfortunately, for most people, pensions have all but dried up.

Will your personal savings provide a third of what you’ll need at retirement?

For many people 401(k)s have replaced their pension. As I see it, there are three problems with this plan.

First, if 401(k)s (personal savings) have replaced our pensions, that means 2/3rds of your retirement will be coming from personal savings.

Second, the only place a lot of people do save is their 401(k) plan. I’ve noticed a lot of people taking loans or closing their plans out as they change jobs. They are losing a large chunk of their money to taxes and penalties. Even bigger, the money they lose in potential earnings from then until they retire will almost never be recovered.

Third, how’s your 401(k) performing? Through either bad advice, unforeseen market changes or simple greed (investing too aggressively), plans made many years ago are way off the mark from where people thought they would be.

Social Security, for most people, is all they’ll really have unless they make some changes.

You can try to get back what you’ve lost by taking even more risk but I wouldn’t advise it.

There are some set fundamentals I would suggest. Before plowing more money into your 401(k) or 403(b) plan, make sure you have a solid emergency fund. 3 to 6 months worth of your expenses is a good start.  It’ll act as an insurance policy to keep your money in your 401(k).

A fixed annuity through Farm Bureau Life Insurance is a way to start putting the building blocks together. After the emergency fund, an annuity can offer a great place to save your money for the long term. It will offer you a guaranteed income for life when you’re ready.  It will help make your life more predictable.

Please call me to get more information. I can be reached at (231) 744-9099 or start by visiting www.muskegonlifeinsurance.com