Quantcast

Saving for retirement: part one - abc27 WHTM

Saving for retirement: part one

Posted: Updated:

Many of us look forward to the day when we can retire. Everyone has a different idea about what retirement will mean.

Maybe you want to travel, see the world. Or perhaps you want to just enjoy spending time at home, with your family.

The retirement lifestyle you choose determines how much you need to save. We know that each person's goal is unique as they look ahead to the golden years. But certain rules apply to everyone.

John Pelham is a certified financial planner. When it comes to saving for retirement, he advises clients to plan for at least 30 years past retirement age.

"The rule of thumb is that you're going to need 60 to 80 percent of your pre retirement income," says Pelham. "With a married couple, there's a 60 percent chance that one of them is going to live to be over the age of 85. There's a 90 percent chance that one of them will make it to age 90. So the risk of outliving your money is very real."

If someone is looking to retire and live a simple lifestyle, Pelham believes one million dollars is the number to reach.

He breaks it down this way. 

On average, people will spend four percent of the saved amount annually. If someone saves a million dollars for retirement: "That four percent sustainable rate means about $40,000 a year. That doesn't take into account other income sources you may have, like social security, other pensions you may have. But if you're talking about somebody with a million dollars and no other sources of income, four percent is a relatively safe assumption."

Even with inflation, Pelham believes the million dollar mark provides a solid foundation for the golden years. 

"There's an 80 percent probability that you would never run out of money," says Pelham.

William Hocutt, a CFP and Certified Professional Accountant, has another take on retirement savings. He says if someone does not have a good pension or receive defined social security benefits one million dollars might not be enough.

"20-years-ago the thought process was, if you have a million dollars then you don't necessarily have to worry about a plan in place, you're probably going to have enough money," says Hocutt.

That's why he tells his clients to make the most of their 401k and benefits to try to save as much as possible. 

"It's on the individual to put their own money into those plans. You always want to put away in your 401k up to the match you're getting because that's free money you're getting from the employer."

Hocutt also swears by the four percent rule in retirement planning. Especially for those wanting to live a steady life. 

"You could pull out four percent of assets starting the first year, and adjust it each year for inflation going forward, pulling out a little more each year. Assuming inflation goes up, and generally you would not run out of money over a 30 year time period," says Hocutt.

He offers this advice. 

"Don't procrastinate, start putting back something. Start with one percent of your salary. Time is the biggest factor that's going to play a lot into this. So the earlier you can start putting back. The better it's going to be long term."

Of course, when in doubt contact your financial planner and see which plan is best for your retirement goals.

  • Central Alabama NewsMore>>

  • Missing swimmer sought in rough surf on Alabama coast

    Missing swimmer sought in rough surf on Alabama coast

    Monday, July 21 2014 2:21 PM EDT2014-07-21 18:21:22 GMT
    Authorities are looking for a swimmer who's missing in dangerous surf on the Alabama coast. Gulf Shores police received a distress call about a male juvenile who was in distress in the water about 4 p.m. Sunday. The search had to be suspended after about three hours because of rough surf and fading light. The Gulf Shores Police Department says the search resumed Monday. A dive team is in the water looking for the missing person. The weather service says there's currently a high risk of danger...More >>
    Authorities are looking for a swimmer who's missing in dangerous surf on the Alabama coast. Gulf Shores police received a distress call about a male juvenile who was in distress in the water about 4 p.m. Sunday. The search had to be suspended after about three hours because of rough surf and fading light. The Gulf Shores Police Department says the search resumed Monday. A dive team is in the water looking for the missing person. The weather service says there's currently a high risk of danger...More >>
  • MH17: International monitors trying to secure Malaysian plane crash site

    MH17: International monitors trying to secure Malaysian plane crash site

    Saturday, July 19 2014 11:29 PM EDT2014-07-20 03:29:10 GMT
    International monitors moved gingerly Saturday through fields reeking of the decomposing corpses that fell from a Malaysian airliner shot down over rebel-held eastern Ukraine, trying to secure the sprawling site in hopes that a credible investigation can be conducted.More >>
    International monitors moved gingerly Saturday through fields reeking of the decomposing corpses that fell from a Malaysian airliner shot down over rebel-held eastern Ukraine, trying to secure the sprawling site in hopes that a credible investigation can be conducted.
    More >>
  • NYPD officer involved in arrest of man who died in custody stripped of badge, gun

    NYPD officer involved in arrest of man who died in custody stripped of badge, gun

    Saturday, July 19 2014 9:49 PM EDT2014-07-20 01:49:49 GMT
     A New York City police officer involved in the arrest of a man who died in custody after being placed in an apparent chokehold has been stripped of his gun and badge and placed on desk duty, police said Saturday.
    More >>
     A New York City police officer involved in the arrest of a man who died in custody after being placed in an apparent chokehold has been stripped of his gun and badge and placed on desk duty, police said Saturday.

    More >>
  • Birmingham Area NewsMore>>

  • House on Fire in Birmingham

    House on Fire in Birmingham

    Tuesday, July 22 2014 2:42 AM EDT2014-07-22 06:42:02 GMT
     Firefighters are working to put out a house fire in Ensley. It broke out just before midnight Monday near 16th street and Avenue I. We will give you more information as soon as those details become available.More >>
     Firefighters are working to put out a house fire in Ensley. It broke out just before midnight Monday near 16th street and Avenue I. We will give you more information as soon as those details become available. More >>
  • DNC's first day on Birmingham site visit

    DNC's first day on Birmingham site visit

    Monday, July 21 2014 9:40 PM EDT2014-07-22 01:40:54 GMT
    It's been a full day of sightseeing for a team with the Democratic National Committee.A 12-member group is touring a variety of Birmingham hotels, attractions and venues Monday as part of a two-day site visit.Birmingham is one of five cities vying to hose the Democratic National Convention in 2016. The committee is in the Magic City to see if it has the hotel and venue space to pull off the large-scale event.ABC 33/40 went alongside the team for part of its day. Members saw the Birmingham Mus...More >>
    It's been a full day of sightseeing for a team with the Democratic National Committee.A 12-member group is touring a variety of Birmingham hotels, attractions and venues Monday as part of a two-day site visit.Birmingham is one of five cities vying to hose the Democratic National Convention in 2016. The committee is in the Magic City to see if it has the hotel and venue space to pull off the large-scale event.ABC 33/40 went alongside the team for part of its day. Members saw the Birmingham Mus...More >>
  • DNC trip helps change residents’ perspective of Birmingham

    DNC trip helps change residents’ perspective of Birmingham

    Monday, July 21 2014 7:35 PM EDT2014-07-21 23:35:35 GMT
    Whether Birmingham is chosen or not, the DNC selection committee's trip alone is a big win.More >>
    Whether Birmingham is chosen or not, the DNC selection committee's trip alone is a big win.More >>
  • Anniston - Gadsden Area NewsMore>>

  • Body pulled from Weiss Lake identified as missing woman

    Body pulled from Weiss Lake identified as missing woman

    Monday, July 21 2014 6:00 PM EDT2014-07-21 22:00:41 GMT
    DeKalb County sheriff's officials say a body that was pulled from Weiss Lake in Leesburg has been identified as a 20-year-old woman who was recently reported missing. Sheriff Jimmy Harris says the body of Sarah Jane Ortiz of Valley Head was found in the lake by a fisherman on Friday. Harris says the woman's body was positively identified on Monday at a forensics lab in Huntsville. Harris says Ortiz was reported missing July 16 by friends and relatives after she failed to return home on July 1...More >>
    DeKalb County sheriff's officials say a body that was pulled from Weiss Lake in Leesburg has been identified as a 20-year-old woman who was recently reported missing. Sheriff Jimmy Harris says the body of Sarah Jane Ortiz of Valley Head was found in the lake by a fisherman on Friday. Harris says the woman's body was positively identified on Monday at a forensics lab in Huntsville. Harris says Ortiz was reported missing July 16 by friends and relatives after she failed to return home on July 1...More >>
  • JSU President announces retirement

    JSU President announces retirement

    Monday, July 21 2014 3:17 PM EDT2014-07-21 19:17:37 GMT
    The longtime president of Jacksonville State University says he will retire next year. Bill Meehan told trustees that he's stepping down as of June 2015. The school announced his decision on its Facebook page. The delay in Meehan's departure provides a chance for board members to name a successor. Meehan has been president since July 1, 1999. Meehan is a Jacksonville State alumnus who started working at the school as a biology instructor. He held other positions at the northeast Alabama campu...More >>
    The longtime president of Jacksonville State University says he will retire next year. Bill Meehan told trustees that he's stepping down as of June 2015. The school announced his decision on its Facebook page. The delay in Meehan's departure provides a chance for board members to name a successor. Meehan has been president since July 1, 1999. Meehan is a Jacksonville State alumnus who started working at the school as a biology instructor. He held other positions at the northeast Alabama campu...More >>
  • Southside woman arrested for Chemical Endangerment of a Child

    Southside woman arrested for Chemical Endangerment of a Child

    Monday, July 21 2014 2:50 PM EDT2014-07-21 18:50:43 GMT
    An Etowah County woman has been arrested for chemical endangerment of a child, according to Sheriff Todd Entrekin.Investigator Haydyn Hedgspeth states, “Christina Goodson Amberson, 36, of Southside, was charged on July 16 with one count of chemical endangerment of exposing a child to an environment in which controlled substances are ingested, produced or distributed, which is a felony.”Amberson admitted to using methamphetamine. She is approximately 5 months pregnant.“It is simply unacceptabl...More >>
    An Etowah County woman has been arrested for chemical endangerment of a child, according to Sheriff Todd Entrekin.Investigator Haydyn Hedgspeth states, “Christina Goodson Amberson, 36, of Southside, was charged on July 16 with one count of chemical endangerment of exposing a child to an environment in which controlled substances are ingested, produced or distributed, which is a felony.”Amberson admitted to using methamphetamine. She is approximately 5 months pregnant.“It is simply unacceptabl...More >>
Most Popular
Stories
Videos
loading...
  • Latest StoriesMore>>

  • House on Fire in Birmingham

    House on Fire in Birmingham

    Tuesday, July 22 2014 2:42 AM EDT2014-07-22 06:42:02 GMT
     Firefighters are working to put out a house fire in Ensley. It broke out just before midnight Monday near 16th street and Avenue I. We will give you more information as soon as those details become available.More >>
     Firefighters are working to put out a house fire in Ensley. It broke out just before midnight Monday near 16th street and Avenue I. We will give you more information as soon as those details become available. More >>
  • Bengals place AJ McCarron on non-football injury list

    Bengals place AJ McCarron on non-football injury list

    Monday, July 21 2014 10:31 PM EDT2014-07-22 02:31:13 GMT
    AJ McCarron played the role of spectator as the Cincinnati Bengals began training camp on Monday. The fifth round draft pick out of Alabama is on the active/non-football injury list with a "shoulder" injury. McCarron remains on the Bengals active roster and will be allowed to workout as soon as the Bengals doctors give him the okay."McCarron is apparently still be heavily scrutinized after missing the first portion of the spring workouts with shoulder tightness," wrote Geoff Hobson, the edito...More >>
    AJ McCarron played the role of spectator as the Cincinnati Bengals began training camp on Monday. The fifth round draft pick out of Alabama is on the active/non-football injury list with a "shoulder" injury. McCarron remains on the Bengals active roster and will be allowed to workout as soon as the Bengals doctors give him the okay."McCarron is apparently still be heavily scrutinized after missing the first portion of the spring workouts with shoulder tightness," wrote Geoff Hobson, the edito...More >>
  • Auburn scores commit from WR Nate Craig

    Auburn scores commit from WR Nate Craig

    Monday, July 21 2014 9:46 PM EDT2014-07-22 01:46:12 GMT
    Nate Craig didn't want to wait. One of the top recruits of the class of 2016 committed to Auburn on Monday night, announcing his choice on Twitter. I will be taking my talents to Auburn University!?????? #WDE pic.twitter.com/8lSreVGBJf -- NITRO (@NitroNate9) July 22, 2014 The 6-foot-3, 205 pound Craig is a 5-star prospect according to the 247Sports composite rankings. He had over 500 yards receiving and 16 total touchdowns at Pasco High School (Tampa, Fla.) last season. He transferred to T...More >>
    Nate Craig didn't want to wait. One of the top recruits of the class of 2016 committed to Auburn on Monday night, announcing his choice on Twitter. I will be taking my talents to Auburn University!?????? #WDE pic.twitter.com/8lSreVGBJf -- NITRO (@NitroNate9) July 22, 2014 The 6-foot-3, 205 pound Craig is a 5-star prospect according to the 247Sports composite rankings. He had over 500 yards receiving and 16 total touchdowns at Pasco High School (Tampa, Fla.) last season. He transferred to T...More >>
  • DNC's first day on Birmingham site visit

    DNC's first day on Birmingham site visit

    Monday, July 21 2014 9:40 PM EDT2014-07-22 01:40:54 GMT
    It's been a full day of sightseeing for a team with the Democratic National Committee.A 12-member group is touring a variety of Birmingham hotels, attractions and venues Monday as part of a two-day site visit.Birmingham is one of five cities vying to hose the Democratic National Convention in 2016. The committee is in the Magic City to see if it has the hotel and venue space to pull off the large-scale event.ABC 33/40 went alongside the team for part of its day. Members saw the Birmingham Mus...More >>
    It's been a full day of sightseeing for a team with the Democratic National Committee.A 12-member group is touring a variety of Birmingham hotels, attractions and venues Monday as part of a two-day site visit.Birmingham is one of five cities vying to hose the Democratic National Convention in 2016. The committee is in the Magic City to see if it has the hotel and venue space to pull off the large-scale event.ABC 33/40 went alongside the team for part of its day. Members saw the Birmingham Mus...More >>
  • Perry sending National Guard troops to border

    Perry sending National Guard troops to border

    Monday, July 21 2014 8:13 PM EDT2014-07-22 00:13:13 GMT
    Texas Gov. Rick Perry plans to deploy as many as 1,000 National Guard troops to South Texas to bolster security along the Mexico border, a local lawmaker confirmed Monday.More >>
    Gov. Rick Perry is deploying up to 1,000 National Guard troops to the Texas-Mexico border over the next month to combat what he said Monday were criminals exploiting a surge of children pouring into the U.S. illegally.More >>
  • DNC trip helps change residents’ perspective of Birmingham

    DNC trip helps change residents’ perspective of Birmingham

    Monday, July 21 2014 7:35 PM EDT2014-07-21 23:35:35 GMT
    Whether Birmingham is chosen or not, the DNC selection committee's trip alone is a big win.More >>
    Whether Birmingham is chosen or not, the DNC selection committee's trip alone is a big win.More >>
  • Warrants issued to arrest Forkland mayor

    Warrants issued to arrest Forkland mayor

    Monday, July 21 2014 7:12 PM EDT2014-07-21 23:12:04 GMT

    Warrants allege: Theft of Property & Tampering Govt Records

    More >>

    Warrants allege: Theft of Property & Tampering Govt Records

    More >>
  • US urges global push for Israeli, Hamas cease-fire

    US urges global push for Israeli, Hamas cease-fire

    Monday, July 21 2014 6:03 PM EDT2014-07-21 22:03:45 GMT
    U.S. Secretary of State John Kerry is making a renewed push for a cease-fire between Israel and Hamas with another trip to the Middle East, as the civilian death toll in the conflict has sharply escalated.More >>
    With high hopes but low expectations, the U.S. stepped up calls Monday for an international push to end fighting in the Gaza Strip as President Barack Obama sent his top envoy to the Mideast to help broker a new cease-fire...More >>
Powered by WorldNow