How to Solve Your Retirement Puzzle

ALLOVEST - RSP VIDEO TUTORIAL SCRIPT Hi, and welcome to this short tutorial on How to Solve Your Retirement Puzzle By now, you've already completed the questionnaire, and your Puzzle right now is either SOLVED, ALMOST SOLVED, or NOT SOLVED. Through this interactive page, you have the opportunity to move 5 different levers to see if you can improve your situation, and they form the acronym SOLVE. So let's go through each one briefly... S - is your current retirement savings or contribution rate; this includes any employer contribution or match... How much should you be saving?...well, the NEW rule of thumb is around 10%-15%...Why so high? Well it's mostly because we're living a lot longer, and many of you can plan for up to 30 years in retirement. In dollar terms, you can contribute up to $17,500 this year, but if you're over 50 you can make an extra 'catch-up' contribution of up to $5,500 a year, for a total of $23,000 into your nest egg. O -- is optional or part-time income in retirement. But there's a lot of caution here. It's highly recommended to leave this slider at zero and see if you can plan your retirement without moving this. Why? The reason is that since we really don't know what kind of physical or mental shape we'll be in when we reach retirement, there is a lot of uncertainty as to whether we will even be able to work part-time in retirement, even if we want to. Many people plan to work in retirement, but instead have an accidental injury or some other impairing condition that prevents them from part-time work. So, use this slider as your last resort, and if you do, don't plan for part-time income past 75 years of age. L -- is your lifestyle or desired monthly income in retirement (in today's dollars). A general rule of thumb is to use 85% of your current income. However, if you're within 10-15 years from retirement, try to instead calculate what your actual expenses might actually be for a more accurate estimate. V -- is your variable investment strategy This slider is an indication of your ability, willingness and need to take risk and has already been determined given your answers on the questionnaire. You're either considered CONSERVATIVE, MODERATE, or AGGRESSIVE, you'll need to go back and modify the answers on the questionnaire. E- is your expected age of retirement This is a personal question that only you can answer. However, to obtain Social Security benefits, for those born in 1960 or later, your Full Retirement Age to receive SS benefits is 67 years. If you'd like to retire at age 62, you will receive a 30% reduction in benefits forever. Keep that in mind. To maximize your Social Security benefits, in general, you should aim for age 70. Why? Because once you reach full retirement age, your benefits do not max out. As a matter of fact, for each year after full retirement age that you delay taking benefits, you will accumulate a permanent increase in your benefits of 5-8% a year up until your age 70. That could amount to a 25% or more permanent increase in your Social Security benefits.