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The New Age of Money.

Avoid going from riches to rags in your golden years by developing a money plan for every decade of your life.


First, the bad news for the Valley’s growing population of millionaires, many of whom are hovering around retirement age.
“The typical Boomer who’s retiring today with a million dollars and nothing else in the way of income is probably going to be living in poverty in 15 years,” says Mike Sullivan, director of education at Take Charge America, the Phoenix-based credit counseling and debt management company.
“If you’ve managed to accumulate a million dollars, and you invest that at a 4 percent guaranteed return – which is about all you’re able to get now – that’s $40,000 a year,” Sullivan explains. “But with inflation, which suddenly seems to be screaming again, there’s an excellent chance that within 10 years, that’s gonna be the equivalent of $20,000 a year. And over 20 years – and most of us can expect to live that long after retirement age today – it’s gonna be the equivalent of $10,000 a year. Pretty grim!”
Now the even worse news for the rest of us. “Most of us won’t have anything close to a million dollars to retire on,” Sullivan says. According to Money magazine, only about 40 percent of today’s Boomers have managed to save at least $100,000. Investment strategists recommend developing a money plan early, laying out what we should be doing with our money at age 30, 40, 50 and so on:

30s
The 30s are a good age to invest in your company’s 401(k) plan, for example, or an IRA – anything to get some automatic savings started. “For most people, if they set up an automatic savings plan, whether by payroll deduction at work or an automatic withdrawal from their checking account, they will be the most successful savers,” says David Carroll of Phoenix Wealth Advisors LLC. “If you want to save whatever is left over at the end of the month, generally we find a way to spend it and there is consistently nothing left.”