***Retirement Resolutions for Your 50's & 60's

Question: My husband and I (age 62 and 57) want to make some resolutions to sure up our retirement picture in 2010. Any thoughts you could provide would be greatly appreciated. Bea, Stamford, CT

Answer: Bea, here’s a checklist to get you on track in 2010!

1. If you haven’t maxed out your 401k/403b contributions at work, you are eligible to take advantage of what is known as the catch-up provision. In essence, if you haven’t saved as much as legally possible every year you’ve been working, you are able to contribute an extra $5,500 per year (over and above the legal limit - $16,500) into your retirement plan in 2010.

2. If you have a spouse, family and assets to protect, I think you should investigate long-term care insurance. Long-term care protects you and your family from the emotional, physical and financial pain that a health issue can have on them. Take advantage of 10-pay plans which allows you to pay the entire cost of the policy off in 10 years, while you still have earned income, a job.

3. Start paying down your non-deductible debt such as credit cards and auto loans. Try to be debt free, perhaps with your mortgage being the only exception, by the time you retire. If you can pay off your mortgage too, more power to you. This can free up a lot of cash flow and keep your expenses low in retirement.

4. Review your investments and asset allocation. Make sure you're NOT too heavily invested in equities (no more than 50% to 60%) or your own company stock (no more than 10%).

5. Consider accumulating up to three years worth of income in savings, CDs, money markets or treasury bills. This is where you should start taking money from when you retire. I use this “safe-money” benchmark strategy with my retired client so the money they need is in the safest yet lowest yielding investments where their principal is protected. It helps to weather the ups and downs of the stock/bond markets where the rest of their long-term money is allocated and diversified properly.

6. Finally, review your estate plans with an estate planning attorney and consider reducing and eliminating unnecessary insurance coverage to free up cash flow for income in retirement.

Bill’s Bottom-line: Take action today AND Happy New Year!