Retirement.ppt

Retirement Thomas E. Nolan, MD, MBA Abe Mickal Professor and Chair of Obstetrics and Gynecology Director, Women’s and Newborn Services LSU-Health Science Center New Orleans Objectives At the end the presentation the participant should Understand what retirement needs are important in the planning process How to achieve these needs by goal setting Resources available in achieving goals Retirement Changed dramatically in the United States over the past 30 years Individuals are living longer and are healthier More individuals are retiring earlier, working part time or changing careers Retirement The never ending question is: HOW MUCH DO I NEED TO SAVE??!! Variables at work: What do you want to do What are your responsibilities—children at later ages, invalid parents Inflation, investments and longevity Retirement Standard answers are: 70-80% of pre-retirement salary Probably high for physicians because they consistently have higher incomes, with more discretionary income Yearly withdrawals of 4, 5 or 6% of total invested assets Assumes inflation numbers are stable Assumes investment returns are stable Retirement Other driving forces are: Expensive desires (travel, property, boats, grandchildren, etc.) Age of collection of social security Health care and cost—may have to wait until Medicare and pharmacy benefit becomes available to retire Investment losses in 2000-2003 changed a lot of individuals plans Retirement (Non tangibles) Comfort of spouse with significant other in the house (huge!!!) To move or not to move, downsize Boredom, no hobbies Loss of perceived importance First 2 years, plan on spending as much as pre retirement on travel, etc. How to Estimate Multiple websites available to estimate needs: Smart Money Magazine Fidelity Financial Engines (uses Monte Carlo simulations) 2 most important variables: investment return and inflation How to Estimate Time value of money concepts What can you expect investments to return (usually range is 5-9% depend