A Plan for All Seasons
With the demise of pensions, the responsibility of planning for the golden years rests on employees-and it's never too early to start planning.
› Don Wirth, 31, Clearwater
Occupation: Certified registered nurse anesthetist.
Assets/liabilities: Graduated last year from a 2?year nurse anesthesia residency. Owes money on student loans ($40,000) and debt to parents ($8,000) for expenses acquired during his unpaid residency. Maxes out 403(b) ($15,000/year), has a traditional IRA, a Roth IRA and stocks valued at $30,000 and is building an emergency fund. Expects to have family and car loans paid off by the beginning of the new year. Besides the family and student loans, liabilities include a mortgage ($1,800 a month), auto loan and credit cards.
Retirement Planning Advice
Matthew Bower, senior vice president, U.S. Trust Corp., Sarasota
"Don's situation is great. He has secured a very lucrative professional career with significant income potential, and he has established a very solid retirement program through his 403(b) plan and his two IRAs. Here is what Don should be thinking about:
› Continue maximizing retirement plans.
› Look into balancing out the retirement assets with non-retirement investments, including stocks, bonds, mutual funds, real estate, etc.
› Build up a rainy-day fund.
› Consider making extra principal payments on mortgage."
› Don't forget to protect assets with appropriate property and casualty and liability insurance.
› Pay the student loans off, perhaps over the next three to five years.
› Think about setting up a 529 education savings plan for himself (which the law allows). He may very well want to go back to college for further education. Worstcase scenario is he pre-saves for his future children and/or grandchildren, and if he has none then maybe nieces and nephews