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.
› Jack McCabe, 52, Deerfield Beach
Family: Mary Grace; Victoria, 10, and two adult children, ages 19 and 21.
Occupation: CEO, McCabe Research & Consulting; CEO, McCabe Acquisitions; partner in other real estate related limited liability companies.
Assets/liabilities: Majority owner and managing partner in businesses. Income streams from other real estate interests. Investments converted to cash since end of 2005. Bracing for "an upcoming recession triggered by the housing industry." Only liability: $425,000 mortgage on a personal residence.
Retirement Planning Advice
Troy Sterba, certified financial planner and consultant, BankUnited, Coral Gables
"This couple needs to maximize retirement funding because they are looking at a shorter horizon to retirement. I also recommend more of a diversified portfolio, understanding that their comfort zone is real estate. I have a number of clients that have money on the sideline in real estate, and I recommend they also include investments in stocks, bonds and life insurance so they are not overly into any particular style of investment. They should not put all of their eggs in one basket. The Dow Jones industrial average just set a new record, and had this couple any money in the stock market, they would have seen some benefits from that too. The diversification allows them to ride the ups and downs of all markets."
› Get back into investment markets -- at least to some degree.
› Consider a life insurance strategy to protect the businesses and to use as an estate planning tool.
› Maintain a well-diversified investment portfolio, especially important as retirement nears and income streams become important.
› Establish a cash-flow statement and balance sheet to help quantify progress toward goals.