Keep Your Retirement Savings on Track

The financial meltdown has dealt some of its sharpest punches to many individuals’ retirement plans. Despite what we believe to be a temporary derailment, four strategies can help get your retirement savings goals back on track.
Take stock of your situation. The first step to developing an effective recovery plan is to gather information on all your assets. Build a holistic view of how your funds have withstood the market thus far and determine whether your total asset base is allocated effectively for your particular plan.
Consolidate accounts. The process of gathering and reviewing all your assets may reveal just how many “savings buckets” you have to manage. Allocating assets and managing risk can be logistically more difficult when you’re managing multiple pools of scattered assets. You may be able to make fewer accounts work harder for you, and you could find it easier to respond to shifting markets.
For example, if you have multiple retirement accounts from previous employers, consider rolling them over into your current plan or a rollover IRA. Be sure to work with your tax advisor to help assess whether a rollover makes sense for you.
Emphasize income. Consider what portion of your assets should be dedicated to providing an income stream. Bonds, treasuries and CDs can all create income, especially if you stagger maturity dates. And don’t forget, a paycheck is another form of regular income. Remaining in the workforce — even if part time — can reduce the pressure on your investments to produce income and give you more time to save.
Re-evaluate your risk exposure. With retirements projected to last for 20 years or more, every retirement-focused portfolio needs a long-term growth component, and that usually comes from stocks. While it’s important to avoid taking imprudent risks in an effort to play catch-up, hiding in a heavy cash position for the long term can have you coming up short when you need it. Work with your financial advisor to adjust your asset allocations regularly.
Neither Merrill Lynch nor its Financial Advisors provide tax, accounting or legal advice. Clients should review any planned financial transactions or arrangements that may have tax, accounting or legal implications with their personal professional advisors.
For more information, contact Merrill Lynch Financial Advisor Daniel Magee of the Egg Harbor Township office at 609-484-7180 or
www.fa.ml.com/daniel_p_magee.
—Vince Grogan is Director of Marketing and Sales Support of Personal Retirement Solutions at Merrill Lynch.