Will a Late Start Hinder Your Retirement?

Physician's Money Digest, March 2006, Volume 13, Issue 3

In February of 1980, the US Olympic Men'sHockey Team took on what experts consideredthe world's best: the Soviet Union. Without anysupport from critics or fans, the United States pulledoff one of the biggest sporting upsets of all time,defeating the Soviet Union 4 to 2 in the semifinals.They then went on to defeat Finland for the gold.

How did the US team pull off the inconceivable?Some say it was a miracle, while others point topreparation. While the Russians sat and studiedplays, the Americans practiced on the ice as hard asever during the days leading up to victory, and theircoach planned a winning strategy. This dramatic victoryis a solid example of believing that it is never toolate to reach your goals, and great things can beaccomplished with the proper planning and strategy.

Never Too Late to Plan

If you are nearing retirement and have not spentmuch time planning for your life when your days asa practicing physician end, you can still create a turnaroundin your savings. With the proper planningand a great vision, you can accomplish great thingsfor your retirement, even with a late start. The rightcombination of perseverance, planning, and sacrificewill enable you to retire in relative comfort.

One of the keys to successful retirement planninglater in life is the right frame of mind. You can sitaround like the Soviet Union hockey team, or youcan prepare yourself for the challenging yet rewardingroad ahead. When faced with the reality of catchingup, you must accept the fact that you may haveto be more aggressive in your saving habits and yourinvestments. Unlike your colleagues, many of whomstarted saving long ago, you do not have the luxuryof a conservative portfolio as you near retirement.

Your Winning Strategy

If you are starting later in the game, it is extremelyimportant to take advantage of the catch-up provisionfor 401(k)s and IRAs. You will need to contribute themaximum amount to each plan, plus the maximumcatch-up contribution allowable by law. If you areaged 50 and older, the 401(k) catch-up provision for2006 is $5000. You can contribute an additional $1000to traditional and Roth IRAs and an extra $2500 toSIMPLE IRAs. While it may seem difficult to contributethe maximum amount plus a catch-up contribution,you have to stay focused on your goal. Ask yourself ifyou would rather sacrifice now or worry a lot later.

Just playing catch-up isn't the only way to preparefor retirement. By reducing the amount you owe incredit card bills, car loans, or even your children'sextra college expenses, you can retire knowing thatyour largest debts are behind you. You can thenfocus on your everyday needs rather than debt, loans,or mortgages.

Finally, you may have to consider the possibility ofworking past age 65. There is a growing trend of peoplewho love their jobs or just love to work. Besidesthe added financial benefit, you are also contributingto your personal well-being both mentally and physically.You may even consider starting your own smallbusiness and making an extra income while settingyour own hours. After all, you've earned this freedom;shouldn't you be taking advantage of it?

These are just a few of the basic ways to be preparedfor retirement this late in the game. There isalways something you can do to save for retirement,even if you think it is too late. It does take a certainamount of self-sacrifice, elbow grease, and trustedplanning from a financial professional. Although itmay not always be an easy path to retirement savings,you can still enjoy your retirement with the right combinationof hard work and trusted planning.

, of Huntington Beach, Calif, is with

Financial and Retirement Management, a registered investment

advisory firm. He is a registered representative of and offers

securities through Securities America, Inc, and is a registered

broker/dealer, member NASD/SIPC. He welcomes questions or

comments at 877-732-2637.

Robert Valentine, CSA