Plan now to retire later

On election night, I watched a special on PBS, "Can you afford to retire?"

I like to catch these kinds of shows because the subject is germane to my business, and I am not exactly a youngster anymore myself. I fret over whether the mass of baby boomers nearing retirement will be able to afford the cost of living such long lives.

The numbers I have seen coming from various sources are really quite startling. Many people who think that they can retire, cannot. Many more will be forced to work longer than they had planned.

Let's get back to the PBS show though. It concentrated on the fact that the U.S. is relying more and more on defined contribution plans like 401K and less and less on defined benefit plans like pensions.

As folks live longer and cost more in health care, the pension system is finding itself in a position of not being able to fully fund future benefits. If I had to rely on those benefits, I would be pretty nervous these days.

The old days of a pension being as good as it gets is over, and now we see things like United Airlines being allowed to bail on their pensions to stay in business. What will be next?

As for the 401K system, that allows workers to save for themselves for retirement with employer matching contributions. The problems arise in how much the worker contributes and how they invest their money. Here is where quality professional advice comes in handy.

Most people do not know how to allocate their 401K or deferred comp plans, so then tend to ignore them. Let's face it, asset allocation is not everyone's bag.

Now the "allocate and ignore" strategy can sometimes work, but that is a gamble. Markets rotate and conditions change, and the correct allocation can make or break your retirement dreams.

I have noticed that not many companies really help their workers with correct allocations, so it is up to them to get outside advice. Many of my clients work for the State of Nevada, and I include as part of the planning process reallocation of their deferred comp plans on a yearly basis.

Having money sitting in a general account is not going to get you to retirement no matter how safe it seems. Risk is relative to time in the market and if you have a lot of time, you can afford different allocations.

I don't want to see my boomer brethren retiring from one career just to start another, but I fear that will be a reality for many. I, for one, want to raise my donkeys and do a little day trading instead of seeing how my skills can be retooled for another job.

I suspect many of you might feel the same, not about the donkeys, but about not wanting to work until you die. Now is the time to seek professional guidance and save, save, save. The new horizon in retirement is looming and procrastination will cost you dearly. To see if you need to reallocate your retirement plan, call Ray Masayko, Walter Shepperd or myself at 841-4277.

• Carol Perry, a Northern Nevada resident since 1983, represents the firm of Wachovia Securities in Carson City.