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Hale Pai
Pacific American-News Journal

Nowemapa/Kekemapa - November/December 1996 Volume 2 Issue 11


Since we started this column, the questions have ranged across many areas. In order to help focus on key issues, I will address selected areas in some depth. The first is on retirement planning.

Q: We thought retirement meant retirement?

A: Welcome to the world of active retirement, semi-active retirement and full retirement. Think of retirement as a road you can follow to all kinds of new and wonderful experiences. Retirement is no longer synonymous with rocking chairs; it's an exhilarating, richly rewarding time and can be the best time of your life. Ask yourself where you want to be in 10, 20 and 30 years; what you value most; then go for it.

Q: When should we start planning for retirement?

A: Today. And I wished that when I was a young man someone had recognized that there are no words in our cultures for “financially secured retirement” and taken the responsibility to share this kind of knowledge with me.

Q: How much money will we need?

A: As a rule of thumb, most planners like me believe the figure is somewhere between 60-80% of your current income, adjusted for inflation. But first, you have to determine where you are now financially; second, you have to develop a Crystal clear picture of what you want your retirement to look like; and third you have to determine exactly how much money it will take to make that picture come to life.

Q: Where will our money come from when we retire?

A: The most likely sources are your Social Security, your spouses social security, company pension, 401 (k), IRA, part-time work, and personal savings like stocks, bonds, mutual funds, CDs, the cash value of your insurance, and money market accounts.

Q: How much can we expect from Social Security?

A: You can start collecting full benefits between the ages of 65 and 67. Or you can collect 80% of your benefits if you decide to retire at age 62 (as more and more people are doing). For a single retiree at age 65 retiring in the year 2000, the average would be $13,669.00 and the maximum $19,802. If you would like an estimate of what your benefits will be, just call your local Social Security office or 1-800-772-1213 and ask for a “Request for Statement of Earnings” card, form SSA-7004.

Q: Should we sell our home?

A: Tough question; squishy answer. It depends on: do you want a warmer climate? A smaller home? Remain close to the kids and friends? how often do you want to visit with the mo`opunas? But I do know that you can take advantage of a one-time tax break if you are over 55 years old - it lets you exclude up to $125,000.00 of gain from the sale of your home from taxes.

Q: If we had $250,000.00 in investments earning 5.5% annual yield compounded quarterly, how long can we expect our savings to last?

A: You would be able to withdraw $2,673.00 monthly for ten years; or $1,686.00 monthly for twenty years; or $1,108.00 for a long, long time since your would be withdrawing the interest only. Ah, but then there is inflation that will seriously affect the value of the withdrawals. So, adjust your value down by what you think inflation could be.

Q: What are the biggest expenses during retirement years?

A: Monthly mortgage payments, health insurance, dental expenses, property taxes, and rising utility costs generally in that order.

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Copyright 1996 Hale Pai Pacific American-News Journal
Last modified: February 28, 1998

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