Advisers: Review Retirement Plans this Season

While Commack residents may be busy this fall with back-to-school hassles, early holiday shopping and Halloween costumes, financial advisers say there's one more thing that requires attention this season: their retirement plans.

Whether residents are in or approaching retirement, or just starting their long-term savings, advisers say the beginning of the fourth quarter is time for them to pick up the phone and call their advisers for a good end-of-year review of investment plans.

There's no one-size-fits-all for saving for retirement, so residents should analyze their individual goals and ensure savings plans are still working toward them, according to Pat Byrne, head of Maximus Financial.

"A year goes by very quickly and much can change, including a new job, the birth of a child or unexpected expenses," Byrne said, adding all these things can affect how local residents save for retirement.

Even without a major life change, investments in retirement plans should be reviewed and savers should work with their advisers to make sure they've allocated the right percentage of funds to both aggressive and conservative investments, Byrne said.

Michael Kresh, a Commack resident and financial planner, said all residents should be reviewing plans now to make sure they're closer to retirement goals this year than they were last year.

Whether enrolled in a company 401(k), Individual Retirement Account or 403(b) account for teachers, residents should evaluate the contributions they've made this year, how difficult it was to sock that money away, and if it's possible to increase contributions next year, Kresh said.

"You don't want to wait until the year starts to make those changes," he added.

For Commack residents already at or past retirement age and receiving Social Security benefits, this is the month the federal agency releases benefit amounts for the following year.

If this year is at all like 2009, Social Security increase will be minimal, Kresh said. That means local retirees may need to increase how much they withdraw from retirement accounts for the year ahead.

"The vast majority of people living on Long Island have Social Security and a retirement plan," Kresh said. "This is the time to do a year-end budget because you know what Social Security will be and can make any last-minute adjustments to retirement plans."

Money in personal savings investments requires an even more intense end-of-year evaluation because taxes and capital gains are involved. Kresh said most retirees have some kind of personal investment account that's not a retirement plan for an extra cushion during the golden years.

The upside to the market crash of 2008 is residents may have investment losses that they can carry forward to this year to offset any capital gains. That means they'll pay less in taxes on the money they made on investments throughout 2010.

"Usually in any given year if you're properly diversified you have stuff that makes money and stuff that loses money," Kresh said.

Regardless of the type of account Commack residents are using for retirement savings, Kresh said it's important for them to conduct year-end reviews now, before holidays and other winter activities distract them.

"If you wait until the last minute you might discover the numbers don't work in your favor," he said. "If you wait until November, then it's Thanksgiving and the December holidays, and before you know it, it's January and too late to do anything."