Costco Connection - September 2011

cover story
;gi;g wisely Assembling the ssential pieces for a secure future
JUST HOW OLD ARE YOU? Ask yourself what your age will be on your next birthday, and whether the answer is 30, 60 or some age in between, it will likely come with a twinge of realization that ime is passing by quickly—maybe faster than you’d like.
When you’re young, a driver’s license, the drinking age and
voting are on your radar; other age issues are for later.
In middle age, there are tons of distractions. Money tends to
get allocated to the kids’ education in lieu of preparing for your
golden years. After all, that’s still a long way off.
If you’re in the “sandwich generation”—caring for both kids
and aging parents—you may be additionally distracted by the
challenges your parents are facing. How can you help them
through the needed transitions?

Or maybe you’re facing those same transitions yourself, looking at a picture puzzle with many important pieces still missing—an estate to protect and preserve, changes in living space, medical concerns and wealth sustainment. Will you have enough to get as far as you’re going if age 90 really is the new 75?

The Connection recently asked readers to voice their con-
cerns about aging and retirement. Three thousand readers
weighed in with several common interests that a panel of experts
addresses here with tips and guidance.—David Wight

Finance comes first By Eric Tyson THE EARLIER YOU START planning for your financial future, the more years you’ll have to accomplish your goals. But, no matter your age, the better you plan, the better your options will be.

If you’re in the early years of being in the full-time workforce, here’s how to get on the path to financial success:

☞ Get in the habit of saving and investing. Ideally, your savings should be directed into retirement accounts, such as employer-based 401(k) plans, that offer tax benefits, unless you want to accumulate down-payment money for a home or small-business purchase. Start saving and investing money beginning with your first paycheck. Try saving 5 percent of every paycheck and then eventually 10 percent. A fund of funds (such as a life-cycle fund) is a simple and highly diversified way to get started. If you’re having trouble saving money, track your spending and make cutbacks as needed.

☞ Get insured. When you’re young and healthy, imagining yourself feeling otherwise is hard. But because accidents and unexpected illnesses can strike at any age, forgoing health coverage can be financially devastating. When you’re in your first full-time job with limited benefits, buying disability coverage, which replaces income lost due to a long-term disability, is also wise.

☞ Continue your education. After you get out in the workforce, you may realize how little you learned in formal schooling that can actually be used in the real world, and, conversely, how much you need to learn (such as personal financial management) that school never taught you. Read, learn and continue to grow. Continuing education can help you advance in your career and enjoy the world around you.