Common Cents
Nov/Dec 2008 Issue

Update your saving strategy

There are many choices for building a retirement nest egg, and the investment strategy you had when you were 40 may need updating when you reach 55. If you’re planning to retire within the next 10 years, here are a few things to consider.

Check under the hood. Weigh factors like whether you plan to work part-time in retirement, the value of a pension or other assets, and whether you and your spouse will retire at the same time. Add expenses for new items like long-term care insurance or increased medical services.

Safety first. The ideal retirement portfolio should be a mix of stocks, bonds and shorter-term cash investments such as CDs. Generally, it is advisable to move money into “safer” investments such as high-yield savings accounts the closer you get to the point in time when you actually need to use the money.

Keep cash within reach. As you get closer to retirement, you’ll want to ensure that you have access to your money when you need it. The basics: 12 to 18 months’ worth of living expenses, plus a cushion to handle surprises.

With a refreshed picture of your savings plan, research new savings solutions. There are many resources, including AAA, that are available. AAA has partnered with Discover Bank to offer Certificates of Deposit, Money Market Accounts and CD IRAs. These financial products may be appealing to those closing in on retirement. Call 1-888-204-8990 or go online to for more information.


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