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Editorial - Are you prepared for these five retirement challenges?

It's out there, waiting. It's maybe a little hazy right now but with each passing year, it gets a little clearer.


How prepared are you? Will you have enough set aside to add luster to your golden years?

Planning for retirement is a big challenge, especially in today's economy when every dollar is tight. But it's best to face those challenges head on instead of pushing the thought away.

We received an e-mail from Thrivent Financial for Lutherans that had some sound advice for those in their 50s, 60s and 70s about how to manage their retirement dollars. Here are five important things to keep in mind:

• Due to increased life expectancies, many boomers will have retirements lasting 20 years or more. In fact, the National Center for Health Statistics reports that the median life expectancy for someone age 65 is 18.6 years. With increased longevity comes increased risk of potentially outliving one's retirement assets.

• Retirees need to account for inflation. Inflation is the sustained increase in the price of goods and services over time. As inflation rises, every dollar owned buys a smaller percentage of a good or service. As prices go up over time due to inflation, the value of one's money can erode. This is particularly true over a long time period, like 20 or 30 years or more.

• Responsibility for funding retirement is shifting from the employer to the employee. Many traditional company pensions (defined benefit plans) are being phased out or frozen, even by financially healthy companies. They are being replaced with defined contribution plans (like 401(k) and 403(b) plans). This means the burden of managing one's retirement income is increasingly falling on individuals.

• Unplanned personal "life events" will happen. No one can know what lies ahead in his or her retirement journey. While everyone hopes for good health and the ability to determine "when" to retire, life holds no guarantees. Planning for one's retirement years must include consideration of life events that have the potential to complicate those years.

• Investment markets will continue to fluctuate (up AND down). Typically, investments generating the potential for greater returns also have greater potential for loss.

"Funding your retirement years is a financial balancing act among playing safe, taking risks and spending wisely," said Ann Koplin, director of retirement solutions for Thrivent Financial for Lutherans. "If any of those areas gets out of whack, troubles may result."

She added that having a financial strategy that's flexible enough to adapt to changing needs and circumstances is crucial. Her last piece of advice: "While you may retire, the fact is your money never should."