1. Treiger, Teresa M. RN-BC, MA, CHCQM-CM/TOC, CCM

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This column is a bit of a departure from my usual reflective pieces. It has to do with the fact that we look after the needs of our patients and put together stellar care plans to facilitate reaching their desired goals. However, when it comes to planning for our own goals, or perhaps even formulating them, we may be falling short.


Look around the audience at any case management function and you observe that a vast majority of attendees are in the 40- to 50-year age range. For this age group, retirement planning and saving should be a priority. The fact that the stock market can be a roller coaster ride got me to wondering what, if any, adjustments I need to make-and in a big picture sense-How do case managers handle their retirement planning. Upon reflection, I believe many of the skills case managers utilize in their work can be applied to our personal retirement planning.


With ongoing fluctuations in the stock market, do we assess retirement plans and our savings goals, adjust strategies to accommodate short-term and long-range outcomes, or monitor our existing plan and avoid making minor adjustments?


Those of us already retired, or semi-retired, likely feel palpitations with steep declines in our account balances. But those precipitous market fluctuations are going to happen and if you have a good plan in place, you should be able to get through the upheavals with modest impact.


For those who are not financial professionals, financial and retirement planning can be overwhelming. The complexity of the laws, the overload of available information, the vast array of choices, and even the tools intended to simplify decision making are significant barriers to effective planning. But by taking some simple and basic steps, you can begin to assemble the framework of a plan and move closer to achieving a financially secure and comfortable retirement.


The first thing to keep in mind during all this planning is that your retirement may last decades. For a 65-year-old woman, there is a roughly 50% chance of living beyond 85 years of age and roughly a 25% chance of living past 91 years of age. So, plan for the retirement funds to last for many years.


Where do you start? For most retirees, Social Security is the foundation of their retirement finances and a good starting point is the Social Security website ( You can create an online account where you can review your salary history. Make sure that your history reflects all of your wages. If there is missing or incorrect information, you may not receive all of the benefits to which you are entitled. You may also use the retirement calculators and other tools to estimate your retirement benefits based on certain assumptions such as your age when you plan to begin taking the benefit.


The next step to successful retirement planning is the mantra-Save-Save-Save. There is no easy or magic answer, but there are some tools that make saving for retirement easier. One of the most popular retirement savings programs is the 401(k). Most mid-size and large employers have these plans. An amount specified by you is withheld from your paycheck and deposited into an investment account. Typically, you can designate the specific funds in which the money is to be invested. An important feature of many plans is employer matching. This where the employer contributes or matches your contribution, up to a certain limit. At a minimum, you should contribute the percentage of your pay that maximizes the employer match amount. It is like getting a pay raise. One added benefit of the 401(k) is that your contributions and the employer matching contributions are not subject to income taxation. However, income taxes are imposed when funds are withdrawn. Your Human Resources Department is generally the best place to get basic information regarding your employer's retirement benefits.


Another program is the Independent Retirement Account, commonly known as the IRA. This is a specific account typically held at a bank or other financial firm. As with the 401(k), you decide how the funds are invested. There are two better known types of IRAs-Traditional and Roth. With the Traditional IRA, your original contribution is tax-deductible but withdrawals are counted as taxable income. With a Roth IRA, the contribution is not tax-deductible but the withdrawals are not included in your taxable income. Which IRA you should choose is dependent on your specific circumstances. It is best to consult a professional tax or financial advisor. Although IRA contributions for given tax year may be made until April 15 of the following year, it is generally easier if you make contributions on a regular schedule (e.g., monthly). Most financial firms can arrange automatic withdrawals from your checking or savings account to facilitate your investment.


One last IRA planning idea is having a separate Spousal IRA. Generally, you need earned income at least equal to your IRA contribution. But for a nonworking spouse with no earned income, you can make a contribution based on the working spouse's earned income. So, if the working spouse makes a contribution to their IRA, the Spousal IRA contribution is separate and not dependent upon the working spouse's contribution.


401(k) and IRA plans are referred to as tax advantaged because investment income compounds tax-free. Over many years, this tax-free compounding can yield truly extraordinary results. There are some disadvantages. If withdrawals are made before reaching the minimum allowed age, that money may be subject to tax and also early withdrawal penalties. However, Traditional and Roth IRA rules are different (as are rules for 401(k)). This is where consulting with a qualified financial advisor or tax professional is essential.


When you might need access to money before retirement, perhaps a better alternative is maintaining a nonretirement savings or investment account. As with IRAs, regular, automatic deposits into these accounts are easy to arrange. Having this separate account is important to maintaining the integrity of your retirement account. In other words, your retirement account should be insulated from life's challenges as well as the occasional urge to access it for unexpected needs. One of the best antidotes to premature evacuation of your retirement account is to have a separate emergency fund that is equal to at least 3 months of your regular living expenses.


So what do you do once you have set up a retirement account?


* As mentioned previously, consistent and regular contributions are the best plan.


* Although it is great to buy low and sell high, the problem is no one really knows when those highs and lows are going to occur. Don't try to time market, just invest regularly and consistently.


* Develop what is called an asset allocation strategy. This means splitting your funds between asset classes (e.g., stock, bonds, commodities) to reduce the risk associated with being too heavily concentrated in one type of investment instrument. The further away from retirement you are, the more you can be invested in more volatile assets (e.g., stocks). As the time draws closer to retirement, your emphasis should shift to low-volatility assets (e.g., short-term bonds, bank certificates of deposit). This aspect of retirement investing can be tough because it takes time and effort. But it is important to keep your retirement portfolio age-appropriate. That generally means investing in riskier, higher potential reward assets when you are younger and gradually moving to lower risk assets as you near and move through your retirement.


* Stay the course with your plan through recessions and booms. Your ally is time. As an example, a $10,000 investment earning 6% in income annually for 25 years yields more than $40,000 at the end of the 25 years. Investment income compounded over decades provides an excellent opportunity to achieve significant gains to meet your retirement goals.


There are some basic investing guidelines, which are valid in both prosperous and depressed markets:


1. Diversify your investments. Experts disagree on the exact number, but a good rule of thumb is to have no more than 7% of your portfolio in any one company's stock or bond and no more than 20% in any industry (e.g., health care, energy, utilities). The easiest way to diversify is to invest in large diversified mutual funds. Use financial websites (Yahoo Finance is a good one) to review the past performance of funds, which interest you. You should seek a mix of funds among ones that invest in large, small, and foreign companies. The Morningstar rating system (also found on Yahoo Finance) rates funds from one to five stars. This can be especially useful in evaluating a mutual fund.


2. Rebalance at least once each year. This is an extension of the diversification guideline. Unfortunately, with investing for retirement, you cannot invest and forget. Some investments will increase in value and some will decline over time. For example, assume you have determined that an appropriate retirement portfolio should consist of 60% stocks and stock mutual funds and 40% bonds and bond mutual funds. In your annual review, the portfolio that a year earlier was 60%:40% is now 75%:25% ratio of stocks to bonds. You should consider selling some stocks and using the proceeds to buy bonds to maintain the 60%:40% ratio of your original plan.


3. Keep costs low. One of the biggest barriers to successful retirement investing is high cost. Remember that concept of compounding income? Compounding works in a similar way for expenses. Small mutual fund fees that might seem relatively innocuous can become significant over many years. High fees can keep total investment returns much lower than they should be. One of the lowest cost mutual fund equivalents is the Vanguard Total Stock Market Index Fund that charges $17 per year for every $10,000 invested. If you can get comfortable investing in individual company securities (a stock or bond), there is no fee for holding those-even better!


4. If you don't understand an investment or how it fits into your retirement plan, then avoid it. Don't yield to pressure from financial salespeople to make investments that you cannot explain clearly to a 12-year-old. Your retirement should not be mysterious, and you should feel comfortable with your plan and the individual investments under that plan.


5. Be patient and don't change your plan or investments based on sudden fluctuations in the markets. However, be alert to major shifts in fundamental economic, industry, and company trends. A change to your plan or an individual investment may be appropriate in some instances.


Some people are confident and comfortable with retirement planning and investing. For those who are uncomfortable, advice and support from a professional advisor are the best solution. No matter which path you choose, you should have a retirement and investment plan. The HeartBeat of Case Management focuses on supporting ourselves, because to take care of others, we have to be good self-caretakers. We often use the axiom "if you fail to plan, then you plan to fail" in our work lives. How about applying this same logic to our personal retirement.