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Bankrate's 2008 Retirement Guide
The road ahead
There's no perfect plan for everyone but keeping with solid fundamentals is a wise path for most to follow.
The road ahead
Best retirement moves this year
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Consider target-date funds
Target-date funds also help employees maintain a diversified mix of assets because they automatically shuffle and remix their holdings to reflect age and retirement target date. As you get older, the funds become more conservatively invested.

"People might want to look at them," says Ed Ferrigno, vice president of Washington Affairs at PSCA. "They're a convenience so you don't have to rebalance."

As helpful as target-date funds are, they're designed with a cookie-cutter approach to investing. They may, in fact, not be allocated to best suit your personal goals, financial net worth or risk tolerance.

Get professional advice
Seek help carefully. You want to hire someone who's trained in various retirement issues, not just a salesperson who's going to try to sell you a certain product, be it investments, life insurance or other assets.

But a professional can be extremely valuable in helping you allocate assets and determine if you've got the right mix to meet your specific retirement goals. Fee-only planners charge for their time, while fee-based planners earn commissions for investments they sell you.

While word-of-mouth references are a good way to start tracking down help, it may be advisable to seek a professional agency, which requires members to adhere to certain training and other standards. The American Institute of Certified Public Accountants, or AICPA, has a list of CPAs who've earned an extra Personal Financial Specialist credential by passing tests on a variety of comprehensive planning topics, including retirement.

Certified Financial Planners, or CFPs, are required to pass exams for accreditation; you can look for those who specialize in retirement, through the Financial Planning Association.

Make a withdrawal plan
If you're hovering near that magic retirement age, it's time to start planning how you'll withdraw retirement assets. That's because the IRS requires you to start taking required minimum distributions from certain accounts, like 401(k) plans and traditional IRAs, by April 1 of the year after you turn 70.

Tread lightly. Taking assets from tax-sheltered retirement funds isn't like driving up to the ATM machine; you trigger taxes when you obtain your money. Generally, the more money you take at once, the bigger and more immediate your tax hit. The trick is to minimize taxes as much as possible.

In fact, you could lose as much as 70 percent of your nest egg to income taxes, estate taxes and state taxes by choosing the wrong distribution method, warns Slott.

-- Posted: Nov. 10, 2008
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