hgazette.com, Haverhill, MA


June 30, 2011

Financial Focus

On July 4, we shoot fireworks, attend picnics, watch parades and celebrate our nation's independence and the many freedoms we enjoy.

But as you go through life, you'll find out how important it is to work towards another type of freedom — financial freedom. That's why you need to put strategies in place to help you work towards your own Financial Independence Day.

And there's no way to sugar-coat this task, because it will be challenging. In recent years, a combination of factors — including depressed housing prices, rising health care costs, frozen or eliminated pension plans, and the financial market plunge of 2008 and early 2009 — has made it more difficult for many of us to accumulate the resources we'll need to enjoy the retirement lifestyle we've envisioned. In fact, the average American family faces a 37 percent shortfall in the income they will need in retirement, according to a recent report by consulting firm McKinsey & Company.

But now that we've gotten the bad stuff out of the way, let's turn to the good news: You can do a great deal to work towards financial freedom during your retirement years. Here are some suggestions that can help:

* Save and invest more. Obviously, the younger you are, the greater the benefit you'll get by increasing your savings and investments. But whatever your age, you'll find that it pays to save and invest more. During difficult economic times, of course, it's not always easy to boost your savings and investments, but try to find ways that are as "automatic" as possible. For example, whenever you get a raise, increase your 401(k) contributions, which come directly from your paycheck. And whenever you get a "windfall," such as a tax refund, try to use part of it for your IRA or another investment account.

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