People are living longer. But living longer usually means living more years without the income of a full-time job, which means it is more important than ever to plan for the future.

McGraw-Hill Federal Credit Union is hosting a talk on that subject Wednesday, October 30, as part of its Financial Literacy Series at 120 Windsor Center Drive, East Windsor. This month’s free seminar, “Living Longer and Planning a Financially Secure Future,” will be held from 5 to 7 p.m. www.mcgrawhillfcu.com.

Barbara O’Neill, professor of financial resource management at the Rutgers School of Environmental and Biological Sciences, will discuss tips to prepare for retirement at any age. O’Neill, who has a bachelor’s degree in home economics education from the State University of New York at Oneonta and a Ph.D. in family financial management from Virginia Tech, is a certified financial planner, chartered retirement planning counselor, accredited financial counselor, certified housing counselor, and certified in family and consumer sciences. O’Neill is also the author of “Saving on a Shoestring and Investing on a Shoestring.”

In an online guide O’Neill has published, “Late Savers Guidebook,” she discusses some of the key questions people ask as they approach retirement:

How much do you need to retire? It depends. Some people can live happily on half of their pre-retirement income while others require 100 percent or more to maintain, or even enhance, their lifestyles. For many people, 70 to 80 percent of the amount earned during their working years is a realistic income replacement percentage; these figures are commonly quoted in financial publications.

A lot depends on your goals (such as traveling and pursuing hobbies) and lifestyle decisions (such as where you choose to live), as well as available resources such as an employer pension and/or free or low-cost retiree health insurance. Other important factors to consider are age at retirement, expected life span, health status, family responsibilities (caring for aging parents or grandchildren, for example), and inflation.

Michael Stein, author of “The Prosperous Retirement,” notes three distinct phases of retirement: active (go-go), passive (slow-go), and final (no-go). Expenses during the early years (active phase) of retirement can equal or exceed those during the years before. Often expenses decrease in later years but may increase during the final phase due to medical and/or long-term care costs.

Among the key variables in a retirement savings analysis are:

Age at Retirement: Retiring before age 65 has been an increasing trend in recent years, but the downside is that early retirees have fewer years to save, fewer years for their savings to grow, and a longer time period to sustain themselves on invested assets. A major factor affecting when you retire is the availability and cost of health insurance.

A recent study of the spending patterns of people in two different retirement phases (age 65 to 74 and 75 and over) found that, in the first phase of retirement, individuals spent 71 percent of pre-retirement income. In the second phase, however, spending decreased sharply to only 50 percent.

Growth Rate on Savings: A savings analysis should reflect the average rates of return actually earned on all investments. While stocks have averaged about 10 percent annually since 1926, it is generally not prudent to invest in stocks alone due to the increased investment risk. In addition, only half of Americans invest in stock or growth mutual funds at all.

More than $1 trillion is placed in low-yield savings accounts, often earning less than the rate of inflation. Make sure you use a realistic rate of return based on your portfolio mix. If you have 50 percent of your assets in stocks or stock mutual funds, and 50 percent in bonds or Certificates of Deposit (CDs), use a blended rate of return. (A blended rate of return is an average of the different returns on different types of assets-the blended rate is often 6 to 7 percent.)

Life Expectancy: In just one century — from 1900 to 2000 — our average life expectancy has increased by about 30 years. Many people are living into their 80s and 90s. Since nobody has a crystal ball, the next best thing is to start with the average life expectancy figures for your gender and current age, and then make adjustments for factors such as good health and longevity of family members. You don’t want to run out of money because you estimated your needs to age 85, but then live to 92.

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