People belonging to the largest generation in history, the so-called Baby Boomers, have finally begun to reach 59.5 in 2005. Over the next 18 years, 78 million people will reach this age. Why is turning 59.5 so important if the majority of people don't retire until they are 65 or older? This age marks a life milestone, when individuals may begin to take distributions from several types of retirement accounts without penalty.

One of the primary goals for investors is to save enough money for their retirement years. What if they haven't saved enough by age 62, 63, 64, 65? How do they know whether the amount they have saved will carry them through their so-called golden years, especially if they begin withdrawals at age 59.5?

There are a number of factors for your clients to consider when planning for a worry-free retirement. For instance, a person who retires today at the age of 62 will need to save enough money to pay expenses, support lifestyle expectations and perhaps build an estate to leave behind, for 25 to 30 years! At the same time, a dollar today will be worth about $0.42 when that same 62 year old turns 92. So, not only are people in the U.S. living longer, requiring them to save additional money for those extra years, but they also need to plan ahead for the eroding effect inflation will have on their purchasing power over time.

The government has created a number of retirement plans to help U.S. citizens achieve their retirement goals and to lessen the impact of inflation on their assets. In this section, we explore several tax-deductible and tax-deferred retirement plans and accounts and their role in developing retirement strategies for your future clients.

Paying for college has also become an increasingly worrisome prospect for many families in the U.S. While inflation erodes retirement savings at roughly 2-4% per year, the cost of a four-year undergraduate college program has been rising steadily at a rate of 5-6% or more per year. Congress has also recognized the need for college savings plans that alleviate at least some of the costs associated with college savings while providing methods and incentives to help families save for future higher-education costs. The last portion of this section is devoted to these new college savings plans.

Employer-Sponsored Retirement Plans

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