The Golden Years: getting there from here

By Suzanne Kubota
Senior Internet Editor

Planning for your financial future can be stressful, especially during today’s tough economic times. The Federal Drive asked Lt. Col. June Walbert (USAR), a Certified Financial Planner with USAA, about “the most expensive goal that we’ll ever have to fund.”

“Hewitt Associates, which is a big administration firm for 401(k)s, said something shocking in my financial planning association journal: they said that we need 126% of our pay each and every year that we’re retired. I, as a financial planner, was floored. I sort of plan on 100%. So you have to save in order to meet that goal.”

Walbert said “just imagine replacing that paycheck that magically appears in our checking account every two weeks for 25 or 30 years.” When military members serve 20 years, “either in the reserves or on active duty, you get a pension. In the case of the reserves at the age of sixty. In the case of active duty, starting the… month after they retire. It’s 50 percent of their paycheck.”


After 30 years of service, they’ll get 75 percent of their base pay.

Either way, Walbert tells FederalNewsRadio the numbers don’t add up to what’s going to be needed. She has different recommendations for feds and military members.

I’m a very strong proponent, in the case of the military, to fully fund a Roth IRA first and then any other long term money, turn to the TSP. In the case of our federal workers who do receive a matching contribution, the civilian government employees, I recommend that they fund their Thrift Savings Plan. Capture that match, which is my favorite money: free. And then turn to the Roth IRA so that you can create some tax-free income and have some measure of control over taxes during retirement. Because most of us think that taxes are probably going to go up.

Walbert said there are basic steps you can take to prepare for your long-term wealth.

The number one thing, says Walbert, “Live within your means.” She says you have to have a budget. “Whether you make $50,000 or $150,000 a year or even more, you still need to know how much you’re spending and on what and then that allows you to not only get out of debt and then stay out of debt, but also to save for tomorrow.”

“The devil,” she adds, “is in the details. We sure have a handle on how much our car payment is, our mortgage or rent, an idea of our average utilities, and student loan payments if any… those kinds of things, but how much do we spend grabbing that quick cup of coffee on the way in? …And then we grab lunch with friends and go out after work and go to the mall and the grocery store without a list. I’m telling you those things can truly be budget busters.”

Walbert recommends tracking discretionary spending over the course of a month or two. A pen and paper is fine for some, but for those needing, or wanting something a little more 21st century, there are online and computer-based options.

Certainly You can track your spending. They can categorize your spending for you. Let you know how close you are to overspending that particular month. There are simply just budget worksheets. There are software programs like Quicken™ that really work and help people out.

On the Web:

Hewitt Associates – Rapidly Growing Medical Costs, Declining Pensions and Medical Subsidies, Longer Life Spans Make 401(k) Plans Critical Saving Vehicles for U.S. Employees, Regardless of Additional Sources of Income (press release)

June Walbert – biography –

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