AMES, Iowa -- Everyone's retirement savings account has taken a hit during the country's financial crisis, prompting some nervous investors to reassess their retirement options in the New Year.
Tahira Hira, a professor of personal finance and consumer economics in the Department of Human Development and Family Studies at Iowa State University, says it might be a good time for people to take stock of their retirement plans.
"The end of the year is a good time to review our financial activities from the previous year and develop plans for the next year's activities," said Hira, who serves on President Bush's Advisory Council on Financial Literacy. "We all have to put all our records together to file taxes anyway. We can use this time to review actions we are taking to prepare for our retirement, because these retirement contributions help save taxes and allow us to take advantage of employer matching funds."
A national leader in financial literacy and personal finance research, Hira offers these 10 retirement planning New Year's resolutions:
1. I will stay calm and not make any hasty decisions.
2. I will gain good knowledge of my financial situation to determine what, if any, corrective steps need to be taken.
3. If I'm nearing retirement age, I will stay on the job a little longer if an option is there. And if I'm already retired, I will be open to exploring the possibility of working for a few hours a week to supplement cash flow.
4. I will not be lured by anyone into making changes to my investment portfolio at this time -- remembering that this investment is for the long haul.
5. If I'm not retired, I will increase the retirement contributions to supplement my accounts.
6. I will take advantage of "stock sales" and buy shares of stock from sound companies.
7. I will reduce withdrawals from retirement accounts until the economic environment stabilizes.
8. I will take steps to understand the current economic environment.
9. I will become an informed investor so I can take an active part in managing my retirement funds.
10. I'll ensure that "money talk" takes place between appropriate members of the family before any changes are made to our retirement savings plans.
"For those of us who are fortunate enough to be still holding a job, this current economic environment challenges us to be more reflective of what we have been doing with our hard earned money, and mindful of how we want to handle it in the future," Hira said. "So we need to take steps to enhance our current and future financial security. Keep in mind that our government has concrete tax policies in place to influence our investment behaviors -- and one of those is saving for retirement. We should take advantage of that, as well as the retirement contributions we receive from our employers, as we prepare for our financial future."
Under Hira's leadership, the President's Advisory Council on Financial Literacy hosted "Financial Literacy in the Heartland" -- a special listening forum on financial literacy -- last month in Des Moines. She contributed to the council's tips for the public during tough times, which were posted to vice chairman John Hope Bryant's Web site here.