Indianapolis Recorder, Indianapolis, Marion County, 19 April 1997 — Page 26

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THE INDIANAPOLIS RECORDER

SATURDAY, APRIL IS, 1927

Enjoying retirement with financial peace of mind

How can you retire comfortably — and permanently? All of us want to be able to retire comfortably—and maintain our standard of living for the rest of our lives. This article will mention some of the things you need to think about now to help make sure that happens. How do you reach financial independence? The first step is to know your definite sources of retirement income. Fixed income sources include Social Security retirement benefits and annuity pension benefits. At a designated age, monthly payments begin. The amounts may be adjusted from time to time (Social Security, for example, allows for cost-of-living increases). As a rule, though, J once you retire, you have no control over die size of your fixed-income payments. The next step is to know your variable sources of income — all your private savings and investment income. Some retirement plans permit you to receive the entire balance to your credit in a single payment—in which case this, too, becomes a variable source of income. You have some control — perhaps a great deal — over the amount of this income. Will you reach financial independence? Most Americans never achieve

financial independence. They face a reduced standard, of living because their income decreases when they stop working. They don’t plan to fail — but they do fail to plan. The earlier you start to prepare, the more likely you are to achieve a financially secure future. If you’re already retired, you may be wondering how your resources measure up against future needs. In either case, careful planning can help. Steps in planning for financial independence If you set a specific retirement goal and establish a plan to reach that goal, you will improve your prospects for the future. We think this step-by-step approach offers the best potential for success: 1. Set a specific age by which you expect to be financially independent. If there are more than a few years remaining, you may have to be flexible enough to extend your horizon depending on how things go. 2. Estimate your monthly retirement spending need. This is usually 70 to 90 percent of your pre-retirement spending, adjusted for inflation. 3. List your fixed sources of retirement income. Your employer can

provide an estimate of your pension benefit, and your local Social Security office can obtain an estimate of your monthly retirement benefit. 4. Estimate your total investment capital at retirement. This includes the present value of your savings and investments, plus amounts you can save between now and your retirement age, and also the earnings your savings and investments will accumulate. 5. Calculate your variable sources of retirement income. You can see how this is done in step 4 (in the planning example below), by applying a reasonable rate of earnings to the projected value of your investment capital at retirement. 6. Subtract your projected monthly expenses from your projected monthly income. The result is your projected monthly cash flow at retirement. Here’s an example. This is an example of a financialindependence worksheet. The amounts vary widely in each case, but the principles apply regardless of the amounts. Step 1: Time Horizon

Present Age:55 Target Age for Financial Independence: 62 Years to Achieve Goal:? Step 2: Monthly Retirement Spending Present monthly spending: Housing $1,130 Food 475 Utilities 200 Auto expense 173 Insurance 120 Health/personal care 60 Clothing 95 Entertainment 130 Income tax 330 Miscellaneous 75 Tout $2,850 Adjusted for inflation (7 years at 5%) $4,010 Retirement spending (at 80 percent of present purchasing power) $3,208 Step 3: Fixed Retirement Income Sources Pension $1,400 Social Security 830 Total $2,250 Step 4: Investment Capital At Retirement Present savings and investments $185,000 Planned monthly saving until retirement ($300/mo. for 7 years) 25,200 Estimated investment earnings & accumulation (8% for 7 years) 140,500

Total

$350,700

Step 5: Variable Sources of Retirement Income Estimated investment: $2,250 capital at retirement (from Step 4): $350,700 Estimated total annual return on investments at 8% Annual investment income: $28,056 Monthly investment income: $2,338 Step 6: Projected Monthly Cash Flow Projected income: Fixed (Step 3) $2,250 Variable (Step 5) 2.338 Total projected income $4,588 Projected expenses (Step 2) -3,208 Projected monthly cash flow $1,380 Maintaining your financial security It’s a good sign if your own worksheet shows positive expected cash flow — a surplus. But your planning shouldn’t end there. Inflation will probably continue after you retire. Be sure to compare your current income sources and spending needs at least once a year. Your financial consultant can provide valuable assistance in your planning for financial independence. To establish a plan to achieve, and maintain your financial independence, talk with your financial consultant today.

Preparing for the mortgage process

How to build or rebuild your credit

1. Meet or talk with a bank officer to be “pre-qualified” and establish goals and an action plan. If you don ’ t know a banker, call Frank Pace, MNC Mortgage at 469-4220. 2. Do not change your employment status unless you are staying in the same field or increasing your income. 3. Open a bank account if you do not currently have one. Establish a deposit and withdrawal pattern with youreamings and obligations. Any large deposits need to be explained, so keep good records of any deposits that are not obvious earnings, such as tax refunds, lottery winnings, insurance settlement and business expense reimbursements. 4. Order a credit report. Write to TRW Complimentary Credit Report, P.O. Box 2350, Chatsworth, CA 91313. Include your social security number. 5. Devise a budget and live within it. Do not make any large purchases, until you know you will

qualify, with that monthly debt, for the home you want. Contact Consumer Credit Counseling Service to help you. Check the phone directory or call the CCCS referral line: (800) 388-2227. (The counseling service can negotiate with creditors and set up a debt-repay-ment plan.) 6. Make sure your credit file is accurate. Write to the bureaus (see below) with any misreported information. The bureau must then contact the creditor. If the creditor does not verify it within 30 days, then the bureau must remove the notation and send an updated copy of your report. However, the notation will most likely return on your credit report through direct contact with the creditor. Trans Union, 9247 N. Meridian St., 843-7200; CSC, 8275 Allisonpointe, Suite 100,579-5555 or579-5037; TRW8900Keystone Crossing, (800) 392-1122. 7. Negotiate with your credi-

Y0UR REAL ESTATE ADVISOR By MILDRED WILKINS

tors. Some creditors will remove debts from your file in exchange for full or partial payment. Also, some creditors will “re-age” your account. This is done by making the current month the first repayment month and showing no late payments. 8. Work with local merchants. 9. Take out a secured credit card. Charge a little and pay off each month. 10. If you do not have any credit, start contacting utility companies or any institution such as a health club, doctor, dentist or attorney who will verify credit worthiness.

BRIEFS

Continued from Page D1 fice, located in room 1001 of the City-County Building. The Treasurer’s Office regular business hours are Monday through Friday from 8 a.m. to 4:30 p.m. Payments not received in the Treasurer’s Office or postmarked by U.S. Postal Service on or before May 12 will automatically incur a 10 percent penalty which, by law, cannot be waived. For additional information, call 327-4444. United Way seeks diversity internship candidates United Way of Central Indiana is seeking candidates for a six-month diversity internship program, which begins June 2 and ends Nov. 28. Candidates must be members of a racial minority group and have

completed at least two years of college. To inquire, call 921-1363. Planning for results The Indianapolis Chamber of Commerce and Franklin Quest Co. are offering Planning For Results: A practical approach for project and workload management, from 8:30 a.m. to 4:30 p.m. at the Indianapolis Athletic Club, 350 N. Meridian St., May 15. To register, call (800) 963-1776. Free workshop for small business owners The IRS and Indiana Department of Revenue will offer free workshop to help small business owners meet their federal and state tax responsibilities. The workshop will be held from 9:30 a.m. to 4:30 p.m. at Libruy Services, 2450 N. Meridian St., May 23. For additional information, call 226-7650.

CHURCHS Continued from Page D1 new point-of-sale systems. The reimage and technology upgrades means an immediate investment of more than $8 million in these 100 restaurants. AFDC’s majority shareholder is composed of prominent Afri-can-American business people with expertise in food service operations, investments and the law. AFDC is purchasing all com- , pany-owned Churchs restaurants in each of the following markets: Chicago (29); Detroit and Flint, Mich. (19); St Louis (21); Indianapolis (12); Richmond, Va. (4); Cleveland-Akron/Canton, Ohio (Ty, Columbus, Ohio (3); and Dayton, Ohio (5). “We fomted AFDC with a vision to reinvest in America’s cities and empower the people who live in the inner city,” says Heard. “We chose Churchs Chicken because of foe bread’s strength, and its commitment to the same vision. As we inoveroYwira, we u dc impiciTicniing many programs, from and build-

viding employee ownership opportunities and supporting the communities where our restaurants are located.” “Churchs is excited to move forward in our partnership with AFDC,” says Hala Moddelmog, Churchs president “Twenty-five percent of Churchs’ franchise partners are African-American, and this

transaction strengthens the minority franchising initiatives we’ve been committed to for more than two decades. The reinvestments AFDC plans to make with reimaging restaurants and providing ownership opportunities for employees will help to make Churchs grow and become a stronger global brand.”

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