Financial Consultant Provides Advice About Retirement
WHITFIELD: So before the break we mentioned the top three states for business according to CNBC's annual ranking. Now, here's a look at the bottom three on that list. Coming in at number 48, of all places, Hawaii. Number 49 is Alaska. And at number 50, Rhode Island. This is the second year that they came in the bottom three. Perhaps closing shop, riding off into the golden years is what you want to do. If you could, would you retire in five years? It might be as easy as getting your finances in order. Eric Amado is president and CEO at Amado Consulting, and he is joining us live from Dallas. Good to see you, Eric.</s>ERIC AMADO, CEO, AMADO CONSULTING: Good to see you. How are you doing?</s>WHITFIELD: I'm doing pretty good. Folks say maybe in five years or so I want to retire. First you say you've really have to envision what you want retirement to look like before you figure out whether you're financially able to do so?</s>AMADO: Absolutely. You want to start thinking about how you and your spouse want to retire, if you want to take vacations, if you want to build a business, if you want to travel around the world, that's what you need to do. You need to think about income, taxes, and health care costs. Right now most retirees will spend about one-fifth of their income on health care costs. And they're going through the roof. These are the thing to think about right now.</s>WHITFIELD: A lot of people forget, once leave that job, there goes some of the benefits. So when you had your health insurance is different when you retire. Can you afford to take care of yourself? You have to fold that into the equation.</s>AMADO: Absolutely, you have to do that. You have to do that.</s>WHITFIELD: So a lot of folk were thinking, maybe I'll be able to count on my Social Security. Say you will be retiring in five years, maybe even four. Is Social Security going to be your friend?</s>AMADO: Absolutely. Social security will be your friend. We all know that you can start taking Social Security between the ages of 62 and 70. But something you want to do is think about probably prolonging taking your Social Security, maybe take it at 65 or even taking it at 70. If you do that, you will get more money down the line. Of course you need to think about your spouse. You need to think about your health and your overall age longevity. If you can do that, it will be a great thing for you and your family.</s>WHITFIELD: Then you need to review benefits. We talked about this with health insurance. What other benefits do you need to keep in mind and familiarize yourself with?</s>AMADO: Great question. You need to sit down with your employer and look at anything you have. You might have a pension plan. You might have a 401(k) plan. You might have other types of post- retirement benefits. This is the time to sit down and look and see what you have. Look and see what the company will pay you. And also something you need to do is look at creating a post retirement budget. What this is, usually you don't spend as much money in retirement as do you when you're working. So, for example, two or three years out you want to start living on your post retirement budget so when you retire, it won't be such a big shock to you.</s>WHITFIELD: And then folks think golden years. They don't want to work. They want to make time for all the things that are fun or they've been longing to do but you say you need to work into the equation, will you be working?</s>AMADO: Absolutely, a great point. We have to be realistic about what's going on right now. A lot of seniors have lost a lot of money due to the recession we came out of. Many Americans will have to work during their retirement years. Basically the best thing to do before you retire, is to sit down with your company and say I don't want to retire. I want to work two or three or five more years. I continue to add value to this company. If they say no, maybe you can try part time or a consultant basis. You don't want to outlive your money. That's the wrong thing to do. If you need to work, it's OK. There's nothing wrong with continuing to work.</s>WHITFIELD: Maybe you need a little consultation on how to manage your money.</s>AMADO: Absolutely. If you can find yourself a CPA or a financial adviser sometime within the five years before you retire, that's a great thing. They're going to help you to map out a road plan on what you need to do, how to spend your money and what you can actually do as far as being realistic. You don't want to go throughout and start retiring and then you feel like you don't have a game plan.</s>WHITFIELD: All right, Eric, thanks so much. Appreciate it. Folks love the idea of getting free advice. They got some from you today but maybe they want more. Folks can go to your Web site at AmadoConsultingLLC.com. Have a good holiday weekend.</s>AMADO: You too.</s>WHITFIELD: Not much holiday to celebrate if you're in Minnesota this weekend. The government is shut down, which means a number of agencies and buildings closed up. I'll be asking a Republican lawmaker if social issues are partly to blame, not just economics. And later, face to face with two top NASCAR drivers after I see what it feels like to go 170 miles an hour around a race track.