Your Future Self Will Thank You

Image of Bill Partin Sharonview CEO
by Bill Partin
Sharonview Federal Credit Union

April, 2019

Retirement is something to look forward to if you plan, save and invest properly, and you are never too young to plan for your future. If you haven’t begun saving for retirement yet, it’s time to start, and the more money you have saved, the more interest it will collect. In other words, a penny saved is truly a penny earned.

1. Determine how much money you will need

When you stop working you will require approximately 70 to 90 percent of your annual pre-retirement earnings multiplied by the number of years you plan to spend in retirement (EBSA). You may require more than this amount depending on various factors, such as medical costs, the status of your mortgage, and if you qualify for Medicare at the age you wish to retire. Lastly, don’t forget to factor in inflation. Once you have calculated the savings you will need, find out how your social security, pensions and annuities stack up. If you find that you still don’t have enough for retirement after combining all of your savings, then it is time to consider different ways of growing your money, such as investing.

investments grow

2. Work with your employer for a successful future

Find out if your employer offers a retirement savings plan. By participating in a company-led retirement plan, you will reduce the amount of taxes you pay, and saving will become easier with automatic transfers into your retirement fund. Your employer may also have a pension plan available. A pension plan guarantees a monthly stipend for the retiree and puts the burden of investment on the plan provider. If a retirement plan is not offered by your place of work, then suggest they start one. Retirement plans can be mutually beneficial for you and your employer.

3. Decide if an IRA or a 401(k) is better for you

When looking into additional ways of saving, it’s important to recognize that retirement plans are not one-size-fits-all. A 401(k) is a retirement plan offered by employers, and employees have the option of putting a portion of their pay into the account. The ideal 401(k) is one in which your employer matches your contribution and contributes the same percentage to your account as you do. On the other hand, IRAs are individual accounts without any ties to employers. Therefore, IRAs allow individuals to periodically contribute a portion of their earned income.

The more you know about saving for retirement, the better prepared you will be when the time comes. Utilize retirement plans that may already be available to you through your employer or reach out to a financial advisor if you’re unsure of where to start. Remember that your contributions add up over time, so the earlier you start saving, the sooner you can comfortably retire. By taking care of yourself now, you’re also taking care of your future self.


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