Save for Retirement Today
But, we all know — life comes at you fast. Saving enough for retirement continues to be a leading source of significant financial stress for all generations. While studies show that 71% of Americans are adequately prepared for retirement, much of that includes receiving Social Security benefits under the current law. However, Social Security payouts are only scheduled to be paid at the full benefit amount through 2035! Thus making Millennials and Gen Z approach retirement from a different perspective — one that is diverse and doesn’t rely on Social Security benefits. The good news is that starting early allows you to reach your retirement goals more easily.
1. GET IN THE “RETIREMENT READY” MINDSET.
The first step is getting in the right mindset. This means making your new savings goal a priority. We encourage you to “Start Small, Think Big” and take advantage of retirement solutions available to you like your employer's 401K or 403 B plan or IRA options you can open on your own.
If you’re starting your retirement savings journey early, you have time on your side! However, if you’re closer to retirement age, then prepare to be a bit more aggressive in order to achieve your retirement goal. Research how to make catch-up contributions to your retirement savings so you can jump start your stalled plan.
The good news is this: it’s never too late! It is important to remember that saving anything is better than saving nothing. Even increasing your retirement savings by one percent can make a huge difference in the long run. We offer various retirement accounts that can help get you started!
If you’re starting your retirement savings journey early, you have time on your side! However, if you’re closer to retirement age, then prepare to be a bit more aggressive in order to achieve your retirement goal. Research how to make catch-up contributions to your retirement savings so you can jump start your stalled plan.
The good news is this: it’s never too late! It is important to remember that saving anything is better than saving nothing. Even increasing your retirement savings by one percent can make a huge difference in the long run. We offer various retirement accounts that can help get you started!
2. DEFINE WHAT RETIREMENT WILL LOOK LIKE FOR YOU.
Have you visualized how you’d like your retirement to look and feel? Think about where and how you want to settle down. Will you stay put and relax on the front porch, or do you intend to travel far and wide? Most importantly, how much “annual income” will you need to achieve this envisioned lifestyle? Asking yourself these questions will help determine a rough estimate of how much to start saving now.
If you plan to travel the world, you need to save more than someone who will spend their time relaxing at home. You will also need to consider exactly when you want to retire. This will help determine how much you should be saving annually. In the modern age, people pre-retire, half-retire or even never leave the workforce at all!
If you plan to travel the world, you need to save more than someone who will spend their time relaxing at home. You will also need to consider exactly when you want to retire. This will help determine how much you should be saving annually. In the modern age, people pre-retire, half-retire or even never leave the workforce at all!
3. CALCULATE HOW MUCH YOU’LL NEED TO SAVE.
Once you have an idea of what type of retirement you want to have, you need to estimate the annual retirement income needed. You want to ensure you're saving for the future you want. Most Americans are not putting enough money into their retirement fund every year in order to afford the life they want for themselves in the future.
What each person needs will vary widely based on a number of factors, including your current age, the age at which you plan to retire, if your partner or spouse has an income, your spending habits, and different sources of retirement income. There are also circumstances beyond your control, like how long you can expect to live based on family history.
While there is no hard and fast rule to determine how much to save by a specific age, many personal finance experts recommend having saved an amount equal to your annual salary by age 30, three times by age 40, and five times by age 50. While this can be overwhelming if you haven’t hit those milestones in your retirement savings yet, one small step you can take is to increase your contribution rate with each pay raise. Remember, building a savings habit and taking control of your finances, like you’re doing now, is worth celebrating.
What each person needs will vary widely based on a number of factors, including your current age, the age at which you plan to retire, if your partner or spouse has an income, your spending habits, and different sources of retirement income. There are also circumstances beyond your control, like how long you can expect to live based on family history.
While there is no hard and fast rule to determine how much to save by a specific age, many personal finance experts recommend having saved an amount equal to your annual salary by age 30, three times by age 40, and five times by age 50. While this can be overwhelming if you haven’t hit those milestones in your retirement savings yet, one small step you can take is to increase your contribution rate with each pay raise. Remember, building a savings habit and taking control of your finances, like you’re doing now, is worth celebrating.
4. DO YOUR HOMEWORK.
Consider what type of accounts to deposit your retirement savings into. Your employer may offer a retirement plan such as a 401K or 403B, and match your contributions up to a certain percentage. The most important consideration here is to take advantage of any employer benefits such as matching your contributions up to a certain percentage. Find out if your employer offers a match and contribute at least enough to maximize that benefit.
Individual Retirement Arrangements (IRAs) are also an option, and you can open one anytime through financial institutions or financial services providers. There are several different IRAs including the most common: Roth and Traditional. Roth IRAs can be withdrawn at anytime without penalty and are tax-free. Traditional IRAs may be tax-deductible and your earnings grow tax-deferred until you start making withdrawals. You’ll need to determine which is best for you — or maybe a combination of both. The IRS has put together a great comparison tool to understand the differences between the two accounts and decide which may be better for you.
Individual Retirement Arrangements (IRAs) are also an option, and you can open one anytime through financial institutions or financial services providers. There are several different IRAs including the most common: Roth and Traditional. Roth IRAs can be withdrawn at anytime without penalty and are tax-free. Traditional IRAs may be tax-deductible and your earnings grow tax-deferred until you start making withdrawals. You’ll need to determine which is best for you — or maybe a combination of both. The IRS has put together a great comparison tool to understand the differences between the two accounts and decide which may be better for you.
5. PRIORITIZE MAKING YOUR CONTRIBUTIONS AUTOMATICALLY.
Now that you can visualize the type of retirement you want, have determined approximately how much you’re saving for, and have a plan and support in place, the best thing you can do is to set it and forget it! Set up automatic payments and contributions either through your employer or from a financial institution to stay on track.
The point of retirement savings is to keep it invested for the long term. This means avoiding dipping into your retirement fund for emergencies. Instead, create an emergency savings fund that you are also contributing to consistently.
Research by the Employee Benefit Research Institute shows that it typically takes 13 years or more of contributions to an account before you begin to reach a level of savings that is enough to fund a number of years of retirement as a supplement to Social Security. So don’t become discouraged if you feel you do not have enough savings in your retirement fund just yet.
Whatever path you choose to take toward retirement, the biggest step to take is being consistent. Retirement savings is a long-term commitment, but today’s work will pay off in the long run, literally. Take the America Saves Pledge and let us help you reach your goals, no matter what they are. Your future self will thank you!
The point of retirement savings is to keep it invested for the long term. This means avoiding dipping into your retirement fund for emergencies. Instead, create an emergency savings fund that you are also contributing to consistently.
Research by the Employee Benefit Research Institute shows that it typically takes 13 years or more of contributions to an account before you begin to reach a level of savings that is enough to fund a number of years of retirement as a supplement to Social Security. So don’t become discouraged if you feel you do not have enough savings in your retirement fund just yet.
Whatever path you choose to take toward retirement, the biggest step to take is being consistent. Retirement savings is a long-term commitment, but today’s work will pay off in the long run, literally. Take the America Saves Pledge and let us help you reach your goals, no matter what they are. Your future self will thank you!
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