By saving early, your retirement assets have the potential to grow exponentially faster than if you start later. How? The power of compounding. The sooner you start saving, the more time you allow your investment to earn interest.
There are many places you could be receiving money from throughout retirement. Among them may be pensions, Social Security, IRAs, 401(k)s, annuities, etc. Track your sources and budget accordingly.
Much of your retirement nest egg will depend on you. Develop a savings habit where you live within your means and put aside money for retirement each month. After all, this is YOUR retirement security you are building.
Educate yourself on what your employer offers for retirement plans. Many companies match some portion of your retirement contributions. That means free money for you. Make the most of matches to help lighten your load.
Consider funding a Traditional IRA or Roth IRA. These tax-advantaged plans encourage saving for retirement. Especially if your employer does not provide a plan – or even if it does – expect that a large share of your retirement wealth will depend solely on you. IRAs are retirement saving vehicles just for that purpose.
Social Security can be daunting. It is important to know when to claim, how much you may receive and what impacts your payout. For starters, check out our Social Security Know How resources to learn more. Enlist the help of your financial professional.
As you move along in your career, chances are your earnings will increase. As they do, seize the opportunity to put more away for your retirement. This is a simple way to grow your retirement savings and improve your prospects for a more secure retirement.
Expect that you will change jobs in your career, perhaps many times. As you do, make sure to keep track of your past plans and what you can do with them. One possibility is rolling over your old plans into an IRA*. Keep track of your money – it’s your future.
Talk about the Elephant in the Room, namely, what should be done in preparation of incapacity or death. It may be an awkward conversation, but uncomfortable is better than unknown. It is important to know where money is going to come from should something negative happen and how that plays a role in your plans for retirement.
No question is dumb. Especially given how complex this topic can be – and how important it is. Contact your representative to start planning and to discuss any questions you may have.
*Before moving retirement assets, you should consider all of your account options, as well as any account features and fees.