We all lead busy lives — our packed schedules and daily expenses claim most of our attention. Planning for retirement, especially when it seems so far in the future, may be little more than an afterthought. But the future will be here before you know it and you don’t want to get caught without a plan.
1. Make retirement planning a priority. Envision the kind of lifestyle you plan to lead and start saving as soon as you can. Set goals for saving: maybe you can save up the amount equal to your annual salary in your retirement accounts by the time you turn 30; or, start with a smaller goal of contributing $20 every time you receive a paycheck.
2. Take steps to ensure you go into retirement debt-free. Any debts you keep through retirement will siphon off your hard-earned retirement funds, leaving less money for you to spend on what you want.
3. Once you’ve committed to saving, it’s time to hire a trusted financial adviser. He or she can walk you through your financial journey and help you achieve your goals. A good financial adviser can help you determine the best course of action for saving and interpret jargon that might be confusing. Choose wisely, though — a bad adviser could do more harm than good.
There are several options available as you plan for your financial future. Be prudent and research all opportunities thoroughly before you commit your money.
4. Open accounts specifically for retirement. Individual retirement arrangements, or IRAs, are investment accounts that offer tax benefits. Traditional IRAs direct pretax income toward investments that can grow tax-deferred until you withdraw the funds in retirement, presumably when you are in a lower tax bracket. Roth IRAs, set up with after-tax income, have income-eligibility requirements for full contributions, but you can withdraw funds at any time tax-free. You can set up automatic deposits to your retirement accounts for an easy way to build savings.
5. Check with your employer. Many companies offer plans specifically geared toward retirement earnings. These might include:
- A 401(k) plan, in which employees contribute a portion of their paycheck on a pretax basis.
- A 403(b) plan, which is available to certain eligible employees such as public school employees, employees of tax-exempt organizations and clergy members.
- A 457(b) plan, which is available to state or local government employees or employees of a tax-exempt organization.
- A Keogh plan, which is a tax-deferred pension plan for employees of unincorporated businesses.
- Savings incentive match plans for employees (SIMPLE), which are designed for businesses with 100 or fewer employees that don’t provide traditional retirement plans.
Your employer may also offer profit sharing plans
(PSP), which are flexible plans that give employees the benefit of sharing in the profits of a company.
Simplified employee pension plans
(SEP) are for business owners and self-employed individuals. SEPs provide a way for entrepreneurs, contractors and other independent operators to contribute toward retirement savings.
6. Consider your bank’s resources.
Odds are, your bank will be able to help you with retirement on some level. Landmark Bank, for example, helps you take the steps necessary for a comfortable retirement with specific account options and planning services
7. Hold off on Social Security payments for as long as possible
. Depending on your birth year, the rules vary for receiving full Social Security benefits. Check the Social Security Administration’s age chart
for the optimal age to claim benefits.
For more on retirement planning services offered at Landmark Bank, visit [https://www.landmarkbank.com/investing/retirement/planning-services].
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