Planning for retirement? We'd like to help.
Preparing for retirement can be daunting, especially because the costs of living are
always on the rise. But don't be caught unprepared—it's important to plan for your future
even if retirement seems decades away. Here are some thoughts to keep in mind.
Already have an active retirement plan? Click here
for ways to maximize your savings.
This isn't your parents' retirement
Think back about 30 years.
Individual retirement accounts (IRAs) were brand new. There were no 401(k)s.
Gasoline was practically free, or at least it may seem that way now. Many older
people were relying on Social Security, pension checks and savings to support themselves
during their golden years. During this time, retirement didn’t last too long because
the average life expectancy didn’t go far beyond the age of 70.
Your retirement, however, will be very different. You will live longer, and you'll
probably have an active lifestyle, which means more expenses. If you're uncertain
about Social Security, you’ll need to explore a different strategy than your parents did in
order to live a comfortable retired life.
You're responsible for taking care of you
Social Security, savings/investments and pension plans were once the three legs of
most retirement plans. But the number of companies offering pensions has
decreased by 50% in the past 30 years. And, no matter how you feel about the future
of Social Security, its been estimated that this retirement benefit only replaces 40% of
your pre-retirement salary. This means that your personal savings will probably be one
of your most valuable and substantial sources of income when you choose to retire.
And luckily enough, you can easily control your own destiny by the amount that you put away
each year.
It's never too early—or too late—to start saving for your future
The earlier you can start saving the better, but it’s never too late. Whether you’re
25 or 55, you can start saving for your retirement. Three things greatly impact your
investments:
- How much you invest
- The rate of return you earn on your investment
- The number of years those investments are allowed to grow
The more you invest, the more you’ll make. The higher the rate of return, the more
you’ll make. The longer your investment is allowed to grow and compound, the more
you’ll make. No matter what your age, the sooner you start saving and planning, the
more money—and options—you’ll have later in life.
If you're not sure how much you'll need to invest, try our
Retirement Calculator. It can
help you create a retirement savings plan that will allow you to live comfortably
during your retired years.
Invest wisely
We all know that the largest returns often come from the stock market. However, most
of us also know that the stock market is a fairly risky investment and that is why the
returns are so large. If you’re not into taking risks, there are always bonds and
certificates of deposit (CD), but the
returns on these investments are much lower. When you begin planning your retirement, we recommend that you meet with one of our Financial Consultants. They can help you get the mix of stability and high returns that is right for you.
Take advantage of your employer’s 401(k) plan
The number of employer-related benefit plans—401(k)s—has greatly increased over the past decade. But for one reason or another, many people are still choosing not to participate in these plans. 401(k)s can be a very valuable retirement tool and your employer offers them at no additional cost to you. The contributions are taken directly from your monthly/weekly paycheck, so you’re saving without actively doing it. By contributing to these plans, your taxable income decreases. This in turn decreases your overall income tax bill. Plus, your investment is allowed to grow tax-deferred, which leaves more money to compound throughout the years. Another great benefit of a 401(k) plan is that many employers will match your contributions. For example, your company might add a dollar to your account for every two dollars you invest. This is a great way to increase your investment without actually having to invest more money.
We're here to help
At NWCU, we offer a variety of accounts and services that
can help you save for your golden years. If you have more questions about retirement
planning, try our Retirement FAQs section
under Special Topics. Feel free to stop by your
local branch or send us a note if you have
questions.