Prepare for Retirement | How to Retire With What You’re Earning Now | Invest in Yourself


Prepare for Retirement

Know your retirement needs. Retirement is expensive. Experts estimate that you’ll need about 70% of your pre-retirement income to maintain your standard of living when you stop working.

Understand your Financial Future.
Find out about your Social Security benefits. Social Security pays the average retiree about 40% of pre-retirement earnings. Call the Social Security Administration at 1-800-772-1213 for a free Personal Earnings and Benefit Estimate Statement (PEBES).

Learn about your employer’s pension or profit sharing plan. If your employer offers a plan, check to see what your benefit is worth. Most employers will provide an individual benefit statement if you request one. Before you change jobs, find out what will happen to your pension. Learn what benefits you may have from previous employment. Find out if you’ll be entitled to benefits from your spouse’s plan.

Contribute to a tax-sheltered savings plan. If your employer offers a tax sheltered savings plan, such as a 401(k), sign up and contribute all you can. Your taxes will be lower, your company may kick in more, and automatic deductions make it easy. Over time, deferral of taxes and compounding of interest make a big difference in the amount of money you will accumulate.

Put money into an Individual Retirement Account. Whether it be a traditional IRA, a ROTH IRA or an education IRA, your credit union can help. There’s no better way to secure a safe future for you and your family.

Don’t touch your savings. Don’t dip into your retirement savings. You’ll lose principal and interest, and you may lose tax benefits. If you change jobs, roll over your savings directly into an IRA or your new employer’s retirement plan.

Start now, set goals, and stick to them. Start early. The sooner you start savings, the more time your money has to grow. Put time on your side. Make retirement savings a high priority. Devise a plan, then stick to it, and set goals for yourself. Don’t believe it? A $10 weekly investment into a 401(k) starting at age 20, can grow to over a quarter of a million dollars by the time you’re 65. Bump it to $50 a week and you are a millionaire at 65!

Consider basic investment principles. How you save can be as important as how much you save. Inflation and the type of investments you make play important roles in how much you will have saved at retirement. Know how your pension or savings plan is invested.

Ask questions. These tips should point you in the right direction, but you’ll need more information. Talk to your employer, your credit union or another financial advisor. Ask questions and make sure the answers make sense to you.

Consider your credit union. Your credit union offers IRA and investment options to match your needs. Saving money is easy when combined with the added convenience of payroll deduction.