Retirement

Tips on Planning for Retirement

 

Regardless of your financial situation and life goals, reaching a comfortable and secure retirement takes thoughtful planning. And there’s no better time to start the process than today, regardless of your age. As many retirees will attest, laying a solid foundation for life after work takes foresight, discipline, and steady stewardship.

While everyone’s approach to preparing for the future will vary, here are a few tips that may suit your needs as you look ahead toward a fulfilling retirement.

Save, save, save

Start growing your money as soon as you can. It’s never too early – or too late -- to start saving for retirement. Take a close look at your monthly budget to determine how much you can comfortably put toward retirement savings. Adjust this amount as your financial situation changes.  Even if it doesn’t seem like a lot of money to you at the time, anything you can put toward savings will reward you in the end.

Set your retirement goals

How much money will it take for you to maintain your current standard of living once you retire? Answering this question will enable you to focus your energies on a target number. There are several websites, including FirstMerit’s, that can help you calculate your retirement needs. Once you have a figure in mind, you can define a plan to help you reach it. Everyone is different. How much money will you need to enjoy more travel experiences? What will you require to move to and reside in a warmer climate? It pays to talk with an experienced retirement planning professional to create a plan that’s right for your unique circumstances and post-work goals.

Put what you can in your employee savings plan

This is a savings opportunity you can’t afford to miss. Experts recommend maximizing your contribution to your employee savings plan, such as a 401K, if you are able. Take the time to talk with those who administer the plan to learn of all its benefits and details (investment options, how much you should contribute, amount of company contribution, how long you need to be on the plan to be fully vested, etc.). Money from your paycheck will be automatically deducted, making your contribution hassle-free. Over the years you will benefit from the compounded interest.

Learn about your pension plan

Find out if your company has a traditional pension plan, if you are covered by this plan, what the benefit is worth to you, and what will happen to the plan if you change jobs. You may also be entitled to benefits under your spouse’s plan. Talk to the pension administrator at your company for full details.

Understand how your money is being invested

How you invest your money in your savings plan or pension can make a major difference in how much these plans will be worth to you. Most plans have numerous investment options, allowing you to divide the money you have in the plan among multiple opportunities – from low-risk to high-risk. Experts recommend mitigating risk by diversifying in different types of funds.  Be sure to take advantage of employer matching contributions, if offered.  Even if you are not financially savvy or an experienced investor, it pays to take the time to understand how your money is being invested. This will enable you to ask the plan’s investment advisor smart questions and play a more active role in deciding what investments are best for your goals. You’ll feel more in control of your financial future and, hopefully, more satisfied with your returns.

Don’t be tempted to withdraw your savings

Patience has its rewards when it comes to retirement plans. Experts stress that the savings in your retirement plans should be used for one thing – namely, your retirement. Withdrawing your savings early could mean a deduction in your savings, and a loss of interest, principal, and tax benefits. When changing jobs, you can leave your savings invested in your current plan, place them in an Individual Retirement Account (IRA), or roll them into your new employee’s plan.

Consider an IRA

IRAs give you another sound option to save for retirement, in addition to providing certain tax advantages. You can put up to $5,000 annually in an IRA (more if you are at least 50 years old). It’s a good idea to talk with a wealth management professional about how much you should contribute each year and whether a traditional or Roth IRA is best for your situation.

FirstMerit is here to assist you

Let us serve as your trusted partner as you set your goals for retirement. Our retirement planning advisors are ready to help you with professional services, sound advice, and the products you need to start, implement, and manage your custom retirement plan.