The New Year presents the perfect chance for a fresh start. Many will wisely seize the opportunity with a money related resolution, but one area people often overlook is their commitment to saving for retirement. According to the Federal Reserve Board, 31% of workers have no pension or retirement savings. To make your retirement-savings resolution successful, it is important to develop specific action items for you to take in 2016. Drawing up a game plan doesn’t have to be hard. Here are some tips from Seneca retirement planning that will help get you on the path to financial security.
- It’s never too early or too late to start saving.
- Many people mistakenly believe they are too young or too old to begin saving for the future. Whether you are 18 or 58, working part- or full-time, the time to start saving is now. If you have an employer-sponsored retirement savings plan such as a 401(k), take advantage of it. If a work-sponsored retirement isn’t available to you, your options include myRA, a no-fee starter retirement savings account launched this year by the U.S. Treasury designed for those who don’t have a retirement plan at work.
- Already saving? Increase your contribution rate.
- If you are already participating in a retirement savings plan, focus on upping your contributions. Even increasing your regular contributions by one or two percent can make a big impact on your future financial security. You can contribute up to $5,500 each year into a myRA, Roth IRA or Traditional IRA account (or up to $6,500 if you’re age 50 or older). Increasing how much you save, even by a little, is a move in the right direction.
- Don’t miss opportunities for one-time contributions.
- Most of us don’t have retirement savings on our mind when we receive a tax refund or overtime pay, but these situations present excellent opportunities to increase your retirement savings account. Save it rather than spend it. In 2016, myRA accounts can be funded with all or part of your tax return. You can also contribute directly to your myRA account from your checking or savings account.
- Make your plan and stay the course.
- Make your retirement savings plan and stick to it. Set up automatic contributions from your paycheck or from checking or savings account to help you meet your goals.
The emphasis one puts on retirement planning changes throughout different life stages. Early in a person’s working life, retirement planning is about setting aside enough money for retirement. During the middle of an individual’s career, it might include setting specific income or asset goals and taking steps to achieve them. In a few years leading up to retirement, financial assets are more or less determined, so the emphasis changes to non-financial aspects. Call us today and let us get your new year started off the right way by paving the way to a financial future you deserve.