Take steps now to create a plan
When you’re serious about saving for retirement, a good plan includes some important steps. These recommendations are just that; they’re flexible. We can help you get started planning by considering your income, budget, lifestyle, and goals. Start with these basics, and you’ll be on your way.
1. Create a Budget
Regardless of your age, it’s a great idea to create an achievable budget to manage your spending and increase your savings. When you have enough to start investing for the long term, stop in for advice on planning for your retirement.
2. Set a goal to save a percentage of your income every year
This includes matching contributions from your employer 401K if available, IRAs, and any other workplace retirement accounts. A good target: by the time you reach 30, try to have saved a total amount equal to your current salary. This is simply a goal. If you’re not there yet, start right in and do your best.
3. Set targets based on your age
If you're in your 40s to early 50s, saving is especially crucial as you approach retirement age. Common rules of thumb in the financial community recommend a goal of having at least 3 times your salary saved by age 40, and 6 times your salary saved by age 50. If you’re already behind these goals, make every effort to increase the portion of your income you save.
4. Maximize your 401(k), especially with employer matching
If it’s available to you, your first place to put retirement savings should be the maximum allowed in a 401(k) with employer matching. The matching funds are essentially free money. Ask your employer what you’re currently contributing, and consider having more deducted from your paycheck (up to the maximum allowed) if you can. If your employer doesn’t offer it, or you are self-employed, other options are available, such as a SEP IRA, SIMPLE IRA, or Self-Employed 401(k).
5. Take advantage of IRAs
IRAs, both Traditional and Roth, offer tax breaks if you meet certain eligibility requirements based on your income. Each may have a place in your retirement savings mix. Learn more here, and ask us what may work for you.
6. Make your savings automatic
You won’t spend a part of your income that your don’t see, so we recommend setting up automatic withdrawals for retirement. Making automatic contributions to your retirement accounts after every paycheck makes it easier, once you find an amount with which you’re comfortable.
7. Check your progress regularly
It’s a good idea to evaluate your retirement plan once or twice a year, or whenever your income, expenses, or other factors change. We can help you evaluate your savings, your goals, and whether any changes are in order.
Getting Started Planning
Make an appointment with a First Source Representative to start your retirement planning process. Once you have a plan in place, you can begin to work toward your goals, and take control of your future. We’ll be here for you as move toward your retirement, ready to help you make informed choices and Retire Smarter.