Saver Tips From the Dean
I get this question quite a bit: "I am a few years away from retirement. Should I increase the amount I am saving?" The answer is YES. But maybe not for the reason you're thinking.
Saving more as you approach retirement will increase your balance. And that is good because even small amounts can help. The main reason I would increase my savings rate is to reduce my take-home pay and therefore manage my spending habits better. It's a great way to prepare for retirement.
See how these courses fit together? Creating a successful retirement outcome is a combination of being a good Spender, Saver, Investor and Planner.
Start Up and Bump it
Saving is easy when you make it a habit. If your employer matches contributions, take full advantage of it. If your plan can automatically bump up contributions every year, do it. Put the savings to the metal now and find any way to increase your savings every year.
Don't forget, if your company matches your contributions, that 1% could be even more.
*Assumes total of 20% in Federal and state taxes.
Tony's retirement bucket may look fuller than Tammy's, but check out their buckets after we figure in 7% compounding earnings.
Even though Tammy contributed less money than Tony, her retirement balance is significantly higher. How did that happen? Tammy benefited from one major advantage that Tony didn't; the power of time. Her retirement bucket had more time to grow with compounding earnings. The moral of this story? Start saving today.
It's never too late to save. Your plan may allow participants who are age 50 or older any time during the calendar year to make additional deferrals known as catch-up contributions.
Goals for Retirement
Have you thought about specific goals or things you would like to do in retirement? If not , you need to. It will make saving for retirment easier.
Calculate one or two goals on this page. And then find a way to record them. Put them on your refirgerator, note them in your phone. And write down the amount you need to save each year to achieve them.
List one small goal you have for retirment.
How much does it cost today?
|Possible Cost at Retirement:||Saving Amount Per Year:|
We may ask you for this amount in another Act section.