As we approach the end of another year, one of the important issues to address is, “Am I on track with my retirement planning?” Many of us have been affected adversely one way or the other by the difficult economic environment of the last few years and our plan may have derailed. Planning is never perfect, but it is a tool to make sure we continually focus on the goal. The reality is all of us will likely retire at some point and be responsible for providing for ourselves and those we love for many years.
Although statistics show that 41% of the income of the elderly is received from Social Security benefits, almost two-thirds of today’s workforce say they are not confident Social Security will continue to provide benefits of at least equal value to benefits received by retirees today. In like fashion, those polled have concern about the benefits provided by Medicare. The fact is both entitlement programs, Social Security and Medicare, face projected deficits because the percent of the population age 65 and over increases each year as does the number of people eligible to qualify for Medicare.
So, what are strategies to focus on to accumulate enough for your needs and, hopefully, make your money last as long as you do?
Pay yourself first. Put the maximum amount possible into your 401(k) and invest additional amounts in IRAs and mutual funds through deductions from your credit union account. Automatic investment plans are an easy way to stick with your retirement investing program.
Manage current expenses. Begin with the end in mind. Although it would be nice to have all the things we want when we are young, developing habits of saving, delayed gratification, prudent use of debt, and conservative use of money in general is not only good for us in terms of retirement planning but teaches solid values to our children.
Save as much as you can as soon as you can. Time can be an investor’s greatest asset. Because of the “magic of compounding,” money saved early compounds for many years and grows your retirement nest egg exponentially.
Don’t count on Social Security. If it is there when you retire, consider it a bonus. For your personal financial planning, make it your goal to provide for yourself the funds you will need in retirement. You will need to save more from the beginning, but, as time goes on, that commitment could prove very wise.
Consolidate retirement plan assets into one IRA each time you change jobs. Most people change jobs several times over the course of a working career. Each time you change jobs, roll over your retirement plan assets into the same IRA. A Financial Consultant at Founders Investment Services can guide you in choosing investments in line with your goals and risk tolerance and make sure you have a diversified asset allocation.
Retirement planning requires long-term financial goals and lifetime commitment to accomplish them. Often a financial consultant can provide expertise, guidance, and encouragement to help you not only establish a plan but also “stay the course.”
Financial Consultants at Founders Investment Services are available to meet with you and provide the expertise, guidance and encouragement you need. To take advantage of the services available through Founders Investment Services, call 1-866-739-7064 to speak with a financial consultant by phone or set an appointment at your convenience.
Kristen Davis Rhyne is a Certified Financial Planner® at Founders Federal Credit Union. She can be reached at 803-578-4236 or by email firstname.lastname@example.org.
Securities and investment advisory services offered through Financial Network Investment Corporation, member SIPC - Founders Federal Credit Union, Founders Financial Group, LLC and Founders Insurance Services are not affiliated with Financial Network Investment Corporation. Financial Network Registered Sales Branches are located at 607 N. Main Street, Lancaster, SC 29720; 1290 Old Springdale Road, Rock Hill, SC 29730; 100 Springcrest Drive, Fort Mill, SC 29715; 1307 Boiling Springs Road, Spartanburg, SC 29303.
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This article was written by Kristen Davis Rhyne, CFP with Founders Investment Services Team. It was published in Founders FCU Transaction Newsletter (October 2012).