Saving for Retirement

When it comes to saving for retirement, there's no time like the present. Regardless of your age, it's always a good idea to start putting money away for your future. How can you get started with planning for retirement?

It may seem overwhelming to think about how much you will need decades into the future. Whether you're in your 20s, 30s, 40s, or 50s (or beyond!), we'll show you how to start saving now so you can enjoy a comfortable retirement later on.
 

Why saving for retirement is important

The power of time and compounding dividends (or interest, as it's known at Big Banks) are your greatest allies in achieving a secure financial future. Saving for retirement is important not just from a financial perspective, but from physical and mental health angles as well. With money saved ahead of time, many retirees find that they have flexibility when it comes to activities such as travel and leisure pursuits; plus, having a secure financial plan makes the day-to-day worries associated with money much less likely. Although it may seem daunting at first glance, the beauty of saving for retirement is that you can incrementally increase your savings over time so that you’re setting yourself up for success down the road.

How to get started saving for retirement in your 20s

Starting to save for retirement in your 20s might seem very early, but this important step towards financial stability starts now! The earlier you start saving and investing wisely, the better off you’ll be in the long term. An individual retirement account (IRA) offers tax advantages to help you reach your goals faster and more efficiently. Even if you can only save a small amount of money now, it will pay off immensely down the road as you gain dividends over time. For example, let's say you start off your retirement savings with $500 and then contribute $100 a month (roughly $3 a day!) for 35 years. At a dividend rate of 5%, after 35 years you would have over $110,000 in savings -- your contribution would be $42,500 over the years...the rest is compounded dividend! So get started! Get in the habit of putting aside a portion of each paycheck into an IRA so that when you reach retirement age, it won’t be a daunting task.
 

How to get started saving for retirement in your 30s

Starting to save for retirement in your 30s is an important step towards financial security and stability in the future. If you haven't started yet, there's still time - but the sooner you take action, the better! Contributing to an Individual Retirement Account (IRA) is a great place to start, especially for those with fewer years left until retirement. With an IRA, you choose the investments you're most comfortable with, helping provide better returns on your investments for an even more secure retirement. Deposit as much as you can each year to maximize tax breaks* and take advantage of compounding dividends to grow your savings quickly. Consider automating regular payments into your IRA account to help keep your future on track and provide yourself with enough options in the years ahead.  Don't forget to periodically reassess your goals, so that if circumstances change or emergencies come up, you can adjust accordingly. Your 30s may seem like just another decade on the way to retirement, but making smart investments now can keep you secure no matter how far away it feels.

How to get started saving for retirement in your 40s

Saving for retirement in your 40s is a smart move, as you need to accrue wealth that will provide income during the last few decades of your life. You may feel late to the game, but there are still options available if you’re able to act quickly. Investing in an IRA offers tax incentives and can be invested in mutual funds with low risk and high return potentials.  Determine an annual goal regarding retirement savings so that you know what sort of numbers need to be achievable each year in order to meet financial goals and safeguard future years. Consider meeting with one of our financial advisors in order to plan most efficiently and get off to a successful start.

How to get started saving for retirement in your 50s (and beyond!)

It’s never too late to begin investing—in fact, it’s actually a great time to start. Your retirement contributions could be subject to catch-up provisions that allow you to contribute more money than younger investors, leading to greater tax breaks and reducing the amount of taxes you have to pay*. Opening an IRA is still an excellent option at this stage since these accounts are designed specifically for retirement savings and come with many tax advantages like pre-tax contributions or even the ability to defer taxes until withdrawals are made.  You may also want to consider investing in stocks, bonds, or other investments that could help you make the most of your money and give you a higher return on your investments.  Planning ahead is essential and don’t forget to reassess your goals regularly - sometimes life changes can require adjustments to long-term plans.

The reality is that saving for retirement should be a lifelong commitment. However, your retirement savings strategy isn’t the same at 20 as it will be in your 50s, or beyond. Mastering your saving journey through each decade is key to reaching your retirement goals. By utilizing the above strategies and speaking to an experienced advisor, you can confidently and effectively manage your retirement savings better than most. Your future self will be thankful that you put in the hard work; start calculating and investing now!
 

*Consult your Tax Advisor 

IRA products held at Financial Partners Credit Union are federally insured by the NCUSIF for up to $250,000. 

Investment and insurance products and services provided by Financial Partners Wealth Management are offered through INFINEX INVESTMENTS, INC. Member FINRA/SIPC.  Financial Partners Wealth Management is a trade name of Financial Partners Credit Union.  Infinex and Financial Partners Credit Union are not affiliated.  Products and services made available through Infinex are not insured by the NCUA or any other agency of the United States and are not deposits or obligations of nor guaranteed or insured by any credit union affiliate.  These products are subject to investment risk, including the possible loss of value.