Tag Archives: retirement

Three Rules for Retirement Savings

Michael St. John, CPA, CRPS®, Vice President & Retirement Plan Services Manager

Michael St. John, CPA, CRPS®, Vice President & Retirement Plan Services Manager

For most of us, saving for retirement is a necessary step in ensuring a comfortable lifestyle as we grow older. Despite competing demands for our money, ultimately we must commit ourselves to saving for retirement.

You likely have an employer sponsored retirement plan at your place of work where you can save a portion of your paycheck directly into an account set aside for your retirement (401k, 403b, SIMPLE). And don’t forget about Individual Retirement Accounts (IRAs). If you do not have a retirement plan at work you might consider regular contributions to an IRA.

Follow three basic rules to boost your retirement savings.

  1. Start Early

Save as much as you can, as soon as you can. The sooner you start, the longer compounding can work in your favor. Don’t assume that you can put off saving for retirement and make up the difference later with larger contributions. Waiting too long to start saving can make it very difficult to catch up. Only a few years could cost you tens of thousands in accumulated savings at retirement age. Start saving today!

  1. Increase Contributions

Sometimes we cannot save as much as we should early in our working years. If you are not saving as much right now, make a plan to increase your contributions each year or every time you receive a raise or promotion. Always be aware of employer matching contributions. Your first goal should be to contribute the amount that will ensure you receive the maximum employer match.

If possible, you should increase your contributions enough over time that you reach the maximum allowable contribution in your plan. Increasing just one or two percent of your pay each year can quickly get you on your way to a savings rate that can make a big difference in reaching your retirement goals.

  1. Don’t Stop

It can be tempting to reduce, or even stop contributing when we change jobs or experience other life changes such as getting married or having children.  It’s easy to stop, but much, much harder to get started again.

We may also feel inclined to stop saving when investment markets take a downturn. Downward trending markets can actually signal a great time to even increase your contributions. By investing consistently through down market cycles, you purchase investments at a lower cost, buying more shares with each dollar, and allowing for greater potential growth of your account in the future.

Reducing or stopping retirement savings in your employer sponsored plan can also reduce employer matching contributions. Make sure you contribute at least enough to receive the maximum match allowed under your plan.

Make saving a priority! By saving what you can now, increasing your contributions over time , and remaining consistent with your current plan, your savings can really add up over time.

The information contained in this article does not constitute tax or investment advice.  The above statements do not include all rules that may impact your contributions and tax benefits. To confirm what options are available to you, please consult your tax advisor or one of our wealth advisors or retirement planning specialists.

Michael St. John, CPA, CRPS® is a Vice President & Retirement Plan Services Manager at Alpine Trust & Investment Group. He has more than 25 years of experience in accounting, income tax and retirement planning.

Investment and insurance products are: not FDIC insured; not guaranteed; and, may be subject to investment risk, including possible loss of principal.

 

5 Ways to Start Retirement Planning Before You Turn 30

retirement-planning-before-30

Retirement is for the birds, right? If you’re not even 30, why should you worry about it? You have student loan debts to pay off, rent or your first mortgage to pay, a tepid job market to navigate and insurance to be worried about. Retirement? You’ll think about that when you’re 40.

 

If you follow this train of thought, you’re on the wrong train. Retirement planning may be more crucial when you’re younger because it dictates how you approach your finances as a whole for the rest of your life. Remember the 2008 recession? Millions of Americans lost their retirement nest eggs and either had to go back to work or extend their working years.

 

You don’t want to end up working until you’re 67 or 68, right? Here are five ways you can avoid that fate:

 

Get a sense of what you need- but please don’t freak out. You need a goal in order to save properly, and there are seemingly endless resources available, at Alpine Bank and online, to help you see what you’ll need for retirement.

 

Prioritize- before you start funding your retirement, take care of your immediate needs: establish an emergency fund and pay down your debts.

 

Fund your 401(k)- if your employer offers a 401(k), opt in, especially if there’s a company match involved.

 

Get your IRA on- no 401(k) option? Try a traditional or Roth IRA. A traditional IRA lets you make tax-free contributions, while money in a Roth IRA grows tax-free.

 

Chill out- yes, saving and investing in your future early can really pay off. It also takes time for all that to happen, so be patient, don’t stress over each rise and fall and keep your eyes on the prize.

 

The earlier you save, the more your money gets the benefits of compound interest. You don’t have to start out dumping huge amounts into your account; all that matter is that you start. The Investment and Retirement teams at Alpine Bank can also be a trusted resource for this and other information regarding retirement, so be sure to get in touch with them if you have questions.