Top 10 Ways to Beat the Retirement Clock
1. Know Your Retirement Needs
Retirement is expensive.
Experts estimate that you’ll need
about 70% of your pre-retirement income (in the case of lower
earners, 90% or more) to maintain your standard of living when you
stop working. Understand your financial future.
2. Find Out About Your Social Security Benefits
Social Security pays the average retiree about 40% of pre-retirement
Call the Social Security Administration at
1-800-772-1213 for a free Personal Earnings and Benefit Estimate
3. Learn About Your Employer’s Pension or Profit Sharing Plan
If your employer offers a plan, check to see what your benefit is worth.
Most employers will provide an individual benefit statement if you request one.
Before you change jobs, find out what will happen to your pension. Learn what
benefits you may have from previous employment.
Find out if you will be
entitled to benefits from your spouse’s plan.
4. Contribute to a Tax-Sheltered Savings Plan
If your employer offers a tax sheltered savings plan, such as a 401k, sign up
and contribute all you can. Your taxes will be lower, your company may kick in
more, and automatic deductions make it easy.
Over time, deferral of taxes
and compounding of interest make a big difference in the amount of money you
5. Ask Your Employer to Start a Retirement Plan
If your employer doesn’t offer a retirement plan, suggest that he/she start one.
Simplified plans can be set up by certain employers. For information on
simplified employee pensions, call 1-800-559-2900 or
contact Atlantic Financial.
6. Put Money Into an Individual Retirement Account
As of 2004 you can put $3000 a year into an Individual Retirement Account (IRA)
and delay paying taxes on investment earnings until retirement age.
don’t have a retirement plan (or are in a plan and earn less than a certain
amount), you can also take a tax deduction for your IRA contributions.
Publication 590 contains information about IRAs.
7. Don’t Touch Your Savings
Don't dip into your retirement savings. You’ll lose principal and interest, and
you may lose tax benefits. If you change jobs, roll over your savings directly
into an IRA or your new employer’s retirement plan.
8. Start Now, Set Goals, and Stick to Them
The sooner you start saving, the more time your
money has to grow. Put time on your side. Make retirement saving a
high priority. Devise a plan, stick to it, and set goals for
Remember, it’s never too late to start. Start saving
now, whatever your age.
9. Consider Basic Investment Principles
How you save can be as important as how much you save. Inflation and
the type of investments you make play important roles in how much
you’ll have saved at retirement. Know how your pension or savings
plan is invested. Financial security and knowledge go hand in hand.
10. Ask Questions
These tips should point you in the right direction, but you’ll need
more information. Talk to your employer, your bank, your union, or a
financial advisor. Ask questions and make sure the answers make
sense to you. Get practical advice and act now.
should know about your retirement savings plan