Start Saving Smarter
January 30, 2018 |
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Retirement Resolutions? We Can Help with That
Around the start of every new year, we hear our customers discussing their retirement goals — and how they plan on using the next 12 months to improve their future and start saving smarter. But how do you start saving for retirement?
There are a few adages we hear a lot when it comes to saving and retirement:
- You need to start saving when you’re 25
- You need at least a million dollars in assets to retire comfortably
And there’s a reason we’ve all heard them: they’re pretty true. But are they hard and fast rules? No. Here’s what they really mean.
When Should I Start Saving for Retirement
Saving money is one of those things — like most good habits — that takes time to become a habit, and the sooner you start, the easier it is to become part of your routine. So if you haven’t started saving for retirement already, start now.
It’s true that the younger you are, the bigger the advantages of saving. You stand to benefit more from compounding interest, and can potentially earn more than someone who started saving more money later in life.
So if you haven’t started saving yet? There’s no need to panic — there of plenty of options to help you get caught up. Money Market Accounts, CDs, IRAs, stocks, bonds, and more can help you jump start, or regain, your savings goals.
How Much Do I Need to Save to Retire?
The wise man would say that, to retire comfortably, you’ll need to replace 70-90% of your pre-retirement income through savings and Social Security, though you should never plan on relying on Social Security alone. That wise man would also say to save about twice as much as your annual pre-tax salary by the age of 35. But if that doesn’t seem feasible, or you’re already over 35, there’s no need to panic.
Start yourself on a reasonable and realistic path toward saving, regardless of your age. The exact target you’ll need to hit will vary based on your age, assets, and your retirement goals. Even if you haven’t set up a 401(k) or an IRA yet, there’s still plenty of time to do so and add it to your retirement savings plan.
Take a look at how much you owe on large items like homes, vehicles, and other non-monetary assets. If you’re still going to be paying off those debts when you retire, that could impact the size of your nest egg. If you can pay them off before retirement, that’s more money you can put towards your retirement lifestyle. Take a look at your current budget and see if there are ways you can cut down future expenses by paying a little more now.
Planning on how you want to live when you retire should play a key role in how much you need to save. There are a number of tools to help you decide how much you’ll need, like NerdWallet’s Retirement Calculator. While these calculators can’t predict the future, they’ll give you a good idea of what you’ll need from a financial perspective. So whether the outcome is favorable, or you need to start saving more, you’ll be able to plan your next step.
When to Get Started
At Dime, we make it our goal to help you reach yours. Whether you’re just starting your retirement savings journey, or want to ramp it up, our financial experts can help you find the right products to meet your specific needs. If you’ve set a goal to start saving smarter this year, we’ll help you take the next step, and be with you during the entire journey. Visit your local Dime branch or speak to a Dime representative today at 1-800-321-DIME (3463).