Sunday, October 21, 2012

National Save for Retirement Week

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By Terry Orr

Did you know that to live comfortably during retirement you will need from 80 percent to 100 percent of your pre-retirement income?

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Your defined benefit or defined contribution plan and Social Security are a foundation. But you will need savings to fulfill your retirement dreams.

The U.S. Congress thinks it's so important that Americans reflect on their personal retirement goals - and determine if they're on target to reach those goals - that the lawmakers designate one week in October to focus on the issues.

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Goals for National Save for Retirement Week:
  • Make employees more aware of how critical it is to save now for their financial future;
  • Promote the benefits of getting started saving for retirement today; and
  • Encourage employees to take full advantage of their employer-sponsored plans by increasing their contributions.

Saving is The Key
  • Nest eggs require many years to build;
  • People are living longer: retirement can now last 20 – 30 years;
  • Many employers will provide a match for your retirement contribution to help motivate you to contribute; and
  • Saver’s Credit. For those with limited income, saving can be especially hard. The government has a special Saver’s Credit just for those individuals. If you are eligible, you can actually receive some of your contribution money back when you file your tax return.

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How much should you save? – Here are guidelines provided by the National Association of Government Defined Contribution Administrators (NAGDCA):
  • In your 20’s, save 7% of you salary;
  • In your 30’s, save 10% of your salary;
  • In your 40’s, save 15% of your salary; and
  • In your 50’s, save 20% of your salary.

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References and Links:

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