Retirement 101: Actionable Steps to Save, Invest & Prepare for Retirement
Join our weekly #CreditChat on Periscope, YouTube Live, Twitter, and Snapchat every Wednesday at 3 p.m. ET. This week, we talked about ways to prepare ourselves for retirement (and what we all need to know about investing).
Our featured guests on Twitter were: CRR Boston College & Cary Carbonaro
The panel included: Cathy Weatherford: CEO of Insured Retirement Institute; Cary Carbonaro: CFP, Personal Financial Expert, and Author; Joseph N. Sanberg: Co-Founder of Aspiration.com; Rod Griffin: Director of Public Education at Experian and Mike Delgado: Director of Social Media at Experian.
We’re also featuring financial tips all week on Snapchat.
6 Ways to Start Saving for Retirement
1. Save Save Save
Your ability to save is a major key to financial success. Consider your savings a mandatory bill that you pay yourself each paycheck. Just like you can autopay a bill, automate your savings so you don’t even have to think about it.
2. Calculate your retirement savings goals.
According to the United States Department of Labor, you will need at least 70% of your preretirement income to cover your expenses, and depending on how low your income is, you may need 90%. There are many great retirement calculators available online, and you may want to consider talking to a financial planner to help you come up with specific goals and a plan of action.
MarketWatch Retirement Calculator
Bankrate Retirement Calculator
US Department of Labor Calculator
3. Take advantage of your employer’s retirement savings plan.
If your employer offers a 401(k) or a 403(b) plan, take advantage of it. You’ll want to contribute as much as you, especially if the employer offers a match. (Who says no to free money?) Your 401(k) will automatically be deducted from your check so you don’t even have to think about it.
4. Save money in an Individual Retirement Account
Anyone can contribute up to 5,500 per year of pre-tax dollars in an IRA ($6,500 if you’re over 50). You will be taxed when you withdraw it in your retirement. Another option is a Roth IRA. With a Roth IRA, your are contributing after-tax dollars and you can get no tax deduction for your contribution, but you will not be taxed when you withdraw your funds in your retirement.
5. Invest in your retirement.
There are three main kinds of investments, or “asset classes”: stocks, bonds and cash. Your retirement accounts should probably contain a mix of stocks and bonds – and maybe cash too.
You can invest in stocks and bonds in one of two ways: by buying them individually or by buying them via a mutual fund. A mutual fund is simply a collection of stocks, or bonds, or cash equivalents – or sometimes a mix of all three. (via CNN Money)
6. Talk to a financial planner.
If you are confused about where to begin to save for retirement, or how to invest, you may want to talk to a financial planner. For tips on how to choose the right financial planner for you, check out this recent #creditchat.
Questions We Discussed:
- Q1: When should people start saving/investing for retirement?
- Q2: What questions should people ask themselves when planning for retirement?
- Q3: How can someone figure out how much they realistically need to save for retirement?
- Q4: What options are available for investing for retirement?
- Q5: How can entrepreneurs, freelancers and contract workers save for retirement?
- Q6: Should asset allocations change as we get older?
- Q7: How often should someone check their retirement investments?
- Q8: What advice do you have for someone who is nearing retirement, but doesn’t have much saved?
- Q9: What resources are available for someone who wants to prepare for retirement, but doesn’t know where to start?
- Q10: Any final tips for someone planning for retirement?
View the Entire Discussion via Storify:
If you’ve never heard about #CreditChat, here is a brief overview:
Relevant chats on YouTube:
- Ways to Control Emotional Spending
- How to Juggle Debt & Retirement
- How to Pay Down Credit Card Debt Faster
- How to Eat Healthy (Without Breaking the Bank)
- How to Throw a Fun Dinner Party on a Budget