Saving For Retirement: The Do’s and Don’ts

by Washington Federal Team on August 20, 2012

Saving for RetirementWe all dream of a time where daybreak evokes leisure, not the wail of an alarm clock.  But in an unstable economy, the prospect of retiring at a reasonable age seems less feasible than most of us would like. Did you know that fewer than half of the American population knows how much money they’ll need for retirement? While the thought of planning for retirement can be daunting, at Washington Federal, we’re here to help with a few savings tips for retirement.

Set your goals and stick to them

Roll up your sleeves, because the simple concept of saving is usually easier said than done. It makes sense to start early, but not all manage saving cash at a young age. Our best advice is to start small and increase the amount you save every month. For the middle class, experts say you’ll need around 70 percent of your preretirement income to maintain your current standard of living. Those at lower income levels will need even more. So set your goals early.

Save along the way

A penny saved is a penny earned, right? If offered, make your financial life a bit easier by taking advantage of your employer’s 401(k) plan. Contribute what you can, because your company may match a good portion of it and your taxes could be lower too.

If this isn’t an option at your workplace, consider an Individual Retirement Account, which is funded by you. At Washington Federal, our IRA options are simple, straightforward and most of all, affordable—just $15 a year per plan. (You can have multiple accounts within a single IRA plan.) Choose either a traditional or Roth IRA and roll your existing IRA or 401(k) into your plan.

Don’t touch those retirement savings!

If you’re a bit short on cash for bills, try to find any other way to settle up – anything besides touching your retirement savings. Withdraw your retirement funds early and you’ll lose principal, interest, and maybe those precious tax benefits. You could also be subject to withdrawal penalties.

Learn more about retirement plans or contact Washington Federal for affordable retirement solutions.

 

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