Steps in Preparing for Retirement

By Jana Castanon Media Relations/Community Outreach for Apprisen

No matter your age, retirement will be here before you know it.  However, according to a poll by the Employee Benefit Research Institute, only 13% of consumers felt very confident that they were prepared for retirement.  That’s a scary statistic. What about the rest of us?  Where are we going to be when that time comes?  But it doesn’t have to be that way.  It’s never too late to start saving for your future.  Here are few tips to get you on track in order to meet your retirement needs.

1. Find out about your Social Security benefits. Social Security pays the average retiree about 40% of pre-retirement earnings.  The Social Security Administration sends out Your Social Security Statement” automatically to current workers 25 and over who are not receiving Social Security benefits approximately three months before the recipient’s birthday.  Contact the Social Security Administration at 1-800-772-1213 for more information and to request a free statement if you didn’t receive yours.
2. Know your retirement needs.  Retirement is expensive.  Experts estimate that you will need about 70% of your pre-retirement income to maintain your standard of living when you stop working.
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.
4. Contribute to a tax-sheltered savings plan. If your employer offers a tax sheltered savings plan, such as a 401(k), 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 will accumulate.
5.  Put money into an Individual Retirement Account. You can put money into an Individual Retirement Account (IRA) and delay paying taxes on investment earnings until retirement age. If you 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. (Withdrawals prior to age 59 1/2 may be subject to a 10% penalty tax.).
6. 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.
7. Start now, set goals, and stick to them. Start early. 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 yourself. Remember, it's never too late to start planning for your retirement.
8. 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.
9. 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

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