Retirement Made Easy # 1

(This is the first blog of a series for retirement. This first one is for those who are just beginning and then the next blogs will continue through for those who have already started and then to those who are close to retirement.)

A neighbor might tell you to start saving for retirement, a Good Neighbor shows you how.

Thought Starters

Why should I start saving for retirement now?
How do I get started saving for retirement?
How much money will I need to retire?
What are my choices for retirement savings?

Start Simple
The sooner you start saving for your retirement, the more time your money has the potential to grow. Here are some tips to get started:

Pay Yourself First, Regularly, Automatically
Decide how much you can save every month - after paying your monthly bills -- then write the first check to yourself . This little trick ensures you’ve made saving for your future a high priority.

If you can automatically withdraw money from your paycheck or checking account, do it! This way you will never miss the money.

Assess Your Progress
After a few months, if you’re easily meeting your monthly savings goal, try to boost what you’re paying yourself each month.
If you’re struggling to pay your monthly bills, you may want to consider eliminating wasteful spending like eating out or opting for the premium cable or satellite package.
Remember, contributing regularly is the key to saving for retirement!

Determine How Much You Will Need
To maintain your standard of living during retirement, you may need an income of 70 to 80 percent of the amount you’re living on in the months before you retire.
Your retirement income may come from several sources, such as:
401(k)s
Other company retirement plans
Traditional IRA(s)
Roth IRA(s)
Social Security
Other savings and investments

Start Now
Start saving for retirement as early as possible, and try to set aside 10 percent of your income every year for this purpose.
Because you’ve got a long savings horizon, you may be able to ride out market fluctuations so consider higher-risk investments that may provide greater earnings.
To see if you are on track with your retirement savings, visit Calculate My Retirement.

Take Advantage of Your Employer's Retirement Plans
Use Payroll Deductions to Invest in Your 401(k) or other similar employer-sponsored retirement plans, especially if your employer matches your contributions. This helps make regular investing a habit.

No Employer Retirement Plan or Match?
If your employer doesn’t offer a retirement plan or any matching contributions, consider opening an IRA for yourself.

Not Yet Eligible?
Until you’re eligible for an employer match, consider contributing to a Roth IRA. Once you’re eligible, contribute enough to get the maximum employer matching contribution into your 401(k). If you can, continue contributing to your Roth IRA while maxing out your 401(k).

Contribute to an IRA.
With a traditional or Roth IRA your money grows tax-deferred. Your earnings are exempt from federal income tax until you begin withdrawing money for retirement.* You can contribute up to $5,000 a year into your IRA(s) even if you already participate in a retirement program at work although contributions may not be tax deductible.

* Withdrawals made prior to 59½ may be subject to federal income tax and a 10% penalty tax.

Other Things to Consider

Establish a Budget
Do you know where your money is going? Budgeting is the first step towards financial freedom. Use our budget calculator to determine your spending habits.
Establish an Emergency FundSet aside an amount of money equal to three to six months of your net income (take-home pay) or expenses. Store this money in a separate interest-bearing savings, checking, or money market account to make sure the money is easy to access should you need it quickly.

An agent will be glad to help you create a personal retirement plan that works best for you. Find an agent in your area, visit www.bobbyromander.com