Retirement made easy # 2

(This is the second blog for retirement, it focuses on those who have just begun to save for retirement.)

A neighbor might tell you to save more, a Good Neighbor helps you develop a plan.

Thought Starters if you are already saving

What kind of retirement am I hoping to have?
What do I want to do?
Where do I want to live?
How do I get there?
Am I on track?
What are my best choices for saving for my future?

You’re already saving regularly for your future and are on your way to achieving your retirement goals. Here are some tips to help you stay on track:

Continue Saving for Retirement

Invest in an IRA
If you haven’t already, now is the time to start.
State Farm offers you both traditional and Roth IRA account options. Talk with your State Farm agent about opening an account today.
With an IRA, your money grows tax-deferred, so your earnings are exempt from federal income tax until you begin withdrawing money for retirement.1
You can contribute up to $5,000 a year to your IRA(s), even if you already participate in a retirement program at work.
Visit the IRA Learning Center.

Use Your Employer-Sponsored Retirement Plans
Are you taking advantage of them? Use payroll deductions to invest in your 401(k) or other similar employer-sponsored retirement plans, especially if your employer matches your contributions.
Learn more about Retirement Plans for Businesses.

Periodically Re-Calculate your Retirement Goals
You’ve probably been promoted, earning more money than when you started your retirement savings plan. Changing your standard of living can change your retirement income goals.
Re-calculate how much you’ll need for retirement every few years.
As a general rule, a retirement income of 70 to 80 percent of the amount you are living on in the months before you retire can help maintain your standard of living during retirement.
Check to see if you are on track with your retirement savings by visiting www.calculatemyretirement.com.

Simplify Your Life
As you change jobs — or even careers — what should you do with the retirement accounts from your previous employer(s)? One option is to directly roll over assets from your 401(k) and other employer-sponsored plans into a traditional IRA. A direct rollover allows you to:
Avoid paying federal income taxes and penalty taxes1
Continue to grow your savings tax-deferred
Reallocate your funds, as your goals may have changed since you began saving in your previous company’s retirement account.
To begin a direct rollover from your qualifying employer-sponsored plan to a traditional IRA, see your plan administrator from your previous job for the appropriate paperwork.

Other Things to Consider

Safe Guard Your Income
Protect yourself against costly medical expenses and the sudden loss of your income due to an illness, injury, or permanent disability.
Health insurance is important if you or a family member gets sick or injured. This coverage will help protect you from any financial hardships due to expensive medical bills.
Disability insurance helps cover financial responsibilities if you can’t work because of an illness or injury.
If your employer doesn’t offer health or disability insurance, or if you’re self-employed, talk with your State Farm agent about health and disability insurance.

Protect Your Family's Future
Having the proper amount of life insurance can help provide for your family when you’re no longer here to help.
Your State Farm agent can help you determine the amount of coverage that’s right for you and your family.
It’s also important to have a will. In your will you can make proper provisions for your children’s education.
Also, make sure you’ve properly designated your beneficiaries for insurance policies and retirement accounts.
The federal and state governments have created tax-favored accounts so saving for education can reduce your taxes, making saving for college an even easier decision. The availability of such tax or other benefits may be conditioned on meeting certain requirements.
We offer several options for college education savings plans:

College Savings Plan Sponsored by the State of Nebraska Coverdell Education Savings Account
Uniform Gift to Minors Act/Uniform Transfer to Minors Act

Establish a Budget
Do you know where your money is going? Budgeting is the first step toward financial freedom. Use our budget calculator to learn about your spending habits.

Reduce your Debt
Taking on some debt, like a mortgage, is often necessary and may even be a good thing. Carrying consumer debt, however, means that the money you could be investing and growing for your future is being used to finance your debt instead. Working to reduce personal debt by limiting your purchases or refinancing your loans at a lower rate is a good first step for any household to consider.

Establish an Emergency Fund
Many people set aside an amount of money equal to three to six months of their 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.

We are glad to help you create a personal retirement plan that works best for you. For more information visit www.bobbyromander.com