Saving for Retirement

It probably goes without saying that retirement is very important to you. You certainly deserve to enjoy the rewards of your hard work. At the same time, the thought of accumulating enough savings to retire can be difficult to imagine. 

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Rest assured that you can make it happen with the right planning and commitment. At ESL we understand your concerns about retirement. Take a moment to explore some of the things we’ve learned. We’re confident that you’ll leave ready to tackle your retirement savings with confidence!

Things to know:
 
  • Make retirement savings an automatic part of your budget to secure your future.
  • Use the Retirement Calculators to figure out how much you’ll need.
  • You can use the benefit calculators at Social Security Online to come up with an estimate of your benefits.
  • Many retirement plans offer tax-deductible contributions lowering your taxable income.
 
  • Start Early

    Did you know that many experts believe you'll need close to 80% of your pre-retirement income to maintain your current standard of living?  There are steps to help make the process of saving for retirement more manageable …

    Start planning today:
     

    Step 1 – Develop your goal by figuring out the monthly spending amount you'll likely need in retirement

    Step 2 – List the different sources of income that you know you'll have

    Step 3 – Figure out how much more you'll need to save to reach your goal

    (You can use the “Retirement Calculator” for help figuring out Step 3.)

    Don’t forget to answer the following questions:

    • Is a pension available to you? How much will you possibly receive each month?
    • Can you contribute to an employer sponsored retirement savings plan? How much do you think you'll accumulate at retirement age?
    • Will you contribute to a tax-deferred savings plan like an IRA? How much do you think you’ll accumulate at retirement age?
    • How much do you think any Social Security benefits will be?
      (You can use the benefit calculators at Social Security Online to come up with an estimate of your benefits.)

    Here are a few quick tips to help you get started early:
     
    Tip 1 – The longer you can save, the more you can save
     

    Tip 2 – Consider contributing raises - you lived without them before, maybe you can continue to do so

    Tip 3 – Use automatic contributions through your paycheck, if possible

    Tip 4 – Take full advantage of your employer’s match

    Tip 5 – Keep things simple

    DailyFinance.com has an article with more details about these tips to jumpstart your retirement savings.

     
  • My Retirement Picture

    Everyone’s retirement picture will look a bit different. What’s important is that you begin to get a sense of what yours might look like by considering where your money will come from and the lifestyle you plan to lead. Contact us to help you develop a plan or use the chart below to create an idea of what retirement might look like for you.

    Income Source:
    Monthly Amount:
    Your Notes:
    Income Source:Social Security
    Monthly Amount:
    Your Notes:
    Income Source:Pension
    Monthly Amount:
    Your Notes:
    Income Source:Retirement Plans
    Monthly Amount:
    Your Notes:
    Income Source:Inheritance
    Monthly Amount:
    Your Notes:
    Income Source:Other
    Monthly Amount:
    Your Notes:
    Income Source:Total
    Monthly Amount:
    Your Notes:

     
     

    Potential Expenses:
    Monthly Amount:
    Your Notes:
    Potential Expenses:Housing
    (apartment, mortgage, paid, home, etc.)
    Monthly Amount:
    Your Notes:
    Potential Expenses:Transportation
    (car payments, public transport, etc.)
    Monthly Amount:
    Your Notes:
    Potential Expenses:Food
    (at home, dining out, etc.)
    Monthly Amount:
    Your Notes:
    Potential Expenses:Living Supplies
    (toiletries, household care, etc.)
    Monthly Amount:
    Your Notes:
    Potential Expenses:Utilities
    (Phone, water, etc.)
    Monthly Amount:
    Your Notes:
    Potential Expenses:Care for family
    (parents, children, etc.)
    Monthly Amount:
    Your Notes:
    Potential Expenses:Travel
    (leisure, visits to family, etc.)
    Monthly Amount:
    Your Notes:
    Potential Expenses:Hobbies & Entertainment
    Monthly Amount:
    Your Notes:
    Potential Expenses:Other
    Monthly Amount:
    Your Notes:
    Potential Expenses:Total
    Monthly Amount:
    Your Notes:

     

    Total Income
    Total Expenses
    Difference
    Total Income$
    Total Expenses$
    Difference$
     
  • Retirement Plans

    Learning about how to plan for retirement doesn’t have to feel like learning advanced math. The basic plans are easier to understand than you may think. In addition to Social Security and Pension Plans, these are the essentials of some of the most widely used retirement accounts:

    Type of Plan
    Features
    Advantages
    Considerations
    Type of Plan401(k), 403 (b), and 457
    Features
    • Employer sponsored retirement savings account.
    Advantages
    • Allows pre-tax contributions which lower the amount of income on which you are taxed.
    • Some employers match a portion of your contribution.
    • Can be "moved" to new employers
    Considerations
    • If you take a withdrawal before retirement age, you will likely pay a 10% penalty and taxes.
    Type of PlanTraditional IRA
    (Individual Retirement Account)
    Features
    • Investment account designated for retirement.
    • Offered at many financial institutions (learn about ESL Traditional IRAs).
    Advantages
    • Allows tax-deductible contributions.
    Considerations
    • If you take a withdrawal before retirement age, you will likely pay a 10% penalty and taxes.
    • You pay income taxes on the money when it's withdrawn at retirement.
    Type of PlanRoth IRA
    Features
    • Investment account designated for retirement.
    • Offered at many financial institutions (learn about ESL Roth IRAs).
    Advantages
    • You pay no taxes on account earnings.
    • You won't have to pay taxes on the money you withdraw during retirement.
    Considerations
    • Contributions are made after tax.
    • If you take an unqualified withdrawal, you will likely pay a 10% penalty.
    Type of PlanAnnuities
    Features
    • Investments that are paid out in equal payments.
    • May be insurance products.
    • You pay a premium.
    Advantages
    • Premiums can be flexible.
    • There is typically a guarantee that you'll get back 100% of your principal.
    Considerations
    • If you withdraw money from the account prematurely, you will pay a penalty.

    For a more in-depth look at retirement plans, check out the Retirement Planning Guide.