What Will Your Retirement Look Like?
article contributed by Daniel A. Mallen, CLU, ChFC
Do you dream of traveling to exotic places? Taking up new hobbies that you finally have time for? Taking the grandkids to Disneyland?
Ah, the carefree life of a retiree ... no time clocks to punch ... no bosses to answer to. Sleep until the crack of noon. Shop while others are still at work.
Ain’t it great? Or is it? Now that you have the time, will you have the money?
Social Security was originally intended to supplement a worker’s pension and personal savings. These days, unfortunately, very few organizations currently offer pension plans. Yet, the maximum Social Security in 2003 was $1,741; the average was $895.
We are bombarded with advertising that pressures us to spend, spend, spend. Which gets us into debt, debt, debt. We end up with little left over to save.
The trick is to commit to paying ourselves first, just like we budget to make our house payments. Target 10% of your income towards retirement. If you can do more, great. If you cannot do 10% at this time, do something. Just get started.
Seventy-five percent of retirees regret that they didn’t save more for their retirement. I have yet to find anyone who has complained that they saved too much for retirement.
Your first choice for retirement savings would be your company-sponsored plan, such as a 401(k). If your company is willing to match your contribution you are foolish not to take advantage of the “FREE MONEY” they are offering.
Once you have claimed all the matching funds you qualify for, your next stop is a Roth IRA.
The Roth account allows you to save up to $4,000 this year and if you are qualified for an AARP card (age 50+), you can contribute an additional $500 for 2005 and an additional $1,000 for 2006.
Although a contribution to a Roth does not reduce your taxes, when you take the money out at retirement, all of your growth comes out tax-free.
Arizona Federal’s investment representatives* can help you plan your financial future by offering assistance with a wide range of financial options. To contact, a representative online, click here. Or you can call (602) 683-1000 or 1-800-523-4603.
* Not NCUA insured—not insured by the credit union—may lose value.
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