Saving Money Now to Help Plan Your Future Retirement

Retirement. It seems like a lifetime away, right? It’s probably something you plan to worry about when you’re a little closer to your retirement date as well. However, financial experts suggest that the best time to start planning is in your 20s when you typically start earning a steady paycheck.

Regardless of your retirement date, it’s never too early to start planning for your retirement. You may be asking, “Where is the best place to start?” and “How should I invest my money to maximize the returns I see at retirement?” Both of these are great questions that we will delve into on this post.

Set your goals.

This applies to 20-somethings, 30-somethings, and 40-somethings. How do you know what steps to take if you don’t know where you’re going?

Sit down and figure out your goals. Do you want to buy a house one day? How long do you need to rent and save money? What “bad debt” do you need to pay off now to help you in the long run? These answers may change as life circumstances change, but it’s helpful to know what your goals are and create a plan to achieve them before you set out on your savings adventure.

Take advantage of your employee benefits.

Does your company offer a retirement savings account? Many full-time employers will offer either a 401(k) or a SIMPLE IRA (Savings Incentive Match Plan for Employees Individual Retirement Account). It’s important to understand what these accounts are, how they work, and whether or not it’s a viable option for you.

What’s the difference between a 401(k) and a SIMPLE IRA?

A 401(k) is an investment account you make contributions to out of each paycheck. If your employer matches your contribution up to a certain percentage, that’s free money going into your 401(k) in addition to the contributions you’re making.

A SIMPLE IRA is a tax-deferred employer-provided retirement plan. Like a 401(k), you make pre-tax contributions from your paycheck, and your employer can also elect to match your contributions up to a certain percentage. Unlike a ROTH IRA, when you reach retirement age and begin drawing from the SIMPLE IRA, you will pay taxes on the money you’ve saved.

Good debt vs. bad debt.

Believe it or not, there is such a thing as good debt. Debt to buy a home or to start a business is considered good debt as it can be used as collateral. To our 20-somethings, listen up! Consumer debt: credit cards, car loans, and student loans often come with high-interest rates, which may only hurt you as you get older. Educate yourself on interest rates before taking out one of these types of loans (especially for credit card usage).

No matter what age you are, the best thing you can do is to avoid buying things you can’t afford. But, if you have debt or need to go into debt for a major purchase, have a plan to get out of that debt promptly. Look for areas within your monthly budget where you can reduce spending and cut unnecessary costs.

Check out debt consolidation and refinancing options.

Consolidating debt and refinancing loans are two great ways to save money on your monthly payments. Debt consolidation is typically used for unsecured debt and is especially effective for high-interest debt like credit cards, while refinancing a loan enables borrowers to “redo” an existing loan to get a lower monthly payment, different term length or a more convenient payment structure.

Both options are a great way of saving money each month. Ideally, you’d be able to measure the savings you’re seeing and put that toward your retirement planning. It might not sound like a lot of money, but even if you were able to save $50 a month, at the end of a year you’d have $600 to put toward your retirement.

Do you have debt that can be consolidated? Do you have loans that may need to be refinanced? You never know what your options are until you ask! Check with your local branch to see if we can save you some money each month to put toward your retirement.*

To take it a step further, did you know First Financial has an Investment and Retirement Center which offers complimentary retirement consultations to our members?**

Stop in or call to make an appointment with one of our Financial Advisors today!

The truth is, there are a dozen different ways you can prepare for retirement early and start saving money. You just have to find the ways that work for you, and we are here to answer any questions you might have and get you started!

*Not all applicants will qualify, subject to credit approval. Additional terms & conditions may apply. Actual rate may vary based on credit worthiness and term. Current loans financed with First Financial FCU are not eligible for review or refinance. A First Financial membership is required to obtain a First Financial auto loan and is available to anyone who lives, works, worships, volunteers or attends school in Monmouth or Ocean Counties. See credit union for details. A $5 deposit in a base savings account is required for credit union membership prior to opening any other account/loan. Federally insured by NCUA.

**Representatives are registered, securities are sold, and investment advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor, 2000 Heritage Way, Waverly, Iowa 50677, toll-free 800-369-2862. Non-deposit investment and insurance products are not federally insured, involve investment risk, may lose value and are not obligations of or guaranteed by the financial institution. CBSI is under contract with the financial institution, through the financial services program, to make securities available to members. CUNA Brokerage Services, Inc., is a registered broker/dealer in all fifty states of the United States of America.

3 Things You Should Do With Extra Money ASAP

According to a recent report by CareerBuilder, 78% of Americans who work full-time live paycheck to paycheck. Thinking about the long term is hard, especially when it comes to finances, but life does get easier the earlier you start laying the foundation for good financial habits. Whether you have $100 or $1000 to spare every month, investing extra funds wisely can have a significant impact on your financial future.

1. Pay Off Your Debt

First and foremost, consider putting part or all of your extra income every month toward paying off your debt. Being in any kind of debt can definitely loom heavily over your life and finances. Instead of spending any extra cash, it’s smart to chip away at that mountain to become debt-free. You should start with your highest interest debt first and work your way down, though some people find more motivation to tackle their debt by focusing on paying the smaller debts first.

2. Put it in Your Emergency Fund

Having an emergency fund is not just a smart idea, it’s a necessity. Life is unexpected and you never know what can happen. Having an emergency fund can help you in life’s hardest situations, such as a car accident or the loss of a job. Begin putting money toward an emergency fund, any little bit helps. It’s ideal to have six months of expenses saved up just in case.

3. Invest in Your Retirement

After you’ve paid off your debt and put money in your emergency fund, it’s now time to think about the future – which means retirement. While it’s still years or maybe decades away, saving for retirement as early as possible means you reap more rewards later. And that can start with a 401k. Surprisingly, many full-time workers are unaware that their employers may match up to a percentage of your contribution to the company’s 401k plan. Find out what your company’s policy is and get started with contributing to your retirement as soon as possible.

A Roth IRA is another popular retirement savings account that allows your money to grow tax-free. When you’re ready to withdraw at retirement, you do not pay taxes on these funds. If you’re under the age of 50, the most you can contribute to a Roth IRA is $5,500 yearly. This basically means that those who have earned income, can put in just over $458 monthly to reap the most benefits in their retirement future.

If you have extra income at the end of every month, start with these three steps. It will set up a healthy financial foundation for you and your family. Going forward if you still have money leftover after that, you might want to start looking into investments or perhaps spending a bit on yourself.

Need help with retirement planning? To set up a complimentary consultation with the Investment & Retirement Center located at First Financial Federal Credit Union to discuss your savings goals, email Mary.Laferriere@cunamutual.com or stop in to see us!*

*Representatives are registered, securities are sold, and investment advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor, 2000 Heritage Way, Waverly, Iowa 50677, toll-free 800-369-2862. Non-deposit investment and insurance products are not federally insured, involve investment risk, may lose value and are not obligations of or guaranteed by the financial institution. CBSI is under contract with the financial institution, through the financial services program, to make securities available to members. CUNA Brokerage Services, Inc., is a registered broker/dealer in all fifty states of the United States of America.

Article Source: Connie Mei for moneyning.com

 

5 Essential Things You Need to Know About Saving for Retirement

bigstock-Mature-Retired-Couple-Enjoying-71278750Saving for retirement is essential. The concept of retiring on the checks you get from social security has vanished in the 21st century. You have to go out of your way to gather the funds necessary to sustain a long and enjoyable retirement.

Generation X is the most vulnerable group. In the financial crisis a study revealed that they lost nearly half of their total wealth. But it’s never too early to save for a long and happy retirement, and it’s certainly never too late.

This guide is going to show you the essentials you need to know about retirement saving.

1. Look Ahead.

Don’t be blind to your financial situation. Be proactive and take notice of what your various retirement funds are going to actually give you during your twilight years. Look into your employer-sponsored retirement program and see whether it’s sufficient enough to cover your needs.

There are so many people that have yet to even think about retirement. The later you start saving for it the less you can expect to get. This can have the consequences of forcing you to continue working throughout your retirement simply to survive.

You can never save too much for retirement, so get started now.

2. Ignoring the Problem.

It’s never nice to think about your final years, and it’s certainly never nice to think about your final years if you are unsure as to whether you can afford to survive. But this is a problem that will only become more urgent the older you get.

Don’t enter a cycle of denial where you prioritize current financial issues over your retirement. Starting today is always better than starting tomorrow.

3. Make Sacrifices.

If you are starting your retirement fund later in life, you may have to consider making sacrifices. In other words, you are going to have to sacrifice some of your current quality of life in order to get the income you need when you decide to leave work.

Make some conscious trade-offs to increase saving and reduce spending. One good move is to increase contributions to your work-based retirement fund. Each time you receive a raise, you should make it your priority to increase the amount of money you are saving.

A simple change in your state of mind can have a big impact going forward.

4. Face Financial Reality.

If you have already reached middle age, you are about to enter your peak earning years. Many people are scared to face the financial realities of retirement. They are terrified of discovering they don’t have enough to retire at the age they wanted. But it’s vital that you know you are following a clear path.

You should have an intimate knowledge of interest rates and inflation, for a start. It may be worth contacting a financial advisor to find out about what other retirement options are open to you. You may discover that there are better choices available.

5. Consistency is the Key.

Be consistent with your savings. Make sure that you are constantly contributing to your retirement fund. The key to building up a healthy amount of money is to be automatic. Make sure that you are constantly making payments and you will be amazed at how quickly it can all add up. Setup a regular payment agreement with your bank so you don’t even need to think about making contributions.

Saving for retirement is best done as early as absolutely possible. Failing to do this will leave you in the difficult position of not having enough money to meet your basic needs. Begin saving and commit to regular payments and don’t compromise on your retirement for anything or anyone.

How will you begin preparing for your retirement today? To set up a complimentary consultation with the Investment & Retirement Center located at First Financial Federal Credit Union to discuss your savings goals, contact us at 732.312.1500, or stop in to see us!*

*Representatives are registered, securities are sold, and investment advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor, 2000 Heritage Way, Waverly, Iowa 50677, toll-free 800-369-2862. Non-deposit investment and insurance products are not federally insured, involve investment risk, may lose value and are not obligations of or guaranteed by the financial institution. CBSI is under contract with the financial institution, through the financial services program, to make securities available to members. CUNA Brokerage Services, Inc., is a registered broker/dealer in all fifty states of the United States of America.

Original article source courtesy of AJ Agrawal of the Huffington Post.