Advice Center

The key to reaching a financially secure retirement is to start early. The younger you are when you begin to save, the more time your money will have to grow. So, even if retirement is still decades away, get started today.

Lay the groundwork.

• Find out how much money you have on-hand today and how much you owe to others.
• Establish a monthly budget that accounts for your take-home pay and your monthly obligations. Be sure to include two line items for savings – the first for emergencies; the second for retirement. Depending on what your budget allows, try to earmark 15% or even 20% of your income to savings.
• Make the commitment to pay yourself first through savings.

Start saving.

• Participate in your employer’s 401K program. Contribute as much as you can each year, preferably the maximum – especially if your employer matches a portion of it. Doing so will make saving easy, help you better manage your remaining budget, and even can reduce your taxable income.
• If your employer doesn’t offer a 401K savings plan, open an Individual Retirement Account (IRA). Make the maximum contributions.
• Open a bank savings account and begin depositing funds to cover emergencies like job loss, family illness, etc. Consider an automatic transfer each month from your checking account to your savings account.
• Whenever you receive a raise or a bonus, make the commitment to allocate a portion of it to both emergency and retirement savings.

Manage your debt.

• Work to reduce outstanding loans or other credit obligations. Prioritize and pay off amounts owed according to those that carry the highest interest rates. Always pay debt on time, according to each contract.
• Use credit cards very carefully. Only purchase on credit when you know you can pay the total amount owed each month.
• Pay attention to “the spread”. This means, don’t use money from your savings to pay off debt that charges a lower interest rate than what you’re currently earning on those funds. Likewise, don’t ‘borrow’ money from your savings to make a major purchase if an available credit option (loan or line of credit) offers a lower interest rate than your savings yields. In both cases, you’re still making money ‘on the spread’ – or the difference between savings and borrowing interest rates.

Get Smarter.

• Read or attend seminars on investing and retirement planning. Follow the performance of your own investments.
• Consult with a retirement or investment planning professional to map out a long term plan to match your lifestyle and retirement goals.
• Consult with a tax professional to make sure you’re optimizing your employer withholding structure and as well as tax-deferred investing.