Saving for Retirement – Money Matters | Mountain America Credit Union

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Speaker 1: Switching topic, a secure comfortable retirement is every worker’s dream. Sterling Neilsen of Mountain America Credit Union is here to discuss the important aspects of planning ahead. Always good to have you.
Sterling: Thank you.
Speaker 1: Here is the big question, I don’t call it the million dollar question because that has too literal of an application. How much should people be saving for those retirement years?
Sterling: It’s so hard to determine. It’s really changed, you probably noticed how employers used to provide what they call the “Fine Benefit Plan” where they would tell you exactly how and what percentage of your income they would actually give you. They shifted to a defined contribution plan where they’ll contribute a certain amount to a 401K or some other investment. It leaves you to determine how much you need. What you need to do is start with the basics. Take a step back and say, “What do I want my retirement to look like?” Make a plan. “Am I going to be travelling? Am I going to start a business? Am I going to school? Am I going to spend time with my family?” Once you have that, you can develop a plan and estimate what you’ll need for retirement and with that you can get started. The catch is right now, we’re living longer. Instead of a short retirement, we could be 20 or even 30 years. We need a quite a bit for retirement.
Speaker 1: Is there any good rule of thumb formula? You say, I know what type of a lifestyle I would like when I retire, I’m currently living on about this much. Any way to estimate that?
Sterling: Some people say you need to live on about 60% of your pre-retirement income at retirement. When you look at it, the length, the duration, you may need as much as 10 times your final salary available set aside for retirement.
Speaker 1: Retirement planning I know seems overwhelming to so many. What’s a good place to start? How quickly really begin taking those baby steps?
Sterling: When you do start planning now, you really don’t delay, a lot of people put it off and say, “I don’t have the money now.” Start with a plan, look at your financial situation, have a budget put aside and budget for retirement. Make sure you’re putting money aside, so that you have something when that time comes. Every little bit counts because the time value of money, it could grow into a large amount over time. I really recommend getting someone to help you out. There’s a lot of rules relating to investments and government rules that are changing. You really need to understand all the ins and outs and a financial consulting can really help you get ahead. When it comes to retirement knowledge is power.
Speaker 1: I know the consultants of Mountain America is so helpful working with people, one on one to really establish a plan that works for them. In closing, what would you say to someone whose approaching retirement age? What’s the message to take away?
Sterling: There’s a lot of things to consider. You need to ask yourself, when should I take social security? Because if you take it too early or later, or later you can actually get a lot more on a monthly basis. Also, as you’re approaching 65, what about Medicare? Do I need to sign that? What elections do I need to make? Also, do I need a supplemental Medicare plan? All of these things are really important. There are many tools available out there that’ll help out with these. You can visit our website at macu.com. We have a retirement center that has calculators, articles, a lot of resources. Also, you can sign up to visit with all of our licensed consultants and they can really help you put you on the right direction.
Speaker 1: Great. It’s a big topic you’d [inaudible 00:03:16] going in the right direction. Sterling thank you.
Sterling: Thank you.
Speaker 1: We will be right back.

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