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Retiring Isn’t Just for the Lucky

With all the expenses and surprises that can come along over the years, you might be thinking you’ll be lucky if you ever retire. And while a little extra wishing this St. Patrick’s Day couldn’t hurt, thorough planning is really the key to retiring at a reasonable age with enough funds to celebrate. So we’re here to share seven tips for you consider, no matter where you are on your timeline to retirement. 
  1. Start (or keep) saving and stick to your goals.
If you’re one of those people that keeps putting off starting to save for retirement because you think you have plenty of time, now is the time to start saving. There will always be a reason not to save for retirement – you’re looking to buy a house, you need to save for the children’s college fund – but putting it off will only make it more difficult on you in the end. Start putting a little aside each month.
Have you already started saving? Great! Keep going. You should always send a portion of your paycheck each month into your retirement fund. 
  1. Know what your needs will be in retirement.
Closely consider how much money you will need in retirement. What are your monthly expenses? Are you planning to travel? Do you have extra money saved for emergencies?
Financial experts say most people need about 70% of their pre-retirement income to maintain their standard of living. Use that as a starting point and double check that it’s enough to cover all your expenses. 
  1. Consider contributing to your employer’s 401(k) or retirement plan.
If your employer has a 401(k) or other retirement plan, consider contributing to it. Some employers even match their employees’ contributions up to a point and this contribution match by the employer is seen by many as free money. If you start automatically putting money into a plan like this, you’re less likely to miss it. And the sooner you start contributing, the more time your money has to grow!
Be sure to learn the details, risks and various options of the plan. Consider the length of time you need to remain employed at a specific company to become vested in their matching contributions, how much they will contribute on your behalf and if you could roll the funds over into another retirement plan.  
  1. Learn about your investments.
Be sure to diversify your investments to reduce the risk and improve your return. The younger you are, the more aggressive you can be. You will need to re-evaluate your investments as your age, goals and financial circumstances change. 
  1. Don’t touch your retirement savings until you’re ready to retire.
There are many reasons to leave your savings alone until it’s time to retire. First, if you withdraw the money early, you may have to pay a penalty. In addition, you will be losing the interest and possibly even tax benefits on the money that is no longer in the fund. Third, saving for retirement is just as important as any other purchases you may have today. You need to save that money and withdrawing it early will only make it harder to save in the end. 
  1. Slowly increase the amount that you are saving as you make more money.
Financial experts often give people in the workforce the goal of saving 10-15% of their income for retirement purposes. If that’s too difficult for you today, that’s fine. But save a little each month with the goal of eventually working your way up to that 15% mark. Re-evaluate your finances each year and try to increase the percentage saved each January, even if it’s just by .5%. If you stick to that plan, you will reach the 15% mark in no time.

Financial surprises and emergencies may come your way, but by talking to your Delta Community Credit Union representatives and sticking to these tips, you will likely be in a better financial position for retirement. And that’s what it’s for, right?

Article submitted by Sharon