Tips for Saving for Retirement

• The key to retirement savings is to INVEST EARLY and regularly! From your first salary you should begin to put away money. It is suggested that during your early earning years you should save 10% of your gross income. In the middle of your career, as your salary rises, you should be saving 12% to 15% of your gross income. In your later years, when your salary should be at its highest, you should save between 15% and 20% of your gross income.
• You should also find a way to automatically save, that is, have the amount you save come out of your pay check each month and be diverted to your savings account or investment account or your 401K immediately. If you don’t see it, you will not spend it.
• Your savings strategy for retirement should be aggressive in your early years. What you lose with more risky investments or higher-priced investments can be recouped. As you move into middle age, the better strategy is to become more conservative.
• Your strategy may adhere to the general advice that you will need 70% of your income for retirement. But, do you really want to live on 30% less? Live and save with this end goal in mind!
• Do not put savings for retirement on hold in order to pay for your children’s college education. There are loans and scholarships for college, not for retirement.
• Before retirement, you should meet with a financial advisor and look at your retirement plan one more time. Take into account any changes in your life, life expectancy gains, and the idea of part-time work after retirement.
• Do not rely on Social Security; it will be a bonus. Rather, consider investing in the stock market; 401Ks, especially when you have the benefit of employer contributions; IRAs; and personal savings, such as CDs.
• Know the difference between traditional IRAs and Roth IRAs. For traditional IRAs, your contributions up front are tax deductible, but your distributions later will be taxed at a normal rate. For Roths, your contributions are not deductible, but the distributions are not taxed.

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