Do you expect to continue working after you retire? Join the crowd—so do three out of every four of today’s workers. A little more than half of these workers admit to having less than $25,000 in household savings and investments—if any—excluding home and pension.
Here’s how to take action, starting today, to reach a real retirement goal:
- Calculate how much money you’ll need. Use one of the many online retirement calculators—Ballpark Estimate is a good one—to determine how much money you’ll need to provide a certain income at a certain age, given your financial resources. A rough projection of your future needs will allow you to set manageable saving and investment goals.
- Gather information. Take advantage of CapEd’s staff and educational resources to examine all your retirement and investment options. Then plot a course of action. There probably will be several different ways to accomplish your goal; the more you know about them, the better the plan you’ll devise.
- Start now. The younger you are when you begin retirement planning, the fewer sacrifices you’ll have to make to accumulate the nest egg that will keep you from having to return to the labor force.
If you need convincing on that last point, see for yourself: If two workers, one 55 years old and the other 25 years old, each want to amass $500,000 by age 65, watch what happens to their investments:
- The 55-year-old will need to save $380,000 total by setting aside $38,000 every year.
- The 25-year-old, in contrast, will have to save only $160,000 total by setting aside $4,000 every year.
These amounts assume their investments achieve average annual earnings of 5%.
Let CapEd and our partner, SagePoint Financial, help you figure out when you want to retire and how, and implement a plan to get there.
* The author of this article is not a registered investment adviser. Readers should seek independent professional advice before making investment decisions.
Copyright 2011 CUNA Inc.
SagePoint Financial, Inc., is not affiliated with Capital Educators Federal Credit Union. Securities are not insured by NCUA, are not obligations of or guaranteed by Capital Educators Federal Credit Union and are subject to investment risks including possible loss of principal investment.
Securities and investment advisory services offered through SagePoint Financial Inc., A registered Broker Dealer, Registered Investment Advisor and member FINRA/SIPC.