Tools & Resources

Start saving early on, and make it a priority

The key to making your money grow is to start saving as early as you can, since the sooner you start saving, the more time your money has to grow. If you are already saving for retirement, keep up the good work! If you haven’t started, regardless of your age, it’s never too late. Start small if you have to and try to increase the amount you save each month.

Know your retirement needs

Retirement can be expensive. Experts estimate that you will need about 70 percent of your preretirement income—lower earners, 90 percent or more—to maintain your standard of living when you stop working. Do you want to travel? Relocate to another part of the country or world? These can be important factors in determining how much you’ll need when you stop working.

Find out how our money market account offers a simple, hassle-free way to help you grow and manage your nest egg.

Contribute to your employer’s retirement savings plan

If your employer offers a 401(k) plan, sign up and contribute as much as you can from each paycheck. Your taxes will be lower, you can benefit from company matches on your contribution, and you can have the contribution automatically deducted from your paycheck. Over time, interest and tax deferrals make a big difference in the amount you will accumulate. Find out how much you would need to contribute to get the benefit of the your employer’s full contribution, along with the timeframe you would need to stay in the plan to qualify for that money.

Consider basic investment principles

The type of investments you make play an important role in how much you will have accumulated once you retire. There are many different ways to save, but one rule generally applies to everyone: diversify—put your savings in different types of investments. Diversification helps you reduce risk and improve your return. Your investment mix may change over time depending on a number of factors such as your age, goals, and financial circumstances.

Consider the differences between an IRA and 401(k):

IRA – You can put up to $5,000 a year into an Individual Retirement Account (IRA). You can contribute even more if you are 50 or older. You can also start with much less. IRAs also provide tax advantages. When you open an IRA, you have two options—a traditional IRA or a Roth IRA. The tax treatment of your contributions and withdrawals will depend on which option you select. Also, the after-tax value of your withdrawal will depend on inflation and the type of IRA you choose. IRAs can provide an easy way to save. You can set it up so that an amount is automatically deducted from your checking or savings account.

401(k) –  A 401(k) is a type of retirement savings account in which employers can help their employees save while reducing taxable income.  You can choose to deposit part of your earnings into a 401(k) account and not pay income tax on it until you withdraw the money when you retire. Interest earned on money in a 401(k) account is not taxed during your working years but is taxed when you withdraw funds after you reach age 59 ½. Your employer may choose to match a certain percentage of the contributions you make. The 401(k) account is typically administered by the employer, but employees choose how their savings will be invested through mutual funds that use a mix of stocks, bonds, and money market investments.

Don't touch your retirement savings

If you withdraw your retirement savings before you retire, you’ll lose money earned and you may lose tax benefits or have to pay withdrawal penalties. If you change jobs, keep your savings invested in your current retirement plan, or roll them over to an IRA or your new employer’s plan.

Find out about your Social Security benefits

Social Security pays benefits at about 40 percent of what you earned before retirement. You should receive a Social Security Statement each year that gives you an estimate of your benefit will be and when you can receive it. For more information, visit the Social Security Administration’s website or call 1.800.772.1213.

Ask Questions

While these tips are meant to point you in the right direction, you’ll need more information. Talk to your employer, your union, or a financial adviser to plan your retirement savings strategy. And remember…it’s never too late!