Saving for retirement: Where to begin?

Dreams don't retire.^SM

The key to achieving your dreams for the future is to begin planning now. A financial advisor can help you envision your life throughout retirement and discuss what you can do now to prepare. Once you have identified your dreams, a financial advisor can help you develop a plan to get there, and track your progress along the way.

Keep these questions in mind:

• What are your goals and dreams for retirement?
• Are you making the most of your employer's retirement plan?
• Are you taking advantage of tax-deferred and tax-free investments?
• Have you left retirement savings with former employers?

Plan for success

Your retirement savings plan can change as your life circumstances evolve.

• Determine how much you'll need to save. The American Institute of Certified Public Accounts estimates that you'll need about 70% of your current annual income to fund your retirement. Calculate how long your nest egg will last.
• Project your retirement expenses. Think about insurance costs, prescriptions, taxes, nursing home or assisted living costs, loans, utilities, transportation, mortgage payments and inflation (3% annually).
• Decide on your retirement age. In most cases the longer you work, the less expensive your retirement will be (and the more you'll have saved).
• Assess your risk profile. The amount of time you have until retirement will help you determine how much risk you might want to assume. In general, the longer you have, the better you'll be able to withstand normal market flux.
• Find the right mix of retirement accounts. Social Security may provide a portion of your retirement income, but the rest is up to you. Here are some popular options:
  • An employer-sponsored retirement plan like a 401(k) or 403 (b) lets you contribute up to a set amount of your pre-tax dollars for tax-deferred growth. Be sure to take advantage of employer-matched contributions.
  • Traditional IRAs and Roth IRAs provide additional tax-advantaged retirement savings opportunities. A financial advisor can review contribution limits and income restrictions.

Stay on track

By regularly meeting with a financial advisor, you'll maintain a retirement plan that reflects your current financial situation, as well as your dreams of the future.