Retirement plans are important tools for ensuring financial security during retirement years. Even small contributions to a retirement plan can add up over time and make a significant difference. Additionally, many retirement plans offer employer matching contributions, which can increase your retirement savings even further.
A retirement plan is an essential tool for ensuring a comfortable and financially secure future.
First and foremost, they provide a source of income during your retirement years when you are no longer working. A retirement plan can help you maintain your lifestyle and cover expenses such as healthcare, housing, and travel.
Second, retirement plans offer tax benefits. Many retirement plans are tax-deferred, which means that you can contribute pre-tax dollars to your retirement account, reducing your taxable income in the process. This can lead to significant tax savings over time.
Finally, retirement plans provide peace of mind. Knowing that you have a plan in place for your retirement can alleviate stress and anxiety and allow you to enjoy your retirement years to the fullest.
5 Things You Can Do to Learn More
1) Research different types of retirement plans: There are many different types of retirement plans available, including 401(k)s, IRAs, and pensions. Each has its advantages and disadvantages, and it’s important to understand the differences to choose the plan that’s right for you.
2) Speak with a financial advisor: A financial advisor can help you understand your retirement options and develop a personalized retirement plan that aligns with your financial goals and needs.
3) Attend a retirement planning seminar: Many financial institutions and organizations offer retirement planning seminars that can provide valuable information and resources. Attend one of these seminars to learn more. Additionally, usa.gov offers this Retirement Planning Toolkit resource.
4) Use online retirement calculators: Online retirement calculators can help you estimate how much you need to save for retirement and how much income you’ll need to cover your expenses.
The Social Security Administration has an online calculator that will provide immediate and personalized benefit estimates to help you plan for retirement. It is an interactive tool that allows the user to compare different retirement options. Visit www.socialsecurity.gov/estimator to use the calculator.
5) Review your employer-sponsored retirement plan: If your employer offers a retirement plan such as a 401(k), review the plan details to understand your contribution options, investment choices, and potential employer-matching contributions. Take advantage of any employer-matching contributions to maximize your retirement savings.
By starting to contribute to a retirement plan early and consistently, even with small amounts, you can take advantage of compound interest and allow your retirement savings to grow significantly over time. By taking the time to learn more and taking action to develop a plan that works for you, you can enjoy a bit of peace of mind. It’s never too early or too late to start planning for your retirement!
Learn More with Money Smart Week®: April 15-21, 2023
Hosted each year, this national public education program is coordinated by the Federal Reserve Bank of Chicago and empowers people with the knowledge and skills to make better-informed personal financial decisions.
Attend one of the events to learn more about the topics below:
- Monday, April 17 @ 1:00 p.m. CT | Family Budgeting. Presented by Katie Cullum of the University of Arkansas System, Division of Agriculture
- Tuesday, April 18 @ 1:00 p.m. CT | Spanish language session: Instituciones Financieras. Presented by Vanessa Arita Reyes of the Washington State Department of Financial Institutions
- Wednesday, April 19 @ 1:00 p.m. CT | Debt Relief. Presented by Bruce McCleary of the National Foundation for Credit Counseling
- Thursday, April 20 @ 1:00 p.m. CT | Employer Retirement Plans. Presented by Kimberly Johnson of the U.S. Department of Labor, Employee Benefits Security Administration
View more details at www.moneysmartweek.org. Events are free and open to the public, but registration is advised. Questions for the panelists can be submitted during the registration process.
During the week of April 15-21, 2023, Bank On Greater Milwaukee joins the Governor’s Council on Financial Literacy and Capability and the WI Department of Financial Institutions (DFI) in celebrating Money Smart Week, a financial literacy awareness and education campaign (learn more here). We’re featuring posts with tips and resources on teaching kids about money, certified accounts, debt relief, employer retirement plans, and 529 savings plan.