Available through CUSO Financial Services, L.P.

New Year’s resolutions have become a tradition. Many individuals jot down goals they hope to achieve in the coming year, and often a financial goal—or two—will top someone’s list. In 2020, 49% of Americans said saving money was one of their resolutions. Since saving for retirement is a long-term goal, it’s safe to assume that retirement will make many resolution lists for the year.

Whether you like making resolutions or have a vision of what retirement looks like for you, knowing your retirement savings options will help you achieve your goals. This blog will cover three easy steps to help you achieve your retirement dreams.

Your retirement goals.

Retirement goals are more than dollar signs. When defining your goals, you should consider your ideal retirement vision. Are you in your dream home by the lake or staying close to family? It’s essential to see your retirement in high definition because it will help you be more focused and committed to taking the necessary steps.

It’s always a good idea to review your goals to make sure you’re on track or to see if your vision of retirement has or hasn’t changed. Meeting with your Financial Advisor regularly to review your accounts and discuss adjustments will help ensure you stay on track.

Accounts that work for you.

Next, figure out what it will cost to make your goals a reality. Many employers include retirement savings plans—like 401(k)s or pensions—as part of their benefits package. And yet, according to the U.S. Government Accountability Office, about half of the households age 55 and older haven’t started saving. Workplace retirement plans, like 401(k)s, are a great place to start. According to a study of millionaires, 80% said their 401(k) was their biggest wealth-building tool. However, not everyone will have access to this type of retirement account or might be looking for alternative options.

To help encourage saving for retirement, the government created Individual Retirement Accounts (IRAs), which have significant tax advantages*. The two most common IRAs are Roth and Traditional. Roth IRAs are set up to allow you to pay taxes on the money you put in upfront. The growth of your Roth IRA and withdrawals made after age 59 ½ are tax-free (as long as you’ve had the account for more than five years). Traditional IRAs are great if you’re looking for tax-deductible contributions and if your income level is above the limit set by the IRS for a Roth IRA.

The biggest difference between a Roth and Traditional IRA is how they are taxed. Here’s a comparison chart that breaks down the differences:

Check out our Traditional IRA vs. Roth IRA comparison graphic for more details.

Build savings into your budget. 

Most budgets focus on expenses. Is saving an expense? Not really, but you can treat it that way, especially if you want to save for retirement successfully. A good rule of thumb is to save at least 10-15% of your pre-tax income annually. To keep yourself on track, you can:

• Opt-in for employer matching. If available, take full advantage of any contribution matching programs offered by your employer. Setting up automatic payroll deductions makes saving easy.
• Open an IRA. It isn’t an either/or—it’s both—and IRAs are a great tool when saving for retirement. Using multiple retirement options will help you achieve your goals or allow you to take advantage of catch-up contributions.
• Work with a Financial Advisor. 77% of individuals who met with a Financial Advisor found they could stick with their financial resolutions. Plus, they’ll create a custom plan to fit your needs.

It’s easy to let life get in the way of your retirement goals. But, with the right plan and support, you can retire living the lifestyle you dream about. Whether you’re just getting started, looking to max out retirement investment opportunities or want to learn more about your options, Shanel Dubique, CFS** Financial Advisor, is here to help. Schedule a no-cost, no-obligation appointment with her today at Shanel.Dubique@atriawealth.com. Or visit our Wealth Management page to learn more.

*For details about taxes and tax-deductions, consult your tax accountant.

**Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk, including possible loss of principal. Investment Representatives are registered through CFS. The Credit Union has contracted with CFS to make non-deposit investment products and services available to credit union members.