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Strategies: Saving for Retirement

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Reveals how much you need to save, (if any) by your targeted ... Save More (spend less) BEFORE retirement. Spend Less AFTER retirement. Combination??? 5 ... – PowerPoint PPT presentation

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Title: Strategies: Saving for Retirement


1
Strategies Saving for Retirement
Marsha Goetting Extension Family Economics
Specialist
1
2
Thrifty persons prepare today for the wants of
tomorrow
3
Results of Web Financial Calculators
  • Reveals how much you need to save, (if any) by
    your targeted retirement date

3
4
General Tradeoffs
  • Save More (spend less) BEFORE retirement
  • Spend Less AFTER retirement
  • Combination???

4
5
Revisit Decisions
  • Age at retirement
  • Years in retirement
  • Current retirement savings
  • Income needed
  • Income sources/amounts
  • Investment rate of return
  • Inflation rate

5
6
Strategy 1
  • Start/Increase
  • Contributions to tax deferred tax free
    retirement plans

7
Tax Deferred Plan Limits (401K, 403b, 247)
  • 16,500 2009
  • Catch up 50 older 5,500

7
8
Vangards Center for Retirement Research
  • 2007
  • Contribution unchanged for tax deferred plans
  • 7.3 of annual salary

8
9
T. Rowe Price Recommendation
  • Save 15 of annual gross
  • Replaces 50 or more of current salary
  • Lasts until age 95

9
10
Boost Your Retirement Account Increase by 1
(Yellow Slide Card)
  • Side 1 ( closet to salary)
  • - 10,000 - 40,000
  • Side 2
  • - 45,000 to 75,000

10
11
Boost by 1 More

Assuming 8 rate of return Pay Increases 3
11
12
Boost by 1 More

Assuming 8 rate of return Pay Increases 3
12
13
  • Jim, you Cheryl are magicians.

14
  • Every month you make two paychecks disappear.

15
Strategy 2
  • Accelerate Debt Repayment

16
But Jane, everyone spends more than they earn.
Thats what America is for.
17

Debt 25,000
17
18
Strategy 3
  • Kick the minimum payment habit on credit
    cards!!!!!

18
19
Matt Julie
  • Credit Card Debt
  • 10,000

20
Wealth Question
  • If Matt Julie make minimum payment on their
    10,000 credit card debt….
  • How long will it take for them to pay it off?

21
Using Credit Smarts Slide Calculator
  • Complimentary
  • First Interstate BancSystem Foundation
  • Montana Credit Unions for Community Development

22
Side 1-Orange
  • 10,000 Debt
  • Pay back 19,421
  • Interest charges 9,421
  • Years to pay off 20

23
Side 2 Increase payments
23
24
Strategy 4
  • Moonlight for additional income

25
Until Ron got me this job, I didnt realize I
was an important factor in his retirement plan
26
Moonlight Savings For Retirement

Assuming 5 rate of return
26
27
Strategy 5
  • Trade down to a smaller home

28
Retire? Sure, Cheryl you can retire….if we live
in a tent!
Ha, Ha, Ha, Ha, Ha, Ha, ,
28
29
Savings from Smaller Home
  • Lower/ no mortgage payment
  • Reduced maintenance costs
  • Lower utility bills
  • Lower property taxes
  • Lower insurance premiums

29
30
Strategy 6
  • Move to a less expensive location

31
Montana

32
Montana Average Home Price
Source www.bestplaces.net
32
33
Strategy 7
  • Delay retirement date

34
Delayed Retirement
  • Provides additional income
  • Postpones asset withdrawals so can grow

35
Strategy 8
  • Work for pay after retirement

36
Retirement Job
  • Full-time
  • Part-time

36
37
Pay after retirement
  • 63 of workers say they plan to

37
38
Strategy 9
Adopt creative ways to save
39
Costly Habits
  • Kick habits that cost

40
Coin savers
  • Piggy bank extra coins

41
Found Money
  • Put IRS refund in retirement fund

42
Loan Payoffs
  • Pay off loan
  • Then place former payment in a designated
    retirement fund

43
Automatic payments
  • From paycheck/ checking saving accounts to
    designated retirement accounts

44
Make a commitment to spend time learning about
retirement planning, then take action
Strategy 10
44
45
MSU Extension
  • Financial Security in Later Life Web site
  • www.montana.edu/ extensionecon/
    financialsecurityinlaterlife

45
46
NEFE www.smartaboutmoney.org/nefe
  • Guidebook to Help Late Savers Prepare for
    Retirement

46
47
T. Rowe Price
  • Retirement Readiness Guide (40
    pages) www.troweprice.com/retirement
  • Retirement Savings Guide (26 pages)

47
48
U.S. Department of Labor
  • Taking the Mystery Out of Retirement Planning
  • 62 page booklet

48
49
Web based pubs
  • Financial Planning for Retirement-Purdue
  • Retirement Secure Your DreamsBegin by Planning
    Today-Iowa
  • Thinking Over an Early Retirement OfferIowa

49
50
Best wishes as you decide on strategies that you
will adopt to save for retirement. Mar
sha
50
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