Planning for the Future
Who are you?
As a whole the human race can be broken down into two categories- the planners and the procrastinators. The planners carefully determine what they want to do in life, what they will need to get there and a suitable time frame in which it can be completed. The procrastinators "fly by the seat of their pants" taking life as it is handed to them and only planning when it is absolutely necessary. Now whether you are a planner or a procrastinator; read this article for tips on how to make the most out of your future. Want more information? Read up on planning for the future in our Online Financial Center.
Where do you want to be?
Dreaming of cross-country trips or cross-continent trips? Want to down-size your home or buy a vacation home? Leave a legacy for your children or spend it all on your own? Before you can even think about planning, you need to figure out what you want to do in retirement. Knowing what you want to be able to do when you are retired helps you set a monetary goal of what you should plan for. So sit down and make a list of what you want to do. Then find out what it will cost to get there. There are numerous calculators on the web to help you figure out what it will cost you to maintain your lifestyle. Use our retirement calculator or visit Smart Money and use their retirement calculator.
How will you get there?
First off, determine a personal budget (download our PDF budget worksheet). Figure how much you will need for such basic needs as shelter, food, clothing, healthcare and transportation. Don't forget to factor in optional expenses such as entertainment and vacations. Resist the urge to spend 100% of every paycheck on luxury items. Then calculate how much you can comfortably afford to save on a monthly basis for emergencies and future expenses, such as retirement — the more the better.
Then analyze your paycheck to compare saving in a taxable account to saving through a tax-qualified or tax-deferred retirement plan. Find out if your employer offers a retirement savings plan, whether it's a 401(k), 403(b), 457(b) or other tax-qualified plan, and enroll in it as soon as you are eligible. Employee of Duke? Get info here. Contribute regularly and increase your contributions proportionately as your income rises from pay increases and promotions. Where possible, contribute to your employer-sponsored retirement plan via payroll reduction, which not only automatically invests a pre-set amount in your account, but also helps to reduce current income taxes.
Stay focused on your long-term goals, even as your life changes. Don't be lured off course by changes in the financial markets or by short-term frills and extravagant purchases. Revisit your retirement savings plan on a regular basis to ensure the plan is working to meet your financial and savings goals.
Don't do it alone!
At the Credit Union we believe that we cannot all be experts on everything. We will let you handle the astro-physics and brain surgery if you let us help you with the financial matters. We have developed a partnership with AIG VALIC to help you plan for the financial matters. They can help to provide a consistent, comprehensive approach to all your financial needs. Find out more or call an advisor.
