SPOKANE, Wash. – A recent study from the Employee Benefit Research Institute found that most retirees wished they had saved more and started planning for retirement earlier in their lives.
While everyone’s situation is different, factors like current savings and investment potential vary greatly from person to person. However, some universal themes apply, regardless of age or when one begins saving.
JD Allen from Baird Private Wealth Management emphasized the importance of starting to save as soon as possible.
“The most important thing, is to get started,” said Allen. “It is never too late.”
Allen recommended a long-term approach to savings, emphasizing steady and consistent efforts and advised those looking to save to set clear financial goals and evaluate their current savings strategies.
“I believe in the long term approach. Steady Eddie wins the race,” said Allen. “The key is sitting down and thinking what are my goals, what are my plans, what have I done so far and what can I do differently so that I can try to get here at my ending date,” said Allen.
Among the tips of things you can start doing now is building out an emergency fund. That can look different for everyone, but having money set aside that is not dependent on the market is key. Once emergency funds are secured, Allen suggested participating in employer retirement plans as an accessible first step.
“Certainly, taking advantage of any match the company is going to give them. That’s free money in my mind,” said Allen.
And it is. Many companies will match your 401K contribution up to a certain percentage. So make sure your contributions are at the very meeting that match.
Additionally, a Roth IRA is a viable option for those looking to invest in the long term, with a contribution limit for most of $7,000 per year. If you’re over 50 years old, the limit is a little bit higher thanks to “catch-up contributions” at $8000. Putting money in those accounts is great, but you also need to make sure that money is being invested. You can do this yourself, or have the account professionally managed.
For those feeling overwhelmed by the prospect of saving, Allen acknowledged the challenges but stressed the importance of starting as soon as possible.
“I’ve encountered individuals who have been in the late start stage, it can be very daunting, it can be very challenging for them to be able to see the opportunity that is still there, but the longer they wait the more daunting that challenge is going to become. So it is a matter of just getting started,” said Allen.
Again, every person’s situation is different, but saving now, even if it’s just a little bit at first, can pay off in the long run. If it all feels like too much, reaching out for help is the best option to make sure the money you’re saving is ultimately building and working for you.
