PRIMGHAR, Iowa — About 3 in 10 respondents age 55 and over have no retirement savings, according to GoBankingRates analysis in Time Magazine/Money. There were 26 out of 100 who reported retirement savings with balances under $50,000 – an amount that is insufficient for people nearing retirement. Over half (54 percent) of people age 55 and over have balances far behind typical retirement fund benchmarks for their age group.
Financial goal setting is like planning the itinerary for a vacation. You need to know a starting point and an ending point, the timeframe for traveling, and an estimated cost.
If you have an opportunity, as an employee, to contribute to a traditional retirement fund, such as a 401K or 403B, it is the only place where you can get FREE money. The employer usually matches up to a certain percentage. This may be something to look into, and take advantage of a tax break this year.
As a self-employed individual, it can be even more difficult to plan for the future. A self-employed individual will need to look at options like a SIMP (Saving Incentive Match Program) or SIMPLE IRA or a KEOUGH plan as an option. Talk to your accountant, they can help you in making this decision.
Iowa State University (ISU) Extension and Outreach offers a free publication called Retirement Investment Options – Retirement: Secure Your Future (PM1822). Within this document, you can learn about several tax-advantaged retirement plans, their tax benefits and possible employer match. To view or download this free publication, visit the Iowa State University Extension Store (https://store.extension.iastate.edu/) or go to your local ISU Extension and Outreach office and ask for a copy.
Planning for your financial future does not have to be scary if you plan ahead and pay yourself a little amount each month into a savings plan, annuity, or Roth IRA. We have all heard the old saying, ‘If you fail to plan, then you plan to fail.’ The same goes for retirement.
— Jan Monahan, MFCS, Human Sciences Specialist, Family Finance, Iowa State University Extension and Outreach
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