Take Stock of Your Retirement Savings This October
There are literally a million reasons to plan ahead for retirement. That’s the dollar figure many financial planners estimate it will take to generate the $40,000 in annual income the average household will need in full retirement. Your numbers are unique to you, from the amount you’ll require to how much you’ve saved. October is an ideal time to review how far you’ve come — and may still need to go. It’s not only National Financial Planning Month, but Oct. 21-27, 2018 is also National Retirement Security Week. Use this time to step up your efforts if you’re already saving for retirement or spring from the planning stage to actively building your nest egg.
You’ll be in good company. The Department of Defense’s 2016 Status of Forces Survey found that 63 percent of active-duty service members were already working on their retirement savings goal, and an additional 31 percent had put it on their list of goals. Their Reserve Component peers had similar numbers, with 59 percent actively working on saving for retirement and another 31 percent having it on their to-do list.
Take a closer look at your retirement planning this National Financial Planning Month and National Retirement Security Week and pave the way for your own bright and secure financial future. Here’s how you can develop or expand your plan today:
- Calculate your personal retirement savings goal. Start by picturing your future self. What do you want your life to look like in retirement? How much money will you need? What do you care most about? How would you most like to spend your time? The Bureau of Labor Statistics has information about the spending patterns of older Americans that you may find helpful. Once you know how you want your future to look, you can begin to estimate how much you will need in retirement. Free financial tools, such as the retirement Ballpark E$timate worksheet at Investor.gov, can help.
- Take inventory of the streams of income you expect to have in retirement. Calculate any Social Security benefits you or your spouse may qualify to receive, earnings from employer retirement plans, traditional or Roth individual retirement accounts, mutual funds, and cash and other investments.
- Take stock of your big picture and fine-tune your current spending and savings habits to work toward your target retirement goal. The objective is to make sure you have enough money to last throughout your retirement years. Boost your savings by making sure you are taking advantage of all of the benefits and entitlements you qualify to receive. While serving in the military, you can get no-cost, personal support from an accredited Personal Financial Manager, or PFM, or Personal Financial Counselor, or PFC, at your installation’s Family Center. The Road to Financial Readiness maps out the timeline for you along your military career.
One of the major benefits of serving in the military is the opportunity to save for retirement. This is true for service members under the new Blended Retirement System, or BRS, and those who have remained under the legacy system.
The BRS blends the traditional legacy retirement pension, also known as a defined benefit, with matching government contributions made into each participant’s Thrift Savings Plan, or TSP, account, also known as a defined contribution. For new service members, this is the first opportunity for planning and saving for retirement regardless of length of service.
Service members who have remained under the legacy system may also contribute to the TSP or other investment products.