Financial Planning & Wealth Management

Retirement planning insights from one of SAC FCU’s free webinars

No matter what your age, now is the perfect time to plan for your retirement. SAC Federal Credit Union’s Beverly Hobbs, AAMS®, LPL Financial Advisor and Ryan J. Shaughnessy, LUTCF®, LPL Financial Advisor recently spoke about the topic in one of SAC’s free webinars. The discussion examines retirement, goal setting and investment strategy.

wealth-management-graphsRead on for a recap of the “Retirement Planning: It’s Never Too Soon – Or Too Late – To Start” webinar. (You can also listen to the free webinar online, and sign up to be notified of upcoming webinars.)

How much is enough
This is a difficult question to answer. Many suggest saving enough to provide 60 to 80 percent of your current annual income for each year of retirement, but the answer really depends on your situation and what exactly you’d like to do it retirement. Do you want a vacation home or just to be able to buy some toys for the grandkids? Deciding what you want out of retirement will help you decide how much you need.

Also consider:

  • Inflation. This will go up and down over the years, but 4% is a commonly used baseline.
  • Social Security benefits. You can go to www.SSA.gov to see your benefits.
  • A pension plan. If your company does have a pension, determine you potential benefits.

How to pursue your goal
Once you’ve determined how much you need, the next step is to decide how to potentially meet that goal. Some options include:

  • 401(k). A tax-deferred account that your employer would provide. Taxes are paid upon withdrawal.
  • IRA. Another tax-deferred account. This one you can open on your own.
  • Roth 401(k). Money for this group account is taxed before it’s invested. As long as you meet the withdrawal stipulations, you won’t be taxed on it when you take the money out.
  • Roth IRA. An individual account where funds are taxed prior to investment, not after (assuming you meet withdrawal requirements).

Work with your tax accountant and financial planner to determine which investment option is best for your situation.

Investment asset classes
When you invest money, even a little bit can potentially grow into a sizeable amount that can help fund your retirement. When looking at investments, it’s important to understand the fundamentals. The three basic asset classes are:

  • Stocks. Ownership in a company.
  • Bonds. An IOU. You promise to give someone money and then they repay you, plus interest, over time.
  • Money market accounts. An account that pays interest. The rate depends on current money market interest rates.

Asset allocation
When deciding how to allocate your funds, consider your personal financial situation and risk tolerance. If you have a longer time frame before retirement, you may want to be more aggressive, but if you are nearing retirement, you may want to protect your assets and invest more conservatively. There’s always a risk in investing. The key is to look at your time horizon and decide how you personally could potentially weather the ups and downs of the market.

It’s also important to evaluate your current savings. Knowing how much you already have will help you determine how much you need to save in order to meet your larger retirement goal. Remember to pay yourself first and stick to a monthly savings goal.

Next steps

Don’t miss a free webinar! Sign up for alerts today.

SAC FCU_CTA_Webinars
SAC Federal Credit Union and SAC FCU Wealth Management are not Registered brokers/dealers and are not affiliated with LPL Financial.

Securities are offered through LPL Financial, member FINRA/SIPC, Insurance products offered through LPL Financial or its licensed affiliates.

The investment products sold through LPL Financial are not insured SAC Federal Credit Union deposits and are not NCUA insured. These products are not obligations of SAC Federal Credit Union and are not endorsed, recommended or guaranteed by SAC Federal Credit Union or any government agency. The value of the investment may fluctuate, the return on the investment is not guaranteed, and loss of principal is possible.

Author SAC FCU Managing Editor

Leave a comment