Facebook Messages: Retirement Savings

1. America Saves Website: http://bit.ly/ASaves

Messages

1. Take advantage of retirement plans that your employer offers. Deposits come right out of your paycheck making it easy to save. Some employers also match workers' contributions twenty-five cents, fifty cents, or even a dollar for every dollar saved. This is "free money" that should not be missed. If you change jobs, roll your retirement account over into an IRA or new employer's plan to maintain its tax-deferred status. More savings information: http://bit.ly/ASaves.
2. A tax-deferred employer plan (e.g., 401(k), 403(b), etc.) is a good place to save. Contributions are deductible on federal income tax returns. There is also tax-deferred growth of principal and investment earnings and savings is deducted from a worker's paycheck, before it can be spent. Another advantage is employer matching at many workplaces. This is free money that shouldn't be passed up. More savings information: http://bit.ly/ASaves.
3. Calculate what you need to save for retirement. To get started, determine your desired annual income and subtract expected income, like Social Security, and the future value of current savings in retirement savings plans such as an IRA or 401(k). A helpful retirement savings planning tool, the Ballpark Estimate, can be found at http://www.choosetosave.org/ballpark/. For more savings information: http://bit.ly/ASaves.
4. It's okay to play retirement catch up. Take advantage of additional catch-up retirement savings contribution limits available in federal tax law if you are age 50 and over. In 2016, you can save an additional $1,000 in an IRA (up to $6,500 total if you are age 50+) and an additional $6,000 in a tax-deferred 401(k), 403(b), 457, or Thrift Savings Plan or TSP (up to $24,000 total if you are age 50+). For more information: http://bit.ly/ASaves.
5. Save at least the amount of your employer retirement savings plan match. Find out the maximum amount of worker contributions that your employer's 401(k) plan will match. If your company matches 6% of pay and you earn $50,000, save $3,000 ($50,000 x .06) and you'll receive $3,000 in "free money." Annual savings of $3,000 requires weekly savings of about $58. For more information: http://bit.ly/ASaves.
6. Raise your savings when you get a raise. Each time you get a pay increase, earmark at least half to increase tax-deferred retirement plan savings. For example, if you get a 2% raise on a $50,000 income ($1,000), keep $500 and contribute an additional $500 to your retirement savings plan. Some employers will even raise your retirement savings deposits automatically when you earn a higher salary. For more information: http://bit.ly/ASaves.
7. Save automatically for retirement in tax-deferred accounts at work. If you put $3,000 in a 401(k) or 403(b) plan, your federal taxable income would be $47,000 instead of $50,000. In the 25% tax bracket, you would save $750 (3,000 x .25) on federal income taxes and the after-tax cost of the deposit would be $2,250 ($3,000 - $750). If you don't have a savings plan at work, put savings in an individual retirement account (IRA). For more information: http://bit.ly/ASaves.
8. Save for retirement with pre-tax dollars in tax-deferred accounts. You'll pay no current federal income tax on the amount saved, as well as on the earnings that are generated. Thus, money grows faster than savings funded with after-tax dollar deposits (i.e., money that has already been taxed). Mandatory taxable withdrawals must begin at age 59 ½, however, for Traditional IRAs and employer savings plans like 401(k)s. For more information: http://bit.ly/ASaves.
9. Contribute as much as you can afford today to a retirement savings plan at work and increase your contribution when you receive a raise. Some employers even allow you to authorize future savings increases that will come from future raises today so you don't procrastinate doing this later. In addition to when you get a raise, another good time to save more is when a household expense, such as a car loan or child care, ends. For more information: http://bit.ly/ASaves.
10. Social Security is not enough for most people to live on when they retire. It was always meant to be a base amount of income to build on with personal savings and other income sources. Savings is important for financial security in later life to add to Social Security. Possible places to save include IRAs and 401(k) and 403(b) plans. Start small. Think big. You can save if you put your mind to it. More savings information: http://bit.ly/ASaves.