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  • America Saves Week: Set a Goal. Make a Plan. Save Automatically.

    America Saves Week 2013

    This year’s America Saves Week motto is Set a Goal. Make a Plan. Save Automatically. These are important steps in building yourself a secure retirement.

    Set a Goal.

    In our Winter 2012 Newsletter, we reported that the Employee Benefit Research Institute (EBRI) found that 42% of workers determine their retirement goal by guessing. And while some people might feel that knowing ‘the number’ is too scary, it turns out, figuring it out may make you more confident. According to EBRI’s research, workers who have done the math are far more confident about achieving their goal than those who haven’t. There are lots of online tools to help you set your goal.  To start, get help figuring out what kind of saver you are by taking this Retirement Personality Profiler quiz. Then read our article about online financial calculators and use them to help determine your retirement goal. You may need some help in figuring out some important retirement information, such as how long you are likely to live. This is a central question to retirement planning because you don’t want to outlive your money. Try taking the following longevity calculator Living to 100. Additionally, you may wondering what the impact on your take home pay will be if you increase your contribution to your 401(k) plan. Use this payroll deduction calculator to find out.

    Make a Plan.

    Once you have your retirement goal, it’s time to make a plan for how you will achieve it. Part of this plan is knowing that you will have financial setbacks in life and you need to be prepared for those by setting up an emergency fund. Your emergency fund should equal three to six months of your expenses (rent, food, transportation), and will allow you to pay for unexpected costs that arise, such as needing to fix your car, having to pay for an unexpected health problem or suddenly losing your job. Keeping that in mind, start saving for retirement as soon as possible. To begin, you should be participating in a retirement savings account.  If your employer has a company retirement plan–like a 401(k)—sign up if you haven’t already.  Make sure you are contributing enough to receive the maximum amount of any company match, if not more.  If you do not have a company plan, or you want to open other retirement accounts, look into a traditional IRA or Roth IRA. Find out the rules regarding these accounts. Total annual IRA contributions for 2013 are capped at $5,500 (or $6,500 for people 50 and older). If you are able to contribute the maximum and have money left over, invest it. If you are not able to contribute the maximum, don’t worry! Contribute what you can and it will add up.

    Save Automatically.

    It is best to save automatically so that you don’t spend that money elsewhere. Have a certain amount of money automatically taken out of your paycheck or bank account every month and put into your retirement savings accounts. Many employers allow you to divide your paycheck into different accounts through direct deposit. Take advantage by putting part of your pay into a savings account. If you get paid in cash, take a small amount to the bank to deposit into a savings account each week. Another quick way to immediately start saving is to have your tax refund automatically put into a savings bond. Visit the IRS website for information on how to set that up. You can also use this time to see what other tax credits you might be eligible for. For example, learn about the Federal Saver’s Tax Credit and Earned Income Tax Credit to see if you qualify.  And be sure to check WISER’s blogs later this week for more information about saving with savings bonds.

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    WISER

    About Us

    WISER is a nonprofit organization that works to help women, educators and policymakers understand the important issues surrounding women's retirement income. WISER creates a variety of consumer publications including fact sheets, booklets and a quarterly newsletter that explain in easy-to-understand language the complex issues surrounding Social Security, divorce, pay equity, pensions, savings and investments, banking, home-ownership, long-term care and disability insurance.

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