Saving Never Gets Old
It just takes time and a winning retirement savings strategy
You’re familiar with your clients’ dearest retirement dreams: the cabin on Martha’s Vineyard, paying for their grandkids college or finally summiting Kilimanjaro in style. They work hard and both expect and deserve to enjoy rewards in due time.
No matter their age, it never hurts to remind them that to make those dreams a reality, part of the planning is to be realistic, realizing that saving takes time and the amount you can put away differs for everyone. But it’s never too early – or too late – to start preparing.
Savings strategies that never get old
Whatever a person’s age bracket, it’s always the right time to put a little something away. The clock may just be starting for the youngest workers, but that works in their favor because the biggest advantage for investors in their 20s is the power of compounding growth over time.
But time always marches on. Workers beyond their 20s should consider these strategies:
Clients should start buying into the goal of retiring a millionaire. They should take advantage of an employer’s retirement plan and contribute enough to receive the full company match. Also, setting a goal of increasing contributions by 1% each year you get a pay raise is a good habit to start in their 30s.
According to the Bureau of Labor Statistics, the average tenure of American workers is approximately 4.4 years. Investors in their 40s may have changed jobs at least a few times by this point in their careers, but left their retirement balances in their former employer plans. They should consider consolidating these “orphaned” accounts into one IRA or even your current employer’s retirement plan (assuming rollover contributions are allowed).
It’s time to accelerate contributions. For many investors, their 50s represent peak earning years allowing maximum contributions to various retirement accounts.
Deciding to delay Social Security retirement benefits can maximize benefits.
The bottom line
From start to finish, tailoring advice on nurturing wealth is a critical to each demographic. To learn more, review our Wealth Strategies tips about programs and resources for wealth management, estate planning and high-net-worth clients.