Saving for the future

By Lindsay Chin

Retirement means saving for the future. A person needs to consider how they will fund their future. However a personal saving rate alone tell us little about the adequacy of workers’ preparation for retirement. There are three things to consider when planning for your retirement. First you should
1) Assess your retirement.
a. You can keep track of your progress with retirement savings calculators such as the one available on Charles Schwab’s website.
2) Develop a retirement savings plan.
a. You should consider some strategies for saving. Most strategies fall under three types of plans. Qualified plans, which are plan set up by employers to give employees retirement saving opportunities. Individual Retirement Accounts, which is a personal savings plan that provides tax advantages. The three main advantages is that you may be able to deduct your contributions in whole or in part during the tax year you make the contribution, contributions are generally not taxed until distributed, and the IRA fills in the gaps in other tax-favored ways to save for retirement. And last there is Nonqualified Plans, which is an employer-sponsored retirement or other deferred compensation plan that does not meet the tax-qualification in a lower tax bracket.
b. You should diversify your retirement savings into a variety of asset classes
c. Build a portfolio in line with your long-term goals and risk tolerance
3) Explore ways to save
a. Maximize contributions to your existing 401k, 403b, 457
b. Establish a traditional or Roth IRA
c. Consider an individual 401(k), SEP-IRA, or profit-sharing plan if you own a small business.

Source 1, Source 2, Source 3