Often people put off planning for retirement. As time goes on, this task can get pushed to the bottom of the “to-do” list.
Planning for retirement doesn’t have to be tedious or frustrating. A visit with a qualified financial adviser can provide valuable information to help get the planning process started.
If you’re a business owner, you may be wondering how you can encourage your employees to get information about the importance of investing early, or even how to start a retirement plan option at your company.
Offering a retirement plan for your employees is a good first step in making sure they receive the facts about investing for retirement and to help them set up for a successful financial future.
Getting started is easy: seek a qualified financial adviser to help with all of the details.
An adviser works with you to help create the best possible options for your company and your employees by first understanding the goals and objectives of the plan you have in mind.
Next, the adviser will work with you to establish the details of the plan and will conduct one-on-one interviews with each of your employees to provide the investment options that may work best for them in the plan. Employees may want to consider including their spouse when they meet with the financial adviser.
Once the employee interviews are completed, your adviser will ask you to schedule a follow-up meeting and will review the plans that were chosen – and make sure that the plans are still meeting the goals of the company retirement plan.
At this time, your adviser also may suggest providing retirement investment education to employees to help them understand how important it is to begin saving early.
One question your employees may have is: “How do I know how much to save?”
There are guidelines a financial adviser can go over to help employees determine how much they should be saving per year to make sure they maintain their existing lifestyle after retirement.
This simple planning example shows the benefit of investing early:
Jill begins investing when she is 23 and contributes $100 per month to her savings plan, but stops when she is 33. However, she leaves the money she contributed, a total of $12,000, in her account until she is 65.
Her friend Joe waits to start investing until he is 35 and begins contributing $100 per month for 30 years, until he reaches age 65. Joe contributes $36,000 to the plan.
If we assume that the investments of both Jill and Joe grew at 8 percent per year, the total of Jill’s investment at retirement is $236,223, while the total of Joe’s investment at retirement is only $149,012.
This is because of the longer amount of time that Jill’s investment was allowed to compound and increase in value.
Some studies show that for the first several years after retirement, individuals will need up to 110 percent of their income since they may like to travel and take part in activities they were not able to fully enjoy while working.
But after a few years, retirees will settle in and may only need about 70 percent of their income.
And, in the later part of retirement as they begin to age, the percentage of income increases again with the cost of medical expenses.
Retirement is a time to enjoy all of our hard work. Making an appointment with an experienced financial adviser is the first step in preparing for a secure financial future.
Dave Hanson, who joined Fulton Financial Advisors in 2007, has more than 20 years of experience in investments and trust banking – serving as closely held business analyst, business development officer, manager of private client services and corporate strategies/mergers and acquisition-related roles. Fulton Financial Advisors’ parent company is Fulton Financial Corp., which operates Fulton Bank in Berks County and Lafayette Ambassador Bank in the Lehigh Valley.
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