Retirement Planning

Next Week Is National Save for Retirement Week
Consider your goals and plan for the future.

National Save for Retirement Week is the first congressionally endorsed, national event calling on employers to promote the benefits of saving for retirement and to encourage their employees to take full advantage of employer-sponsored plans. The annual campaign is an opportunity to raise public awareness about the importance of saving for retirement. It also aims to shed light on individual financial goals and the ability to meet them in the future. What can employers do? If you offer a retirement plan, continuously stress to employees the importance of saving for retirement; or if they are already saving, the importance of increasing their contributions to meet their retirement goals. Saving doesn’t have to be overwhelming—small systematic savings over a lifetime results in a greater savings and a more secure retirement. Here’s some food for thought about compound interest: Contributing $100 every month for 20 years with an assumed rate of return of 7% will yield a nest egg of about $51,000. If contributions are increased to $150, the nest egg grows to an estimated $76,500. A one-time investment of $1,000 put into an account that earns 5% interest will yield a balance of $3,386 at the end of 25 years. If you don’t offer your employees a retirement plan, do so. You may find administering a 401(k) plan is cost prohibitive, but be aware there are less expensive options available, such as SEPs, simple IRA plans and payroll-deducted IRAs to name a few, which reach the same common goal of retirement savings—but usually for a much cheaper cost.