Posted on June 5, 2012 at 3:11 PM
Did you know that 58% of those over 40 years of age don’t have a solid retirement plan in place?
Suzanne Klenk, a financial coach at Washington State Employees Credit Union,presents some of the tools necessary to get the ball rolling in the right direction. It may seem like you are a far cry from figuring things out, but there are some tips that will help you along the way.
Here are some of Suzanne's tips:
Forty, Fabulous and Flat Broke, That is a catchy phrase, but what does it mean?
A. There is a whole generation of people like us in their 40’s and 50’s that have been working hard to create a good life for today. We’ve been busy raising children, creating careers, self improvement and a not just a little bit of shopping! As the economy has shifted, so have our priorities and the realization that we may not have planned well enough for tomorrow is affecting more than just a few of us. So that is where 40 (plus), Fabulous (because we are) and Flat Broke comes in. Looking good, feeling good, but realizing that there is more to do.
For those of us that are coming around to this new truth, what are some of our options? Working Forever?
A. It’s not nearly that grim! We have plenty of options; we just have to get started.
· Extending out your retirement date for a few more years may be all that is needed for some. Getting professional assistance with figuring this time frame out is a big help.
· Part Time retirement is a great option for others. Retiring from your place of business and then taking part-time or seasonal employment to supplement your income or to retain benefits.
· Keeping in mind that life has a way of taking us in a different direction at times; we need to also get in to the habit of saving. Some of us may not be able to work longer. Illness, injury or a slow economy may keep us from working. 1200 employees of a state agency just lost employment on June 1st, preparation for the unexpected life is important.
So you say that it is never too late to start, even for the average income household?
A. That is the beauty of it! It is never too late to begin. At this age it takes a more focus, but it is very do able. Saving is the key.
You say that saving is the easiest step and the hardest step. How is that?
A. It is the easiest step because it is simple math. Decide what you need to and are able to save and take it right off the top. It is the hardest step because it takes discipline and you have to make the decision that you are going to do this, no matter how difficult it may seem. Savings should never be a part of your budget. It should come off the top and then you budget with what is left over.
How much should you begin to save?
A. It is different for every person. And 10% to 15% is the goal. But if you are just beginning it is good to start out small and build from there. We usually tell beginning savers to start with whatever you can put away without taking it out at the end of the month or using a credit card.
What are some of the other steps we need to take in addition to saving?
A. Stop mortgaging your future. Stop charging items. Cash is the new Black!
B. Create a Spending Plan! Budget sounds like a straight jacket! Let’s call it what it is! Spend your money on paper before it comes into the house. It becomes your guide for the month. Family participation is a must.
C. Payoff your debt. A debt paid is a tax free raise! I like the snow ball method. Pay off your smallest bill first and then take that money and add it to what you are paying on the next bill until that one is paid and down the line. You will be surprised at how quickly you can be debt free if you stay the course. Creating new habits it never easy, but it is worth it.
D. After your debt is paid, begin looking into long term planning. Investments, Insurance, Etc. Finding a good financial planner is important.
Does everyone really need a financial planner?
A. I believe that if you want to get the most out of your savings and investments, you need to get all the information. Knowledge is power. Let’s face it; most of us are not money savvy. We need a little help. Credit Unions have Financial Planners on staff that can help you plot the course, regardless of where you are financially. I like to think of a financial planner as a guide. Without a good map and a guide, we can find ourselves moving and circles and lost.
There is so much to think about isn’t there?
A. Yes, but start at the beginning... Come into your credit union and sit down with a Member Service Consultant. They can help get you started by putting your savings on Automatic Withdraw and then find ways to get you on the right path. There are so many service options that can assist you with your journey. It’s the silver lining! We can do this!
For more information about Washington State Employees Credit Union, please click here.