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Retirement Plan Considerations at Different Stages of Life

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Investing for your retirement is an important part of your overall financial plan — and we’ve got valuable tips to consider as you put your plan together. Here are a few key things to think about, whatever your current stage of life…

Starting out

When you’re in your first job, you face a lot of financial challenges. College loans, car payments, and rent all take necessary chunks out of every paycheck. It’s tempting to put off savings and investments. But consider this: Right now, time is on your side. Because time makes money compound — and you’re at just the right age to take advantage of that.

What is compounding?

Basically, it’s how your money doubles itself, over and over across time, when the earnings on your initial investment start earning returns as well. It’s a good idea to invest whatever you can now, even if it’s not as much as $3,000 per year. As you earn more or pay off debts, it will become easier to increase your investment percentage as well.

Getting married and starting a family

Getting married and having kids brings a whole new set of financial obligations. Now you’ll likely have a house payment and maintenance expenses, along with higher grocery and gas costs, family vacations, and childcare or extracurricular activity expenses.

Staying diligent with your savings may seem difficult. But before you cut back, think about your objectives for yourself, and your family. If you or your spouse take time off to be home with kids, can the other spouse increase their savings to offset the loss? Will you be able to absorb the future loss of Social Security or pension benefits if one of you does not work for a period of time?

With some planning, you may be able to save extra prior to having children, to help accommodate such losses. And with 20-30 years until retirement, you may also be able to invest more aggressively in the hope of stronger returns. Talking to a financial advisor can help you weigh the risks and benefits of your choices.

Peak earning years

By now, you may be earning more than ever — but you may be facing home repairs, college expenses for your older children, or time off work to care for aging parents, a spouse, or yourself. With a higher income at your fingertips, this can be a good time to kick your savings up a notch.

Are you 50 or older?

At this point, you may be able to make “catch-up contributions” to your retirement account — allowing you an increased maximum annual contribution to enhance your savings. This is also a good time to check in with a financial advisor to refine your goals and investment allocations.

Preparing to retire

There are many decisions to make at this time: when you might begin drawing down retirement assets, whether to change your investments to lower-risk assets, and more. When you talk with your financial advisor, you may want to discuss:

  • Healthcare needs (including retiree health insurance)
  • Income-producing investment vehicles
  • Tax rates and living expenses in your desired retirement location
  • Potential part-time work / other sources of income
  • Estate planning issues — like required minimum distributions (where you are required to begin drawing down retirement plan assets by April 1 of the year following the year in which you reach age 70 1/2, depending on your work circumstances).
  • Tax implications of withdrawals taken as a loan or for hardships

And of course, always keep an eye on your investment mix, to ensure that your portfolio is in line with any major life events that affect your goals or needs.

Want to get some Sensible Advice for retirement?

Contact Horizon Bank for a free investment review at to discuss your investment strategy, no matter what your current stage of life.

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