This month has been an exciting one at Bank Midwest. Five of our team members are retiring, and while we’re sad to see them go, we’re also excited for what’s in store for them in the years to come.
Retirement is a tough decision to make. It’s important to be ready for it emotionally — after many decades growing your career, walking away from the workplace can be difficult. It’s also important to make sure you’re financially prepared. Leaving the workplace means you’ll be relying on the money you’ve saved throughout your lifetime to support yourself, rather than earning money each day you go into the office.
Since the choice to retire is such a complicated one, it’s important to plan it out well. Here are some things our own Bank Midwest employees consider when they are planning for retirement:
1. Look for retirement saving resources at work.
Help in retirement savings is available to many workers in America by way of employer-sponsored retirement plans. For many, this is the easiest way to begin saving for retirement because it’s relatively easy to begin.
If your employer offers a match, enrolling in the 401(k) plan isn’t just an easy way to save; it’s perhaps the best way to get ahead. Some people call the match “free money,” but U.S. News & World Report noted that Scott Dougan, co-founder of Retirement Elevated, a financial education program, sees the employer match a little bit differently.
“To me, it’s not free money,” he explained. “It’s already calculated into a compensation package.”
According to Dougan, by not opting into the employer match program, you’re missing out on a portion of your deserved compensation.
2. Calculate how much retirement will cost.
One of the biggest surprises seniors discover after leaving the workforce is the cost of retirement itself. According to recent data from Merrill Lynch, 81 percent of Americans don’t know how much they’ll need in retirement. Additionally, a recent survey from the company found the typical retirement costs $738,400. Further, Fidelity estimates the average couple that retired in 2016 will spend $260,000 on health care.
Before you enter retirement, determine how much you’ll realistically need, how much you have saved and how much you’re lacking. Then, make changes to your savings strategy as needed.
3. Think about what you want to accomplish in retirement.
Retirement can mean many things, depending on who you ask. For some, it means becoming a globetrotter, exploring the planet and seeing unique sights. For others, it’s an opportunity to boost their volunteerism and give back to their community. Still others like to spend their retirement relaxing with friends, new or old, and family.
Before entering retirement, decide what you want to do. Then, begin planning for it. For example, if you want to explore unfamiliar countries or corners of the U.S., begin saving now. Also, you might consider getting a new credit card that offers great airline mile benefits. Or, if you’re planning on downsizing to make housekeeping easier in retirement, now might be a good time to prepare to sell your home or inquire about reverse mortgages.
Retiring is an exciting milestone to reach, but it’s important to be prepared for it when you get there. If you have questions about saving for retirement, the professionals at Bank Midwest are always happy to help.