by Sara Gilbert, GreenPath manager, Colorado and Wyoming

Did you know this week is National Retirement Planning Week?

National Retirement Planning week is supported by the National Retirement Planning Coalition - a group of prominent education, consumer advocacy and financial services organizations to raise public awareness of the need for comprehensive retirement planning. You can find more information at www.retireonyourterms.org

According to a recent survey, forty-nine percent of Americans are unsure of their ability to be able to retire someday.

Sixty-two percent of Americans do say they plan to work longer so that they can have a more comfortable retirement but in reality half of retirees actually retired sooner than expected due to health issues or loss of employment.   Here are some ideas to help you focus on your retirement savings plans.

Obviously, starting early is the best solution to having enough saved for retirement.  If your employer matches a certain percentage of your income that you deposit to an employee retirement fund, be sure to take advantage of this.  The recommended amount to save is 10-15 percent of your income starting in your 20’s though lifestyles and your age need to be factored into this amount.  But, even if you can’t afford much, start small and decide to begin. Even $50 per month with a plan to increase this quarterly or at the very least annually will get you started and eventually help you to get to a sufficient amount of retirement savings without too much stress on your monthly budget.   Starting and then building on your success is better than never saving.

Educate yourself on the basics of retirement planning.  Use the adviser connected to the work plan if you have one or find one in the community.  They can help you identify your risk tolerance for your investments and make sure that you are diversified and protected as much as possible from market fluctuations.  If you are seeking advice of a local investment adviser, the US Securities and Exchange Commission require brokers and investment advisors to be licensed and registered.   You can check this out at http://www.sec.gov/investor/brokers.htm.   

Avoid borrowing from your 401k retirement plan.  51 percent of those having a 401k retirement account have borrowed from their retirement fund and this can cause long term problems for your retirement goals.  Initially this may seem like a good idea because you do repay the loan with the interest you pay coming back into your investment.  But if you lose your job, the balance you owe will become due in full immediately and most of us wouldn’t have a way to pay that back during a period of job loss.  You will then be considered to have taken an early withdrawal and have taxes to pay on the money in addition to a 10 percent penalty for taking funds out before the allowed age of 59 and a half.   You also lose out on market conditions and the possibility that your investment is experiencing a high rate of return while the money is on loan to you. 

Another way to be ready for retirement is to pay off debt and avoid debt when possible.  Entering the retirement years with credit card debt, car payments, or even a house payment can reduce your lifestyle choices in retirement significantly.  Carrying lots of debt throughout your earning years will certainly affect how much you can save for retirement.  Do everything you can to banish debt from your life.    As you pay things off you can increase your retirement savings.    

Getting right with your retirement goals won’t happen overnight. Get on track to make better choices over time.  You’ll be grateful someday that you did!

Read more on retirement savings options by visiting GreenPath University, or clicking here.