Tag Archives: retirement

Retirement: What You Should Know

While retirement might sound lifetimes away, it sneaks up faster than you think. Many people wonder when to start saving for retirement, how to start, how much money they’ll need and more. We’ll answer those common retirement questions in this blog, so keep reading to find out more.

When to Start

The time is now! If you are earning paychecks, start saving for retirement as soon as you can. The sooner the better, and the main reason for this is because your money will have more time to grow. Compounding makes a huge difference, and those 5 or 10 years of extra saving can turn into tens of thousands of dollars more than you would’ve had before.

How to Start

Don’t be intimidated – you can start small and work your way up to saving more. Something is better than nothing, so even putting a couple hundred dollars into your retirement savings is a good start. The next step is to be consistent. Keep adding to the pile periodically and don’t tap into that money unless necessary.

How Much to Save

One general rule-of-thumb is to save at least 70% of your yearly salary for retirement. Another way to look at it is to save 10-15% of your income starting in your 20s. The amount you save depends on what you plan on doing once you’re retired. If you plan on traveling the world or buying a new sports car, your retirement fund will look different. It’s smart to have an idea of your retirement plans so you can adjust how much you save accordingly.

When to Retire

The answer to this is different for every person depending on your retirement plans and how much you’ve already saved. The average retirement age is 62, but many people retire earlier or later in life. Some people also enjoy working and staying busy, so working doesn’t really come with an age limit. Knowing what age to retire comes with lots of planning and financial analysis, so be sure to talk to an advisor to know if you’re on track.

What if You’re Falling Short?

If you’re saving like crazy but still won’t meet your retirement goals, it’s time to consider some alternatives. The most effective change to make is delaying your retirement by just a few years. Not only will this add to your fund, but it takes off a few years you would’ve had to pay for to make it through retirement.

As time goes on, retirement gets closer even when it seems far off. If you haven’t started saving already, it’s time to start!

Best Retirement Strategies for Your 20s

If you’re in your twenties and thinking about retirement, you are light-years away from your peers who wait until it’s too late. You’ll be so glad you started to take serious steps towards your golden years with these straightforward strategies.

1. Negotiate More

Your first job isn’t typically known to be a real money maker. You’ve been told to “pay your dues” and take the work for little pay. However, it is especially important for college graduates to negotiate for a higher salary. Whatever number you are thinking, add $5,000 to that salary. This is important because whatever salary you start with will follow you and be the basis for much of your career. You will of course get raises, but often, each new position you take is related to the salary you had prior. Start off high so you can begin investing greater now.

2. Automate Savings

It’s never easy to save and can be incredibly challenging if it’s saving for something that’s thirty years away. One way to take the struggle out of this is to have your savings automated. You can set a specific percentage to come directly out of each paycheck and into your savings account. It’s a painless way to force yourself to make wise decisions with your money.

3. Establish an Emergency Fund

While you’re saving for the golden years ahead, your plans can be easily derailed with a major financial emergency like a flooded basement or an unexpected medical procedure. Having an emergency fund in place will help to provide some cushion so you aren’t going into debt to cover these losses.

4. Start a Retirement Fund

Having a straightforward savings account for retirement is not the best way to make the most out of your money. You are going to want to invest in a retirement fund that’s built for growing your wealth over time. Most employers offer a matching 401(k) compensation plan as a part of the benefits. However, if yours does not, you can and should invest in your own Roth IRA.

5. Pay Off Debt

Debt of all kinds is crippling to millions of Americans at all ages. Those in their twenties average $20,000-$35,000 in debt. Debt should be paid off as soon as possible so you can begin investing in the things that matter most to you. You shouldn’t have to be constantly playing catch up, but instead, planting financial seeds for your future.

Continue to build your retirement funds with a CD or IRA from Heartland Bank!

Retirement Savings Made Easy

When you are in the early stage of your career, there’s usually lots of bills that add up. Things such as rent, student loans or car insurance can truly wipe out your bank account. We want to make sure you avoid excess financial stress, which is why we’re offering four simple strategies on how to start saving early for retirement.

Start small early on – The longer your money is invested, the more you can benefit from compounding. Compounding can turn small amounts of money into larger sums; it’s where you earn interest on the money you save and on the interest that money earns. It is best to start early, because the money you start to save will build up. Putting a small amount of money away can help establish a good savings habit — consistency is better than quantity early on!
Spend wisely – Create a budget for yourself so you can be better aware of your finances. At a younger age, you may think you have all of your spending under control, but seeing a breakdown on paper will make it much clearer — or if you’re tech savvy download a budgeting app! Seeing a breakdown of your finances can help you see what to cut back on and if your spending matches your priorities. Doing this can make it much easier to save for retirement.
Create a debt repayment plan – Student loans or car loans, whatever it may be, take control of your debt! That may seem easier said than done, but once you create a feasible plan you can be more in control of your finances. Now, paying off your debt does not mean holding off saving for retirement. Take a look at your monthly income and order your debts by priority. Once a plan is set in place, set a small amount of money aside for the future.
Your employer-sponsored plan is no joke – Whether it’s a 401(k), 403(b) or 457, it is a really good idea to look into the retirement plans your employer offers. You could establish automated contributions from your paycheck each month or max out company match programs, where employers will provide a percentage or retirement contribution up to a certain amount. This is an easy strategy to get started with – your Human Resource manager can help!

So is today the day you start to save? Whether you save 1%, 6%, or more, it does not matter. What matters is you finding a spot in your budget to save your money. In the end, you will thank yourself. With these four simple strategies, we hope you find success with your budget and saving for retirement!

How Much Money Do You Need to Retire?

Asking yourself how much money you need in order to enjoy a comfortable retirement is difficult. Although it may be a challenge to figure out how much money you’ll need, a true monetary amount is different for everyone. It depends on factors such as where you’ll live, how healthy you are, and what you want to achieve in retirement. For example: travel or try exciting, new adventures. Ultimately, it depends on your lifestyle. But, here are some general guidelines to help you refine your answer.

Figure out your living expenses.

It is best advised to figure out how much you’re actually spending now. Create a budget, (if you haven’t already) to keep track of all your expenses. Doing this gives you the opportunity to see how much you’ll potentially need for your future.

Aim for 80 percent.

Financial experts suggest that you will need at least 80 percent of your income during retirement. For instance, if your salary was $75,000 per year, you may need $60,000 per year when you retire. That amount will vary depending on what you plan to do for retirement — whether you plan to take vacations or retire elsewhere, but 80 percent is a good start.

Use an online calculator.

If you’re having trouble trying to figure out estimates in your head, try an online calculator. Often times they will be able to offer estimates for how much you need to retire. It will also be in your best interest to try a few different calculators because each of them vary on the information it collects — see which one works best for you!

Have retirement checkpoints.

You will always want to make sure you’re on the right track with how much you’re saving. It’s important to know where you stand, and what could be done to further your success. Checkpoints allow you to see how you’re doing based on the progress you’ve been wanting to make.

Save Save Save.

The best thing you can do is save — start early and stay consistent. Amounts will differ based on income, but if you have extra income coming in be sure to deposit it right into your retirement savings account. By saving at a reasonable or consistent rate, you’ll be able to keep an open mind about your retirement and hopefully avoid any situations where you fall short of money.

Saving for retirement may come as a challenge, but with these general guidelines, we hope to help you figure out how much you need to save for a comfortable retirement. Save what you can and decide what you want for your retirement lifestyle. We’re happy to help with any financial questions you may have, so contact us today!

Deep Cleaning for Retirement

It’s finally time! You’re getting close to taking a new path in life – but do you know where to begin? Retirement is an ideal time to declutter, as you may be downsizing or moving locations. Heartland Bank offers a few ways you can deep clean for retirement, so you aren’t left with a mess!

Turn Big Tasks into Smaller Ones

When beginning to downsize to a different home or clean out old tax returns, it is easy to get overwhelmed with the process. Try starting small instead of tackling everything at once. For example, when moving your clothes, start with winter outfits and move on to summer pieces once those clothes have been taken care of. A good rule of thumb is to donate any clothing you haven’t worn for a year, only worn once or never wore at all.

Drop the Small Expenses

Say goodbye to magazine subscriptions, cable, memberships, and any other monthly expenses that have been draining your account. If you really like your gym membership or can’t live without People magazine, you can keep it – just be sure to cut the costs on another item so you aren’t continuing to lose money. Your average cable can cost around $85 – 100 a month, so that is always a safe cost to cut when you have cheaper options such as Netflix and Hulu available.

Shred Old Documents

Go through old tax returns, pay stubs, important documents and any other papers you have been hoarding. Find the ones that you may need to keep and toss the rest. Be sure to shred all documents, as identity theft is on the climb. This will make you feel refreshed and help make your switch into retired life a little easier.

Change your Insurance Coverage

Once retired, you may have different options and benefits you can take. Talk with your bank about new savings options or look at different deals certain companies give retirees. Continue to review plan choices each year to find better pricing options. Insurance can be tricky once you don’t have your employer to go through, so be sure to go through all options slowly and ask questions when needed.

We believe these tips are a great way to start off your retirement! Cleaning out the clutter and preparing for this journey will only make the process easier. If you’re wondering what the next step is for you financially, feel free to give us a call or stop on in! We’d love to discuss your banking retirement options with you.

How to Save $1,000,000 for Retirement

retirement

Retirement, 401(k), stocks and bonds, the subject matter of saving for the long term isn’t often as appealing as saving for the short term. Perhaps that’s why nearly three-quarters of Americans are underestimating how much they’ll need for retirement. The United States is on the brink, if not already in, a retirement crisis. However, at Heartland Bank we believe retirement saving can still be easily accomplished, there are just a few steps to get started:

The first thing you’ll need to do is determine when and how you want to retire. There are an endless variety of retirement lifestyles, each of which entail a different budget and distribution structures. Some popular options include traveling by RV, retiring in a new location, downsizing your home in the same area, pursuing a new business or passion, and of course maintaining your current lifestyle without the need for work. By choosing your lifestyle goal we can begin to structure your savings plan around what you hope to achieve.
Once you know what you want, start saving ASAP. As the old adage goes, “Slow and steady wins the race.” This phrase is the epitome of retirement. If you save less, but start earlier you will consistently save more than if you deposited higher amounts later in life. We recommend utilizing any 401(k) or retirement savings plans your employer offers. If you are self-employed or don’t have access to retirement benefits, an IRA is a great self-funded option to help you save and take advantage of valuable tax incentives.
Create a goal for how much you need to save. Financial Mentor, offers great calculators to help you plan your path to retirement. They can help you determine your strategy to become a millionaire, or show you how much you may need beyond $1,000,000. Saving more than one million could be more pertinent than you think. Today’s research indicates that millennials may need to save more than their baby boomer or gen x counterparts.
Add any available surplus funds to your retirement savings. Simple adjustments like changing grocery stores, carpooling, and bringing your lunch to work can save more than you think! If you are able to find some additional ways to save, put those funds to work by contributing to your retirement accounts.
Diversify your retirement savings. Instead of putting all your funds in company stock, corporate shares, or your 401(k), we suggest diversifying your savings options to ensure your risk isn’t higher than you need. Speaking with a professional adviser could help you determine what type of risk you’re comfortable with, and how you would like your contributions to grow over time.

By continuing to save each and every month you can beat the odds and have a fulfilling and successful retirement. The most important thing to do is to start. If you’d like to open a dedicated savings account, IRA, or CD, our dedicated team is here to help. Stop by or drop us a line today to get started today.

How to Save for Retirement at Every Age

Retirement

How much do you need to retire? Will you continue working after age 65? Do you want to travel during your retirement? These are just a handful of questions that are important for retirement preparation. Unlike saving for a home or new vehicle, saving for retirement requires long-term commitment and goal oriented benchmarks. At Heartland Bank we want to help you succeed as you save, and offer these milestone marks:

Age 18-25: During this point in your life, you are discovering what you want to do, and how to get there. Focus on creating a solid foundation through a monthly budget, and designated emergency fund. If your employer offers a 401(k) option we highly recommend utilizing its potential by contributing the maximum amount your budget will allow. Always be sure to take advantage of a company matching policy if available.

Age 25-35: In addition to your 401(k), we also suggest opening an IRA. This enables you to continue to save without having your funds tied to an employer. Now is a great time to take advantage of other tax beneficial accounts, such as an H.S.A., 529, or Coverdell account. Both the 529 and Coverdell accounts aide you in saving for your child’s education without the burden taxes.

Age 35-45: One of the key aspects of retirement is making sure your money is where you need it when you need it. An experienced financial adviser can help you invest in appropriate stocks, bonds, and other financial strategies. Together you can construct a plan to ensure your risk decreases as you age, and be certain the funds you need are available upon retirement.

Age 45-55: Now is the time to examine your current career path, and determine the year at which you would like to retire. Although the average age of retirement is 66, this may not hold true for you. Whether you decide to retire later at 72, or earlier at 57, you’ll need to have this number available to help continue the development of your savings. To easily calculate your current savings projection, this tool can provide the most accurate information to help you make the most informed decision for your specific goal.

Age 55-66: During this time you may begin to qualify for distributions from your 401(k) and IRA. By postponing these distributions, you can continue to save, and work to build your retirement nest egg before you need it. Additionally, look into various employment options upon retirement. If you decide to work part-time for enjoyment, it could mean added savings to help you afford extra splurges in the future.

Age 66 and up: Once you have officially retired, you will begin to take distributions from your 401(k) and IRA. While both a 401(k) and Traditional IRA require you to accept funds after age 70 ½, a Roth IRA can remain untouched until you decide to use the money. For this reason, we recommend using a Roth IRA when your income levels allow.

We look forward to joining you on your journey to retirement. Whether it’s in 10 years or 50, it’s never too early to start saving!

7 Financial Goals to Make 2017 a Success

Personal Finances

Heartland Bank challenges you to make 2017 the year of financial prosperity. Complete with an emergency fund, sound credit, and a monthly budget, you can conquer any fiscal goal so long as you keep moving towards it. To optimize your money management potential, we recommend these seven goals:

Check Your Credit Score. There are many websites available which allow you to view your current credit score across the three reporting bureaus. However, the only federally authorized FREE site is com. This site gives users one free report from Equifax, TransUnion and Experian every year. By keeping regular track of your score, you can ensure that no fraudulent inquiries have been made, and no outstanding debts are currently being held against you. After all, a higher credit score could mean potential savings elsewhere.
Make a Monthly Budget. This tool is invaluable when building your personal financial success. By creating a plan for each dollar you earn you are no longer reacting to your spending, but proactively telling your money where it should go. Adding this transparency to your spending can often showcase areas where you may be spending more than desired. After adjusting your monthly allocations you can then reassign some of those dollars to help build your personal savings and other areas of improvement.
Automate Your Savings. “Out of sight, out of mind,” or so the saying goes. Adding processes to your budget, such as automated savings, can help you to accumulate money before you miss it. Before you start planning your spending for the month, determine how much you want to save. So long as your fixed monthly expenses are covered, you can then create an automatic monthly transfer from your checking to your savings. By doing this the same day you are paid, the funds will be gone before you even know to miss them. You can then budget the rest of your spending to cover flexible categories like groceries, entertainment, and more.
Start an Emergency Fund. In order to safeguard your savings, you’ll need to create an emergency fund. This particular account offers protection against unexpected expenses or dilemmas that could otherwise infringe upon your diligent accrual of funds. It is often recommended to begin by saving $1,000, and then gradually work up to three or six months worth of income. By adding this cushion to your personal finances, you ensure that you are financially stable enough to weather storms both big and small.
Submit Your Taxes Early. Tax fraud is an increasingly relevant issue, posing many problems for both the IRS and tax paying citizens. To help avoid potential criminals from using your information to their benefit, we suggest completing your tax return as soon as possible. Additionally, if you have a potential tax refund, the earlier you file your return, the sooner you are able to receive it.
Maximize Your 401(k). To make the most of your diligent savings, we recommend revisiting your HR materials, to find out the specifics of your company’s 401(k) plan. If they will match up to ten percent, and you’re only contributing six, you could be missing out on free funds! Additionally, if you want to retire by a certain age, you may need to adjust your contributions to maximize the years you still have during your employment.
Pay Down Your Credit Cards. Interest rates on credit cards are infamous for being consistently high. If you have multiple credit cards which carry a balance, we recommend paying down the account that has the least amount on it. By continuing to pay the minimum installment on each card, you can then assign any additional funds to the card with the lowest value, to help pay it off sooner. Once the first card is no longer carrying a balance, you can then utilize the monthly installment and the additional funds to put toward the next card and continue through the accounts.

How to Save $1,000,000 By Retirement

Retirement may seem an eternity away; however, even if it’s a dream 20 years down the road, saving for retirement shouldn’t wait until the goal is in sight. Rule of thumb says you’ll need $1,000,000 in savings to retire comfortably. Our experts at Heartland Bank recommend taking the following steps to save with the future in mind:

Determine when you want your $1 million. The typical age of retirement is 65, but you may be shooting for a few years earlier or later. Whatever the age affects how much you need to save each month, so calculate years left to save based on current age and breakdown monthly savings requirements thereafter.
Start saving ASAP. Compound interest rewards those that begin saving earlier rather than later. A $10,000 investment at age 25 could yield tens of thousands of dollars more by 65 than if that same $10,000 were invested at 35.
Spend less than you save. It’s basic math. You’ll have money left over only if income exceeds expenses. Buying a home within your range, purchasing cars secondhand, and paying for vacations out of savings and not on credit protects you from dipping into debt.
Opt for automatic. Research your employer’s 401k or retirement-based plans and determine what percent you’d like funneled from your paycheck and into your savings. If your employer matches contributions up to a limit, work to reach their maximum to maximize your savings.
Save beyond your 401k. Expect the unexpected. A flooded basement or dying car engine can send you spiraling out of your financial plan if you haven’t budgeted for rainy days. Set up a $1,000 emergency fund as soon as possible, and work to expand it to anywhere from 6-12 months of income to protect you from larger surprises, like medical issues or unemployment.

The road to a million takes time and discipline, but it’s exceedingly possible. For further savings strategies and investment options, make an appointment today to meet with one of our trained financial advisors.

3 Steps to a Successful Retirement

Retirement

A successful retirement plan involves extensive planning and lots of patience. Once accomplished however, you gain the benefit of watching your finances work for you! The average age of retirement is climbing. Currently averaging at age 62, reports speculate that the average retirement age may increase to 75 for recent graduates facing mountains of student debt. As in any successful game plan, the key is to have an effective and feasible strategy, here’s how to begin.

Start Saving Now

Even if it’s just a little at a time, saving 6% of your earnings annually can begin to set you up for a lofty retirement. Did you know if you save even 10% of your annual income you could save $1,555,000 and retire at age 70? (Based off of median salary of $45,478 and $35,051 in student loan debt.) Dig a little deeper and see what savings potential you have!

Hop on that 401k ASAP

Tucking away pre-tax money is like being asked if you want a puppy as a child, the answer is always yes! By using this valuable system you are able to put a percentage of your annual salary away without having to pay taxes on it that year. Generally employers may match a percentage of your contribution, so if you put 6% of a $45,000 salary ($2,700) into a 401(k), and your company contributes 3% additionally ($1,350), you would yield a yearly contribution of $4050 towards your retirement! Another perk of utilizing a 401(k) is the change in your taxable income. The amount that you invest in your 401(k) is deducted from your taxable income reducing the final amount you pay on your yearly income tax. (Example: $45,000 – $4050 = $40,950)

Grow a Diverse Portfolio

Ensuring your finances’ diversity is a large component to a successful retirement. The saying “Don’t put all your eggs in one basket,” is the epitome of investing. By creating an investment plan that entails stocks, bonds, equities and more you are able to gain the benefits and financial buffers that each individual product provides. Additionally this allows you optimize your savings, ensuring the gain and profit generated from each asset goes towards to your growing retirement fund.

Use these simple tips from Heartland Bank to help bolster your retirement nest egg! Stop in or give us a call at (515) 352-3181 to learn more today!