5 Simple Steps to Secure Your Retirement

5 Simple Steps to Secure Your Retirement

January 13, 2021

Tagged As: Wealth Management

Saving for retirement doesn’t need to be complicated. Just follow the five simple steps below to position your portfolio for success when you’re ready to retire.

Are you contributing to your company’s 401(k) plan?

If not, sign up now to secure your retirement. See your Company’s Plan Contact to obtain the enrollment kit.

Don’t sell yourself short by not saving enough!

Experts suggest you should aim to save between 10%-15% of your income each year for retirement. The good news is this goal includes any contributions you get from your employer. Invest wisely for the long term. Financial Planning experts recommend your allocation to stocks should be equal to 110 – your age (example 110 – 35 years old = 75% invested in stocks). Another great way to invest for the long term is to select a Target-Date Fund option. You could simply select the fund with a date that closely matches the year you will attain age 65 or full retirement age. You can make changes to your investment selections online or by completing a Hills Bank Investment Election form.

To Roth or not to Roth.

The earnings for a Traditional 401(k) grow tax deferred, and a Roth 401(k)’s earnings grow tax free. Distributions from a Traditional 401(k) are subject to income taxes at ordinary tax rates, while distributions from a Roth 401(k) are potentially income tax free. Though a Traditional 401(k) offers immediate tax savings, consideration should be given to balancing immediate tax savings with the potential income tax impact of later distributions. Perhaps the real question should be, is it better to pay taxes now in a Roth 401(k), or pay taxes later in a Traditional 401(k)?

Don’t delay, increase today!

Review what you are saving and consider increasing your contribution. No one has ever said “Wow, I have too much money. I wish I had not saved so much!” Evaluate how much you are saving each year and consider increasing your 401(k) contribution by 1-2%. To learn more about how you can maximize your 401(k) plan options and for a free Financial Check-Up, call Hills Bank at 1-800-899-8858, email trust_rps@hillsbank.com, or visit us online at www.HillsBank.com/WealthManagement.

Investment products are not a deposit, not FDIC insured, not insured by any federal government agency, carry no bank guarantee, and may go down in value.