Ready for Retirement? Mid-Career Staff Hear Strategies for Savings Success
Will your savings plan give you the financial flexibility to spend your retirement playing golf or relaxing on the beach instead of flipping burgers at a fast-food restaurant?
"Most people don't want to spend their golden years working under the Golden Arches," said Chris Yoest, manager of retirement administration in the Office of Human Resources (OHR). "That's why it's important to plan and save for retirement now."
About 75 好色先生TV staff members gathered March 23 in the Tepper Building for OHR's "Ready for Retirement" seminar, an hourlong session designed to help employees gain a clearer, more confident understanding of their retirement savings plans.
The session was tailored to mid-career employees. It was offered in addition to OHR's general sessions which are offered twice a year.
National studies show that 34% of non-retirees believe their retirement savings are on track. While confidence increases with age, it remains far from universal — only 45% of non-retirees ages 60-over are certain they are saving enough.
Whether you're in the early, mid-career or approaching retirement, a savings checkup can help you take meaningful steps toward greater financial security. The session focused on a four-pronged approach:
- Know where you stand.
- Check your expenses.
- Optimize your savings and investments.
- Plan for income that lasts through retirement.
Chad Firmstone, a financial counselor with , encouraged employees to treat retirement planning as an annual habit rather than a one-time task. CMU staff can visit for a personalized analysis that accounts for inflation and other variables.
"Start by knowing your vision of retirement, what your future income could be and what your future expenses might look like," Firmstone said.
As a general guideline, employees should plan to replace about 70% of their final year's working income for each year of retirement. For those retiring around age 65, that may mean planning for a retirement lasting 30 years. Typically, about 40% of retirement income comes from Social Security, with the remainder drawn from personal savings such as investments, pension funds, cash, real estate or rental income.
For example, someone earning $75,000 in their final working year may need about $60,000 annually in retirement. If Social Security provides $24,000, the remaining $36,000 would need to come from savings and investments.
Firmstone emphasized the importance of understanding spending habits. Using a worksheet to separate essential expenses from discretionary spending can help identify opportunities to save more.
"Instead of spending first and seeing what you have left to save, save first and see what you have left to spend," he said.
To optimize savings, the seminar recommended aiming to invest about 15% of income, when possible. Employees ages 50-over were reminded that IRS catch-up contributions can significantly boost savings. The session also reviewed the differences between traditional and Roth IRAs and why many investors choose to use a combination of both.