If you aren't getting the most out of your company retirement plan, you're leaving money on the table.
Financial Finesse, a company that provides retirement planning tools and education to businesses and government entities, held a training session this week for human resource professionals. Here are seven pieces of advice from CEO Liz Davidson that employees as well as employers will find helpful.
- Get an estimate. More than 60 percent of workers haven't attempted to figure out how much money they'll need to live comfortably in retirement. Find a retirement projection tool. Good resources include your employer's human resources department and the company handling your investments, or give Bankrate's calculators a try. Even if you are younger than 30, taking this step can help you get on track.
- Pay attention. Read up on your 401(k). Study its investment options. Consider taking a risk tolerance assessment to gauge what kinds of investments best suit your mindset. Balance or rebalance regularly to keep on the right track.
- Up your savings rate. How much you're saving is the one factor over which you have complete control. If your household income is less than $60,000 a year, it is particularly important to save something. Social Security will replace a substantial amount of your income, but you still need a cash cushion.
- Don't forget your spouse. You are in this together. Dual planning can increase your options and improve your situation.
- Avoid retirement plan loans. They reduce the likelihood that you'll achieve retirement security.
- Don't look at retirement planning in a vacuum. Consider all of your priorities and get advice about balancing these demands.
- Hold yourself accountable. Retirement is your responsibility. Save smartly, and the latter stages of your life will be much more comfortable.