Alert

If you are experiencing problems with online and mobile banking, most issues can be resolved by clearing your cache. CLICK HERE for instructions. We apologize for any inconvenience.

close
community blog
magSearch
community blog
print this page email link of this page Online Banking Login

Published July 19, 2018

Planning for Retirement: An Introduction

Identity Theft

Even if you truly love your work, the day will come when it’s time to punch out for the last time and start your retirement. And when that day comes, you’ll want to have a robust financial plan in place.


Your primary financial goal throughout your work years is to amass enough in savings to support that plan — to sock away enough money to support your lifestyle without a steady paycheck. But saving as much money as possible is just the beginning: You’ll also need to account for taxes, determine which investments will best grow your money, account for other sources of retirement income, and plan for retirement expenses.

Here are the basics of planning for retirement.


Retirement Accounts

Saving a lot of money is a must. Most experts agree that you should save at least 10 percent of your income every year, and many suggest pushing that to 20 percent, if possible. But it’s not just about how much you save—it’s also about where you save it.

Over the last few decades, congress has attempted to incentivize retirement saving by allowing for the creation of special tax-advantaged retirement account. The most popular is the 401(k), which is offered by most employers, and allows you to contribute pre-tax dollars toward your retirement with every paycheck. Many employers also offer to match a certain percentage of your contributions, which essentially amounts to free money.

Other retirement accounts can be opened independent of your employer. The most popular is the Individual Retirement Account, or IRA. The “Traditional” variety of these accounts is similar to the 401(k), in that money can be contributed pre-tax; donate a few thousand dollars to an IRA, and the money can be deducted on your taxes. The other variety of IRA is the Roth IRA, in which money is contributed post-tax—that is, you can’t take a tax deduction on it—but then grows and can be withdrawn tax-free in retirement.

Investing Your Savings

It’s not enough to just save a bunch of money in a tax-advantaged retirement account. To make sure that your money grows and multiplies, you need to invest it. In fact, if you fail to invest your money, it will essentially shrink in value, because it won’t keep pace with inflation.

So what should you invest in? Stocks, mostly—especially when you’re younger. Investing in the stock market is the best, most consistent way to grow your money, and money invested in the stock market has grown, on average, between 7 and 10 percent a year (depending on how you do the math). Of course, the stock market is not without its risks, and sometimes it goes down.

That’s why a mostly-stock portfolio is best when you’re younger, and you’ve got time to make up any losses you might incur in the market.

As you grow older, you should allocate more of your savings toward safer investment like bonds, so you don’t risk losing a bunch of money in the market just before you retire.

Rather than directly play the stock market with your retirement savings, you’ll likely want to put most of your money in mutual funds and/or ETFs. While some of these are actively managed by fund managers who try to “beat the market,” others are more passive in their approach. Whatever you choose, you can select investments through your 401(k) provider or the brokerage in which you set up your IRA.

Your Retirement Income and Expenses

The money that amasses in your retirement accounts will eventually form the basis of your retirement income; once you reach retirement age, you can begin withdrawing money from those accounts as income.

But 401(k)s and IRAs aren’t the only sources of retirement income. Some people—mainly those working in the public sector—will have a pension instead of a 401(k), providing them with a guaranteed income stream determined by their previous income and years of employment.

But pensions are increasingly rare. What’s not rare is Social Security, which provides a regular check from the government; the longer you wait to start claiming it, the larger your check will be. Even though it comes from the government, be aware that it’s still subject to taxation.

Beyond that, there are other ways to set yourself up for retirement income. One such way is an annuity, a type of life insurance product that provides for guaranteed income over a given period of time.

A good financial plan will account for these various sources of retirement income, and consider how they meet your income needs. That last bit is important, as your expenses will likely look very different than they did in your working years! For instance, by the time you reach retirement your home mortgage may be paid off, significantly decreasing your housing expenses. But the amount you spend on medical bills will likely go up as you get older. Your retirement plan should anticipate your income needs, and make sure your various sources of income cover them.

To recap, here are the basics of planning for retirement:

  • Save a bunch of money
  • Put it in tax-advantaged retirement accounts
  • Invest that money in the stock market, adjusting asset allocation as you get older
  • Consider your retirement income needs
  • Use your savings and other income sources to meet those needs


Those are the basics of saving for retirement, but there are plenty of crucial decisions to be made along the way such as: When to take Social Security, what types of investments to buy, which retirement accounts to use, and more.

Use the links here and here to guide you through these decisions... and toward your dream retirement.

 

© Copyright 2018 The Balance. All Rights Reserved.

April 22, 2019

Earth Day Tips to Save Money (and The Planet!)


Earth Day!
Earth Day is a great time to start thinking more about the environment and all the little things we can do to make the world a better place. Being more environmentally conscious is the right thing to do. However, did you know that living a more eco-friendly lifestyle can help save you money, too?

Continue Reading

April 10, 2019

Why Your Online Privacy Matters


Privacy Matters
On the Internet, data has high value. It’s stolen, sold, collected and analyzed.There are many facets to privacy. There’s what you do, and who you are. Who you are is your personally identifiable information (PII), which is as it sounds—your name, date of birth, address, Social Security number, phone numbers and more...

Continue Reading

March 27, 2019

How to Create Your First Financial Plan


Paycheck to Paycheck
Structure is the key to growth. Without a solid foundation – and a road map for the future – it’s easy to spin your wheels and float through life without making any headway. Planning allows you to prioritize your time, plot your future and measure the progress you’ve made...

Continue Reading

March 13, 2019

Living Paycheck to Paycheck? Regain Your Financial Independence


Paycheck to Paycheck
If you aren't currently living paycheck to paycheck, chances are you know someone who is. A 2018 Survey by CareerBuilder found that 78% of U.S. workers are living paycheck to paycheck, and more than 25% do not set aside any savings each month...

Continue Reading

February 27, 2019

How to Choose the Charity That’s Right for You


Choosing a Charity
For many of us, the desire to help those less fortunate comes from how we were raised. If your parents gave to charities, chances are good that you will too. Giving is nurture, not nature, so if you come from a giving household, supporting charities might very well be part of your mental DNA...

Continue Reading

February 13, 2019

Debunking Credit Score Myths


Credit Score Myths
Improving your credit is possible, but it’s hard to know where to start. There is a lot of misleading information out there, and these credit myths can get in the way of improving your credit score...

Continue Reading

January 30, 2019

It’s Tax Identity Theft Awareness Week — Are You Ready?


Tax identity theft
Ready for tax season? If you haven’t heard about tax identity theft, you may not be.This week is Tax Identity Theft Awareness Week. Tax identity theft happens when someone files a phony tax return using your personal information — like your Social Security number — to get a tax refund from the IRS...

Continue Reading

January 23, 2019

9 Housing and Mortgage Trends to Watch for in 2019


Housing and Mortgage Trends
It’s going to be a challenging year for homebuyers in 2019: They will continue to compete for a short supply of homes. Home prices and mortgage rates are likely to keep moving upward, bruising affordability....

Continue Reading

January 3, 2019

Meriwest Credit Union Exemplifies the Credit Union Motto of “People Helping People”


People Helping People
As a local, community-based credit union, Meriwest knows first-hand that the closer you are to a community the better you’re able to understand their needs—and with 2019 kicking off, we can now reflect on the impact that Meriwest Credit Union and our employees have had on the community...

Continue Reading

December 26, 2018

5 Top Habits to Help You Stress Less About Your Finances


Habits to help you stress less about finances
If your finances are a constant source of stress and anxiety, you’re certainly not alone. In fact, 40 percent of American adults say they would have a tough time covering an unexpected expense of $400 or more, according to the Federal Reserve’s Report on the Economic Well-Being of U.S. Households in 2017...

Continue Reading

December 5, 2018

How to Set Yourself Up for Success During the Holidays


Success During the Holidays
What’s in store for your credit this holiday shopping season? Holiday shopping season is upon us. Whether you’re looking for a good deal on something you’ve wanted for a while or finalizing a list of gifts, there’s one thing you may not be paying enough attention to: your credit...

Continue Reading

November 21, 2018

What Are the Benefits of CO-OP Shared Branches?


Benefits of Co-op branches
Credit unions have a reputation for community involvement, but they also have an extensive national footprint. That’s good news for customers at many credit unions, who have access to thousands of branch locations through CO-OP shared branches...

Continue Reading

November 7, 2018

7 Habits of Highly Successful Savers


7 habits of highly successsful savers
For more than 25 years, CEOs, business leaders, and entrepreneurs have cited Stephen Covey’s The 7 Habits of Highly Effective People as the business book that transformed their thinking and launched their success...

Continue Reading

October 24, 2018

How to Create a Budget You Can Live With


Creating a budget
"From writing your budget down on a pad of paper to using electronic spreadsheets that are available on the Internet, there are many different ways to create a personal or family budget. But a budget, whatever form it takes, will be meaningless if you can’t or won’t live within your means...

Continue Reading

October 10, 2018

How to Create a Resilient Retirement Plan


Living at home?
"If you can’t change it, change the way you think about it."Resilience is defined as the ability to deal with life events and essentially “roll with the punches.” When you take a few moments to think about all the events that challenge our resiliency the list of those life experiences can appear to be quite extensive...

Continue Reading

September 26, 2018

Living at Home? It’s a Smart Way to Chart a Financial Future


Living at home?
If you are a young Millennial living at home with your parents, you’re not alone. According to Pew Research people 18 to 34 years old who are living with one or both parents is now the most common living arrangement for this age group – 32 percent of Millennials are doing it...

Continue Reading

September 12, 2018

What Are Credit Unions And How Can They Help You?


Credit Unions
The euphoria of getting a paycheck has probably been tempered with the reality of bills and savings. Car payments, rent, student loans, saving up to buy a house, all of that counter-balances the excitement of earning real money for the first time...

Continue Reading

August 30, 2018

Is It Safe to Bank on Wi-Fi?


Public Wi-Fi
Wi-Fi makes it easy to access information and do business online — whether you’re around the house, around town, or anywhere around the world. But just because it’s easy doesn’t mean it’s a great idea...

Continue Reading

August 15, 2018

How to Use Credit the Right Way


Your Credit
When you’re working to build or rebuild your credit history, how you use credit is everything. It’s important that you use credit the right way to build and maintain a good credit score...

Continue Reading

August 1, 2018

The Most Important Rule of Investing


Identity Theft
There's one golden rule that you should always keep in mind and observe when you're investing: Never invest money that you can't afford to lose. Investing is not saving. There's a significant difference between saving and investing...

Continue Reading

July 19, 2018

Planning for Retirement: An Introduction


Identity Theft
Even if you truly love your work, the day will come when it’s time to punch out for the last time and start your retirement. And when that day comes, you’ll want to have a robust financial plan in place...

Continue Reading

July 3, 2018

How to Protect Yourself From Identity Theft


Identity Theft
A financial plan gives you a road map for handling your money in a way that cuts stress and builds security. It’s crucial for meeting goals, such as buying a house or creating a nest egg that will last long after you’ve collected your final paycheck...

Continue Reading

June 18, 2018

How To Make a Financial Plan


Financial Plan
A financial plan gives you a road map for handling your money in a way that cuts stress and builds security. It’s crucial for meeting goals, such as buying a house or creating a nest egg that will last long after you’ve collected your final paycheck...

Continue Reading

June 5, 2018

Should You Rent or Buy a Home?


Buy or Rent?
Homeownership was once the cornerstone of the American Dream, but times are changing. More U.S. households are renting today than at any point in the last 50 years, according to a Pew Research Center analysis. For many people, the comforts of home include a well-funded bank account...

Continue Reading

May 22, 2018

The Huge Expense of Cultural Norms


The Cost of Cultural Norms
Having a big wedding. Going out to the club with friends. Exchanging gifts at Christmas with extended family. Going out for dinner. Driving a shiny new car. Living in a bigger house than necessary. Going out for drinks. Wearing makeup and jewelry...

Continue Reading

May 8, 2018

The Five Enemies of Your Financial Success


Enemies of Financial Success
The path to financial success is actually surprisingly simple.Spend less than you earn. Do something sensible with the difference.That’s it. If you do that each month, each year, each decade, you’ll have quite a lot of financial success. Debt will melt away...

Continue Reading

April 9, 2018

National Credit Union Youth Month: The Science of Saving


The Science of Saving!
This April, we are celebrating National Credit Union Youth Month and we encourage you to bring your children into any of our branches to learn more about the Science of Saving. Saving your money isn’t always easy, especially when you don’t have a lot to spare...

Continue Reading

March 27, 2018

What to Do if Your Aging Parents Are Going Broke


Family Money Issues

It’s a money leak that no one’s talking about: Nearly one in four Americans helps support a parent financially, according to a Care.com survey. But most families don’t discuss the issue — or the dollars involved — until a health or other crisis arises, says Jody Gastfriend, vice president of senior care at Care.com.

Continue Reading

March 15, 2018

This Simple Rule Tells You Where to Put Your Retirement Money


What's Your Plan for Retirement

IRAs. Roth IRAs. 401(k)s. SEP IRAs.

Simple IRAs. Considering all the different types of retirement accounts can get a little dizzying. With all these options, where should you be socking away your retirement dollars?

Continue Reading

February 28, 2018

The Disasters That Can Ruin Your Finances (and How to Avoid Them)


Avoiding Financial Disasters

To protect against floods, some people build houses on stilts or pilings. For tornadoes, there are storm cellars. And in the event of a fire, most buildings have (mandatory) smoke detectors and fire extinguishers. There’s no doubt the idea of a disaster can be terrifying, but in many cases they can be avoided—or at least insured against—with some smart planning...

Continue Reading

February 13, 2018

Charity of the Month: Abode Services


Helping Adobe Help the Homeless

“Abode Services is one of the largest and most effective nonprofits fighting to end homelessness in the Bay Area” says Abode Services Community Landlord Retention Coordinator Audrey Kwon.

Continue Reading


February 1, 2018

How to Open a Credit Union Account


How to open a credit union

Credit unions are a great place to keep your money and get loans. They’re usually a safe bet for finding free checking, and rates on savings accounts and loans are competitive. What’s more, these institutions are typically local, so they keep money (and their attention) in the same community you live in...

Continue Reading

January 17, 2018

Parent Trap: Supporting an Adult Child Will Cost Both of You


parent trap

You can’t blame parents for wanting to help their adult children. But when they fork over cash for their kids’ daily living expenses, parents may jeopardize their children’s long-term financial success — and put their own retirement at risk..

Continue Reading


January 8, 2018

5 Homeownership Changes Coming Under New Tax Law


Home Ownership Changes

Will the new tax law save you money or cost you money? The answer depends on a complex array of factors that touch on just about every aspect of your financial life. This article is about a subset of your finances: How the tax law will affect homeownership and mortgages...

Continue Reading


September 11, 2017

Charity of the Month Thomas Russell Middle School


Charity of the Month Thomas Russell Middle
It’s that time of year again! School is back in session. During the month of August, Meriwest Credit Union’s Milpitas branch was busy getting hundreds of students ready for the new school year...

Continue Reading


September 8, 2017

Equifax Data Breach What Can Consumers Do


Equifax Data Breach
Equifax has reported that a giant cybersecurity breach compromised the personal information of as many as 143 million Americans — that’s almost half the country...

Continue Reading


August 17, 2017

Millennials Fuel Mortgage Growth


Millennials Fuel Mortgage Growth
Did you know that economic trends in residential real estate suggest opportunities ahead in mortgage lending? In 2017, there will be more qualified borrowers, more buyers looking for a home, more new homes, and more refinancing for home improvement...

Continue Reading


Join Now
You can also call us at 877-MERIWEST (877) 637-4937