Not Prepared for Retirement? Join the Club

03 June 2015

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Haven’t thought much about retirement?  You’re not alone.

The Federal Reserve just released its comprehensive report on the financial well-being of Americans[i] and the results are noteworthy.  The study covers a number of financial subjects that affect Americans at all income levels such as savings, credit, debt, student loans, homeownership, banking habits and retirement.

 When it comes to the retirement years, the reported outlook for the lower income people isn’t terribly golden.   55% of those surveyed who make less than $40,000 per year say that they plan to work as long as possible or not to retire at all.  In that same group, over 50% have given no thought or very little thought to retirement.   An unsettling 58% of workers making under $40,000 have no retirement savings at all.  The average life expectancy for a person born in 1995 is around 82 years, and if they make it to age 70, they are expected to live to nearly 90 years.  While many lower income folks today might envision themselves “working forever” it’s quite possible they won’t be able to, and they may only have their limited social security income to rely on.  That’s why it’s more important than ever to encourage everyone, no matter what their income is, to contribute to a retirement account.  Don’t have a 401K plan or enough to start an IRA?  Look no further than the myRA, a U.S. Treasury-backed retirement savings account that follows you from one job to the next—and you can deposit as little as $5 per paycheck through direct deposit. 

A 40 year old worker earning $30,000 per year who starts putting aside 10% of her salary now and every year into a 401K earning 7% will have just over $310,000 by the time she’s 67.  That same worker who starts contributing to retirement 15 years earlier at age 25 will have over 1 million dollars.  It’s the power of saving early, saving steadily, and compounding interest.  If you’ve got a retirement plan at your workplace but you haven’t taken the time to set up an account, do it now—you won’t regret it.  And, if you don't have a plan at work  check out myRA on line at www.myra.treasury.gov.

 

Our Locations

Washington County

20 Gable Place, Barre, VT 05641
1-800-639-1053 or (802) 479-1053

Lamoille County

250 Industrial Park, Morristown, VT 05661 1-800-639-8710 or
(802) 888-7993

Orange County East

P.O. Box 500, 22 Whistle Stop Way, Bradford, VT 05033
(802) 222-5419

Orange County West

PO Box 284, 12 Prince Street, Randolph, VT 05060
1-800-846-9506 or (802) 728-9506

Mad River Valley

Waitsfield United Church of Christ, 4335 Main Street, Waitsfield, VT 05763
802-496-6900


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