• March 12, 2024
  • Posted by General Electric Credit Union
  • 6 read

Are You on Track for Retirement?

Do you lie awake at night thinking about the future? If so, your retirement savings may be a part of why. The best way to address these feelings of unease is to evaluate the status of your saving efforts. You may find you’re on track and can rest easy—or that you stumbled somewhere along the way and need a new strategy. With the amount you need to save being no small sum, the plan you put into place will help you track progress, stay motivated, and meet goals. But first, you must determine where your starting point is. Use this guide to gauge your retirement readiness.

Retirement needs and income 

First, calculate your expected retirement expenses, considering factors like housing, healthcare, and leisure activities. This may be difficult depending on how far off you are from retirement. Thankfully, there are many online retirement calculators you can use to better understand your needs—even if it’s far off in the future. 

Next, familiarize yourself with retirement income sources, such as pensions, Social Security, and other investments. In doing so, you’ll have a better idea of the income options available to you and can even build them into your strategy. 

Current savings

Take stock of your current retirement savings, including any employer-sponsored plans, individual retirement accounts (IRAs), and other investments. Evaluate the performance of your investments and determine if they are on track to meet your objectives. If you’re uncomfortable reviewing these accounts alone, a financial advisor can offer guidance and insight. They can analyze your asset allocation and provide recommendations based on your risk tolerance. 

Once you know how much you have saved or how your accounts are performing, it’s important to regularly monitor progress and adjust contributions as needed. For the latter, you should calculate how much you're currently saving for retirement as a percentage of your income. The general rule of thumb is to save at least 15% of your income for retirement, but this can vary depending on your age, income level, and other factors.

Determine your retirement age

The age you want to retire will impact how much longer you have to save. The longer you work, the longer your savings have time to grow, and the less time you'll need to support yourself from your savings. To determine what age you want to retire, consider the following factors: 

  • Financial readiness. Assess the size of your retirement savings, projected expenses, and income sources such as pensions and Social Security. Reflect on your desired lifestyle in retirement, including travel plans, hobbies, and family obligations.
  • Health and longevity. Consider your health status, life expectancy, and potential healthcare needs in retirement.
  • Social Security benefits. Understand how your retirement age impacts your Social Security benefits and whether delaying retirement can increase your benefits.
  • Early withdrawal penalties. Be aware of any penalties associated with early withdrawals from retirement accounts and factor this into your decision. Consult the IRS website for the most up-to-date information about early withdrawal penalties and exceptions. 

Once you know when you’d like to retire, you can base your projections on this timeline. You may realize the amount you’re saving per month isn’t enough to stay on track, or that you need to move the goal post further out. 

If you're unsure about your retirement savings or need help creating a plan, consider seeking advice from a financial advisor. They can provide personalized guidance based on your individual circumstances. General Electric Credit Union members can schedule a consultation with Investment Services, available through CUSO Financial Services, L.P. (CFS)1 to gain a better understanding of their retirement readiness. 

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