Losing Sleep Over Retirement Savings? Here’s How to Destress and Save Smarter

When your head hits the pillow at night, do you find yourself anxious about the future – and about your retirement savings in particular? Maybe you don’t have a retirement fund set up. Or maybe you have some savings but aren’t necessarily on track. No matter where your starting point is, you’re not alone in feeling stressed or overwhelmed. In fact, over half of Americans lose sleep over retirement.¹ Thankfully, there are things you can do to mitigate this stress and set yourself up for years that are truly golden. 

Make a plan 

If your mind races at night, it could be because you have a lot of unanswered questions about the future. These may include: 

• How much do I need to retire?
• What lifestyle do I want in retirement? 
• Am I on track for retirement?
• When should I retire? 
• How much do I need to save every month, year, etc…?
• What accounts should I be saving in? (Jump to the next section for more guidance) 

Brainstorm and write down all the unknowns. Then, start working to answer them. This will involve some research on your part. For example, you may need to use an online retirement calculator or consult a financial advisor. 

Understand your account options

401(k)s

A 401(k) is a tax-advantaged, employer-sponsored retirement account. Employees can elect to contribute a percentage of their income to their account. These funds won’t be taxed until they start taking withdrawals in retirement. Contributions are also beneficial because they lower an individual’s taxable income during the year, though the IRS does have caps on how much someone can contribute to a 401(k). 

If an individual changes jobs, they can’t continue making contributions to an account sponsored by their former employer. As well, some employers may match an employee’s contributions but have requirements that must be met before they own the matched funds. For example, they may require five years of employment before an individual is fully vested in the plan. 

Individual retirement accounts (IRA)

IRAs are not tied to employment, which may make them a better fit for individuals who don’t have retirement benefits through their work, like freelancers or contract workers. Stay-at-home parents have options, too, in the form of a spousal IRA. 

Individuals with a 401(k) can still open and fund an IRA. Having both can be beneficial because it gives them more investment options. Depending on the type of IRA, they can also score tax-free income in retirement. That’s because contributions to a Roth IRA account are taxed upfront. Then, once retirement hits, accountholders can make tax-free withdrawals. 

Prioritize saving 

Calculate what you have leftover after paying for monthly necessities, like rent or a mortgage payment, utilities, and groceries. Then, gauge whether you can reasonably increase the amount you’re contributing to retirement accounts. Maybe you currently contribute 5% of your monthly income but can manage to increase this to 10%. This will limit your spending money, so be prepared to make some sacrifices. 

A financial advisor can help you identify the right investment options for you based on your age, risk tolerance, and financial goals. General Electric Credit Union (GECU) members have access to a no-cost consultation with Investment Services, available through CUSO Financial Services, L.P. (CFS).² They’ll help you find answers to your most pressing retirement questions and walk you through the intricacies of saving for retirement.