Tag Archives: retirement accounts

retirement

Saving for Retirement: How Much Is Enough?

Over the years, we put away money for important events such as a baby, college tuition, a new car or house. Those tangible items make it worth the amount we set aside. However, retirement is a harder concept to grasp, as it is far off into the future. For this reason, we wanted to help shed some light on how much is actually enough when saving for retirement.

How much do I save at my age?
Trying to figure out how much to save at any age can be tough, especially when saving for other items. A good rule of thumb for your 20s is to save 10% of your pre-tax income. When you come to your 30s and begin saving, you’ll need to save 15-20%. If you start saving in your 40s, 30% will be the number to save. These numbers help show how saving young will help you in the long run. The longer you wait to save, the more you’ll have to put away which creates a tighter budget.

Why do I have to save that much?
Knowing how much you’ll need for retirement is tricky. There is no one answer to this question. Some people may need to save more if they live a more luxurious lifestyle. For those who are frugal, they may not need to save as much. Start by figuring out how many years you may be retired for. The average is anywhere from 20 to 30 years. Take your annual income and multiply it by 25. For example, take your $40,000 annual income, multiply it by 25 and you’ll get $1,000,000. This is what your retirement profile should look like to live a very comfortable life. However, not all people will reach this goal, but it’s important to know how much you can expect to have saved when retirement comes.

Where are you at financially?
It’s important to look at where you are at right now. What age are you and how much have you saved? Will you be getting a different job with a higher salary or will you plan on retiring early? Looking at your life and figuring out what your future holds will help you learn the amount you should be putting towards retirement. If you planned on retiring early, for example, you’ll have to save a lot more ahead of time.

Do you plan to invest?
Investing is a great way to make extra money on the side. Work with a trusted company or person, find what accounts you’d like to invest in and what way you’ll choose to invest. When you make the right investments, you’ll be able to save less for retirement.

Thinking this far into the future can be intimidating. While having all types of things to save for and bills due right now, it’s easy to forget about saving for retirement. Push yourself to start putting away the correct amount you need, so you’re not unprepared when the time for retirement comes near. We offer some amazing savings accounts and other options to grow your money. Contact us today to learn more about how our products can help you!

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

Starting a New Job: Bank Accounts You Need

These accounts can help set you up for long-term success, even if you're only starting your first job.

These accounts can help set you up for long-term success, even if you’re only starting your first job.

 

Whether you are just getting your first job, or you recently accepted your first full-time position, now is a great time to reevaluate or open a variety of bank accounts.

Assuming that you are starting from scratch, let’s start with the basics:

Checking Account – As you start to receive paychecks, you will need a place to safely store your money, and a checking account is just the place to do so. Not only can you safely keep your money in a checking account, but a checking account can offer a variety of services:

  • A checkbook and an ATM/Debit Card for making everyday purchases.
  • Some checking accounts offer interest on your account to help your money grow.
  • Many employers utilize a direct deposit paycheck system where they pay your checking account directly, eliminating the need to always cash out your paychecks.

Savings Account – Whereas a checking account is great for everyday use, your savings account is used for, well, saving money! There are a variety of savings account options out there for you to choose from, but your basic savings account will include certain benefits:

  • Safely store larger amounts of money as you begin to build wealth.
  • Most savings account have some sort of interest payments to help your money grow.
  • Even though your savings account is not used for constant use, you still have easy access to your savings account.

Retirement Accounts – This is probably not the first time you’ve heard this and it probably won’t be the last: the sooner you start saving for retirement the better! If you just started a full-time position, your company may offer a 401(k). Take advantage of this retirement savings account through your employer and devote as much as you can to your 401(k) out of each paycheck.

If your employer does not offer 401(k) services, consider opening an Individual Retirement Account (IRA) with your local bank. Peoples Bank & Trust offers a couple IRA options to make saving for retirement easy and hassle free.

Long-Term Savings Accounts and Investment Accounts – A typical savings account can hold large amounts of money and is pretty easy to access if you need to do so. A long-term savings account, such as a certificate of deposit (CD), offers a place for your money to grow over a long period of time. A CD is more of an investment than a savings account and is a good idea to think about when your finances are a little more mature.

The bank accounts that you need depend on your stage in life. If you recently started a job and are just beginning to accumulate wealth, start with a checking account and go from there. Remember, Peoples Bank & Trust is here for you along the way!

Peoples Bank & Trust

Equal Housing Lender

Member FDIC