RICHMOND, Va. (WRIC) — If you google the word ‘retirement,’ you’ll find images of older couples walking on the beach, toasting at sunset and smiling like they haven’t a care in the world.
The golden years look amazing, but you’ll need a road map to get there.
“As soon as you graduate college, your first job, ideally, you should start saving for retirement,” explains senior Financial Advisor Jeremiah Winters of Salomon & Ludwin.
Winters recommends putting away 10 percent of your salary. He says the sooner you start saving, the better.
That makes sense, but how many twenty-somethings are really thinking about retirement? You might be surprised.
8News talked with people walking along Cary Street on a sunny Monday afternoon. We asked at what age should you start saving for retirement.
“Now,” replied Bridget Gregori, “It’s never too soon.”
James Dahlheimer was a little more specific.
“Start saving for retirement at 28, but start saving your money as soon as possible,” he said.
And 22-year-old Hannah Bass seemed to be on the right track.
“When you start your first real adult job,” she speculated. “So I guess if that’s right out of high school or if that’s right out of college, you should start saving.”
On the flip side, we interviewed retirees who admit they didn’t put money away until mid-way through their careers.
“Probably in my 40’s because I had 4 kids and there wasn’t much money to save,” Bill Gensch explained.
Robert Jeunes echoed the same.
“I actually started saving I guess I was about 40 years old,” he said. “I think that’s a good age.”
No matter when you start saving, financial expert Winters says you should plan with these questions in mind:
- What kind of lifestyle do you want when you retire?
- How much money will that cost?
- What’s the best way to invest to grow your nest egg?
Winters adds, “I think a lot of people live in fear of you know, I’m just overwhelmed. I don’t know if I’m going to be okay and they just bury their head in the sand. It’s much better to know and to know what you need to do and have a plan than live in fear and not have a plan.”
So, how do you get started creating a financial plan for retirement? Here’s some advice from financial advisors at Salomon Ludwin:
Ask friends, family, admired friends or co-workers, who do they work with for their financial planning and investments? And when you call a potential new Financial Advisor, don’t be afraid to ask questions, such as:
- Do you offer a financial plan for a set fee? Or, do you require a new client place investment assets with you in order to obtain a full financial plan?
- Do you have a minimum investment amount for me to be able to work with you?
- If I don’t have enough money to work with you, what should I do? How can I start?
Another useful resource for assistance is renowned financial expert Dave Ramsey.
Creating a comprehensive financial plan
A comprehensive financial plan incorporates information from all three areas: investments/financial situation + planning for your estate + ensuring tax efficiency where possible.
Estate Documents are critical if you have anyone or anything that you care about how it will be managed, handled, or treated in the event that you become incapacitated or you pass away. Even if you do not have family, but you have a home or pets or investment assets, then depending on your total net worth and type of assets you have, you may need more than a simple trio of documents: Will, Power of Attorney (POA), and Medical Directive (aka living will). Those three documents are a starting point. Do not mistake the use of the word simple in this context. A straightforward Will can accomplish many things! Also, having these documents in place BEFORE any sort of crisis or decline in health for you or a loved one will be well worth having it completed and ready to access at a moment’s notice! Many people think talking about getting sick, getting old or dying as a very gruesome burden. In truth, the more openly you can talk about that with your family or others who will help you in life, the more peace of mind you could have knowing that they understand what you want and knowing that they know ‘how’ to help you when the time comes.
Your CPA can help you take into consideration how to help you plan for and hopefully reduce the amount of taxes you are required to pay in your working years, in your retirement years and upon your death. This goes hand in hand with your estate documents and your investments (how titled and how beneficiaries are named) and also with your estate/heirs paying unnecessary taxes.
Information from Salomon and Ludwin was used in this report.