By Shane Boehm
, SVP and Investment Services Director for HomeStreet Investment Services
In all my years as an investment advisor, I continue to be surprised by how many people are intimidated
by the process of preparing for retirement. In 2016, Time Magazine published a report that stated that 1 in 3 Americans have yet to begin saving for retirement. Furthermore, a report in the Washington Post
noted that 71% of Americans say they do not have enough saved to retire. But what is the root cause for
this lack of preparedness?
My experience tells me that the reasons for not preparing for retirement run the gamut from not knowing who to trust to simply being scared of thinking about the future. Consumers also still fear another stock market collapse like the one we experienced in 2008, not knowing if the highs of today’s market are a bubble waiting to burst. But there is a simpler reason for the lack of retirement savings: people are unwilling to sit down and actually plan what they want in the future.
Where do you want to live? Do you want to travel? Do you want to help your children and grandchildren through college? The only way to conquer your fear of the future is to prepare for it. Fortunately, no matter where you are in your professional career, a plan can be developed to help you reach your retirement goals.
Gone are the days when talking with an investment advisor was intimidating. These days, retirement planning should begin with a simple conversation. HomeStreet Bank, like any customer-centric bank, has investment advisors available to assist you at your local branch. Your advisor should be able to answer all of your questions and educate you on all of the options available to meet your retirement goals. You should be comfortable with the concept that your advisor works for you; they are there to guide you through this process and put you at ease.
Here are a few other tips to keep in mind as you begin your retirement planning:
- Do the simple things first. If available, join your company’s 401K retirement plan to the
maximum amount that the company matches. In the investment industry, company matching is
known as ‘free money,’ yet the number of employees that withhold the full amount of company
matches is stunningly low. This is particularly true among younger, first-time employees who
have the most to gain by starting early.
- If you are self-employed, start a Roth IRA account. Developed in 1989, the Roth IRA is a flexible
retirement vehicle that uses pre-tax dollars. That means when you use that money in
retirement, no tax will be withdrawn. Don’t be fooled or influenced by political winds when
considering tax implications; put away as much pre-tax dollars as you can. You should know,
however, that Roth IRAs limit the amount you can invest in a given year. In 2017, that amount is
$5,500 for those under 49 years of age. If you are over 50, the amount is $6,500. Not everyone
can contribute to a Roth IRA, so work with your advisor to understand if you are eligible.
- Advocate for enhanced retirement options at your company. Ask your human resources
department to investigate if your company’s 401K can be enhanced with a Roth IRA component.
Alternatively, if you don’t like your company’s 401K plan, consider opening an IRA at your local
bank. HomeStreet offers multiple IRA options through its retail bank and through HomeStreet
Planning for retirement shouldn’t be intimidating. Don’t be afraid to face the future—embrace it. It is
important to find out which options will help you meet your retirement goals. A simple conversation
with an advisor can lead to future financial preparedness. Financial investment options evolve, but
advisors are always there to guide you through the process. With the help of an advisor fortifying your
portfolio, your retirement years can be the best years of your life.
is Senior Vice President and Investment Services Director for HomeStreet Investment
Securities and insurance products are offered through Cetera Investment Services LLC, member
FINRA/SIPC. Advisory services are offered through Cetera Investment Advisers LLC. Neither firm is
affiliated with the financial institution where investment services are offered. Investments are: *Not
FDIC *May lose value *Not financial institution guaranteed *Not a deposit *Not insured by any federal