Paying off credit card debt, maximizing your 401k and building a college fund are key tips for preparing for retirement.
Boston, MA – April 21, 2015
No matter how old you are, it’s never too early to begin preparing for life after work. This National Financial Literacy Month, nonprofit American Consumer Credit Counseling has a set of helpful tips for how to build a retirement account.
A recent survey from the Federal Reserve found that nearly 70 percent of American consumers do not feel financially prepared for retirement. Those same survey results showed that 31 percent of non-retired residents have no retirement savings or pension at all.
“It is sometimes difficult to accept the reality that income will be more limited during retirement than when you were working,” said Steve Trumble, President and CEO of American Consumer Credit Counseling. “Because many of your monthly costs will increase, such as medical expenses, it is important to be knowledgeable about your financial situation and start preparing now. Even saving a little bit every month can go a long way toward building a healthy retirement account.”
American Consumer Credit Counseling offers these 8 tips to build a retirement account:
- Pay off any credit card debt you might have accrued. You don’t want to carry any of that debt into retirement, because the interest will pile up and drain savings.
- Maximize your 401k and take advantage of full employer contributions. As your incomes increases, set aside more for your retirement savings. If your employer 401k plan is insufficient, not offered or you are self-employed, consider a traditional or Roth IRA.
- Figure out your retirement goals. Many people “save for retirement” without actually knowing what that means. What age do you plan to retire? Where do you plan to retire? Will you be downsizing your home, or staying put?
- Once you figure out how much money you’ll need to achieve your retirement goals, figure out if you’ll have enough to retire, using our retirement calculator.
- If you are participating in your child’s college fund, consider cutting back partially and using these funds to build your retirement fund.
- Plan for the unexpected. Make sure you have all of your legal documents in place, like wills, and set up power of attorney and a health care proxy. You may also want to consider insurance that would pay for long-term medical care in the event of illness.
- Adjust your budget as life priorities change. A Household Budgeting Worksheet can help you stay organized and track your expenses.
- Take a look at the home you live in. Is it nearly paid off or not close to being paid off? If the expense is becoming too much, consider downsizing and putting your profits into your retirement.
ACCC is a 501(c)3 organization, that provides free credit counseling, bankruptcy counseling, and housing counseling to consumers nationwide in need of financial literacy education and money management. For more information, contact ACCC:
- For credit counseling, call 800-769-3571
- For bankruptcy counseling, call 866-826-6924
- For housing counseling, call 866-826-7180
- For information on financial education workshops in New England, call 800-769-3571 x1980
- Or visit us online at ConsumerCredit.com
About American Consumer Credit Counseling
American Consumer Credit Counseling (ACCC) is a nonprofit credit counseling 501(c)(3) organization dedicated to empowering consumers to achieve financial management and debt relief through education, credit counseling, and debt management solutions. In order to help consumers reach their goal of debt relief, ACCC provides a range of free consumer personal finance resources on a variety of topics including budgeting, credit and debt management, student loans, youth and money, homeownership, identity theft, senior living and retirement. Consumers can use ACCC’s worksheets, videos, calculators, and blog articles to make the best possible decisions regarding their financial future. ACCC holds an A+ rating with the Better Business Bureau and is a member of the Association of Independent Consumer Credit Counseling Agencies. For more information or to access free financial education resources, log on to ConsumerCredit.com or visit TalkingCentsBlog.com.