Even though calculating a retirement savings goal is key to pursuing and maintaining a confident financial outlook, the Employee Benefit Research Institute reported in 2011 that just 46% of American workers have figured out how much money they will need to accumulate for retirement. And more than half admit that they are behind schedule when it comes to planning and saving for retirement. Are you? If so, Discover can help. Discover’s Individual Retirement Account (IRA) CDs are a great way to earn competitive rates with guaranteed returns; and they offer flexible, renewable terms ranging from 3 months to 10 years.
What’s important to realize is that the exercise of calculating a retirement savings goal does more than simply provide you with a dollars and cents estimate of how much you’ll need for the future. It also requires you to visualize the specific details of your retirement dreams and to assess whether your current financial plans are realistic, comprehensive and up-to-date.
The following action-oriented strategies will help you do a better job of identifying and pursuing your retirement savings goals:
- Double-check your assumptions. Before you do anything else, answer these important questions: When do you plan to retire? How much money will you need each year? Where and when do you plan to get your retirement income? Are your investment expectations in line with the performance potential of the investments you own?
- Use a proper “calculator.” The best way to calculate your goal is by using one of the many interactive worksheets now available online and in print. Each type features questions about your financial situation as well as blank spaces for you to provide answers. An online version will perform the calculation automatically and respond almost instantly with an estimate of how much you may need for retirement and how much more you should try to save to pursue that goal. If you do the calculation on a paper worksheet, however, you might want to have a traditional calculator on hand to help with the math. Remember that your ultimate goal is to save as much money as possible for retirement regardless of what any calculator might suggest. (After all, when was the last time you heard a retiree complain about having saved too much money in his or her 401[k] plan?)
- Contribute more. Contributing an extra $20 each week to your plan could provide you with an additional $51,389 after 20 years or $130,237 after 30 years, assuming 8% annual investment returns1. At the very least, you should try to contribute at least enough to receive the full amount of your employer’s matching contribution (if offered). It’s also a good idea to increase contributions annually, such as after a pay-raise.
Retirement will likely be one of the biggest expenses in your life, so it’s important to maintain an accurate price estimate and financial plan. Make it a priority to calculate your savings goal at least once a year. Also, make it a priority to learn more about how a Discover IRA CD can help you pursue that goal. Discover’s IRA CD gives you the choice of either a Roth or Traditional IRA, they offer convenient renewal options at maturity, and there are no monthly maintenance fees.
In addition to offering IRA CD, Discover also offers an Online Savings Account to help you with your short-term savings goals, a full range of CDs to help you save for the future, and Money Market Accounts that have convenient cash access and a competitive rate. Open an account online in minutes or call our 24-hour U.S.-based Customer Service at 1-800-347-7000.
The article and information provided herein are for informational purposes only and are not intended as a substitute for professional advice.
1This example is hypothetical and for illustrative purposes only. Investment returns cannot be guaranteed.
Discover Bank, Member FDIC