Retirement savings tips from an Albuquerque financial expert
ALBUQUERQUE, N.M. — Saving for retirement feels like such a daunting thing but our Albuquerque financial expert has some tips that may help.
David Hicks, at Oakmont Advisory Group, says April is U.S. Financial Literacy Month and he offers some insight to help you be more financially literate. Hicks says time is most important and to consider the following:
- Start saving for retirement early
- Develop a retirement savings plan to set financial goals
- Utilize resources and tools, such as online calculators and savings apps
- Talk to a financial advisor
If you have some extra money, put it away and save it.
For example, $100/week over 30 years can add up to $150,000. If you make 2% interest on that, that becomes $200,000. If you make 5% interest, that becomes $475,000. 7% interest totals to around $900,000.
Time and compound interest is your friend so remember these things:
- Understand different types of retirement accounts (401K, 403B, TSP, roth IRA, traditional IRA)
- Brush up on different tax benefits and implications
- Determine which type of account is best for your needs
There are some risks to investing, such as inflation, healthcare costs and market volatility. That’s why it’s important to consider diversifying what you invest in and dollar cost averaging.
When you’re investing in your retirement plan, consider these steps:
- Maximize retirement savings
- Employer-sponsored retirement plans
- Maximize contribution
- Develop a portfolio, consider low-cost index funds