Let Us Help You Develop the Road Map to Your Retirement Destination
Before something becomes real, you first have to imagine it — especially when it comes to your retirement. When you look out across the horizon of your life and envision the future, what kind of retirement lifestyle do you see for yourself? Where do you want to live? How do you want to spend your time? Retirement can open up space and time for you to finally work on your passion projects or enjoy fun new adventures No matter what your dreams are, we can help you realize them.
Western & Southern is here to help you develop or adjust a plan to attain your financial goals in retirement so you can live life on your own terms. With effective planning, you may be able to build the financial resources you need to enjoy the freedom you want. We are eager to collaborate with you to listen to and understand your needs, help guide you in considering the most suitable retirement strategies for you and make necessary adjustments to it along the way as your life and goals change.
Start Early & Pay Yourself First
No matter how old you are, you know saving money takes determination and discipline. Retirement may feel like a long time away, and your daily living expenses always seem to take priority. It takes planning and a certain amount of sacrifice to save, so paying yourself first is a good rule of thumb. Sometimes, the earlier you start, the smaller the amount you might need to set aside each month. But remember it's never too late to start saving either.
Let's consider an example1 to illustrate how saving early can help you in the long run. To save $100,000 in 25 years (assuming an 8 percent tax-deferred return), you'll need to save $109.31 each month if you start now. If you wait five years, you'll need $174.62 each month. If you wait 10 years, you'll need to save $294.31 each month — that's $185 more per month to accumulate $100,000. Finding a small amount to carve out of your budget now may be much easier than finding almost double that amount 10 years from now. That's why time can be your best friend in building a secure retirement.
How Much Do You Need to Save for Retirement?
Do you have enough retirement savings to support the lifestyle you envision? Our quick and easy calculator can help you determine how much of your current annual income you may need to save in order to achieve your retirement goals. Use our calculator’s retirement analysis to help you evaluate your current retirement strategies.
Know Your Facts About Retirement Planning, Strategies & Investing
Take a couple of minutes to learn some helpful facts about saving for your retirement. We can help you develop or adjust your retirement plan so you can attain your goals and live life on your own terms.
Facts on Saving for Retirement
We can help you prepare for retirement.
21% of Americans are saving none of their annual income. 20% of Americans are saving no more than 5% of their annual income. (BankRate.com, "Survey: 21% of working Americans aren't saving anything at all," Mar. 14, 2019)
43% of retirees stopped working earlier than planned. Health and job loss were the leading reasons. (Employee Benefit Research Institute, 2019 Retirement Confidence Survey, Apr. 3, 2019)
21% of married couples and 45% of single seniors get ate least 90% of their income from Social Security. (Social Security Administration, Fact Sheet, 2019)
A 65-year-old couple in good health will need $387,000 for health-care costs for the rest of their lives. (CNBC, "Retiring this year? How much you'll need for health-care costs," Jul. 18, 2019)
One year in a skilled nursing facility will cost over $134,000 by 2028 (projected average; private room). (SeniorLiving.org, Nursing Home Costs, accessed Nov. 13, 2019)
Nearly 30% of Millennials don't expect to retire and don't save for retirement because they say doing so is like saving for a stranger. (CNBC, "How to save for the future when it's uncertain," Jul. 2, 2019)
Reasons Americans don't save for retirement include I don't make enough money, I won't need retirement savings, I'm prioritizing paying down debt, my job doesn't offer a retirement plan and I'm already struggling to pay my bills. (The Atlantic, "This Is What Life Without Retirement Savings Looks Like," Feb. 22, 2018)
People who reach their mid-60s without enough savings must either dramatically cut their spending or keep working to survive. (The Atlantic, "This Is What Life Without Retirement Savings Looks Like," Feb. 22, 2018)
Even a small amount put aside each week can help build retirement savings.
We can help you prepare for retirement. Start Now.
Western & Southern Life is the marketing name for The Western and Southern Life Insurance Company and Western-Southern Life Assurance Company. Each company is financially responsible for its own products and services.
When it comes to retirement planning and your future financial security, you want to partner with a company known for its financial stability. With solid financial ratings and a heritage of more than 130 years of financial strength, Western & Southern offers you financial expertise to help determine the right insurance, retirement and investment solutions to meet your goals. A knowledgeable financial representative is available to help you with your retirement planning needs.
1 Hypothetical example used for illustrative purposes only. It is not indicative of any specific investment product or strategy. Investments will fluctuate with changes in market conditions so that, when redeemed, shares may be worth more or less than their original cost. Example does not take into consideration the consequence of expenses and fees. Withdrawals on tax-deferred accounts are subject to income tax and may be subject to a penalty if taken prior to age 59½.
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Unlike anything before, social media has really quickened the pace. People everywhere are continuously searching for that proverbial pot of gold! And it is easy to get lost in the shuffle. So before you buy that dream-fulfilling item, it is important to think about your own well-being… and pay yourself first.
Hi, I’m Sarah Westin, host of Roadmap for the Future, brought to you by Western & Southern Life.
Today we’re talking about… saving. We have with us the President & Chief Marketing Officer - W&S Agency Group, Troy Brodie, to speak to this notion of paying yourself first. Troy, what does that really mean?
Pay yourself first… It is a catchy saying, and it is great advice too. Best of all it applies to all pre-retirement age groups.
Basically, when someone says… “Pay yourself first,” they are telling you to allocate funds for retirement before you start doing any discretionary spending.
By setting aside a portion for retirement, you are helping to shore up your financial future.
I see, and that’s good in theory… but how realistic is it to pay yourself first? So many of us have a lot of financial obligations.
It certainly is realistic, and I think one thing many people find is if they are able to have their retirement allocations handled on their behalf, without actually having to write checks, or transfer funds, they tend not to notice it’s going toward savings. They don’t feel it, and they simply adjust their lifestyles to fit.
Here’s what I mean… A great example of paying yourself first is a 401(k) Plan. Many employers across the nation offer these. The first thing you will want to do is contribute as much as you can, or at least as much as your company will match.
You can make this easier by having your contributions handled directly by the payroll department where you work.
This way, your contributions to your 401(k) are the first thing coming out of your compensation as a payroll deduction – in other words… you’re paying yourself first! Chances are, after a little while, you won’t even miss it.
Now, to be clear… I am not advocating not paying your bills. That would be a huge problem. The key is finding the right balance and making sure you’re putting the right amount toward savings, then with what you actually take home, you pay your bills and purchase necessities like food and transportation. The fun stuff? That comes last.
Is it really so important to do it in that order?
Well, let us look at it. Say you pay your bills first—you are certainly making good on your financial obligations. But should you then start with discretionary spending, the fun stuff… whether shopping online, dining out, or travel?
There is a good chance… when all is said and done, you won’t have much if anything left to put toward retirement. So in that instance, you would have basically put yourself last.
When thinking about paying yourself first, I think it’s important to put things in perspective. Imagine you’re in a movie theatre with your family to see the best new movie out. To your right is your mortgage lender that you owe your monthly mortgage to, to your left is your dentist who you owe a dental bill to and behind you is your car insurance provider who needs to collect your car insurance bill. Suddenly, the movie theatre catches on fire.
Who would you save first?
Your family and loved ones of course! This example puts into perspective the importance of taking care of you and your family before the creditors who are sitting in the theatre with you.
Now, remember, I am not advocating to ignore your bills. You have to pay your bills. But, it is important to prioritize some things over others.
The theory is… You are the most important thing in this equation, and you are placing a priority on saving. So regardless of age… set aside funds for retirement before you do anything else! As we say it “Pay yourself first”!
That is so enlightening, but is it really worth using the process of paying myself first, if you can only set aside a small amount for savings?
Yes… and here’s why… You have to start somewhere. But the key is to start. Allocate what you feel you can toward retirement savings, and if you can, have it payroll-deducted so you aren’t as likely to miss it.
In a few months, or a year down the road, re-evaluate where you stand. Take a look at what you have accomplished in savings, and determine if you can increase your contribution, even a small amount. And the first place to look is your discretionary spending.
Look, I get it… putting money away for retirement is not as exciting as a trip, or a new car. But when you do so before you buy anything else… You really are “Paying yourself first!”
Troy, thank you for this wonderful insight on this topic!
Why Retirement is a Hot Topic
How often have you heard it… 60 is the new 40! Take a look around, people are living lives they never dreamed of. But did you know that six in 10 Americans don’t know how much money they will need to retire?
Hi, I’m Nicole Westin, host of Roadmap for the Future, brought to you by Western & Southern Life.
So why is retirement such a hot topic? We asked the President & Chief Marketing Officer - W&S Agency Group– Troy Brodie - to offer his insights. So Troy, how did we end up this way?
Well, this did not happen overnight, it definitely took time… something on the order of a generation, or more. And there really is more than one answer to your question.
Okay, let’s get started!
Let’s start with employment, and benefits. Generations ago, people worked hard and when they retired, they had access to a pension. Today, for the most part… pensions have gone away, either completely, or have been replaced by defined contribution plans like 401(k)s or 403(b)s.
I have to add a shameless plug here… Western & Southern still offers its associates both a pension, and a defined contribution program in the form of a 401(k). But we are the exception to the rule. Of companies in the Fortune 500, Western & Southern is one of only 16 offering a defined benefit pension plan.
So from an employment standpoint, many Americans just aren’t getting the same retirement benefits they got a generation or two ago.
So we have benefits concerns… Let’s talk about personal savings. I guess the inverse would be spending… Right?
Yes, and what you’re alluding to is lifestyle creep. We all see unrealistic images in the media… People living in mansions, driving sports cars and wearing designer clothes.
So to a degree, we try to emulate these people, and all too often people do so at the expense of their retirement savings. The result can be debt accumulation. And what you don’t realize is that all too often, those images we see online, and on TV portray a lifestyle that is not always real.
It is only natural for younger people not to think about retirement. They often make purchases that provide instant, but only temporary happiness. And worse, they could miss out on years of compounding that could contribute toward a comfortable retirement. In fact, almost two-thirds of Americans have saved little or nothing toward their retirement!
That’s concerning… so what else?
Well, looking at my generation… Whether Social Security, Medicare, or other governmental programs, people used to be able to rely on the government to take care of them in retirement.
A lot of that is just not there anymore, or is diminished in capacity. Or perhaps threatened.
There is a three-legged stool analogy that used to hold true: Of those legs holding up one’s retirement, the government leg used to bear most of the weight, with employer programs and personal savings being the two lesser legs. Today, we are moving toward personal savings being required to sustain the weight.
So our retirement stool is changing. I imagine the economy plays a role too…
Yes, absolutely. No discussion on retirement would be complete without addressing our economic landscape. For a lot of people, the economic recession of 2008 could have wiped out what little retirement savings they had. And these people have had a tough time recovering.
Is there a way out?
In my opinion there is… with a bit of the right guidance the situation that lots of people find themselves in can at the very least be positively affected, and in many cases turned around.
I think too many people think the situation is hopeless, that definitely is not the case. But you need to start saving as early as you possibly can. If you’re earning a living, you aren’t too young to think about retirement. And if you haven’t started saving, the time to start is now.
So the good news is… you probably can get back on track.
Well sure you can. Once you’ve made the decision to take action, you need to partner with someone… a financial professional who will really take the time to listen, and hear what you’re saying.
With a well-constructed retirement plan in place, along with regular reviews, you have a good chance to get on track… and to stay there.
Talk to people who you know… people you respect. And know that Western & Southern has offices nationwide. Our financial professionals welcome the opportunity to sit down, hear what’s on your mind, and help you create a personalized roadmap to retirement.
Roadmap to retirement… Troy, this sounds like good news to me… thank you for your time.
Sources of Retirement Income
Think about mobile technology, social media and shopping. These three things have drastically changed over the past 20 years…just like the proper way to save for retirement has.
The way we prepare for retirement – today - is different from that of your parents and grandparents.
Hi, I’m Sarah Westin, host of Roadmap for the Future, brought to you by Western & Southern Life.
With us today is Troy Brodie, President & Chief Marketing Officer - W&S Agency Group, to talk about sources of retirement income. So, Troy… What makes today’s retirement different from that of the past?
So many things, Nicole! For starters, let’s talk about longevity. For the most part, people are living longer, which equates to more time spent in retirement.
On the surface, this sounds great, and it is… but we need to think about our finances, and what we’re going to live off of during those added years of longevity. I was reading in an article that the average life expectancy of an American is 78.9 years. This number is increasing each year, so it is important to think about how the added years will affect us financially.
Another big difference is that our parents and grandparents may have been able to rely more heavily on a defined benefit plan from their employer, and even Social Security. We cannot.
I have heard talk about a three-legged stool, and retirement. What’s up with that?
The old saying was, “retirement income is a three-legged stool”. Making up the three legs were governmental payments like Social Security, employer plans like pensions and 401(k)s, and personal savings.
And there was a time when this was thought to be a solid retirement income plan.
I see, and I’m sensing you’re speaking of the three-legged stool in the past tense.
You’re right – I was speaking in the past tense. With today’s economy, three legs simply may not provide sufficient retirement funds for many people. And that oftentimes is because people have not saved enough on their own for their retirement.
The personal savings leg is even more important as government programs diminish. Nowadays, you simply cannot expect Social Security to make up the difference.
So… Too many people end up adding a fourth leg to their retirement stools, and that amounts to working either full or part-time after retirement.
But what happens if you want your retirement to look like what most Americans had a generation or two ago… What then?
That is entirely possible, but you need to save. And to do that, you need a plan. I recommend starting as early as you possibly can.
Seek out a reputable financial professional to listen to your dreams, someone who will work with you to create a reasonable roadmap to retirement.
Here at Western & Southern, we are dedicated to helping you create your roadmap to retirement and working with you to achieve your dreams.
Okay, a roadmap. But where do you start, Troy? I seem to hear about all kinds of IRAs out there… how can one know what to choose or where to start?
Well, you’re right, Nicole… There really is no one way to save for retirement. For instance, there are a variety of IRAs out there. But they tend to fall into just a few buckets.
I’ll start with the traditional IRA… You contribute to an account, and any earnings are tax-deferred until you access them.
To avoid tax penalties, you need to leave your money in your IRA until you’re at least 59 ½. When you take your money out, you have to pay taxes but the expectation is you will be in a lower tax bracket when that occurs.
So how does a traditional IRA differ from a Roth IRA?
The biggest difference is… the Roth does not allow you to take a tax deduction on your contributions.
Any earnings accumulate tax-free, and unlike traditional IRAs, Roths do not have required minimum distributions. Roth contribution limitations are the same as a traditional IRA, although some income restrictions apply, so it is a good idea to check with a financial professional, or the IRS for more information.
I have heard about SIMPLE IRAs having something to do with business ownership. Could you talk about that?
SIMPLE IRAS are for employers who have 100 or fewer employees. SIMPLE… stands for, “Savings Incentive Match Plan for Employees.” SIMPLE IRAs, typically accessed at retirement, have the potential to accumulate tax-deferred.
So we’ve talked IRAs… Are there other ways to save?
There are all kinds of annuities out there. If you prefer less risk, or if you’re a little closer to retirement age, you may prefer a fixed annuity that offers guarantees. If you’re more comfortable with risk, or if you’re a little younger, you may want to opt for a variable annuity, with earnings tied to the ups and downs of the financial markets.
But there are more than annuities, right?
Absolutely. If you are not averse to risk you could look into more aggressive investing. Broadly speaking— the greater the risk, the greater the potential for reward.
The bottom line is… if you’re really serious about preparing for retirement you need to take it upon yourself to do a great deal of the heavy lifting. The government, and in most cases your employer is not going to do it for you.
And remember, you should not put all of your eggs in one basket.
Diversification is a term used to describe spreading out your retirement savings strategy among a variety of vehicles with varying risks and reward potentials.
The combination can change for most people over time, so it is important to have a relationship with a financial professional who understands your needs and will re-visit and re-calibrate your plan to fit your changing situation over time.
Here at Western & Southern, we are committed to helping you understand their needs and create a personalized plan to fit their lifestyle.
Diversification and recalibration…and professional guidance. You have truly shed some light on retirement income sources.
Troy… thanks for your time today.
Why People in Their 30s Should Think About Retirement
So you are thirty something and just getting your feet on the ground, career-wise. Perhaps you’re starting a family, buying your first home or simply enjoying a carefree life.
Hi, I’m Sarah Westin, host of Roadmap for the Future, brought to you by Western & Southern Life.
And today we’re talking about why people in their 30s should think about preparing for retirement. We have Troy Brodie, the President & Chief Marketing Officer - W&S Agency Group, here with us to share some of his thoughts.
So Troy, why is it important for people so seemingly young to be concerned about retirement?
Well, when you’re in your 30s, retirement can feel like a lifetime away – I know, I’ve been there!
This is when a lot of people are starting families, with all kinds of life and financial priorities hitting them. But you cannot put your retirement on a backburner. You just can’t.
If you are in this age group, it is important to understand that the decisions you make today will affect where you stand, financially, tomorrow. And if you wait, say five or ten years, you’re going to need to save at a much more aggressive rate in order to catch up. The time to start is now!
I see your point… So let’s get into some specifics for 30-somethings.
Well, for starters, you have the benefit of compounding… meaning your money earns money on itself. Here’s a really simple example… You have your principal, the initial sum you are saving. Keep that in a fixed savings vehicle for a year where interest is credited, thus increasing its overall value.
Now, at the beginning of year two, you’re able to earn interest again, but this time it’s on the principal – that initial sum – as well as the interest it earned the year before.
Imagine leaving this account alone for ten, twenty years or more without adding another penny… Through compounding alone, it has the potential to grow considerably.
Now it’s important to start saving early and continue to contribute, but I hope this simple example helps to illustrate the power of compounding. The more time you have, and the more you continue to contribute to your savings vehicle, the more you will be able to leverage the notion of compounding.
This allows you to save more and may ultimately help create a more comfortable retirement.
Yes, I get it… So how does one get started?
An easy way is to take advantage of your employer’s 401(k) Plan, if available. Many employers offer a 401(k), some also offer some type of matching program.
So you may want to think about contributing as much as you can to take full advantage of any matching offers. Look, this is free money, and if you have your contributions deducted from your pay… you may not even notice.
And the icing on the cake is that… 401(k) contributions may reduce your income for tax purposes.
Is there anything more that people in their 30s could do to add to their retirement savings?
The short answer is, “As much as they possibly can.” You can’t expect the government to swoop in and save you when you want to stop working.
So in addition to what you are able to save through your job, you will probably need to save on your own as well. To do this, consider seeking guidance from a reputable, licensed financial professional.
30-Somethings do have options… a Roth IRA comes to mind, but that’s just one approach and it depends on the person’s situation.
Say you’re putting away a sum every month, which sounds great. Then you get a raise. Even better, right? But this is when I start to hear about “lifestyle creep.”
Yes, but when you get a raise, it’s important to make sure you’re giving your retirement savings a raise, as well. As tempting as it may be, this is not the time to make extravagant purchases. Instead, live within your means, with occasional splurges, but make sure you’re continuing to up the ante with your retirement savings program and this will help you to avoid lifestyle creep!
So what is the bottom line…?
The bottom line is to start now, even if it may seem as though you are not saving much. Start to establish good, healthy savings habits now. And keep in mind… Time plays a huge role in your ability to create a comfortable retirement, so let’s get this train out of the station right now!
Troy… thank you for your time and expertise today.