Tip For Mil­len­ni­als: Pre­pare For Re­tire­ment

Escalon Times - - PERSPECTIVE - By BILL SPANIEL

When was the last time you thought about your ideal re­tire­ment?

If it’s not top-of-mind, don’t sweat it – you’re not alone. For many young peo­ple, it’s hard to imag­ine re­tir­ing when it’s so far away. How­ever, it’s im­por­tant to look to the fu­ture and plan what you’ll need to live out your golden years.

Here are some tips from the Cal­i­for­nia So­ci­ety of CPAs (CalCPA.org) to help make your dream re­tire­ment come true.

Find Fun Ways to Learn

Think­ing about some­thing 35 to 40 years away can seem so ab­stract (and bor­ing!), but there are ways to make it more per­cep­ti­ble. Re­search shows a ma­jor­ity of mil­len­ni­als see clear ben­e­fits from play­ing dig­i­tal games; two in three (67 per­cent) say that games are im­por­tant in help­ing them learn how to cre­ate win­ning strate­gies and seven in 10 feel it aids them in learn­ing how to solve prob­lems.

With these statis­tics in mind, pro­grams like the Amer­i­can In­sti­tute of Cer­ti­fied Pub­lic Ac­coun­tants’ (AICPA) Feed the Pig strive to cre­ate re­sources that en­able mil­len­ni­als to build a strong fi­nan­cial foun­da­tion while still hav­ing fun.

The cam­paign’s new re­source, Yes­ter­day’s Tomorrow, a free dig­i­tal per­sonal fi­nance game, does just that by help­ing play­ers un­der­stand the long-term im­pact of their fi­nan­cial choices and build a re­la­tion­ship with their fu­ture self.

Es­tab­lish Your Re­tire­ment Needs and Goals

While look­ing to the fu­ture, it’s im­por­tant to think about po­ten­tial needs and goals in re­tire­ment. Nail­ing down an ex­act num­ber is im­pos­si­ble be­cause of con­stantly shift­ing fi­nan­cial needs and de­sires, but in this case, per­cent­ages and ra­tios are your best friends.

There are three main per­cent­ages you’ll want to keep in mind: the Five Per­cent Rule, the Stock Per­cent­age Ra­tio and the “Safe” With­drawal Rate. Head to feedthepig.org to find out what each of these means for you.

Start Fund­ing Now

Hold­ing off on sav­ing for your re­tire­ment now (in the hopes of mak­ing up for it later) could be a very costly mis­take. Re­gard­less of your ca­reer sit­u­a­tion, it’s never too soon, too late or too com­pli­cated to get started.

The first step is find­ing the right re­tire­ment op­tions avail­able to you and fund­ing them to their fullest po­ten­tial. Once you’ve de­ter­mined what per­cent­age of in­come you’ll need to save for re­tire­ment, the next step is fig­ur­ing out where you need to put it. Visit feedthepig.org to see what dif­fer­ent types of re­tire­ment ac­counts are avail­able to you.

Con­sult Your CPA

When you set up a per­sonal meet­ing with your lo­cal CPA, you re­ceive ex­pert ad­vice on a wide range of fi­nan­cial top­ics, in­clud­ing in­sights that can help you en­hance any area of your fi­nan­cial life, in­clud­ing sav­ing for re­tire­ment. Turn to your CPA for help with all your fi­nan­cial con­cerns.

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