This post is sponsored by Busey Bank
Brush up on the fundamentals behind sound financial planning for Financial Literacy Month in April. Whether your short-term goal is to save for a down payment on a home or your long-term objective is to start a business, the secret to success is to automate your savings. It’s one of the most impactful and easiest steps you can take!
When it comes to planning for retirement, automatically saving a small amount monthly can make a huge difference, according to experts at Busey Wealth Management. For every $100 you contribute a month with an annual return of 6%, you’ll save $46,000 over 20 years and $197,000 over 40 years!
Busey Wealth Management suggests saving 15% for retirement—but you can start small, if that seems daunting. At the least, make the most of 401(k) contribution-matching, if offered by your employer. Gradually deduct more each year, so your savings will grow with your career.
Prepare for retirement with several savings options:
Individual Retirement Accounts (IRAs) provide a simple, effective way to grow your money. Two types are available: Traditional IRAs (allow your investment earnings to grow tax-deferred until withdrawn) and Roth IRAs (are taxed at time of contribution, but earnings can be withdrawn tax-free). It is important to note that in order to make tax-free withdrawals from your Roth IRA, you must be 59½ or older and have held the IRA for five years.
Employer-sponsored plans also offer infinite potential for growth. These can include: 401(k) plans (allow you to contribute money, most often pre-tax, and are sometimes proportionately matched by your employer), profit-sharing (gives employees the opportunity to invest in the company and receive a percentage of the earnings), and employee stock ownership plans (ESOPs) (allows employees to purchase company stock for a stake in ownership).
The sooner you begin saving, the better. Even modest savings can add up over time.
Busey Wealth Management has a team of professionals who can explain your savings options and help you achieve your dreams for retirement. To get started, visit busey.com or stop by Busey at 312 E. Main St. in Mahomet today.
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