Mid-Career Retirement Planning
You’re experienced in your field. You have more responsibilities with your growing family. And you have a lot more bills and expenses!
Although you may feel stretched in several directions, you need to make sure to plan for your future. Before you know it, retirement will be in view.
For some people, this is the time to start maxing out contributions to your retirement plan. Others might be tempted to withdraw whatever retirement savings you have in order to cover big expenses.
How much to save for retirement?
The most common question we get from employee participants is how much to save for retirement and whether their savings are on the right track. Generally, investment experts recommend putting between 15% and 20% of your income now toward retirement. Your account portal features several calculators that will help you gauge whether you’re on track with your retirement savings. Also, our retirement counselors are happy to review your account with you and answers questions to help you maximize your contributions.
Now is the time to take a hard look at the lifestyle you dreamed of living in retirement and compare those dreams against your savings. The rule of thumb for retirement savings is to accumulate enough to replace 70%-80% of your annual income, including Social Security. Naturally, that percentage depends on how comfortably you want to live. This is the optimal stage in life to make changes if you feel your retirement savings isn’t where it needs to be.
Give your CRA plan a checkup
Now might be a good time to reassess how you allocate your retirement contributions. Work toward increasing your contribution amount, such as by establishing and growing a 457(b) account if your employer offers it. In fact, after you reach age 50, you can make additional contributions to your 457(b) account if you feel your retirement savings isn’t where it needs to be.
Also do a checkup on your investment portfolio.
If you’ve selected a CRA target date portfolio for your age group, your lineup should be appropriate for your projected retirement. If you’d prefer to select your own investments, check out the CRA Investment Learning Center to learn about smart investing. The closer you get to retirement, the more conservative your investments should be.