How to Get the Most from Your Employer's Retirement Plan

How to Get the Most from Your Employer's Retirement Plan

Don't miss any opportunities to maximize your savings! Here's how you can take advantage of programs offered by your employer to make your money work harder for you.

Step 1: Participate in the retirement program
Participate in your company's retirement savings program as soon as you're eligible, and if you can afford it, contribute the maximum amount allowed, or at least enough to take advantage of matching contributions if your company offers them.

Step 2: Make deductions automatic
Make your contributions automatic by having them deducted from your paycheck. In many cases, you can access your account online, making it easy to adjust contributions as needed.

Step 3: Put away money for health care
If your employer offers one, join a program that lets you put money away for health care needs in retirement. These plans offer tax advantages too, since contributions are made with pretax dollars.

Step 4: Educate yourself
Get smart about money by attending any financial seminars and webinars offered by your employer. If your employer offers the services of an objective financial consultant, seek their advice about putting together a retirement plan that's right for you.

Tip
Aim for savings that provide you with at least 80 percent of your salary in retirement.

Step 5: Join other savings programs
Consider participating in other savings options that offer tax benefits, like IRAs, after-tax annuities, life insurance, and 529 plans that help you save for children's college educations. Remember, there's no such thing as saving too much money, and you can't start too soon.
What are the best saving schemes?
Did You Know?
A couple without an employer-sponsored health care plan who retires in 2010 at age 65 is projected to need between $200,000 and $800,000 to supplement Medicare and cover out-of-pocket health care expenses.

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protip: anyone under age 30 should not plan on seeing social security or medicare as a substantial part of retirement care. as a result, everyone should save money as if both of those programs simply do not exist, and then be surprised to find out they do when you retire.