School supplies sit on a blue table

A for effort: Six savings supplies for your future

Aug 4, 2021
Empower Insights

Back to school.

Back to saving.

For many students across the country, summer break is almost history. With classes back in session soon, this is a great time to get back to basics with your long-term financial strategy. After all, when it comes to managing your budget and securing your future, there’s a lot to do, a lot to know and, yes, a lot to learn.

So, are you ready to hit the books?

No matter your current age or career stage, here’s a list of supplies you can use and steps you can take for financial planning.


MEET YOUR MATCH

There may be no such thing as a free lunch, but there is such a thing as “free money.” If your job offers a company match in its workplace retirement program, don’t leave that extra cash on the table. For instance, if your employer provides a common dollar-for-dollar formula up to a certain percentage, you could essentially double your overall input when you increase your deferral rate to reach the full match amount.1

GAIN GROUND

Inching closer to your next adventure? If you’re age 50 or older, you may be able to grow your nest egg even more by making catch-up contributions to your 401(k) account. This feature allows people to pick up the pace and make up for earlier years when they may not have had the means to put as much away for retirement. In 2021, for example, you could be eligible to defer $6,500 over the IRS limit of $19,500.2

A mother helps child pack lunch for school

STAY “SOCIAL”

While social distancing may be a critical measure for your today, Social Security is just as important for your tomorrow.

You may become eligible to start collecting Social Security payments as soon as you celebrate your 62nd birthday — which is a common election for many Americans. But the longer you wait to file, the more money you may pocket in the long run. In fact, for each year you delay claiming, your value may grow by 7-8% (until you turn 70).3 Visit ssa.gov to examine your earnings history and view your estimated benefit. 

NAME NAMES

Life is full of surprises. That’s why a good financial approach factors in both the expected and the unexpected. Choosing beneficiaries for your different accounts (retirement, life insurance, annuity, etc.) and updating them when your circumstances change will ensure your hard-earned savings go to the people who matter most to you upon your death. In some cases, beneficiaries may include  spouses, children and other family members as well as trusts and charities. (Remember, if you are married and want to pick a non-spouse as your beneficiary on a retirement account, your wife or husband must sign a waiver.)

Once you identify a beneficiary, be sure to review your selection after experiencing a major event, such as marriage, divorce or the birth of a child. As your situation evolves, you may need to revise your designation.

ACCESS ADVICE

If you need direction along your journey, you can always seek financial guidance to get answers to your questions. Not only can utilizing professional advice help you feel better and improve your financial health, it can also help you gain confidence and protect your future. Empower Retirement research shows people who obtain both human and digital financial advice are on pace to replace nearly 100% of their income when they retire.4

To keep up with your investment goals, make it a point to meet with a financial advisor on your own or contact your plan sponsor to see the wide variety of tools, resources and components that are available to you.

WRITE A WILL

Where there’s a will, there’s a way. And where there’s a “will,” there’s a plan. Creating a will helps guarantee your final wishes will be carried out exactly as you intend when you pass. This estate-planning document serves as a legal guide for the distribution of your assets and delegates certain responsibilities after you die. Simply put, it’s your chance to determine which persons, individuals or organizations will receive your assets down the road. Without this formal record in place, your prized possessions could go through a lengthy process known as probate, which requires the courts getting involved.

 

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1 FINRA, “Retirement Isn't Free—But Your 401(k) Match Is,” June 2021.

2 IRS.gov

3 Social Security Administration benefits planner, ssa.gov/planners/retire/delayret.html, 2020.

4 Empower Institute, Scoring the Progress of Retirement Savers, September 2020.

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