It’s National Save for Retirement Week and we sat down with David Kling, Vice President and Wealth Advisor, to talk about how to start saving.
What’s the one thing most people are aware of when it comes to saving for retirement?
People typically understand that traditional bank accounts (checking/savings) do not usually provide an adequate return on investment to create a secure retirement. They may know that other vehicles—such as IRAs and 401ks—exist, but lack sufficient knowledge of how these accounts work. This often prevents people from taking full advantage of the benefits available to them when saving for retirement.
What is the one thing that most people aren’t aware of?
While most people know it is a good idea to start saving early, they don’t often have a clear picture of the impact created by starting a savings plan as soon as possible. Starting to save early is the best way to leverage the powerful principles of compound returns—or the rate of return over a period of time—and the time value of money. Think of it this way: since money has the potential to earn interest over time, the sooner you start saving it—no matter the amount—the more opportunity you have for the value to increase. An advisor can serve as a valuable resource in making calculations that quantify the impact of these principles and they can also explain how to take advantage of a strategy for saving over time.
Here’s an example of what may happen if you start saving earlier in life.
What’s a simple step people can take that may help kick-start their retirement savings?
Meeting with a financial advisor may help kick-start retirement savings. An advisor can serve as a guide in determining goals and how much should be saved within a realistic budget. They can also explain how investments and retirement accounts work so individuals will make sound and rational decisions in various market conditions.
If you can only save a minimal amount for retirement every month, is that ok?
Absolutely! The time available for investments to grow is a critical component in a successful retirement plan—the earlier you start saving the better, even if you can only contribute a little. In a retirement plan, time lost is the most challenging factor to try and compensate for later on.
To learn more about saving for retirement, contact one of our Wealth Advisors today.
David is a lifetime Wyoming resident who graduated from the University of Wyoming with a B.S. in Economics and a B.S. in Finance in 2005. Shortly after graduating, David began his career with First Interstate Wealth Management, where his primary responsibility is managing investment and trust relationships for high net worth individuals, institutions, and non-profit organizations. David possesses a Series 7, General Securities License and a Series 66, Combined Uniform Securities and Registered Investment Advisor License. He earned the Certified Trust & Financial Advisor (CTFA) designation through the Institute of Certified Bankers in 2011 and obtained the designation of Certified Financial Planner™ in 2017. In addition, David is also a licensed insurance producer within the State of Wyoming.