The FINANCIAL — Are you on a path to retirement or a highway to someplace else? Most American workers optimistically see their dollars stretching comfortably into retirement, an outlook made easier with simple planning.
About 63 percent of surveyed American workers are at least somewhat confident in having enough money to securely retire, while overall 69 percent of workers or their spouses currently save for retirement, according to the Employee Benefit Research Institute’s 2016 Retirement Confidence Survey.
The numbers are encouraging, coming off record lows in confidence following the mid-2000s economic crisis; however, not everything’s on the up and up. Still, about a quarter of American workers lack confidence in their ability to plan for retirement. A lack of planning takes a toll: Two-thirds of workers without a retirement plan say their assets total less than $1,000.
Clearly, having a reliable retirement plan makes all the difference, and that’s the takeaway of a Congressionally dedicated observance next week.
National Retirement Security Week, Oct. 16-22, seeks to raise public awareness about the importance of saving for retirement, initiating an introspective look at one’s own retirement planning goals and an opportunity to make appropriate adjustments for the future.
As AOA members, doctors have a leg up in retirement planning solutions—for both individuals and practices.
AOAExcel Endorsed Business Partner AXA Equitable offers dedicated retirement specialists who will keep members’ options flexible, simplify their plan’s administration, help with tax-related guidance and IRS compliance, and help communicate with employees to build participation in a practice plan.
“We want members doing what they do best: being optometrists,” says Monica Couillard, AXA Equitable relationship manager. “We want to take that administrative burden off our doctors’ plates and allow them to be doctors.”
With that in mind, AXA Equitable’s Senior Retirement Program Specialist David Kay, and Couillard, offer several retirement planning suggestions for doctors at varying stages of their optometric careers.
Tips of the trade: Starting out
Minimize expenses, maximize ROI. It’s tough enough getting clear of student debt, but don’t let that postpone retirement savings. Newly graduated doctors have the power of compounding interest on their side, so start saving now. Kay says it’s important getting into the habit of saving in your early 20s: “That money compounds, and if you give yourself a longer time to save, then you have a better opportunity to reach your goals in retirement.”
Consider a Roth 401(k). Much has been made about the future state of Social Security when it comes time for Millennials to collect. That makes it even more important for newly graduated doctors to start saving now, and an employer-sponsored retirement option, such as a 401k, is a very good start.
Take advantage of automatic deductions. An easy way to contribute to your retirement savings account is via automatic payroll deductions. Many employers already offer plans that allow automatic deductions, a trend that’s been growing, especially among larger businesses.
Tips of the trade: Nearing retirement
Playing catch-up? 401k plan participants, ages 50 or turning 50 during the calendar year, are eligible to make catch-up contributions up to $6,000 over the regular statutory limit of $18,000. These yearly contributions are tax-free and are aimed at helping people save enough for retirement.
Consider deferring. Reached retirement age but aren’t age 70 yet? Defer Social Security retirement benefits a few years to maximize the annual payout; retirement benefits are increased by a certain percentage, depending on birthdate, if credit is delayed beyond full retirement age.
Stick to your goals. The power of compounding interest is influenced, in part, by the length of time money remains uninterrupted. That means doctors closer to retirement will see less benefits from compounding interest over the short-term than money that has been growing for decades. Therefore, it’s all the more important to set appropriate savings goals and stick to them as doctors near retirement, Kay says.
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