FOR IMMEDIATE RELEASE: January 8, 2007

MAKE RETIREMENT SAVING A GOAL FOR 2007

Money can’t buy happiness, but it can help to fund a comfortable retirement. The beginning of the New Year is an opportune time to get serious about saving for retirement, and the best way to do this is by setting specific goals, reports the New York State Society of CPAs.

The first step in your planning process is to estimate how much savings you’ll need for retirement. This requires considering when you plan to retire, your income sources, and how much money you will need on a monthly and annual basis to live comfortably. You should also consider these factors:

PAY OFF DEBT

This might seem counter-productive, but it’s difficult to save for retirement when you’re paying more in interest on credit card debt than you earn on your retirement investments. Unless you can come up with a plan that allows you to reduce your debt and save for retirement at the same time, it typically makes sense to pay off your credit card debt first. You need to be aggressive – if you only pay the minimum payment due, it could take many years before your debt is fully paid off.

SPEND LESS THAN YOU EARN

This is a key strategy for generating funds to put aside for retirement. Set a goal for cutting your monthly expenses by 10 or 15 percent a month and earmark that money for retirement savings.

CONTRIBUTE TO YOUR EMPLOYER-SPONSORED RETIREMENT PLAN

If your employer offers a 401(k) plan, make contributing as much as possible a top priority. Contributions to a 401(k) are made with pre-tax money and grow tax-deferred, which means you’ll reduce your tax liability while building your retirement fund. As an added bonus, many employers match a portion of your contribution, which makes your retirement fund grow even faster.

For 2007, the maximum you can contribute to a 401(k) is $15,500. If you’re age 50 or older, you can contribute an extra $5000 under the law’s “catch-up” provision.

PAY YOURSELF FIRST

If your company doesn’t offer a retirement plan, you should open a traditional or Roth IRA. Workers who are eligible to establish traditional or Roth IRAs may contribute up to $4,000 for 2007 ($5,000 for individuals age 50 and older).

Instead of waiting until next April 15 to write a check for your IRA contribution, arrange to have up to $333 per month deposited directly to your IRA ($416 per month if you’re eligible for the “catch-up” provision). Automatic deductions are an easy way to make the maximum contribution, since you’re less likely to miss money you don’t see.

If you have self-employment income, look into a simplified employee pension (SEP) plan or a Keogh. These plans allow deductible contributions, and your money grows tax-deferred.

PUT RETIREMENT SAVINGS ABOVE SAVING FOR COLLEGE

Saving for your child’s education is an important goal, but you shouldn’t put it ahead of your retirement saving. There are many options to help with tuition payments, such as student loans and financial aid, while there are no scholarships or loans for retirement. And since most schools do not factor in retirement assets when determining financial aid, saving for retirement can actually work in your favor.

INVEST WISELY AND MONITOR YOUR RETIREMENT FUND’S PERFORMANCE

Learn all you can about investing so you can maximize the returns your retirement investments earn. Invest in a diversified portfolio and keep in mind that, over the long term, stocks generally outperform other investments making them ideal for growth. Review your retirement portfolio regularly and make any necessary adjustments.

ENLIST THE HELP OF A CPA

A CPA can help you devise a retirement savings plan that fits into your overall financial plan. Make an appointment today to get started on making retirement savings a goal for 2007.

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PUT YOUR RETIREMENT PLANNING INTO ACTION THIS NEW YEAR
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Money can’t buy happiness, but it can help to fund a comfortable retirement. According to the New York State Society of CPAs, the beginning of the New Year is an opportune time to step up your retirement savings. To get started, make a commitment to maximize contributions to qualified retirement plans, such as 401(k) plans, traditional and Roth IRAs and, if you are self-employed, Keogh or SEP plans. The sooner you make deposits into these vehicles, the quicker you will boost your savings and the more you can benefit from the tax-free compounding of interest. Where possible, consider having the funds automatically withdrawn from your paycheck and deposited into a retirement savings account. Additionally, now is a good time to review how your retirement investments have been performing and to make reallocations that can help you to boost your savings. No matter how far away you are from retirement age, try to take control of your finances by paying off outstanding debts and limiting unnecessary expenditures that can throw your retirement savings off track. A CPA can assist you in defining your retirement planning goals and developing a plan to meet them.