A comfortable retirement is a big goal that takes a lifetime to achieve. But the decisions you make don’t have to be complicated. There are only two aspects to retirement planning you need to understand – building up your retirement assets, and making use of those assets once you retire.
Make saving a habit
Time is your ally when saving for retirement. Small amounts invested regularly can build up large balances over decades. Automatic contributions to your retirement accounts make saving easy so you don’t have to worry about fitting it into your budget every month.
Select the right kind of account
Accounts designed for retirement help you by reducing the impact of taxes as you save. If you’re already contributing regularly to your employer-sponsored retirement plan, that’s great. A retirement account like a Traditional or Roth IRA is a good tool to supplement your savings. It’s also possible to save for retirement in individual or joint taxable accounts. Those options can be beneficial for some people, but not everyone, so you should discuss the option with a tax or financial advisor.
Set a schedule
Depending on your retirement account, you may be required to take distributions after a certain age. Or, you might just want a monthly check you can depend on. Homestead can help you set a distribution schedule to make it easy to get the income you want.
Consider your account rules
Many people end up with a mix of different account types in retirement. It’s usually smart to take income from accounts that have required minimum distributions first. For other accounts, you’ll need to know whether and how distributions will be taxed. In some situations, retirement accounts can be ideal gifts to family members. Ask us questions, or talk with a financial planner or tax professional.
Choose your funds
It’s all about timing. When retirement is many decades away, you will probably want to invest a good chunk of your savings in a combination of stock funds. Equities carry higher risk, but historically they have delivered higher long-term returns. As time goes on, you’ll probably want to shift assets to funds with lower levels of volatility. Homestead offers funds across all of these categories.
Click any box to learn about that fund
Daily Income FundAsset Class: Short-Term Bonds
Short-Term Government Securities FundAsset Class: Short-Term Bonds
Short-Term Bond FundAsset Class: Intermediate-Term Bonds
Intermediate Bond FundAsset Class: Balanced
Rural America Growth & Income FundAsset Class: Large-Cap Value and Growth Stock
Stock Index FundAsset Class: Large-Cap Value Stock
Value FundAsset Class: Large-Cap Growth Stock
Growth FundAsset Class: International Stock
International Equity FundAsset Class: Small-Cap Stock
Small-Company Stock Fund
Once you’re in retirement, you’ll still want a mix of mutual funds to help you both grow and preserve your savings. Lower-risk money market and short-term bond funds can be at the core of your portfolio. But since retirements can last for multiple decades, you should also consider keeping some money in equity funds to help shore up your nest egg as you draw it down.
Saving and investing for the years leading up to and during retirement is one of the most important components of your financial plan. We’re here to help so your retirement is as stress-free as it should be.
Your next step:
You can open an account in any of our funds online today. If you need help deciding which fund or combination of funds is right for you, visit the Make a Plan page. Or, call the Homestead service line at 800.258.3030 and choose option 2.