5 Steps to Plan for Retirement

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.

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.

Depending on your retirement account, you might 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.

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.

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.