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• By Kevin Alvarez

America Saves Week – Save to Retire

Retirement is one of those endeavors that fall into the “someday” category. When living your day-to-day life as a person in their 20s, 30s, and even your 40s and those everyday expenses pop up, it’s more difficult to save for something that is seemingly so far away. But as we all know — life comes at you fast. A 2020 survey by Charles Schwab of currently employed 401(k) plan participants found that saving enough for retirement continues to be a leading source of significant financial stress for all generations.

While studies show that 71 percent of Americans are adequately prepared for retirement, much of that includes receiving Social Security benefits under the current law. With Social Security payouts only scheduled to be paid at the full benefit amount through 2035, Millennials and Gen Z have to approach retirement from a different perspective — one that is diverse and doesn’t rely on Social Security benefits, if you can help it. The good news is that starting early allows you to reach your retirement goals more easily.

In today’s economy, we can’t overlook the fact that there are some people who are not making a fair living wage, making it difficult to save. But for those of us with the ability to save it’s important to understand that it’s never too late to start saving for retirement. Your future self will thank you!

1. Get In The "Retirement Ready" Mindset

The first step is getting in the right mindset, meaning-making your new savings goal a priority. We encourage you to “Start Small, Think Big” and take advantage of retirement solutions available to you like your employer's 401K or 403 B plan or IRA options you can open on your own.

If you’re starting your retirement savings journey early, you have time on your side! However, if you’re closer to retirement age, then prepare to be a bit more aggressive in order to achieve your retirement goal. Research how to make catch-up contributions to your retirement savings, ultimately jump-starting a stalled plan.

The good news is this: it’s never too late! It is important to remember that saving anything is better than saving nothing. Even increasing your retirement savings by one percent can make a huge difference in the long run.

IRA OPtions with Safeamerica Credit Union

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2. Define What Retirement Will Look Like For You

Your retirement years will be as individual as you are! Have you visualized how you’d like your retirement to look and feel? Think about where you want to settle down. Will you stay put and have sweet tea and lemonade on the front porch most days or do you intend to travel far and wide? Most importantly, how much “annual income” will you need to achieve this envisioned lifestyle? Asking yourself these questions will help determine a rough estimate of how much to start saving now.

Someone who plans to travel and or have an active lifestyle when they retire may need to save more than someone who has a home that is paid off with no grand plans of world travel.

You will also need to consider exactly when you want to retire. This will help determine how much you should be saving annually. In the modern age, people pre-retire, half-retire or even never leave the workforce at all.

3. Calculate How Much You'll need To Save

Once you have an idea of what type of retirement you want to have, estimate the annual retirement income needed. You want to ensure you are saving for the future you want. Most Americans are not putting enough money into their retirement fund every year in order to afford the life they want for themselves in the future.

What each person needs will vary widely based on a number of factors, including your current age, the age at which you plan to retire, if your partner or spouse has an income, your spending habits, and different sources of retirement income. There are also circumstances beyond your control, like how long you can expect to live based on family history.

While there is no hard and fast rule to determine how much to save by a specific age, many personal finance experts recommend having saved an amount equal to your annual salary by age 30, three times by age 40, and five times by age 50. While this can be overwhelming if you haven’t hit those milestones in your retirement savings yet, one small step you can take is to increase your contribution rate with each pay raise. Remember, building a savings habit and taking control of your finances, like you’re doing now, is worth celebrating.

4. Take The America Saves Pledge

Now that you have a better idea of what exactly you’re saving for and how much, it’s time to consider how you’ll achieve your dream retirement. The America Saves Pledge is a tool that helps you make a simple plan to meet your savings goal while offering you long-term accountability and support along the way. Take the America Saves Pledge and visit AmericaSaves.org for tips, resources, and support on your journey towards retirement. Remember: savers who make a plan are twice as likely to save successfully!

5. Do Your Homework

Consider what type of accounts to deposit your retirement savings into. Your employer may offer a retirement plan such as a 401K, 403B, or SEP-IRA and match your contributions up to a certain percentage. The most important consideration here is to take advantage of any employer benefits such as matching your contributions up to a certain percentage. Find out if your employer offers a match and contribute at least enough to maximize that benefit.

Individual Retirement Arrangements (IRAs) are also an option, and you can open one anytime through financial institutions or financial services providers. There are several different IRAs including the most common: Roth and Traditional. Roth IRAs can be withdrawn at anytime without penalty and are tax-free. Traditional IRAs may be tax-deductible and your earnings grow tax-deferred until you start making withdrawals. You’ll need to determine which is best for you — or maybe a combination of both. The IRS has put together a great comparison tool to understand the differences between the two accounts and decide which may be better for you.

6. Prioritize Making Your Contributions Automatically

Now that you can visualize the type of retirement you want, have determined approximately how much you’re saving for, and have a plan and support in place, the best thing you can do is to set it and forget it! Set up automatic payments and contributions either through your employer or from a financial institution to stay on track.

The point of retirement savings is to keep it invested for the long term. This means avoiding dipping into your retirement fund for emergencies. Instead, create an emergency savings fund that you are also contributing to consistently.

Research by the Employee Benefit Research Institute shows that it typically takes 13 years or more of contributions to an account before you begin to reach a level of savings that is enough to fund a number of years of retirement as a supplement to Social Security. So don’t become discouraged if you feel you do not have enough savings in your retirement fund just yet.

Whatever path you choose to take toward retirement, the biggest step to take is being consistent. Retirement savings is a long-term commitment, but today’s work will pay off in the long run, literally. Take the America Saves Pledge and let us help you reach your goals, no matter what they are. Your future self will thank you!

 

Make the Pledge

By accessing this link, you will be leaving SafeAmerica's website and entering a website hosted by another party.

Although SafeAmerica has approved this as a reliable partner site, please be advised that you will no longer be subject to, or under the protection of, the privacy and security policies of the bank's website. The other party is solely responsible for the content of its website.

We encourage you to read and evaluate the privacy and security policies on the site you are entering, which may be different than those of the bank.

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• By Kevin Alvarez

America Saves Week – Building Financial Resilience – February 21 – 25, 2022

Join us for America Saves Week from February 21st to the 25th as we share tools and resources that inspire members and their families to save successfully and achieve better financial stability. Each day during America Saves Week focuses on a new theme regarding Building Financial Resilience and provides you with tips and tools to help you accomplish your financial goals. Be sure to follow us on social media to view new tips each day.

America Saves Week Daily Themes:

  • Monday, February 21, 2022 | Save Automatically
  • Tuesday, February 22, 2022 | Save For The Unexpected
  • Wednesday, February 23, 2022 | Save To Retire
  • Thursday, February 24, 2022 | Save By Reducing Debt
  •  Friday, February 24, 2022 | Save As A Family

Why You Should Participate in America Saves Week

By participating in America Saves Week, we can help you navigate through different areas of your finances that better position you for success. By the end of the week, you’ll learn about short term and long term savings goals (such as emergency funds and retirement), the best strategies for saving successfully (making a plan and saving automatically), and how to have healthy conversations and instill positive financial behaviors with your family.

About America Saves

America Saves is a non-profit organization that uses principles of behavioral economics and social marketing to motivate, encourage and support everyday Americans to save money, reduce debt, build wealth and create better financial habits. America Saves is an initiative of the Consumer Federation of America (CFA), a non-profit, pro-consumer organization of over 270 consumer education, advocacy, and cooperative members dedicated to advancing consumer interest.

America Saves encourages individuals and families to take the America Saves pledge, a tool that empowers you to commit to save successfully with a plan. Thousands of non-profit, government, and corporate organizations partner with America Saves through local, regional, statewide, and national campaigns both year-round and during America Saves Week. Learn more about America Saves Week.

Take The Pledge

Those with a savings plan are twice as likely to save successfully. Taking the America Saves Pledge is a pledge to yourself to start a savings journey and America Saves is here to encourage you along the way.  Take the first step toward creating a better financial future. Make a plan, set a goal, and pledge to yourself to start saving, today. Complete the Pledge and America Saves will send you short email and text reminders, resources and tips to keep you on track towards your savings goal. Become part of an entire community of savers. Get started now!

Take the Pledge

By accessing this link, you will be leaving SafeAmerica's website and entering a website hosted by another party.

Although SafeAmerica has approved this as a reliable partner site, please be advised that you will no longer be subject to, or under the protection of, the privacy and security policies of the bank's website. The other party is solely responsible for the content of its website.

We encourage you to read and evaluate the privacy and security policies on the site you are entering, which may be different than those of the bank.

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Learn about our savings accounts

• By Kevin Alvarez

Five Steps to Prepare for a Big Purchase

A financial journey typically includes several twists and turns – such as understanding how to manage spending, build savings and control debt. There might be “speed bumps” in the form of unexpected changes in income.
Along the way, you might also navigate milestone purchases such as financing a home or car. When considering a big purchase, the destination is within reach when you steer through the following five financial steps.

1. Look at Your Financial Picture

Start by considering what you can afford given your current income, expenses and other debt obligations. Get a handle on how much money comes into your household each month, and where the money goes. Make sure to consider your net income-what is available to you after taxes. Use Greenpath's Budgeting worksheet to calculate your monthly expenses and income to get an idea of what you have to work with, what your commitments are, and what they have remaining to devote to their goals.

For Homebuyers

When purchasing a home, a common rule of thumb is to spend about 30% of your monthly gross income on housing. That includes costs like mortgage principal and interest, property taxes, insurance and maintenance.

For Car Payments

A general rule of thumb is to keep total monthly car costs at about 20% of monthly take-home pay.

2. Check Your Credit Score and Report

Checking your credit score and report is key when considering a big purchase like a home or car.

Pull your credit report from AnnualCreditReport.com and follow the additional instructions to see your current credit score–which influences your overall cost of financing your purchase. The lower your credit score, the more likely you will have a higher interest rate and greater overall cost.

Tip:

Be sure to check your report for accuracy. Resolving errors or incorrect information often helps increase your credit score, giving you more attractive financing options. If the report is inaccurate, file a dispute with the credit bureau. Make sure to check all three bureaus, as sometimes one has information that the another does not. Before making a big purchase, it's important to fully vet (and make sure toy understand) your financing options.

3. Research Your Financing Options

For a home purchase, that means giving yourself enough time to explore mortgage options including types of mortgages, terms, fees, interest rates and other information. Consider getting a preapproval or prequalification letter from a lender, especially in a competitive market with low housing inventory.

If you’re looking to finance a car or other big purchase take inventory of the most competitive loans offered by the dealership, credit union, bank or other lender.

Also be sure to read through any fine print: for example: Is there a pre-payment penalty if you pay your loan off earlier than expected?

Tip:

When conducting your research, remember to use trusted, unbiased information sources, rather than depending upon advice from someone who might benefit from your choice.

4. Plan Your Purchase

Timing is everything, and having a plan in place for when to pull the trigger can make all the difference. Do you have enough in savings to provide a good down payment on a home or car? Is there a certain time of year that special financing or promotions are generally available?

Now’s also a good time to find someone you trust to help you carry out your big purchase – if you’re buying a home, ask friends or families for a real estate professional they can refer.

Having someone in your corner who can help you to understand your options and know warning signs to look out for can make all the difference. For a car purchase, do you feel like the dealership is able to provide advice and guidance? Have you taken the time to research vehicle make and model from a reputable source of information?

Tip:

This is also the time to get your documentation in order, like proof of employment, insurance or other financial information.

5. Make the Deposit

Finally, get ready to make an earnest money deposit for your purchase. In the case of a home purchase ,which indicates you are a serious buyer. Generally, earnest money deposits range from 1% to 2% of a home’s purchase price and are only refundable under specific circumstances.

For a new car purchase, deposits typically total about $500 once you agree to the vehicle price in writing.

Tip:

Make sure you understand whether the deposit is refundable before making a purchase - especially if you think you may change your mind later.

The Journey Ahead

While not an exhaustive list, these steps should help prepare for the financial road ahead. As you travel along your financial journey, take advantage of financial counseling and guidance provided by the trusted national
nonprofit GreenPath Financial Wellness.

To help spread the knowledge, read our Understanding Financial Terms blog post to become even better equipped to make any of your upcoming big purchases.

GreenPath Financial Wellness

• By Kevin Alvarez

Understanding and Preparing a Savings Account – Financial Literacy Month

Have you been keeping an eye out on the housing market? What about the auto industry? Well before you can purchase your first home or a brand new car, taking control and understanding your debt is needed. The journey of reaching your next financial goal may sound like a daunting task, but having the understanding of what it will take to reach those goals is the mindset to strive for. Through then, you can create short term goals which will assist with building up to the overall financial goal.

In order to be properly set for the financial path forward, there are a few initial organizational concepts that need to be accounted for first.

Understanding Your Monthly Income

Do you know the difference between net pay and gross pay? Net pay is the amount you take home AFTER pay roll deductions and tax with holdings have been made. Gross pay is the amount that is shown BEFORE tax deductions like state tax, federal tax and social security.

The number to be aware of is your net pay. As the amount of money you are actually taking home is known and acknowledged, you can create a budget from a true dollar amount and track accurate financial habits.

Understanding and Cutting Your Spending Habits

Are you aware of any habits that add a burden to your wallet? When it comes to finding where you can save money, coffee is a common expense people adjust first. You don’t have to cut coffee completely, but you can easily save by making coffee from home. Purchasing coffee from your favorite café is costly compared to a home brewed pot which could even save you time, eliminate transportation costs and reduce the cost of coffee itself.

Gym passes are also a typical expense that could be adjusted to aggressively save. There may be a numerous amount of reasons for a gym pass, yet there is an equal amount of alternatives that could be implemented in order to save. Switching to a home workout and using online videos and blogs can provide structure to your workout all while saving again, on transportation costs, time and of course, gym fees.

These are both conceptual ideas that could translate to other aspects of monthly expenses, in order to start cutting your spending habits.

Understanding Your Saving Habits

Now that you understand your spending, you can focus on your savings habits and take advantage of different accounts that pay dividends at better rates than traditional big banks. Your typical savings account at a big bank does not offer the same interest rates as a credit union, so it’s often advised to open either a Share Certificate Account or Money Market Account to maximize your monthly savings through dividends.

Understanding How to Move Forward

Everyone’s financial situation is different and some situations require to pay debt down aggressively, with a small consistent stream going into savings. It is recommended to do both collectively even if the monthly deposited savings amount is small. As a member of SafeAmerica Credit Union you have numerous resources readily available to help keep you, financially on track. Being financially healthy is a goal in and of itself and allows the path to financial milestones to present themselves. Keeping to strict saving and spending habits allows you to keep debt down and reach your financial goals.

Learn how you can use a Share Certificate to your advantage as well as the liquidity of a Money Market below.

Share Certificates
Money Market

• By Kevin Alvarez

Saving Money Isn’t a Luxury – It’s a Necessity

Information brought to you by our partner, GreenPath Financial Wellness

4 Reasons to Start Saving Now - Plus Tips for Getting Started

Saving money can often be a challenge — especially during times of financial uncertainty. As humans, we’re wired to take care of our needs now, and worry about later ... well, later. However, saving money is a critical component of financial wellness. Here, we break down why saving (even a small amount) can make all the difference:

Saving Helps to...

Prepare us for emergencies

Putting aside a set amount each month helps protect us in a financial emergency. Perhaps it’s a surprise medical bill, car repairs, or temporary loss of income. There are many reasons why an emergency fund is critical to help handle unexpected expenses. Plus, building up emergency savings to cover unexpected expenses is better than using high-interest credit cards or taking out a loan. An emergency fund gives you peace of mind and prevents you from going into debt.

Set us up to manage planned expenses:

For those anticipating making large purchases, saving money can help us prepare our budget to pay for expenses that we plan to take on–such as a down payment on a car, home improvements, or an upcoming vacation. Emergency savings are also useful for smaller cash outlays like costs for pets, car maintenance and other important bills Here again, by saving up for planned purchases whether they be the significant expenses or lower cost items, we can avoid using high-interest credit cards or taking on other debt. When you plan ahead, you take control of managing your monthly income.

Reduce Stress:

Financial stress is real. It can be overwhelming to have bills and expenses that we struggle to pay each month. In fact, many researchers see a significant connection between financial stress and mental health and well-being. During the ongoing pandemic, financial strain is felt by the newly unemployed, furloughed, and those still working but facing an uncertain future. When you build up savings, you reduce the stress many of us feel about our finances and give yourself a gift–peace of mind.

Provide a sense of freedom:

Gaining a sense of freedom might not be the first reason that comes to mind as a benefit of setting up a savings plan. Yet many of the people who contact GreenPath Financial Wellness report enjoying a sense of improved freedom and flexibility after building up savings, no matter the amount. Setting aside even $20 a paycheck is proven to provide a feeling of freedom due to the "buffer" savings "nest egg" exists gives people more freedom to choose how to handle their finances, rather than feeling stuck in a particular situation.

 

How to Jump-Start Your Savings

1. Assess your budget.

Use GreenPath's Budgeting Worksheet to get a  handle on your monthly income and typical expenses, including credit card debt or other loan payments.

2. Commit to a monthly savings amount.

Once you have a complete picture of monthly income, expenses, and debt, consider how much you can set aside each month to build up savings. How much you set aside will depend on your financial goals. For instance, if you're planning for a large purchase, break down the amount over a 6 month or 12-month period, and automate savings to meet that goal.

3. Automate your savings.

Automating your savings makes it more "painless." You'll be able to set it and forget it, by paying yourself first through automated deposits.

4. Maximize Interest

Ensure you're maximizing the interest you're earning by getting a competitive annual percentage yield (APY). Consider a money market or other higher interest account.

5. make it a family affair.

Setting a savings goal with loved ones lets you come to a consensus about goals and dreams. That way, it is easier for you all to plan and encourage each other to save for emergencies, planned expenses, or other goals.

Saving for your future is closer than you think.

Building savings can seem like a daunting task, but you will start to see results with practice and patience.

If you're unsure how much you can reasonably save each month or need a helping hand getting started, you can request a free financial health assessment with a GreenPath NFCC-certified Financial Wellness Expert.

Our professional, caring coaches will work with you to assess your situation, explain the options or solutions available, and help you create a plan to meet your goals. It's free, confidential, and no pressure.

For additional insight view an on demand webinar: 10 Ways to Start Saving Money.

Learn More

• By Kevin Alvarez

Free Webinar: How to $et (And $tick To!) Your Financial New Year’s Resolution

This free, one hour webinar is presented by GreenPath Financial Wellness

For many, 2020 has created financial challenges and derailed their financial wellness journey. Come along side GreenPath to discuss simple ways to get on track with your finances in 2021. Let us guide you with ways to budget, save, and reduce stress. After our presentation, you will be prepared to make New Year’s Resolutions you can stick with and create realistic goals.

Join us on January 20, 2021 at 10:00 am as we explore financial changes you can make to have a successful New Year’s Resolution.

Who Should Attend

  • Everyone! Anyone that wants to be more financially prepared as we head into 2021. We will be providing tips and suggestions for both the novice and budget conscious individuals.

What You'll Learn

  • How to create a budget
  • Reduce Spending
  • Simplify your finances 
  • How to achieve financial freedom 

Details

Date: Wednesday, January 20
Time: 10:00 am PST - 11:00 am PST

Register Now
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