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Your family and your future.
You can have it all.
Even if you have a solid start on your retirement planning, the picture can change dramatically when kids are added to the scene. Suddenly you’re faced with education expenses. Childcare costs. Unexpected emergencies. And the ever-present request of “Mom, can I have this?” Even the most stringent planner can find their budget stretched beyond its limit. So how do you stay the retirement course?
Put yourself first.
For most parents it seems harsh, but if you have to choose between saving for your retirement and saving for your child’s education, retirement should probably come first. Why? With scholarships, grants, loans and financial aid, your child will have far more sources of money for their college experience than you will have for your golden years. Plus, making sure you have enough to take care of yourself in the future means a lesser chance that you’ll end up as a financial burden on them. And that benefits you both.
Fast Fact! Only about 4 in 10 Americans have taken steps to calculate how much they should save for retirement.¹
Live—and plan—for today.
You don’t want to sweat the small stuff, but you don’t want to forget about it either. There really is such a thing as putting too much emphasis on planning for your retirement. Sure, we want you to have the retirement you deserve, but don’t forget to put aside money for those family-related needs that deserve as much attention, like repairs to your home, your child’s wedding and all of those out-of-the-blue emergencies. Consider taking a “three-way savings” approach:
- Security Savings—This is that “cushion” your mom and dad probably told you about. Aim to have 3- to 24-months worth of income put away to cover living expenses in case of a job loss or other unforeseen emergency.
- Retirement Savings—This is the account dedicated to your retirement—and only your retirement. Even though many retirement plans let you borrow against them, don’t do it. Why? Well at some point you’ll have to pay it back and if you can’t, you may find yourself subject to taxation and a tax penalty. (See “Getting an Early Start” for more details.)
- Dreams Savings—This is the place where you can put away money to make your dreams—whatever they may be—come true. For short-term dreams (less than two years) make sure your savings are safe and liquid, such as a money-market account or a certificate of deposit (CD). Long-term dreams can be funded by a variety of financial services products. Your State Farm agent can help you make sense of the products that are out there so you can put together a diversified portfolio.
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