1. Contribute to a Retirement Savings Plan
Retirement savings plans, also called deferred compensation plans, work alongside your CalPERS pension and personal savings to provide you with income during retirement. As a CalPERS member, you have a variety of plans available to you. Check out this blog post for more information.
2. Establish a Budget
Reaching your retirement goals can be much easier when your money is managed well. It seems obvious, but not spending money is actually saving money. If you know what you spend each month, you are better prepared to cut unnecessary costs. You are also less likely to spend money on impulse purchases when you have limited funds allocated for them. Visit our Planning Your Financial Future Checklist for tips on how to establish a budget.
3. Set Up Automatic Savings
What is the easiest way to save money? Automatically! When you set up automatic deductions from your checking account to a savings account, the work is done for you. Savings accounts are great for having cash on hand when emergencies or opportunities arise. Keep in mind that most don’t offer a high enough interest rate to keep up with inflation, so you may want to consider other long-term savings options.
4. Consider Investing
One form of personal savings is a brokerage account. A brokerage account is a way to buy and sell a variety of investments like stocks and bonds. Keep in mind each of these options is associated with risk. Investing is not for everyone and, if you decide to invest, we suggest you work with an advisor who is also a fiduciary. A fiduciary is legally bound to work for your best interests. It is recommended you work closely with your chosen advisor to determine how much risk you are willing to take, and the right time to adjust your investments as you approach retirement.
5. Delay Social Security
If you will be receiving Social Security, consider delaying the age you apply for your benefits. The amount you receive will increase by a certain percentage each month you delay your benefits. The benefit increase stops at age 70. To determine how much money you will receive based on what age you apply, use the Social Security Online Calculator.
6. Review Alternative Ways to Save
There are additional ways to save money that don’t automatically come to mind. A flexible spending account (FSA) can be purchased through your health insurance plan, if offered by your employer, and provides you a way to pay for health-related expenses through tax-free contributions. Typically, your employer owns this account and the money doesn’t roll over from year to year.
A health savings account (HSA) is an account you own but is usually only offered if you have a health plan with a high deductible. You can earn interest tax-free with this type of account and some even offer investment options.
Finally, ScholarShare 529 is California’s tax-advantaged college savings plan. It’s designed to help families save for future qualified higher education expenses.
A secure retirement is a retirement you can enjoy. To learn more about your benefits and plan for retirement, take advantage of our free virtual member events and classes.
The statements in this article are general and should not be considered a substitute for legal advice. By law, CalPERS cannot provide legal advice.