Last year, Pamela Sutton-Wallace and her husband, Maurice, sat side-by-side at the dining room table with their financial statements. Tapping calculations on computers, they created "what-if" scenarios about their retirement income and expected college costs for their two daughters.
Sutton-Wallace, senior vice president for hospital operations at Duke University Hospital, and her husband, an associate professor of English at Duke, decided it was time to put more money into retirement over the next few years before college tuition squeezed their cash flow.Read More
"I've watched too many people get to retirement age and have to keep working because they hadn't made solid plans earlier," Sutton-Wallace said.
According to the U.S. Department of Labor, fewer than half of Americans have calculated how much they need to save for retirement. Here are some tips to help you make the most of Duke's retirement benefits and maintain your standard of living in retirement:
Start saving, keep saving. Start small but increase the amount periodically. At an average annual interest rate of 5 percent, $500 invested at age 25 could grow to $3,520 by age 65. The same $500 invested at age 50 would only grow to $1,039. "It is never too late to start saving, but you get more bang for your buck if you start young," said Sylvester Hackney, associate director of benefits at Duke.
Set up a retirement consultation. Duke staff and faculty are eligible for in-person or phone conversations with representatives from Duke's four retirement vendors at no charge. "We can help people get a better answer to the question `what will my retirement look like?' by reviewing their financial statements and their expectations," said Chris Mann, a financial representative who covers Duke University for Fidelity Investments. The schedule is at bit.ly/vendorconsult.
No need to be an expert. For employees overwhelmed about investment decisions, Duke offers a solution: Target Date Funds. Since 2011, all of Duke's retirement vendors offer these funds, which automatically diversify an account and re-balance investments to become more conservative as an employee ages.
Review contributions. The market and life situations shift. Financial experts suggest reviewing your retirement plan at least once a year. Duke's Retirement Manager website offers tools to help create "what-if" scenarios based on changes in annual retirement savings, expected Social Security payments and age at retirement.
For Sutton-Wallace, the vice president of hospital operations, reviewing finances once a year is a convenient reminder to take advantage of other benefits Duke offers such as reimbursement accounts for health and dependent care.
"If I can save a dollar on taxes, that gives me another dollar to put into my retirement account," she said. "Every little bit helps."