San Mateo Retirement Planning
San Mateo retirement planning should begin with your very first paycheck. If San Mateo residents can do that, it will make retirement planning that much easier, as well as more enjoyable as you watch your savings grow over the years.
San Mateo residents have a bit of an advantage, in that the median income in this CA city tops $80,000. Of course, residents of this California city also have a higher cost of living, including a median home price topping $701,000. But that's actually up from around $450,000 in 2000, which means homes in this California suburb not only have retained their value, but have continued to grow in value.
San Mateo retirement planning can begin the moment you accept your first "real" job out of college. As part of your benefit package, your CA employer should offer some kind of California retiring plan, such as a 401(k), a pension plan, a profit-sharing plan, or a 403(b) plan if you are working for a school district, hospital or non-profit organization in California. While fresh out of college and possibly facing student loans, you may think retirement planning is something you can put off until later. Don't, experts say.
That's because you'll miss out on the magic of compound interest as a key element in your San Mateo retirement planning. According to Choose to Save, a program dedicated to educating Americans on the importance of saving, compound interest means that you earn interest on the original amount you put away. As that interest is added into your account, you then earn interest on that money as well.
For San Mateo residents to achieve financial security, the money must grow many times over its original value. You can actually predict when your money will double. It's called the Rule of 72: Divide 72 by the interest rate you are earning. For instance, at a rate of 6 percent, you will double your money in 12 years. The best news for your San Mateo retirement planning, Choose to Save officials say, is that you can earn interest on even small amounts, so you can start today.
Even better for your San Mateo retirement planning, your employer will often match your contributions, up to a certain limit, which means your money grows even faster. Check with the person or department in your CA company that manages the retirement accounts to find out the exact amounts of those contributions to aid in your planning.
Planning for success
Once you begin putting a percentage of your paycheck away for retirement, you can then take the next steps in your San Mateo retirement planning. Start an emergency fund of three to six months of living expenses so that if a crisis occurs, you will have the resources to weather it without touching your nest egg. If you have to withdraw from your 401(k) early, you'll not only lose principal and interest, but may be faced with withdrawal penalties.
Got a raise or bonus? Financial experts say to put that right into savings. If you change jobs, remember your San Mateo retirement planning. You can leave your savings invested in your current plan or roll them over to an IRA or your new employer's plan.
San Mateo residents should learn how to make good decisions about where their funds are invested. Most plans offer a variety of mutual funds, so spend some time researching the offerings, planning your choices carefully. You want to maximize your investments, but also to protect your money. You will want to revisit this decision throughout your career as your life circumstances change. The closer you get to retirement age, the less risky the investments you want to choose. While the riskier investments promise a big return, there also is a greater chance of losing your money. You can't afford to do that at 50 like you can at 25 or 30.
Just because you are now out of school and in the workforce, you shouldn't stop learning. According to officials with the U.S. Department of Labor, the most important thing you can do in your San Mateo retirement planning is to ask questions -- and be sure you understand the answers.
To get the answers you need for your planning, San Mateo residents will want to find a professional financial counselor. Interview several in the San Mateo area to find someone you are comfortable with -- after all, you will be entrusting your future to this person, Labor officials say. Make sure this person is on top of not only what's going on with the big picture, but also is familiar with your circumstances, as well as the dreams you harbor for your future. If you can begin your San Mateo retirement planning early, you can relax in the knowledge that your future is secure.
Retirement Planners In San Mateo
Financial Engines Advisors, LLC2350 Mission College Blvd. Suite 450
Santa Clara, CA 95054
Mallory Dinis - Senior Vice President - Investments
Financial Engines Advisors, LLC4301 Hacienda Drive, Suite 100
Pleasanton, CA 94588