Can you live on 56% of your current income?
The fact is, if you rely solely on your pension benefit, you probably won’t have enough retirement savings. Most teacher pensions only provide about 56% of pre-retirement income. Adding insult to injury, as the cost of living increases, the income gap keeps growing.
Experts estimate you’ll need at least 70-90% of your current income to maintain a comfortable retirement.
The good news is there are actions you can take now to make sure you don’t fall short when it comes time to retire.
Contribute to a 403(b) and/or a 457(b) RETIREMENT plan as early as possible.
It helps you bridge the gap between your pension and the funds you’ll need to retire.
According to the Employee Benefit Research Institute, employees who participate in a retirement plan are 50% more confident about having enough money to live comfortably throughout retirement.
USE TIME TO YOUR ADVANTAGE.
The longer you wait to save for your future, the more money you will need to end up with the same amount, or less. Here is a hypothetical example:
At age 25, Julie starts saving $350/month in her 403(b) plan and never increases her contributions. When Julie is age 65, she will have $326,185 – assuming 3% annual interest.
At age 40, Karen starts saving. She does the same thing – contributes $350/month and never increases her contributions. When she turns 65, she’ll only have $157,722. Even if she doubles her contributions to $700/month, her total savings will still be less than Julie’s at $315,455.
It pays to start saving early! Don’t wait!
Take advantage of tax free retirement strategies using Permanent Life Insurance.
In addition to providing a death benefit, Indexed Universal Life Insurance allows you to accumulate tax-deferred cash value. During your lifetime, you can access this cash value as a stream of retirement income.