Saving for retirement: Local financial planner says the first step is to ‘just start’

Posted at 7:42 AM, Oct 21, 2019
and last updated 2019-10-21 08:47:23-04

NORFOLK, Va. - It's what we're all working toward, but are we saving enough?

The thought of retirement and saving can be overwhelming, but Kevin Zywna, a Certified Financial Planner with Wealthway Financial Advisors, says the first step is starting, no matter how little you can put away.

“Most people can start with $25 a paycheck. The first thing you have to do is start with something...anything," he said. "The hardest thing to do is get going but once you get going and you have a little saving success, then that begets more success. So then $25 a paycheck turns into $50, which turns into $100.”

The easiest way to get started saving for retirement? Zywna tells News 3 that's through an employer plan, like a 401k, which offer tax deductions and employer matching a.k.a. free money.

401k plans deduct from each paycheck and employees can choose how much to deduct. Zywna says in most cases, if that number is 6%, then the employer will match half, so he advises putting in what you need to in order to get the maximum amount of 'free money' possible.

At minimum, through combined employee and employer contributions, Zywna says a person should be trying to save 15% of their income, but no matter what you put in, he says make sure it's invested in a place where it can grow, like stock funds.

It's a scary thought because day-to-day those funds can lose money, but in the long run Zywna says what you invest will grow.

“It’s a stock fund so that stock fund is like a basket and probably holds anywhere from 50 to 500 individual companies so you get instant diversification and the long-term growth to go along with it," he said.

Another option outside of employer plans are Individual Retirement Accounts or IRAs, which offer different tax advantages depending on the type. IRAs have a maximum yearly contribution of $6,000 a person.

A combination of these plans and accounts is how you will save the money needed to retire. Money can be withdrawn from them in an emergency, but Zywna says try not to do that.

“The primary purpose of that money is for retirement planning. Until you reach retirement, you should try to sacrifice and save and keep the money in the retirement plans until it’s ready for that purpose," he advises.

For young professionals straddled with college debt, Zywna says it might take a little longer to get to where they want to be with saving, but he reiterates, just start saving.

“The easiest time is when you’re starting out and you’re by yourself. If you can get into that habit, it’s a habit that will serve you well for the rest of your life," he said, adding that pensions aren't a retirement option he's seeing as much.

“There’s been a shift, a cultural shift on retirement savings from the employer to the employee and being educated, being smart with your money and number one, being responsible. It’s up to you to take care of your financial situation now and if you don’t do it, no one’s going to do it for you.”

Zwyna advises reaching out to a financial advisor for advice on how to get started with retirement. For questions on 401k plans, he says generally an employer will have some education on how it works.