Other advice includes enrolling in workplace retirement savings plan by calling your organization’s human resources department to get the ball rolling. Contribute at least enough to take full advantage of any company match that might be offered, Finra suggests.
“No company plan? Open an IRA, which you can often do in a few minutes with a simple phone call,” the alert advises.
The best way to fund plans? “Set up automatic contributions so that you are contributing each month, or with each paycheck. Both IRAs and employer-sponsored 401(k)s or similar plans provide tax advantages designed to encourage retirement savings (and discourage early withdrawals), so that’s where you should begin,” Finra says.
Giving yourself a savings "pay raise" each year, is another staple of successful retirement saving plan, the agency states. “Your savings target should be around 12 to 15 percent per year, inclusive of any employer match. You may need to work up to that amount over the course of a few years, escalating the amount you save by a percentage or two each year. But the earlier you lock in that double-digit savings rate the rosier your retirement balance sheet is likely to be.”
Don’t stop saving for retirement just because you reached an IRS limit, Finra says. “IRS retirement contribution limits are not guidelines for how much you should save. While an admirable first step, saving the IRS maximum may not ensure you meet your retirement goals. This is especially true if you are saving through an IRA, which has a maximum savings limit is $5,500 per year, or $6,500 if you are 50 or older. Unless you supplement this amount with other savings, your nest egg may fall short of what you need to enjoy a secure retirement,” Finra warns
“Consider discussing ways to enhance your retirement savings with an investment or tax professional,” the agency advises.
Last but not least, Finra advises retirement investors to evaluate investment fees. “Investing is never free,” says Finra, which warns investors that fees can “have a surprisingly large impact on your returns. It’s a good idea to conduct periodic check-ups on your financial accounts to ensure your money isn’t slowly being eaten away by high fees.”
How can investors check fees? “You may not have much power to control the fees in an employer-sponsored retirement plan, but you often can control which funds you select,” Finra advises. “Find out how much each fund charges in annual expenses. It may be possible to select lower-cost funds that allow for appropriate diversification and asset allocation,” says the agency, which refers investors to the FINRA Fund Analyzer, which allows individuals to compare performance and fees on over 18,000 mutual funds and exchange-traded products (https://tools.finra.org/fund_analyzer/).