FAIRFIELD, NJ. -- When it comes to retirement planning, there are three keys to success according to Fairfield-based Kearny Bank: starting young, being consistent and diversifying your portfolio.
For most 20-somethings, retirement seems decades away. However, starting to save at a young age can make an exponential difference in the growth of funds. Even small contributions often result in big returns at retirement time, so it’s important to add to an account each year as early as possible in the calendar year.
Diversifying investments is also the surest way to maximize lifetime earnings. Stocks and bonds are important for long-term growth, but many financial planners believe fixed income can be just as valuable.
At Kearny Bank, retirement advisers stress the need to build a plan with a solid base. IRA savings accounts offer security and a consistent return without the volatility associated with stocks and, to a lesser extent, bonds. Certificates of Deposit offer an extra measure of comfort, since once deposited, funds grow without constant monitoring.
Layering accounts is also a valuable strategy. For example, Kearny Bank offers a variety of terms up to five years. Since interest rates change from time to time, having differing maturities improves your ability to access rising rates.
The importance of reviewing asset allocation increases with age. As one nears retirement, risk tolerance reduces. Therefore, older savers should increase fixed assets to assure accumulated savings are available when desired.
Equally important is the choice between a Traditional and Roth IRA. Traditional accounts allow current year tax deductions with monies taxed when withdrawn at retirement. Roth IRAs are not tax deductible but are tax-free when accessed.
When planning for retirement, regardless of age, the financial experts at Kearny Bank can help assess any situation and provide guidance to make the right choices. For more information, click here.