Sunglass shops in Houston may want to stock up on rose colored glasses. Apparently, everyone is wearing them these days.
By Jim Chapman, Managing Director, Wells Fargo Institutional Retirement & Trust
According to a survey released by Wells Fargo’s Wealth, Brokerage and Retirement Group, most Houston-area residents feel good about their finances, with three in five (59%) currently describing their household’s overall financial health as “good” or “great,” significantly higher than the 44% of all US households responding the same. Excellent. Time to celebrate, right?
It depends. On the bright side, we are an optimistic group. We report feeling “good/great” about a few things—our ability to pay monthly bills (79% vs. 67% nationally), our overall standard of living (69% vs. 53% nationally) and our level of discretionary spending for the “fun” things in life (54% vs. 40% nationwide). Seemingly all good news.
That said, there is some bad news. We may not have the long-term outlook needed to back up a truly healthy financial future. Despite our optimism, the survey found that 41% of Houston adults have no type of detailed investment or financial plan or even a budget to help manage spending. Furthermore, while most Houstonians in the past year saw a doctor for a physical check-up (77%) or went to the dentist (75%), fewer than half conducted an annual financial review or check-up (43%). Instead, they were much more likely to take a vacation (73%).
Vacations are great for unwinding and relaxing from stressful jobs. But what happens when you’re ready for the “R” word—retirement?
It may seem a long way off and far removed from day-to-day concerns, but now is actually the best time to start planning and saving—no matter what your age. There are several easy ways to get started.
- Write down your retirement goals. Jot down your best guesses for the age you want to retire, where, and what you plan to do in retirement. You’ll change those goals along the way, but you need to start somewhere. If you’re married or have a partner, be sure you both do this exercise and compare notes.
- Take advantage of any retirement savings plan your employer offers. Many employers offer a match—if you don’t contribute, you are essentially leaving free money on the table. 401(k), 403(b), or 457 plans are simple and convenient. The money is automatically withdrawn from your paycheck, allowing you to save, not spend.
- Live within your means. The less you owe to lenders and credit card issuers, the more you’ll have to save for retirement. Try to avoid overcharging.
- Work with a financial advisor. A financial advisor can help you plot a strategy and take advantage of the best ways to save for retirement.
- See where you stand. Another useful resource that anyone can use is My Retirement Plan, which provides a realistic savings goal tailored to you—and a realistic plan for pursuing that goal.
Between your monthly budget, retirement savings and investments, keeping close tabs on your personal finances may seem like a full-time job. But it doesn’t have to be. Take advantage of the tools and resources available to you so that you can learn how to make the right retirement choices for your future self.