Tag Archives: retirement

How to Create Better Habits

better habits

If you’re like us, starting a new diet, or working to exercise more often is more difficult than we initially planned. The same is true with many financial goals you may have. Saving for retirement, eliminating credit card debt, increasing your credit score; these are all things that take time and dedication to complete, but sometimes it’s hard to stay on track.

Luckily, Business Insider released an article that showcases just how long it takes for your brain to form a habit. Surprisingly, it’s less than you’d think! It takes approximately 66 days for a consistent behavior to be added to your brain’s list of automatic actions. Thankfully, those 66 days do allow for some error. We’re all human, so there’s no need to be perfect during your trial practice. However, by committing to your new habit for 66 days or more, you can ensure that this new beneficial behavior sticks with you well into the future.

This new habit can be as simple as remembering to take the trash out, or as complex as maintaining a specified number of calories in a day. At Putnam Bank we want to inspire you with some important financial habits to help you progress down the path of financial success. Take a look at these three examples.

  1. Use the Envelope System: To help train your brain to only spend what you budget for, withdraw your total miscellaneous spending budget for the month. Then, divvy it up amongst your budget categories like food, entertainment, transportation, etc. After it’s been segmented, stick to your dollars, and only spend what you have in the envelope. No credit or debit cards to spend extra. If you can successfully make this a habit, you could see a large amount of extra savings which can then be used for vacations, retirement, or other savings ventures.
  2. Pay All the Bills Before They’re Due: Many habits appear easier than they truly are. In order to process this behavior into a habit, there are several steps you’ll need to repeat each month. To get started, make a calendar at the beginning of every month to mark the dates bills are due and for how much. Then, as the bills arrive, structure your payments to pay one at a time, leaving extra cushion in your account, should an unexpected expense arise. Using this recurring schedule, you can help yourself to get each expense paid before the designated due date. As an added bonus, an ongoing history of on-time payments may benefit your credit score!
  3. Save for Retirement: This one is often a habit that takes longer than 66 days because there is no immediate reward for the effort you put forward. Later in life, your future self will thank you for putting the time and savings away early on. The first step in this process is to research your options. If your company offers a 401(k), and a match, then that may be the first place you want to start. By automating payments from your paycheck, you can use pre or post-tax dollars to bolster your savings without the temptation of spending. Then, when you save extra money with your envelope system, remember to add those surplus funds into your retirement savings account to give it an added boost.

We love the three goals listed above, but that doesn’t mean you can’t create your own unique financial habits! If you’d like to get started on a new financial behavior, stop into your nearest branch today and speak with one our personal bankers. Our team would love to help kick off your next 66 day habit!

How to Save $1,000,000 for Retirement

Retirement Savings

Retirement, 401(k), stocks and bonds, the subject matter of saving for the long term isn’t often as appealing as saving for the short term. Perhaps that’s why nearly three-quarters of Americans are underestimating how much they’ll need for retirement. The United States is on the brink, if not already in, a retirement crisis. However, at Putnam Bank we believe retirement saving can still be easily accomplished, there are just a few steps to get started

  1. The first thing you’ll need to do is determine when and how you want to retire. There are an endless variety of retirement lifestyles, each of which entails a different budget and distribution structures. Some popular options include traveling by RV, retiring in a new location, downsizing your home in the same area, pursuing a new business or passion, and of course maintaining your current lifestyle without the need for work. By choosing your lifestyle goal we can begin to structure your savings plan around what you hope to achieve.
  2. Once you know what you want, start saving ASAP. As the old adage goes, “Slow and steady wins the race.” This phrase is the epitome of retirement. If you save less but start earlier you will consistently save more than if you deposited higher amounts later in life. We recommend utilizing any 401(k) or retirement savings plans your employer offers. If you are self-employed or don’t have access to retirement benefits, an IRA is a great self-funded option to help you save and take advantage of valuable tax incentives.
  3. Create a goal for how much you need to save. Financial Mentor offers great calculators to help you plan your path to retirement. They can help you determine your strategy to become a millionaire or show you how much you may need beyond $1,000,000. Saving more than one million could be more pertinent than you think. Today’s research indicates that millennials may need to save more than their baby boomer or gen x counterparts.
  4. Add any available surplus funds to your retirement savings. Simple adjustments like changing grocery stores, carpooling, and bringing your lunch to work can save more than you think! If you are able to find some additional ways to save, put those funds to work by contributing to your retirement accounts.
  5. Diversify your retirement savings. Instead of putting all your funds in company stock, corporate shares, or your 401(k), we suggest diversifying your savings options to ensure your risk isn’t higher than you need. Speaking with a professional adviser could help you determine what type of risk you’re comfortable with, and how you would like your contributions to grow over time.

By continuing to save each and every month you can beat the odds and have a fulfilling and successful retirement. The most important thing to do is to start. If you’d like to open a dedicated savings account, IRA, or CD, our dedicated team is here to help. Stop by or drop us a line today to get started today.

7 Financial Goals to Make 2017 a Success

Money Management

Putnam Bank challenges you to make 2017 the year of financial prosperity. With an emergency fund, sound credit, and a monthly budget, you can conquer any fiscal goal so long as you keep moving toward it. We recommend these seven goals to optimize your money management potential:

  1. Check Your Credit Score. There are many websites available which allow you to view your current credit score across the three reporting bureaus; however, the only federally authorized FREE site is annualcreditreport.com. This site gives users one free report from Equifax, TransUnion and Experian every year. By keeping regular track of your score, you can ensure that no fraudulent inquiries have been made, and no outstanding debts are currently being held against you. After all, a higher credit score, could mean potential savings elsewhere.
  2. Make a Monthly Budget. This tool is invaluable when building your personal financial success. By creating a plan for each dollar you earn you are no longer reacting to your spending, but proactively telling your money where it should go. Adding this transparency to your spending can often showcase areas where you may be spending more than desired. After adjusting your monthly allocations you can then reassign some of those dollars to help build your personal savings, and other areas of improvement.
  3. Automate Your Savings. “Out of sight, out of mind,” or so the saying goes. Adding processes to your budget, such as automated savings, can help you accumulate money before you miss it. Before you start planning your spending for the month, determine how much you want to save. So long as your fixed monthly expenses are covered, you can then create an automatic monthly transfer from your checking to your savings. By doing this the same day you are paid, the funds will be gone before you even know to miss them. You can then budget the rest of your spending to cover flexible categories like groceries, entertainment, and more.
  4. Start an Emergency Fund. In order to safeguard your savings, you’ll need to create an emergency fund. This particular account offers protection against unexpected expenses or dilemmas that could otherwise infringe upon your diligent accrual of funds. It is often recommended to begin by saving $1,000, and then gradually work up to three or six months’ worth of income. By adding this cushion to your personal finances, you ensure that you are financially stable enough to weather storms both big and small.
  5. Submit Your Taxes Early. Tax fraud is an increasingly relevant issue, posing many problems for both the IRS and tax paying citizens. We suggest completing your tax return as soon as possible in order to help keep potential criminals from using your information to their benefit. Additionally, if you have a potential tax refund, the earlier you file your return, the sooner you are able to receive it.
  6. Maximize Your 401(k). We recommend revisiting your HR materials to find out the specifics of your company’s 401(k) plan, and to make the most of your diligent savings. If they will match up to ten percent, and you’re only contributing six, you could be missing out on free funds! Additionally, if you want to retire by a certain age, you may need to adjust your contributions to maximize the years you still have during your employment.
  7. Pay Down Your Credit Cards. Interest rates on credit cards are infamous for being consistently high. If you have multiple credit cards which carry a balance, we recommend paying down the account that has the least amount on it. By continuing to pay the minimum installment on each card, you can then assign any additional funds to the card with the lowest value, to help pay it off sooner. Once the first card is no longer carrying a balance, you can then utilize the monthly installment and the additional funds to put toward the next card, and continue through the accounts.

How to Save for Retirement at Every Age

Retirement Savings

How much do you need to retire? Will you continue working after age 65? Do you want to travel during your retirement? These are just a handful of questions that are important for retirement preparation. Unlike saving for a home or a new vehicle, saving for retirement requires long-term commitment and goal-oriented benchmarks. At Putnam Bank we want to help you succeed as you save, and offer these milestone marks:

Age 18-25: During this point in your life, you are discovering what you want to do, and how to get there. Focus on creating a solid foundation through a monthly budget, and designated emergency fund. If your employer offers a 401(k) option we highly recommend utilizing its potential by contributing the maximum amount your budget will allow. Always be sure to take advantage of a company matching policy if available.

Age 25-35: In addition to your 401(k), we also suggest opening an IRA. This enables you to continue to save without having your funds tied to an employer. Now is a great time to take advantage of other tax beneficial accounts, such as an H.S.A., 529, or Coverdell account. Both the 529 and Coverdell accounts aid you in saving for your child’s education without the burden of taxes.

Age 35-45: One of the key aspects of retirement is making sure your money is where you need it when you need it. An experienced financial adviser can help you invest in appropriate stocks, bonds, and other financial strategies. Together you can construct a plan to ensure your risk decreases as you age, and be certain the funds you need are available upon retirement.

Age 45-55: Now is the time to examine your current career path, and determine the year at which you would like to retire. Although the average age of retirement is 66, this may not hold true for you. Whether you decide to retire later at 72, or earlier at 57, you’ll need to have this number available to help continue the development of your savings. To easily calculate your current savings projection, this tool can provide information to help you make the most informed decision for your specific goal.

Age 55-66: During this time you may begin to qualify for distributions from your 401(k) and IRA. By postponing these distributions, you can continue to save, and work to build your retirement nest egg before you need it. Additionally, look into various employment options upon retirement. If you decide to work part-time for enjoyment, it could mean added savings to help you afford splurging in the future.

Age 66 and up: Once you have officially retired, you will begin to take distributions from your 401(k) and IRA. While both a 401(k) and Traditional IRA require you to accept funds after age 70 ½ , a Roth IRA can remain untouched until you decide to use the money. For this reason, we recommend using a Roth IRA when your income levels allow.

We look forward to joining you on your journey to retirement. Whether it’s in 10 years or 50, it’s never too early to start saving! Call Ray Perry today at 860-928-6501 x3076 to arrange your complimentary financial consultation.

Tax Beneficial Accounts

Personal Finances

One of the most proactive ways you can protect your personal finances is to take advantage of tax beneficial accounts. Though these accounts are typically tied to retirement savings, this is not always the case. At Putnam Bank we want to help you make the most of your money by explaining these account options:

Health Savings Account (HSA): Currently tied to your insurance provider, this account allows you to save pre-tax income in an interest bearing account. The funds within this account can be rolled over annually, and are meant to help supplement the cost of various medical and childcare needs. However, there are limits on how much you can save for this account, the 2017 limit for an individual is $3,400 per year, and $6,750 for a family. You can access these funds using a debit card or written check to cover qualifying expenses outside of your insurance offerings. Another great perk of this account is that it can be invested. Work with a financial adviser to invest in mutual funds, stocks, and bonds to help your money mature, and grow your funds even more.

Work Sponsored Retirement Account (401k): Many companies now offer this account as a corporate benefit. By automatically withdrawing pre-tax dollars from your monthly income, you are able to save for retirement before you even receive your paycheck. The funds you contribute, along with those matched by the company, can then be invested into a variety of options, pushing your money to continue multiplying. Since these funds are meant to act as a retirement savings, any early withdrawals have a 10 percent penalty in addition to the income taxes due. However, once you reach age 59 ½, you can begin taking regular distributions from this employer-sponsored plan.

Individual Retirement Account (IRA): This is a great example of a non-work sponsored retirement account. Generally offered in two versions, the Roth IRA and the Traditional IRA, both offer various tax incentives so you get the best bang for your buck. Each account has a contribution limit of $5,500 a year, or $6,500 for those age 50 or better.

  • In a Traditional IRA you contribute pre-tax dollars into an interest bearing account, which can then be invested into an array of opportunities to expand growth. If you remove funds from this account prior to age 59 ½ you will incur a 10 percent early-withdrawal penalty along with paying State and Federal taxes. At age 70 ½, the account requires you to begin taking minimum distributions. This retirement savings option is open to anyone, with no immediate requirements.
  • With a Roth IRA there is no age requirement for distributions, and after five years, you can withdraw as much as you like up to the total amount of contributions. The only amount you cannot withdraw is the interest earned after contributions. The main tax benefit with a Roth IRA, opposed to the Traditional IRA, is that contributions are post-tax dollars, but distributions bear no tax. This means if you are at a higher tax bracket upon retirement, you do not have to pay additional taxes to withdraw those funds, potentially keeping more of your savings. This account option does have an income limit, which disqualifies single filers whose adjusted gross income is more than $132,000, and $194,000 for joint filers.

Start maximizing your money and look into your account options today! Our experienced team will answer any questions you have, and help you choose the best account to get the most value out of your long-term savings.

How to Hit a Homerun in Retirement

Putnam_Blog_HowToHitAHomerunInRetirement

Winning in a baseball game or in your retirement savings is no easy feat! It takes dedication and determination to seal the win. As you begin to reexamine your retirement plan try these key pointers from Putnam Bank to coach you along the way!

Load the Bases

If you have available resources, make sure you’re using them! Just as a batter is primed to score with his bases covered in players, so are you by capitalizing on your 401(k), IRA, personal savings, and structured investing plan. Score extra points by taking advantage of your company’s 401(k) which matches your monthly contributions up to a certain percentage of your salary. Those are free dollars to aim towards your retirement!

Pitch a No Hitter

Don’t let the opposing team get ahead; work to pitch a no hitter by setting up your emergency savings fund. Instead of walking any unexpected expenses, such as auto repairs or medical bills, send those players back to the dugout with an added savings curve ball. You’ll be protecting your savings and racking up points, while staking your claim to your space in the hall of fame.

Build a Winning Team

Just as you would compile your fantasy team around leading scorers and left handed pitchers, the same applies to your financial team! At Putnam Bank we have a well-rounded lineup of personal bankers, wealth advisers, and lenders to help you make it to the big leagues.

Play Extra Innings

Even in retirement, there’s no rule against a little over-time! Take up a part or full-time job you enjoy to cover living expenses before you have to dip into your savings account. You and your spouse could land a home run in the bottom of the 10th with some additional income at the start of your retirement.

No matter if you’re swinging for the fences or just trying to get on base, our experienced team at Putnam Bank can help craft a game plan for your retirement! Give us a call at 1-800-377-4424 or stop by today!

Putnam Bank, Member FDIC, Equal Housing Lender.

How-To Save $1,000,000 Before You Retire

Retiring

Retirement may seem an eternity away; however, even if it’s a dream 20 years down the road, saving for retirement shouldn’t wait until the goal is in sight. Rule of thumb says you’ll need $1,000,000 in savings to retire comfortably. Our experts at Putnam Bank recommend taking the following steps to save with the future in mind:

  • Determine when you want your $1 million. The typical age of retirement is 65, but you may be shooting for a few years earlier or later. Whatever the age affects how much you need to save each month, so calculate years left to save based on current age and breakdown monthly savings requirements thereafter.
  • Start saving ASAP. Compound interest rewards those that begin saving earlier rather than later. A $10,000 investment at age 25 could yield tens of thousands of dollars more by 65 than if that same $10,000 were invested at 35.
  • Spend less than you save. It’s basic math. You’ll have money left over only if income exceeds expenses. Buying a home within your range, purchasing cars secondhand, and paying for vacations out of savings and not on credit protects you from dipping into debt.
  • Opt for automatic. Research your employer’s 401k or retirement-based plans and determine what percent you’d like funneled from your paycheck and into your savings. If your employer matches contributions up to a limit, work to reach their maximum to maximize your savings.
  • Save beyond your 401k. Expect the unexpected. A flooded basement or dying car engine can send you spiraling out of your financial plan if you haven’t budgeted for rainy days. Set up a $1,000 emergency fund as soon as possible, and work to expand it to anywhere from 6-12 months of income to protect you from larger surprises, like medical issues or unemployment.

The road to a million takes time and discipline, but it’s exceedingly possible. For further savings strategies and investment options, make an appointment today to meet with one of our trained financial advisors.

Service Spotlight: Infinex Investments, Inc.

Investments

Trying to uncover the potential in your hard-earned dollars? Putnam Bank and Infinex Investments, Inc. have the solution! Experienced financial advisor, Ray Perry offers professional investment strategy and advice with the same customer service you’ve come to love about Putnam Bank.

With plans available for every budget, we listen to your needs, to then more forward on the best course of action for you. Unlike many larger banks, we make independent choices in conjunction with 40 investment companies, jointly offering over 500 different fund options.

Our primary goal is to help you create a sound package of investments that cohesively produce the results you are seeking.

Services & Products Offered:

  • 401(k)/IRA Rollovers
  • Business Retirement Planning Services
  • Brokerage Accounts
  • 429 College Savings Plans
  • Stocks, Bonds & Mutual Funds
  • Individual Retirement Plans (Traditional and IRA)
  • Annuities
  • Life Insurance
  • Long Term Care Insurance
  • Access to Estate Planning

Call Ray today at (800) 377-4424 x3076 to arrange a complimentary financial consultation, or ask any questions you may have regarding Infinex Investments, Inc. and its respective services.

Investment and insurance products and services are offered through Infinex Investments, Inc.  Member FINRA/SIPC. Infinex and the bank are not affiliated.  Products and services made available through Infinex are not insured by the FDIC or any other agency of the United States and are not deposits or obligations of, nor guaranteed or insured by, any bank or bank affiliate. These products are subject to investment risk, including the possible loss of value.

Retirement Saving How-To

Retirement

Putnam Bank is the place to begin all your savings ventures! If you’re starting a new career or beginning a new chapter of life, perhaps it’s time to reevaluate your retirement plan! Here are some quick tips to keep you on track for a successful retirement lifestyle.

A successful savings plan involves extensive planning and lots of patience. Once accomplished; however, you gain the benefit of watching your finances work for you! The average age of retirement is climbing. Currently averaging at age 62, reports speculate that the average retirement age may increase to 75 for recent graduates facing mountains of student debt. As in any successful game plan, the key is to have an effective and feasible strategy, here’s how to begin.

Start Saving Now

Even if it’s just a little at a time, saving 6% of your earnings annually can begin to set you up for a lofty retirement. Did you know if you save even 10% of your annual income you could save $1,555,000 and retire at age 70? (Based off of median salary of $45,478 and $35,051 in student loan debt.) Dig a little deeper and see what savings potential you have!

Hop on that 401k ASAP

Tucking away pre-tax money is like being asked if you want a puppy as a child, the answer is always yes! By using this valuable system you are able to put a percentage of your annual salary away without having to pay taxes on it that year. Generally employers may match a percentage of your contribution, so if you put 6% of a $45,000 salary ($2,700) into a 401(k), and your company contributes 3% additionally ($1,350), you would yield a yearly contribution of $4050 towards your retirement! Another perk of utilizing a 401(k) is the change in your taxable income. The amount that you invest in your 401(k) is deducted from your taxable income reducing the final amount you pay on your yearly income tax. (Example: $45,000 – $4050 = $40,950)

Grow a Diverse Portfolio

Ensuring your finances’ diversity is a large component to a successful retirement. The saying “Don’t put all your eggs in one basket,” is the epitome of investing. By creating an investment plan that entails stocks, bonds, equities and more you are able to gain the benefits and financial buffers that each individual product provides. Additionally this allows you to optimize your savings, ensuring the gain and profit generated from each asset goes towards your growing retirement fund.

These simple steps will get you on your way to saving for a successful retirement, no matter the age! Retirement can be exciting. Did you know your retirement fund has the capability to replenish itself? Yes, it’s true! By saving over $1,000,000 throughout your life and taking out only $40,000 a year upon retirement, if the interest rate is 4% or better, the fund will be able to continue replenishing itself.

If you would like to look at your retirement savings options we’d love to help you! With so many structures and factors we’ll help you navigate the best path to a financially secure savings. Give us a call or stop by Putnam Bank today to get started planning your retirement!

Putnam Bank
Member FDIC, Equal Housing Lender

[QUIZ] Are You Savvy When it Comes to Retirement?

blog-retirement-quiz

Are you saving enough for retirement? Do you know how much you’ll need to save to live the life you want in retirement?

These two questions can paralyze anyone who is approaching retirement age or beginning to think about retirement. There are many factors that influence your retirement savings: 401(k)s, IRAs, inflation, health care costs and so on.

To help you get a better idea of what you’ll need to save for retirement, we’ve created this Retirement Savings Quiz. Whether you feel unprepared or feel like you have a good handle on your retirement needs, this quiz can help. Go through and answer the questions, then check your answers at the bottom to see how you did.

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