Starting Out

Starting Out

is where you make a plan and set goals. It involves asking some serious questions. When would you like to retire? Where are you going to live? What do you want to do? How much will you need to save to get there? Do you want to pass on any money to your children? Once these questions are answered, you can create a strategy and move on to the next stage.

Need to speak with a financial advisor? Contact us here.

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"Roughly two thirds of Americans have started saving for retirement. Make sure you're one of them!"1
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"20% of Americans between the ages of 30 and 54 believe they will have enough saved for retirement. Start now to join them."2

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"48% of workers report they’ve tried to calculate how much money they’ll need to save to live comfortably in retirement."3

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"The average meal outside the home costs $12.75. If you cut just one of those meals per week, you could save $663!"4

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"The average 50 year old has $42,797 saved for retirement. How do you compare?"5
Why Start Now?
Impact of Investing Now
What Keeps People From Starting?
I’ve got plenty of time before I retire.

Great! You can use that extra time to start earning extra cash for your retirement. The earlier you start, the more prepared for retirement you’ll be.

I don’t have enough extra money to invest.

Don’t worry. Even starting off small – like the price of one coffee a week – will start to add up, giving you a good foundation for your retirement.

I’m too busy.

You’ve already got a good start by coming here. And just 20 minutes with one of our advisors could make years' worth of difference in your retirement. C’mon. Everybody’s got twenty minutes.

The Basics
Should I start saving for retirement now? Where do I begin?

Yes … this is a great time to start saving for retirement. And you’ve done the right thing by seeking information. Now, you need to set some goals for your retirement. 

First, remember to set lifestyle goals, not dollar amounts. You’ll get to the “how much” later. For now, you need to decide what you want your retirement to be like. At what age do you see yourself retiring? What would you like to do during retirement? Do you plan to be a homebody, or would you like to travel extensively? Those answers will lead to the dollar amount decisions.

Now, how many years of retirement do you expect you’ll have to fund? Remember, people are living longer and your retirement could realistically span 30 years or more. Generally, the longer your retirement, the more money you'll need.

Next, estimate your retirement expenses. Most of your basic living expenses (food, utilities, transportation, etc.) will continue through retirement. Other expenses like mortgage payments or funding education for your children or grandchildren could also impact your retirement.

Once you’ve estimated your expenses, you’ll need to project your annual retirement income. What sources of income will you have and how much yearly income will they provide? Your sources might include social security benefits, pension payments, distributions from retirement plans (e.g., IRAs and 401(k)s), and dividends and interest from investments.

Now the big question: will your estimated retirement income meet your estimated retirement expenses? If not, you need to make some changes such as delaying retirement, saving more money, or taking more investment risk. A financial advisor can help you understand your options.

What are the limits on catch-up contributions?

Catch-up contributions are meant to help you make up a retirement savings shortfall by increasing the amount you can contribute in the years leading up to your retirement (typically if you are 50 or older). Catch-up contributions can be made to traditional and Roth IRAs, 401(k) plans, and some other employer-sponsored retirement plans. 

Here are the catch-up contribution limits for 2018:

401(k), 403(b), governmental 457(b) plans:*

$18,500 regular annual contribution limit and $6,000 catch-up contribution limit.

SIMPLE plans:

$12,500 regular annual contribution limit and $3,000 catch-up contribution limit.

Traditional and Roth IRAs:

$5,500 regular annual contribution limit and $1,000 catch-up contribution limit.

*403(b) and 457(b) plans also have special catch-up rules that may apply.

When’s the best time to begin working with an advisor?

There is a lot of good financial information readily available these days. Unfortunately, there is plenty of not-so-good information as well. The key is recognizing the difference, and knowing when you need to go beyond what you can learn through all the books and blogs. 

From a retirement standpoint, a financial advisor could be helpful to those who are truly serious about investing in the future—enough to work with an advisor to formulate a plan and begin making contributions. Advisors can also be helpful to those who are already saving for retirement but need guidance in making adjustments to their plan. 

There is no magic asset value at which you need an advisor. What does your gut tell you? If you feel like professional guidance would help with your retirement investing, talk to an advisor.

My employer offers a 401(k) plan. Should I participate?

Yes, when a 401(k) plan is offered it is always a good idea to participate even if you can only contribute a small amount to start. A 401(k) plan is an easy way to save. Simply decide what percentage of your salary you want to contribute (within the established limits) and your contributions are deducted automatically from your salary each pay period. These contributions are deducted before taxes are withheld (unless contributing to a Roth 401(k)). That means they are not taxed as current income. This reduces your taxable income, allowing you to pay less in taxes each year and save for retirement at the same time. Of course, you’ll eventually pay taxes on those amounts you contributed when you withdraw money from the plan, but you may be in a lower tax bracket by then. You may even qualify for a partial tax credit for amounts contributed.

Money held in a 401(k) plan grows tax deferred. That means the investment earnings on plan assets are not taxed as long as they remain inside the plan. Like your contributions, you won’t pay taxes on earnings until you withdraw them.

Many employers will match your 401(k) contributions up to a certain level. These contributions are also pre-tax, so they are basically free money for your retirement savings. Take full advantage of them. If you don’t make contributions and, therefore, don’t receive the match, you’re literally leaving behind free money being offered to you.

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78% of employed workers report they are offered an employer-sponsored retirement savings plan, such as a 401(k), by their current employer. Are you?

BOK Financial Corporation (BOKF) offers wealth management and trust services through various affiliate companies and non-bank subsidiaries including advisory services offered by BOKF, NA and its subsidiaries BOK Financial Asset Management, Inc. and Cavanal Hill Investment Management, Inc. each an SEC registered investment adviser. BOKF offers additional investment services and products through its subsidiary BOK Financial Securities, Inc., a broker/dealer, member FINRA/SIPC, and an SEC registered investment adviser and The Milestone Group, also an SEC registered investment adviser.

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