Saving for Major Milestones
(3 Minute Read) – This article is part of our America Saves Week celebration.
What do homes, education, and retirement all have in common? They are major milestones that require advance planning and saving large amounts of money. These milestones may feel like goals that are out of reach – and even if you don’t feel that way today, you may have in the past or may in the future.
Ways to Save for Major Milestones
The good news is that there are ways to plan and save for these major milestones in a way that aligns with your values and current life situation. Keep in mind:
- Make a plan for how much you need to save and when you want to have that money saved. The America Saves Pledge and the Spending and Saving Tool are both resources that can help with your planning.
- Whenever you have more than one goal that you are working on at the same time, it’s important to prioritize them. Yes, you can save for retirement and education or retirement and home ownership at the same time. You just may need to allocate a greater percentage of your available money to save more for one goal over another.
- You get to decide which goal is the most important to you right now and you can use that decision to guide your plans. And this can change over time.
- When tough times happen, and they will at some point, it’s okay to pause your saving goals. If you lose your job, you may need to forgo saving for your retirement and child’s education until you find a new job.
- With retirement, you want to understand which savings vehicles you have access to through your employer before seeking resources for individual accounts. You also want to have a reliable calculation for the money you need saved and what the best investment options are for you.
- With home purchases, it’s important to have an idea of the type of house you want and in what area so you can research prices. You also want to know your credit score to understand what types of mortgage rates you can qualify for. You can contact the local home loan experts at Unitus for assistance!
- When saving for education, 529 College Saving Plans are one of the best options available as the money grows tax free and is not taxed when withdrawn if it is used for qualified expenses.
- With any of these goals, utilize automatic saving vehicles wherever possible. Typically, employer defined contribution retirement plans use automatic deductions from your paycheck. You can also direct an investment company or your financial institution to set aside money each month for retirement, home down payment, or education accounts.
Saving for Major Milestones Starts Early
With all these goals, recognize that your situation will determine when you are able to start saving. Delaying when saving for education may mean you need to take out more in loans. Delaying saving for home ownership or retirement may mean you have to wait longer to buy a house or work longer before you retire. These are your choices to make.
Confidence comes with knowing you have done your research, consulted with professionals, examined your current situation, made some predictions for future saving opportunities, and recognized that as life unfolds you can adjust your plans.
What is America Saves Week?
Since 2007 America Saves Week has been an annual celebration as well as a call to action for everyday Americans to commit to saving successfully. Through the support of thousands of participating organizations, together we encourage individuals to do a financial check-in that allows them to get a clear view of their finances, set savings goals, and create a plan to achieve them.