Retirement is one of the most significant financial milestones in life. Whether you’re just starting your career or approaching your Golden Years, careful planning is key to ensuring a comfortable and stress-free retirement.
Why Retirement Planning Matters
Retirement marks a significant life transition where you move from earning a paycheck to relying on savings and investments. Without a proper plan, you risk running out of money or compromising your quality of life. A solid retirement plan ensures you can maintain financial independence, pursue your dreams and cover unexpected expenses.
How OMB Bank Can Help
OMB offers resources like retirement calculators and specialized bank accounts designed to help you save more efficiently. OMB's experienced bankers are here to help you navigate your financial goals including IRAs, HSAs, CDs, checking accounts and savings accounts. Whether you're planning for retirement or looking for the best banking solutions, our team is ready to provide the expertise and support you need.
We also provide online tools and apps for tracking your progress, setting goals and calculating how much you need to save. Taking advantage of these services early can set you on the right path.
Understanding Retirement Accounts
There are different account options when it comes to retirement accounts, most commonly 401(k) plans and Individual Retirement Accounts (IRAs). We have a Money & More article that details the differences between the two, as well as an article explaining how and when to have both!
Here’s an overview:
401(k) Plans
Many employers offer 401(k) plans, which allow you to contribute pre-tax dollars. Some banks can help you consolidate multiple 401(k)s from previous jobs into a single account, simplifying your finances.
Traditional IRAs
Contributions may be tax-deductible, reducing your taxable income. Taxes on earnings are deferred until you begin withdrawals in retirement. Required minimum distributions begin at age 73 as of 2025.
Roth IRAs
Contributions are made with after-tax income, allowing for tax-free withdrawals in retirement. No required minimum distributions, giving you more flexibility in managing your withdrawals during retirement.
How much should I save for retirement?
The 4% rule can be a good place to start your planning.
A general rule of thumb is to withdraw no more than 4% of your savings annually to help ensure they last throughout retirement. As an example, if you retire with $1 million saved, you would withdraw $40,000 annually. This means you’ll need approximately 25x your desired annual retirement income saved.
When budgeting, estimate your future expenses including housing, healthcare, travel and hobbies to provide personalized projections for your retirement goals. Align your retirement savings with your lifestyle ambitions such as traveling, hobbies or even relocating.
Common Retirement Planning Mistakes
Here are some common retirement mistakes you may not know about and how to avoid them.
Mistake | Solution |
|---|---|
Underestimating costs | Healthcare and inflation are often overlooked. Medical expenses are a significant cost in retirement. OMB offers Health Savings Accounts (HSAs) which are designed to help cover these expenses. |
Not taking advantage of tax benefits | Maximize contributions to tax-advantaged accounts. |
Forgetting to legacy plan | Estate planning is a crucial part of retirement. Consult with your financial advisor about trusts, beneficiary designations, and wealth transfer strategies to ensure your assets are distributed according to your wishes. |
Neglecting professional advice | A financial advisor can provide personalized guidance to avoid costly mistakes. |
Maximizing Your Savings
Tips to help you get the most out your retirement accounts.
Employer Contributions
If your employer offers a 401(k) match, contribute enough to take full advantage. Consider speaking with a financial advisor or your bank to understand how employer contributions fit into your overall plan.
Catch-Up Contributions
For those over 50, additional contributions to IRAs and 401(k)s can help close any gaps in savings. Your bank can guide you through increasing these contributions efficiently.
High-Yield Savings Account
Opening a high-yield savings account can help you grow your emergency fund and short-term savings while you focus on long-term investments.
Investments
You can utilize an investment advisor or a wealth management service to help you diversify your portfolio. Depending on your risk tolerance and age, you might invest in:
• Stocks and mutual funds for long-term growth
• Bonds for stable income
• CDs or money market accounts for conservative savings
MONEY TIPS
Plan for Anything
Our 40+ free financial calculators can help you finesse your budget, compare borrowing costs, forecast earnings and so much more.
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Who is OMB Bank?
OMB Bank is a community financial institution with approximately $1.4 billion in total assets that operates with a steadfast commitment to empowering the communities we serve.