Pension Expert: It’s Never Too Early or Late to Save for Retirement

NJ Spotlight News | April 23, 2014 | Personal Finance

New Jersey has been named one of the worst places to retire. Partner-in-Charge of EisnerAmper’s Pension Services Group and 2014 Executive Women of New Jersey honoree Diane Wasser told NJTV News Anchor Mary Alice Williams that it is never too early or too late to start saving for retirement.

Wasser said that the earlier people save to retire, the better. She said that young people want to spend their money and it is challenging to be young and have a car payment and mortgage or rental payments, but it needs to be a balancing act from the very beginning of entering the workforce. She said that if older people started saving later in their careers, they will also be challenged in balancing their finances.

She said that she tells Baby Boomers to try to focus on the slow and steady way of saving and not to get upset by changes in the markets and continue to fund their retirement. Wasser said that they should speak with a very educated financial planner and know what assets they have and how to use them in retirement. She said that it is never too late to save for retirement.

“There are certain regulations that the IRS has for tax qualified plans and a plan just has to be within those guidelines and they have the ability to be free to fund their employer contributions when they want. They just have to make sure that they do it by the end of the following year. A lot of companies pay the match to a 401K plan which is their employer money every paycheck so employees get used to seeing it in their paychecks,” said Wasser. “What some companies have done is change their plans so they only have to put it in once a year after the plan’s year-end, so if you are not there on Dec. 31, you don’t get the money. Whereas if they do it every paycheck, if you leave in June you are still going to get the employer funds for that year into the retirement plan.”

Wasser said that changes are happening this year because of the new health care regulations and the new fees that are imposed. Employers must balance between being a business and providing benefits for employees. She said that it is a very tough decision because it means a lot to the people’s retirements. She said some employers are not taking the money away, they are just changing the timing.

Wasser said that she tells people to try to budget for the money they will have after the retirement contribution. She said people should pretend that they are not getting the money going toward retirement because they do not see it in their paycheck. She said that employees just have to make that first move and tell employers that they want the money deferred into the company’s benefit plan and live off the remainder.