Accepting a new job is exciting not only because of the position but also because of the benefits that are often included. If you’ve recently changed jobs, it’s important to think about how your retirement plans will be affected. If you have questions or are unsure how to save for this stage of life, take advantage of these frequently asked retirement planning questions.

What You Should Know About Retirement Planning

What is an employer match?

If a new job offers an employer match, you should jump at this opportunity and verify the fine print in your contract. Essentially, “employer match” means that your company will match your contributions to your 401(k) up to a certain amount. Depending on your particular arrangement, your company might match a specific dollar amount or a percentage of your full salary.

Should I open an IRA?

An individual retirement account (IRA) can be used in conjunction with a 401(k) to support your living expenses. With a traditional IRA, you can minimize your taxable income—as you won’t have to pay taxes on the contributions you make—but any withdrawals will be taxed.

With a Roth IRA, you will have to pay taxes on your contributions, but withdrawals made during your retirement won’t be taxed.

What if my employer offers a pension plan?

In most cases, this is offered to employees who plan to stay with a company for a long time. If you have a pension plan, your employer likely will not provide a 401(k).

Since pensions require a long time at the company (sometimes 20 to 30 years), you might want to opt for a 401(k) if you’re interested in job flexibility. If you plan to stay with the company until you retire, a pension plan may offer total income security for retirement.

How much should I save for retirement?

Ideally, you should start saving up during your first job, but many people don’t start thinking about retirement savings until they’re well into their careers. To estimate how much you need to save, calculate your average living expenses on a weekly or monthly basis. However, to find a more accurate number, you’ll need to work with a CPA who can consider inflation, life expectancy, investment goals, and market fluctuations.

If you need help planning for retirement, reach out to Wilson, Rea, Beckel & Associates, CPAs, LLC in Pagosa Springs, CO. They have over 16 years of experience helping clients prepare for the future. Whether you need to draw up an estate plan, manage your books, or calculate a monthly budget, you can rely on their dedicated CPAs for clear guidance. Learn more about their services by visiting the website, or call (888) 264-2281 to schedule an appointment.