How to Set Yourself Up for Financial Success, Even When the Economy is Spooky

Recession? Inflation? When scary financial news starts circulating, it might be tempting to hunker down when it comes to your retirement savings, but don’t worry — your TCDRS funds are secure.

By Rebecca L. Bennett

 

As for the rest of your savings, these three expert-recommended steps will help you set yourself up for financial success even when the markets are spooky:

Keep Saving

Your TCDRS deposit rate is set by your employer and cannot be changed or turned off. Our “automatic savings” plan feature helps protect your retirement future. You can have peace of mind knowing your retirement funds are growing with every paycheck. Even if you leave employment, as long as you leave your TCDRS account open, your funds will continue to grow with interest.

In times of volatility, it may feel safer to stop or lower your savings into other retirement accounts until the markets rebound. However, experts say that investing your money in equal portions at regular intervals — no matter how the market is doing — reduces risk. This is called dollar-cost averaging.

In addition, you should make sure you have enough cash on hand for emergencies.

Contribute as Much as You Can

So how much of your income should you be saving for retirement? It depends on your situation, but the general recommendation is 15% of your annual income, if possible. (That includes your TCDRS deposit rate).

However, even smaller amounts can go a long way if they have decades to grow with interest. The bottom line is to continue contributing as much as you can for as long as you can.

Open Additional Retirement Savings Accounts

If you want to save more for retirement in addition to TCDRS, consider opening another retirement account, like an Individual Retirement Account (IRA), 401(k) or 457. Ask your employer if they offer additional options for retirement savings.

For more personalized advice, consider speaking with a financial advisor.

Personal Finance Retirement Prep