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April 29th, 2015 |
By Dave Miller, Senior Vice President, Senior Credit Officer
Welcome to the final week of our “Money Moments of Truth” blog series. Sandy Spring Bank is celebrating Financial Literacy Month this April by taking you on a journey through various stages in life, and teaching you strong financial behaviors with the goal of working toward a financially healthy life. Our own bank employees have shared their stories each week, and shown how their “Money Moment of Truth” helped guide them toward a better financial future. To see earlier entries from our team, from learning how to save their allowance as young kids, to getting on the same page financially with their spouses, click here.
Growing up, my parents worked hard to instill in me the concept of saving. I came to realize that if I started saving as soon as possible, that money would build over time – a principle known as compounding interest. Shortly after I graduated from college, I got my first job in banking. The job included a number of benefits, including retirement savings options. I chose to participate in the company sponsored 401(k) plan, a decision that seemed simple at the time. It wasn’t until my mother got sick towards the end of her life that I came to realize how great of a decision I made to start saving for retirement at a young age.
My mother, like many other adults, thought she had saved plenty of money for retirement. Being the banking guy in the family, I became responsible for all of her finances later in life, including managing her retirement accounts. Since her house was paid off and she had no debt, my mother thought she would be financially set for the future since she had a substantial IRA from her career with the local government. However, her health started gradually declining and she had to move from her home to an assisted living facility. Due to the large expense of assisted living, my mother’s savings started to rapidly deteriorate. We were fortunate that my mother ended up having enough savings to cover her retirement, but if she hadn’t, she would have needed to rely on her children to pay the difference.
What many people don’t realize is how expensive it can be to fund a retirement that can sometimes last 30 years or more. Different factors, especially your health, can make a huge impact on your life, which is why it is so important to prepare for what could happen later in life by saving for retirement. I started to build that nest egg early by making contributions to my 401(k) plan right away. I have been making contributions for almost 30 years now and have been increasing those contributions over time in order to achieve my goal of retirement.
My “Money Moment of Truth,” which I learned from my experience with my mother, is that there is no “right” amount to save for retirement and no magic number. Instead, it’s important to save as much as you can, for as long as you can; the fact of the matter is that there is no way to know how much money you will need in retirement. If you begin saving early, then you will give yourself, and your loved ones, the best chance for a prosperous and stress free retirement.
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