Already Saving?

A neighbor might tell you to save more, a Good Neighbor helps you develop a plan.

Thought Starters

  • What kind of retirement am I hoping to have? What do I want to do? Where do I want to live?
  • How do I get there?
  • Am I on track?
  • What are my best choices for saving for my future?

You’re already saving regularly for your future and are on your way to achieving your retirement goals. Here are some tips to help you stay on track:

Continue Saving for Retirement

Invest in an IRA

  • If you haven’t already, now is the time to start.
  • State Farm offers you both traditional and Roth IRA account options. Talk with your State Farm agent about opening an IRA account today.
  • With a traditional IRA, your money grows tax-deferred, so your earnings are exempt from federal income tax until you begin withdrawing money for retirement.1
  • You can contribute up to $5,000 a year to your IRA(s), even if you already participate in a retirement program at work. After the age of 50, an additional $1,000 can be contributed into your IRA(s), for an annual total of $6,000.
  • Visit the IRA Learning Center.

Use Your Employer-Sponsored Retirement Plans

  • Are you taking advantage of them?
  • Use payroll deductions to invest in your 401(k) or other similar employer-sponsored retirement plans, especially if your employer matches your contributions.
  • Learn more about Retirement Plans for Businesses.

Periodically Re-Calculate your Retirement Goals

You’ve probably been promoted, earning more money than when you started your retirement savings plan.  Changing your standard of living can change your retirement income goals.

  • Re-calculate how much you’ll need for retirement every few years.
  • As a general rule, a retirement income of 70 to 80 percent of the amount you are living on in the months before you retire can help maintain your standard of living during retirement.
  • Check to see if you are on track with your retirement savings by visiting www.calculatemyretirement.com.

Simplify Your Life

As you change jobs — or even careers — what should you do with the retirement accounts from your previous employer(s)? One option is to directly roll over assets from your 401(k) and other employer-sponsored plans into a traditional IRA. 

A direct rollover allows you to:

  • Avoid immediately paying federal income taxes and penalty taxes1
  • Continue to grow your savings tax-deferred
  • Reallocate your funds, as your goals may have changed since you began saving in your previous company’s retirement account.

To begin a direct rollover from your qualifying employer-sponsored plan to a traditional IRA, see your plan administrator from your previous job for the appropriate paperwork.

Other Things to Consider

Safe Guard Your Income

Protect yourself against costly medical expenses and the sudden loss of your income due to an illness, injury, or permanent disability.

  • Health insurance is important if you or a family member gets sick or injured. This coverage will help protect you from any financial hardships due to expensive medical bills.
  • Disability insurance helps cover financial responsibilities if you can’t work because of an illness or disability.

If your employer doesn’t offer health or disability insurance, or if you’re self-employed, talk with your State Farm agent about health and disability insurance.

Protect Your Family's Future

  • Having the proper amount of life insurance can help provide for your family when you’re no longer here to help.
  • Your State Farm agent can help you determine the amount of coverage that’s right for you and your family.
  • It’s also important to have a will.  In your will you can make proper provisions for your children’s education.
  • Also, make sure you’ve properly designated your beneficiaries for insurance policies and retirement accounts.

The federal and state governments have created tax-favored accounts so saving for education can help reduce your taxes, making saving for college an even easier decision.  The availability of such tax or other benefits may be conditioned on meeting certain requirements.

Your State Farm agent offers several options for college education savings plans:

  • The State Farm® College Savings Plan Sponsored by the State of Nebraska
  • Coverdell Education Savings Account
  • Uniform Gift to Minors Act/Uniform Transfer to Minors Act

Establish a Budget

Do you know where your money is going? Budgeting is the first step toward financial freedom.  Use our budget calculator to learn about your spending habits.

Reduce your Debt

Taking on some debt, like a mortgage, is often necessary and may even be a good thing. Carrying consumer debt, however, means that the money you could be investing and growing for your future is being used to finance your debt instead.  Working to reduce personal debt by limiting your purchases or refinancing your loans at a lower rate is a good first step for any household to consider.

Establish an Emergency Fund

Many people set aside an amount of money equal to three to six months of their net income (take-home pay) or expenses. Store this money in a separate interest-bearing savings, checking, or money market account to make sure the money is easy to access should you need it.

A State Farm agent will be glad to help you create a personal retirement plan that works best for you. Find a State Farm agent in your area.

1Withdrawals made prior to 59½ may be subject to federal income tax and a 10% penalty tax.

The State Farm College Savings Plan is available by registered representatives of State Farm VP Management Corp., One State Farm Plaza, Bloomington, IL 61710, 1-800-447-4930. Please read carefully the Enrollment Handbook and Participation Agreement and consider the investment objectives, risks, fees and expenses and other information associated with The State Farm College Savings Plan before investing or sending money. State and local tax laws vary. If you or the designated beneficiary are not Nebraska residents, you should consider before investing whether your or the designated beneficiary’s home state offers any state tax or other benefits to its residents for investing in the plan offered by that state.

The State Farm College Savings Plan (the "plan") is sponsored by the State of Nebraska and administered by the Nebraska State Treasurer. The plan is established in cooperation with State Farm VP Management Corp. ("State Farm"), the State of Nebraska, and OFI Private Investments Inc. (OFIPI), a subsidiary of OppenheimerFunds Inc, pursuant to which State Farm offers classes of shares in a series of accounts within the Nebraska Educational Savings Plan Trust (the "Trust" and plan issuer) that are distributed by OppenheimerFunds Distributor, Inc. (OFDI and together with OFIPI, “Oppenheimer”). The Trust offers other accounts that are not affiliated with the plan.

The Nebraska State Treasurer serves as trustee of the plan; OFIPI serves as the investment manager, with the oversight of the Nebraska Investment Council; and servicing agent: OFDI serves as the distributor: Union Bank & Trust (“Union Bank”) serves as the program manager.

The State Farm College Savings Plan is not insured or guaranteed by State Farm, Oppenheimer, Union Bank and Trust Company, the Trust, the State of Nebraska, the Nebraska State Treasurer, the Nebraska Investment Council, any of their respective affiliates, directors, officers or agents, or any other entity.

The information presented in this document does not constitute tax advice. Please consult your tax advisor for specific information about your tax situation, including any state tax consequences of an investment.

Neither State Farm nor its agents provide tax, legal, or investment advice. Consult your own adviser regarding your specific circumstances.

An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.  Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund.

It is important to note that there is market risk involved when investing in mutual funds, including possible loss of principal.

State Farm VP Management Corp Risk/Important Disclosures. State Farm Mutual Funds Prospectus. The State Farm College Savings Plan Enrollment Handbook (PDF 525 KB) .

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AP2009/12/3589