Quarterly Update

By Chris Cassidy, CEO

Last year for Valentine’s Day, I gave my wife the least romantic present that a husband could possibly give: a contribution to her Individual Retirement Account (IRA). To justify such a boring gift, I spouted off about the importance of saving for retirement and the need to have a sound financial plan. Although I’ve vowed to be a better gift giver this year, I think the benefits of financial planning are enormous.

Having a sound financial plan, and starting that plan early, are highly beneficial due to the record of longterm growth in financial assets. Assuming an annual return of 8 percent, an individual would need to save the following amounts monthly to reach $1 million in retirement savings:

Graph Credit

The table illustrates that investing early allows an individual to reach one million dollars with less in total cash contributed because of the benefits of compounding interest and growth over time. While not an insignificant sum, saving $483.60 per month early on is a lot easier than contributing thousands of dollars each month when retirement is in sight.

While neither my wife nor I plan to retire for a VERY long time, we want the peace of mind from knowing that if we follow a high-quality financial plan, a comfortable retirement will someday be an option for us. That way we can travel, spend more time with family and play more doublebogey golf!

For many individuals the question is not, “How much do I need to save for a comfortable retirement,” but rather, “How much can I afford to spend in retirement and not run out of money?” A good financial plan can answer these questions and more.

At Trust Company of Vermont, we offer financial planning as part of our services at no additional cost to clients. We have sophisticated software as well as financial planning experts who can put together customized financial plans. These plans can help inform saving decisions, spending decisions, estate planning decisions, and much more.

One of our financial planning experts is Katie Gardner, who joined Trust Company of Vermont in 2022. Katie came to us having done coursework and financial planning at her previous employer. She has a wealth of knowledge in this area. Katie has written an article this month about the benefits of financial planning and how clients can use this tool to make informed decisions for their futures.