Healthy Retirement Savings Helps Consumers Prepare for Future During Tough Economy

— Illinois Municipal Retirement Fund encourages individuals to focus on retirement during National Save for Retirement Week —

OAK BROOK, Ill. — October 4, 2011 — As markets continue their unpredictable swings and the danger of a double-dip recession looms, the Illinois Municipal Retirement Fund offers several steps to keep retirement funds intact and survive Wall Street's volatility.

The Illinois Municipal Retirement Fund (IMRF), one of Illinois' best-funded public pension funds, encourages individuals to focus on their long-term savings goals and investments to stay in control of their retirement savings.

"The recent market instability demonstrates the importance of long-term planning and saving for retirement," said IMRF Executive Director Louis W. Kosiba. "IMRF uses a long-term, prudent and diversified approach to investments. We encourage individuals to take a similar approach to their savings by starting to save early, using all available resources and diversifying their long-term investments as well."

This is especially important during National Save for Retirement Week, which will take place from Oct. 16 until Oct. 22.

IMRF recommends keeping a long-term focus on investments while riding out the ups and downs of the market. Short-term drops in the market will not impact most employees' long-term savings outlook. Any losses that are experienced can be recovered by future retirement plan contributions and market returns over the course of the employee's lifetime.

Additionally, workers have options as they approach retirement to ensure their nest egg remains intact. Many choose to retire later or contribute more to their own savings as they near the age they plan to retire, but one of the best options remains underutilized: seeking expert help.

IMRF has more than 176,000 members, including more than 97,000 retirees, and manages more than $24.6 billion (as of Aug. 31, unaudited) in assets. IMRF has identified six steps an individual can take now to gain financial security in the current economic climate:

1. Take small steps toward savings: Start by saving a little bit from each paycheck and consider it a monthly expense. Discipline yourself to gradually set aside a little more money each month, until you reach your target amount.
2. Be prepared: Save enough money to live on for six to eight months. This money is to be used in case of an emergency only. Life is unpredictable—you can be better prepared if you have several months' income put aside for that unexpected housing or automobile repair.
3. Eliminate your debt: Begin paying off debt with the highest interest rates first, such as credit cards. Save for big purchases before buying them and avoid paying with credit. It is best to avoid debt to ensure adequate retirement savings.
4. Use all available resources: Prepare to use all the resources at your disposal: Social Security, employer retirement programs and personal savings. Take advantage of the retirement savings programs your employer offers, such as 401(k). If your employer offers matching contributions on your 401(k) or 403(b) plans, contribute the maximum to get the most out of the offer. Don't leave this money on the table!
5. Diversify your investments: When you're in your 20s, 30s, 40s, and 50s you're able to take more risks with your investments. But as you grow closer to your planned retirement age, consider moving a portion of your assets to more conservative investments.
6. Start early, but it's never too late to start: Seventy-one percent of Generation Y investors report they are disciplined about putting aside money for saving and investing to build a strong retirement portfolio. But regardless of your age, beginning a pattern of saving and reducing high interest debt is always a good idea.

"I recognize that cutting back on current spending to save for retirement requires difficult choices," Kosiba said. "But retirement is the largest 'purchase' you will make during your lifetime. It is important to stay focused on your long-term goals—especially during turbulent markets."

Though everyone has different needs and faces different financial challenges, these tips can help people of all ages and incomes to chart a course to a more comfortable and secure retirement.

ABOUT IMRF

The IMRF was created by the Illinois General Assembly.  Since 1941, IMRF has partnered with local units of government to provide death, disability and retirement benefits for working and retired public employees. Today, IMRF has more than 176,000 active members working for nearly 3,000 different units of government, including school districts, counties, cities and villages, parks and libraries. It has more than 97,000 retirees. Members who retired in 2010 retired with approximately 22 years of service and received an average annual benefit of approximately $17,000. IMRF consistently works toward reaching full funding over the long term, ensuring that it remains financially sound.  A full funding goal guarantees public workers a secure and modest retirement income at the lowest long-term cost to taxpayers.

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