A Conversation With: Matthew Petrozelli, CEO of Valley National Financial Advisors

LVB: Is it harder to get younger people to think about their retirement planning? 

Petrozelli: Historically, yes. Education is the first step in getting anyone to develop a disciplined retirement planning strategy. Today’s young people, who have proven to be tech savvy, have access to more resources and education than previous generations so we are seeing a significant shift, which is a good thing. 

LVB: Why is it important to get younger people to start saving early? 

Petrozelli: For the younger generation, saving for retirement is solely on their shoulders. Most companies no longer offer pension plans and social security is set to run out before they reach retirement age. Starting early allows the time for their retirement savings to grow, in most cases tax deferred, and compound over decades. Starting early creates the best probability for success down the road. 

LVB: What are some of the different things people just starting out with investing and saving should keep in mind? 

Petrozelli: First and most important, put a certain percentage of your income towards your retirement every month. Most people accomplish this through a company 401(k) or a tax- deferred IRA. Second, make sure you are investing for the future. Put that savings into an age-based retirement investment that will help allocate the funds for the long term. Almost all investment providers have age-based options with little or no minimums. Third, use a Roth 401(k)/IRA if you qualify. This will allow to put a percentage of the savings away after tax, which will be withdrawn tax free during retirement. Finally, check in annually to make sure you are on track, especially if you change jobs or have other life events. 

LVB: Can savings and investment plans evolve over the years? 

Petrozelli: As you age towards retirement your plan needs to evolve. Early on, disciplined and systematic savings is critically important. As you age and accumulate savings, ensuring your savings rates and investments are on track to meet your goals, and adjust as necessary. As you get closer to retirement, the IRS allows individuals aged 50 and older additional catch-up contributions to maximize savings. At retirement, you need to have a growth and income strategy and plan to make sure your funds last for the remainder of life. Retirement planning and investing is both an art and a science.