A lot of people don’t think about retirement for one reason or another. Some don’t want to think about getting old, potential health issues or how they will be able to afford some of the things they can afford today. One thing that we can’t control as humans, at least right now, is TIME. Time keeps moving and that means that we keep aging and one day we’ll have to or want to stop working, but still will need money to pay for things. And to spend for tomorrow, you need to save today.
If you don’t have a single dollar saved for retirement, do this: go to your bank ASAP and tell them you want to open an Individual Retirement Account (IRA). The representative there will ask you some questions and help you come up with a plan to start saving.
There’s a limit on how much you can put into an IRA per year, it’s like $5,500 I think, but they can tell you for sure. Just start with that and be proud you took the responsible step.
If you have some money saved then keep going. You may have heard the saying that you should save so much that it hurts….or something like that. I think by doing this, you will accomplish another saying which is – no pain no gain! Based on moneychimp’s calculator: http://www.moneychimp.com/calculator/compound_interest_calculator.htm – If you save $1 today and every year for 30 years in a retirement fund paying typical 7% annual return, it will be worth $109 in 30 years. If you do the same for $100, it will be worth almost $11,000 in 30 years. If you do the same for $100, it will be worth almost $109,000 in 30 years. Simply save more.
More Saving Now = More Relaxing Later
If you have a lot of money saved, team why are you reading this??? Just kidding, thanks for reading. My advice to you as well as anyone who can afford to do so is to save the maximum amount per year for retirement. For 2015, you can put up to $18,000 in a 401k account. If you’re married and your spouse has a separate account, he or she can put up to $18,000 in their account too. If you still have more available to save, hook me up! Or invest in after-tax brokerage accounts like Scottrade (I use them).
Oh, by the way, 401k is a regular retirement account that is offered by most companies and the best thing about this account is that many of the companies that offer it, give you free money if you contribute to it! Yes, they give you free money up to a limit. For example, a company may match 6% of your salary up to the IRS limit. So let’s say your salary is $85,000, that means ($85,000 X 6% = $5,100, they will match per year. So yeah, it’s free baby!
My final thought about retirement saving is CONSISTENCY. In other words, start, and more importantly, don’t stop! Make saving for retirement a habit, the future you will thank you!
So how are you doing???
- How much have you saved for retirement?
- What percentage of your income do you save per year?
- Do you think you’re meeting your retirement savings goals?