Retirement Planning

One of the best excuses to put off planning for one’s retirement is saying to yourself, “I won’t live long enough to need a retirement plan."  The reality is that today’s life expectancy figures are 75 years for men and 80 years for women.  The chances are pretty good that you will need an effective plan to finance those years after retirement.  Parents have a very difficult decision to make when it comes to either saving for retirement or for financing the kid’s college education.  There are a number of alternatives for financing an education, from scholarships to student loans.  

Start a 401k-retirement plan that is offered by your employer at work.  There are a number of advantages to taking this important step because most employers will match employee contributions within prescribed ranges.  Money placed into a 401k is exempt from taxes until you are ready to use it in retirement and it can be deducted directly from your earnings into an account.  Some plans offered by employers match your contributions with company stock, so beware of this and don’t try to overburden your retirement plan with stock from just one company.

It is never too early to begin planning for retirement because the financial behaviors that you set for yourself today will follow and serve you in years to come.  Begin with a concrete plan to rid yourself of debt because money that you literally “throw away” in paying high credit interest rates can instead be placed in retirement accounts to earn top dollar.  Next, develop a sensible budget and take into account all of your spending habits to rid yourself of unnecessary spending.