Want to Have a Comfortable Retirement? Read This!
Are you sufficiently prepared for your retirement? The choices you make at the age of 20, 30, 40, or 50 can impact the course of your retirement. If there is one solid recommendation, it is to be consciously aware of the decisions you make today because they will affect the outcomes of tomorrow.
If your employer matches your 401K contribution, you should be putting in the maximum percentage that they match. You are essentially getting free money!
Open a ROTH IRA! It is true that you pay taxes now, but after you pay that tax, your money in the ROTH will grow tax free, even if your investment grows to be 2, 10, 20, 30 times the size of your initial investment. Still not convinced about a ROTH IRA, do you think the tax rate will go up or down when you retire? Obviously it will go up! Do you make too much to open a ROTH IRA now? Then open a traditional IRA and convert it! It is 100% legal and easy.
Self-direct your IRA! Did you know you can be investing in things besides stocks, bonds, and mutual funds? If your current custodian does not allow you to invest in real estate, notes, private placements, gold, or precious metals, you need a new custodian! Custodians such as Equity Trust and Enturst allow you to make alternative investments. This means you won’t loose half your retirement when someone sneezes in Greece or when the next stock market crash occurs because it will happen, it’s only a matter of time. “Those who cannot remember the past are condemned to repeat it.” – George Santanya
Saving for retirement can sometimes save you from entering a new tax bracket and decrease your tax liability as well. If you are making good money now and are on the edge of hitting a new tax bracket, investing a couple thousand in your traditional IRA can save you from paying thousands to Uncle Sam. It is always good to do some tax planning with your CPA before the end of the year if you are an earner that tethers near a tax bracket.
Another great benefit is that retirement funds are divorce proof! If you ever get divorced, your retirement funds are untouchable no matter how good the other attorney is.
The most typical mistake committed by future retirees is the act of taking out a loan that drastically drains the equity of your retirement fund, leaving you with virtually nothing. You should only take a loan out against your retirement fund in an absolute emergency.
Invest now in order to decrease the likelihood of living a limited, impoverished life as a retiree. Every year that passes reflects a time frame in which you could have saved more money for retirement. If you invest your money in the right type of investment, a mere $1,000 annually can grow exponentially over time, leaving a hefty sum of money for you to use during your retirement. I know what you are saying, “I don’t have $1,000”. Here is a simple way to save called the latte factor. If you drink one latte a day, you are typically spending about $4.
$4 X 5 Days (Mon-Fri) X 52 Weeks = $1040
That is over $1,000 annually that you could be saving! What is your latte factor? If you don’t drink coffee, is it eating out every day when you could be bringing a lunch for a quarter of the price or buying books when you could be getting them for free at the library? What about 5 years?
5 years X $1040 = $5200
In Conclusion
Do not wait 5 years to start investing! Start now because that five years will dramatically affect the outcome of your retirement fund and lifestyle when you get older. I do not want to see you greeting me, “Welcome to Walmart” when you are 80 years old because you didn’t plan and take action today.
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