I don't plan ahead. I could care less about the things that are happening in the future unless it has to do with my kids. I guess retirement has a lot to do with kids in general as well, but hey, whatever. I suppose that has something to do with the fact that I'm still in that geeky stage of wanting to stay in my early 20's and not give a rat's ass, and pretty much having to act like the successful, respectable business woman/mother that I am.
I was sitting here thinking earlier about the course my life has taken the past few years and what that has now paved the way for my future and my family's future. Then it dawned on me that 20 somethings don't THINK about retirement, because it's seems so far away!! I never really thought that much about it, and I worked for a top tier, grade A-rated insurance company for a year!! My main interests then and now are what I'm having for dinner, and who's birthday is next to give me a reason to get a sitter and get out of the house! =]!!!
So I googled some things and found this wonderful article about the 7 things you can do today to prepare for tomorrow (or for retirement, per se). Blogger is giving me hell again...(for heavens sake, make it stop!!!)...so I'm having to copy & paste the 7 things instead of giving you the link to the article.
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1. Max Out Your 401(k). Probably the easiest and best thing you can do to get your retirement plan going. It’s easy, especially if you are an employee, as you are probably already enrolled in a 401(k). All you have to do is fill out a form to increase it to the maximum contribution. And if your employer matches a certain percentage of your contributions, that’s free money right off the bat. Best of all, you get tax breaks up front on your 401(k) contributions, saving you a ton of money.
2. Start now. Even if you’re really late in getting started (as I was), it’s important to start right away. Even if it’s just a little at a time. Yes, we’re talking about the magic of compound interest, which means that if you start now with a small contribution, it’s better than starting later with a larger contribution. Make your money work for you. Even if you just cut out a few small expenses, and used that savings to start investing in retirement, it makes a big difference. And starting small has another benefit: as you watch your investments grow, you become motivated by your success to invest even more.
3. Track your earnings. You don’t have to check stock prices every day, or anything, but simply checking on your 401(k) and other investments once a year or every 6 months will do wonders. Check on your earnings, and use online calculators to see if you’re on track. If not, you can make adjustments, such as increasing your contributions.
4. Roth IRA (or other secondary investment). It’s best to have multiple investments, instead of just 401(k), which might not be sufficient for your retirement needs. Probably the best secondary investment for most people is the Roth IRA, if you’re eligible for it (and most of us are). I won’t get into the details of it (read the Wikipedia article for more), but the main point is they are structured to save you on taxes. There are maximum limits for contributions which change each year ($4,000 in 2007 and $5,000 in 2008), and if you can contribute the maximum, you should.
5. Life insurance. This isn’t really necessary for retirement, of course, but is more of a safety net for your family. Why should you worry about it (if you have a spouse or children)? Because it gives you that financial security needed to invest your money for retirement. The next two items are for the same reason.
6. Disability insurance. If tragedy strikes and you’re not able to work, what happens to your retirement contributions? Well, they go down the drain if you don’t have disability insurance. Get insurance that covers 60% of your current income to be safe.
7. Emergency fund. The recommended 3-6 months of expenses for an emergency fund is a good guideline, but if you don’t have any emergency fund, you should save up at least $1,000 (to start with). Without an emergency fund, you will cut off your retirement contributions anytime an emergency comes up. You absolutely need to start saving an emergency fund today if you want to prepare for retirement. Set up regular transfers to a savings account today.
2. Start now. Even if you’re really late in getting started (as I was), it’s important to start right away. Even if it’s just a little at a time. Yes, we’re talking about the magic of compound interest, which means that if you start now with a small contribution, it’s better than starting later with a larger contribution. Make your money work for you. Even if you just cut out a few small expenses, and used that savings to start investing in retirement, it makes a big difference. And starting small has another benefit: as you watch your investments grow, you become motivated by your success to invest even more.
3. Track your earnings. You don’t have to check stock prices every day, or anything, but simply checking on your 401(k) and other investments once a year or every 6 months will do wonders. Check on your earnings, and use online calculators to see if you’re on track. If not, you can make adjustments, such as increasing your contributions.
4. Roth IRA (or other secondary investment). It’s best to have multiple investments, instead of just 401(k), which might not be sufficient for your retirement needs. Probably the best secondary investment for most people is the Roth IRA, if you’re eligible for it (and most of us are). I won’t get into the details of it (read the Wikipedia article for more), but the main point is they are structured to save you on taxes. There are maximum limits for contributions which change each year ($4,000 in 2007 and $5,000 in 2008), and if you can contribute the maximum, you should.
5. Life insurance. This isn’t really necessary for retirement, of course, but is more of a safety net for your family. Why should you worry about it (if you have a spouse or children)? Because it gives you that financial security needed to invest your money for retirement. The next two items are for the same reason.
6. Disability insurance. If tragedy strikes and you’re not able to work, what happens to your retirement contributions? Well, they go down the drain if you don’t have disability insurance. Get insurance that covers 60% of your current income to be safe.
7. Emergency fund. The recommended 3-6 months of expenses for an emergency fund is a good guideline, but if you don’t have any emergency fund, you should save up at least $1,000 (to start with). Without an emergency fund, you will cut off your retirement contributions anytime an emergency comes up. You absolutely need to start saving an emergency fund today if you want to prepare for retirement. Set up regular transfers to a savings account today.
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OK, a LEEETLE grown up for me, but that's okay. I really don't understand a lot of what that guy is talking about, but that's what I hire those mathy-nerdy-tax/accountant people for. Because as smart as I am, numbers elude me. Let's just hope they don't take me to the cleaners!
Time to go watch some UFC, play some Guitar Hero, and run around the house in my flannel pj's that read "BOOMER SOONERS!!!" because this is really dragging me down, man!
3 hollas!:
I like taht I read your blog and winced and only skimmed the section about actually planning. Yes, I am indeed in denial that I must plan for anything.
Wow...this is heavy. Ok, well I'm going to spend my newly earned money on clothes. They are an investment!
Wow...this is heavy. I'm going to spend my newly earned money on clothes. They are investment afterall!!
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