If you are in the somewhat decent sized group of having the same job, with the same company for 20-30+ years starting when you were in your early twenties, then fantastic. You probably enrolled in the good old 401K plan, contributed as much as you could and your employer would match it to a certain degree and BAM! You are getting ready to retire and you are set. As for the others, that may not be the case, right?
I have some very close friends of mine who are retired. They are constantly giving me some of the best advice I could ask for, and for free I might add. They live their lives, day to day in a gorgeous three story house in a six figure income area of Indiana, with anything and everything they could ask for. They travel three or more times a year and are season ticket holders to the Indianapolis Colts. I would say they are well off, wouldn’t you?
Company funded retirement plans
I will share some of the advice they gave me. If you are with a company that offers a 401K, enroll! Your company will probably only match you up to a certain percentage, but if you can do it, contribute, at the very minimum, the match that they offer. It is always better to contribute more than is required so that you can accumulate additional funds for retirement that much faster. 15% usually equates out to the maximum you can contribute per the Federal government which at the moment is $17,500.00 a year. Now, all that is pre-tax money. Hello! How awesome is that? 401K money is somewhat like a bonus to you when you retire. If you can contribute as much as you can while you are in the work force, you don’t miss it. You don’t see it being taken out of your paycheck, and it adds up very quickly. So yes, in agreeing with my opening statement, the younger you are the better off you will be when it comes time to retire. The best part is that the amount your company matches you is “free money”. However, you can still contribute as much as you can and find other ways to “catch-up” if need be.
Stocks and Mutual Funds are two other great tools to help prepare for retirement. Our dear friends also have these and they tell us a funny story a lot. When Gary proposed to Ranny, he had done his thing, gave her the ring, but said, are you sure you want this instead of a mutual fund? I admire them both very dearly as friends, but also how they act financially. Stocks, bonds, and mutual funds are something you can pick and choose either on your own or with a financial adviser or wealth management representative. Author Jean Folger wrote an awesome break down on retirement tools, which includes stocks and mutual funds called: “Analyzing The Best Retirement Plans and Investment Options”. The article is very clean cut and easy to follow. It breaks down almost everything you can ask for when it comes to different aspects of retirement tools.
Either way there are many, many tools to help retirement go smoothly and stress-free. It doesn’t need to be complicated. These tools will help you take care of yourself, your family and keep a good, if not great, quality of life when the time comes.
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This guest post was contributed by Max Wolff, creative writer for SaveUp. He is an avid blogger who also happens to be a passionate basketball fan and hip hop junkie.