Today we are featuring an article written by Kayla Huynh from Country Financial.
She has some good things to say so let’s get to it!
I’m Kayla and throughout my life, I’ve always tried to make smart money choices. Preparing for retirement is no exception. So, I sat down with our Financial Planning Manager, Joe Burhmann, who taught me how to be SMART when it comes to preparing for my future.
S – Start Saving Now…
No matter what stage of life you’re in, taking steps toward retirement today is important.
Newer in your career?
As a young adult, I’ve been more focused on starting my career than planning for what I might do when it ends. That’s one mistake young people often make, but they should actually start saving for retirement as early as possible.
Further along in your career?
If you don’t have as much time on your side, it’s not too late to start saving today. Buhrmann suggests using the 70/20/10 method to find ways to cut back on expenses that can instead be put toward retirement each month.
70/20/10 Method to find ways to cut back on expenses
This involves living on 70 percent of your take-home pay, saving half of the 20 percent on retirement, and the other half on your emergency fund and short-term goals. Then, use the last 10 percent of your monthly earnings to aggressively pay off any debt.
Is the air in your home making you sick?
Safe-T-Air Fights Mold, Bacteria, Fungus, and Mildew
M – Maximize Your Employer Match…
A 401(k) (or similar defined contribution plan) allows employees to invest part of their paycheck for retirement on a pre-tax, and in some cases, after-tax basis.
Your employer may match your contributions to a 401(k) up to a certain dollar amount or percentage. If you can, be sure to contribute at least enough to take full advantage of the match so you’re not leaving ‘free money’ on the table.
A – Allocate Your Money…
Buhrmann compares “allocation” to a buffet line – you want a little bit of everything as part of a balanced diet!
It can make sense to allocate (or spread) your money into different investments like: mutual funds, CDs, stocks, and bonds to diversify your holdings. There’s no one-size-fits all recommendation on how you should divvy these up, though. For instance, different investment and savings vehicles can help you work toward different goals depending how much risk you’re willing to take on and how far out retirement is.
R – Rebalance Your Investment Portfolio Periodically…
As your money ebbs and flows over time with these investments, you may have to adjust how much of each type of investment you have to keep it aligned with your overall plan to accomplish your goals. Periodically, track which of your investments are actively working toward your current objectives. Then, modify or balance the account if need be so your portfolio stays on track.
If I just said a lot of things that mean nothing to you, don’t worry, you’re not alone.
This is an area where financial professionals can help. Buhrmann says rebalancing your investments is similar to maintaining your car’s tires – even after getting new tires or inflating older ones, you will still need to check on them down the road and rotate them regularly to keep you safe, and keep the car performing well.
But, just like you take your car into the auto shop, choosing to leave your investment decisions to the pros is totally acceptable.
T – Taxes: Keep An Eye On Them!…
It’s important to save tax-efficiently. Luckily, it’s pretty simple to take advantage of the tax options of some common retirement strategies.
Traditional IRAs and pre-tax deferrals to a 401(k) allow you to contribute before you pay taxes. However, because you’ll probably have to pay taxes at some point, those taxes will be taken when you withdraw money from your account.
If you prefer a tax break during your retirement years instead of up front, you may be able to take advantage of a Roth IRA. For a Roth IRA, you will need to pay taxes on your contributions upfront, but the earnings on your investments grow tax free. That means, when you’re ready to the money out during retirement, you won’t have to pay taxes again.
In Closing…
There’s a lot to consider when it comes to investing your money. It is important to not jump into any one thing and to talk to your advisors.
STOP wasting time and money on cosmetics.
Just FIVE items will have your looking and feeling your best…
Third Age Skin Care Promise? Love our products or YOUR MONEY BACK!
We invite you to explore Third Age Skin Care.