you’ll need to save for your
future financial independence
will depend on other factors,
such as when you want to
retire and how much you’ll
need to live on when you
stop working full-time. Armed
with this information, you
can work with an advisor
or use an online retirement
calculator to help you
determine if you are on track
or need to make adjustments.
PUT YOUR PLAN
INTO ACTION
Once you know what you
need to save to reach your
retirement goal, consider
setting up automatic
investments into your
retirement funds. Most
everyone does better with
savings when it is set up to
happen automatically out of
your pay check or savings
account. Here are some
guidelines on where to allocate
your retirement savings, in
order of priority.
If you or your partner has
a 401(k) or similar employersponsored retirement plan
available at work, your first
retirement planning move
should be to do everything
you can to contribute the
maximum into these plans.
Why? Your employer may
match your contributions. Plus,
the money you put in reduces
your taxable income for the
year. And any growth of the
money will be tax-deferred
until you take
the money out
in retirement.
(If your
company offers
a Roth 401(k),
there’s no tax
savings now,
but when you
take the money
out during
retirement, any
investment
growth will be
tax-free.)
The forced
savings of
82 | Eydis Magazine
an employer-sponsored
retirement plan is also, usually,
super supportive in helping
people hit their goals. Once
the money starts being
taken out of your paychecks
automatically, you’ll probably
quickly get accustomed to
living without it.
If you don’t have a retirement
plan through work or your
business, or if you do and
want to sock away even
more money, the next type
of account to consider is
an IRA (Individual Retirement
Account). Think of an IRA as a
container that can hold almost
any type of investment and
allow it to grow, tax-deferred,
until you take the money out
during retirement.
If you are a business owner,
beware of the trap of assuming
the eventual sale of the
business will totally fund your
retirement. I hope this happens
for you. Most business owners,
however, will need to save
outside of their business to
provide sufficient funds for
retirement.
GIVE YOURSELF TIME
AND BE CONSISTENT
For most runners, it would
be potentially dangerous
to wait until the last minute
to prepare for a marathon.