Retirement planning involves a ton of planning to have
enough money to life off for the rest of your life. My number one suggestion that you should be
aware of is: that it is NEVER too early to start planning. Especially as newlyweds, you and your partner
need to discuss how you will plan for retirement and what benefits you will
take advantage of whether at your work or through a private company such as
Northwestern Mutual, Mass Mutual, and etc.
So take into consideration that you will need to talk with one another
about planning.
There are five basic components that every couple should
know about retirement (Guina, 2010):
1.
Significant Savings: Such as a 401(k) plan or a
Roth IRA, as well as investments that you took the advantage of utilizing.
2.
Multiple Incomes: This could include a part-time
work aside of your regular job, Social Security benefits, a pension, and
similar monetary funds that you may receive.
3.
Risk Management: Personally, I believe that this
is the most important component that you should be aware. This, in short, is insurance. Many have homeowners’ and health insurance
but take the time to discuss with your partner about Life Insurance.
4.
Estate Plan: This can help with your estate and
the assets that are worth investing in.
5.
Professional Advisor: Many people believe that
they can manage their finances well enough, but I highly recommend that you
seek into hiring a professional advisor for more than one area such as
investing, health care, and insurance.
This allows you to gain the insight from a professional on your choices.
Most employers offer a retirement plan that is commonly
known as 401(k) plans. As stated before
it is never too early to start planning.
I urge you to go speak with your HR office at your work and explore your
options with 401(k) plans that both of you take advantage of. However, many other companies such as
Fidelity also 401(k) plans. A question
that rises up with retirement plans is how much you should put into with each
paycheck. David Bach, author of Smart Couples Finish Rich claims that at
least ten percent will be a sufficient amount however I believe that how much
you think you’ll be comfortable with putting away into savings each month and
still have the financial stability needed for the rest of the month.
Most 401(k) plans are readily available at all times however
if you withdraw any money prior to the required age of 59 (Bach, 2002) you will
be charged with high interest, so I recommend that you do not take any money
from your plan until you have reached the required age where no charges will
occur.
Similarly to a 401(k) plan is an IRA or a Roth IRA. Many companies offer IRAs such as Fidelity
and Vanguard. This is said to be one
easy way to gain good money. Most IRAs
are tax-deductible which makes having them convenient so you don’t have to
worry about taxes with them. Essentially,
this is investments that gradually grow over time. The same question arises with IRAs as that of
401(k) s of how much you should put aside.
This should be how much you feel comfortable putting away and still have
the money to be secure. Just remember
that you need to have an earned income to supply this IRA (Perez, 2011). The most common IRAs used are Traditional IRA
and Roth IRA. Both have different
requirements and qualifications as to what makes each IRA.
Retirement may seem easy but the process does require
substantial planning to ensure that you will live comfortably off what you have
saved and invested in. I want to bring
up the statement and emphasize the importance that it is NEVER too early to
start planning. Retirement planning is something
that everyone should be doing regardless of age but it never hurts to start
sooner rather than later. If you have
not already, ask your HR office at work about information on the 401(k) plan
they offer or research different companies and the IRA plans they offer. But do remember to put down the amount of
money you feel most comfortable with so that you can live securely for the
month.
Just keep in mind these questions before you actually do
retire:
·
When is it time to retire?
·
How much will you need to retire?
·
What are you going to do upon retiring?
·
Where will you live during retiring?
I know I overlooked some other information that is parts of
planning retirement but if you have questions feel free to ask in the comment
section below. Because I know retirement
planning expands well beyond simply 401(k) plans and IRAs but I could not go in
depth on all of it. So if you do have
questions feel free to ask.
Bach, David (2002). Building
your Retirement Basket in Smart Couples Finish Rich.
Financialmentor.com (2008), 5 Essential Pre-Retirement
Planning Questions. Retrieved from http://financialmentor.com/free-articles/retirement-planning/5-essential-pre-retirement-planning-questions
Guina, Ryan (July 2010). 5 Essential Components of a
Retirement Plan. Retrieved from http://money.usnews.com/money/blogs/On-Retirement/2010/07/27/5-essential-components-of-a-retirement-plan
2 comments:
This has been a valuable post to read, the information found here is applicable to everyone and not just married couples. Saving for one's future insures that they will not be dependent on family or the government. Following these tips sooner than later can build a nest egg that will grow more rapidly, and peace of mind is possible, especially with the instability of Social Security one must plan for a alterative to this program. Thanks for posting!
The 401(k) retirement plan offers several advantages. One is that employees are given the privilege to decide where they want their contributions to be placed, and allow them to control over their investments. Since the employee is permitted to contribute to his/her 401(k) with pre-tax money, it drastically cuts the amount of tax paid out of the paycheck.
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