Retirement is one of those things that seem so far off. Therefore, planning for it often takes a backseat to many other problems and concerns. The sneaky part about planning for your retirement is the sooner you start the better off you will be. That means you do have to make some time to confront retirement plans… long before you need them.
The trick is to make it simple and low maintenance. Spend a week determining how you will plan for your retirement – then do it. If you set it up the right way, you shouldn’t have to think about it much. Whatever you do, don’t put it off. Deal with a plan today; set it up, and then move on.
Start by setting up a tax deferred plan – either through your employer’s 401k program or through a separate IRA plan. Then, once you have made a selection… make your payments automatic. That way you don’t have to think about it.
401k plans usually make it very easy to set up a good plan. Your company will provide a representative that can sit down with you, determine your risk tolerance and long term goals, and then recommend an appropriate plan. The money is then automatically removed from your paycheck each month.
Not all of us are lucky enough to have this sort of arrangement through our job. Still, most quality mutual funds will allow you to set up something similar to match your needs. I recently spent about 45 minutes on the phone with T. Rowe Price. During that time they were very willing to analyze my retirement situation and make a quality recommendation. It is worth your time to spend that hour too; set up an account and make it happen.
Many non-employer based funds will also allow automatic payments to your retirement program. These typically come directly from your bank account on a prearranged schedule. This is a simple way to ensure you are always paying for your future.
Whatever you decide, the key is to get started. Don’t keep putting it off… get started on your retirement planning today.
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