Planning for retirement may be one of many financial demands on your plate right now.
Retirement may seem far off.
You have plenty of time to set aside money.
Yes and no.
The sooner you start saving, the greater return you will have.
Do you have a 401(k) through your employer?
According to a recent USA Today article titled “1 in 5 Americans are making a terrible 401(k) mistake,” not taking advantage of this is a terrible idea.
Especially if your employer provides a match.
A match is essentially "free money" into your retirement savings.
By contributing at least up to the employer match, you are doubling the money you put away.
Makes sense, right?
Unfortunately, about 20 percent of individuals with this work benefit do not take advantage of it.
If you work for one of the 75 percent of companies offering matches in their 401(k) plans, you are fortunate.
Let me give you an example.
Let us say your employer will match half of your 401(k) contributions up to 6 percent of your salary.
If you make $50,000 annually, you will contribute $3,000 each year to reach the full match.
If you do this, you will receive an extra $1,500 from your employer into the account just because you contributed.
That is essentially raising your pay each year by $1,500.
It is just earmarked for retirement.
And it will grow.
Find out the rules regarding your workplace 401(k).
Start saving now.
You will be setting yourself up for financial success later in life while developing wise financial habits.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Reference: USA Today (February 12, 2018) “1 in 5 Americans are making a terrible 401(k) mistake”