Now that the Packers are on their way to the Super Bowl to hoist the Lombardi Trophy, we can talk about an even more important future:) Your retirement.
Eventually you want to stop going to your job everyday right?
What do we do first?
If you are not already contributing to your 401k, get started ASAP. I can't stress this enough! Right now you are getting more bang for your buck with the stock market at a low point and is on the rise. The longer you wait to invest, the more you are going to pay for each stock.
How much should we be contributing?
Each person has their own situation as to what can be afforded but be sure to put in at least what the employer is willing to match, you are instantly doubling your money. My personal recommendation to someone who has already been working and has the joys of bills to pay, start out with contributing 10%. This is the game changer to prove that you will be ready to retire when the time arrives. This will also be the time you will feel the change the most. Think of this as a newly acquired bill that you have no choice other than to pay. Contribute 10% for a year, this will allow time for you to adjust your spending habits to accommodate the change. DO NOT WAIT ANY LONGER TO START THIS!!! If you are not contributing you should be running out the door right now to your Financial Planner! I can't stress this enough, I could write a whole article on the reasons contributing is important.
After the first year then what?
After the first year of contributing 10%, you will need to increase your contribution another 1%-3% and will repeat this each year. At this point you will be making such small changes to your contributions that you will hardly notice the change in your take home pay. My recommendation is to continue to increase your contribution each year until you reach at least 18%.
Once these goals have been met you can kick back and watch your wealth grow knowing that you are on track to financial freedom.
If you don't know what to do to get started go to your Human Resources Department where you work and ask for information on the company's retirement plan. They will most likely direct you to their company's financial planner and he will take care of everything for you.
What if we do not have a 401k plan at work?
Some work places may not have 401k programs or maybe you are self-employed, you will need to go to a bank such as Wells Fargo, ask to speak to a Financial Planner and they will get you started on a retirement plan.
To answer the question, Do you want to eventually stop going to your job every day? I'm sure the answer for everyone is yes but without saving for the days of old age, you will be working until your body and mind won't let you any more.
Happy Savings!
Dustin
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