We all get older, like it or not. And most of us plan to
retire once we reach our golden years. Unfortunately, however, retirement isn’t
something that just magically happens and that is all taken care of for us. No,
it’s our job to plan for our own retirements, and as such, our planning or lack
thereof plays a major role in how much enjoyment we are able to get from
retirement. One of the most common ways to plan for retirement is by opening
and regularly contributing to a 401(k).
The best course of action is to open these plans early in
life and to contribute as often as possible. This leads many people to jump on
the “automatic withdrawal” bandwagon, in which employers regularly take funds
from the 401(k) holder’s paycheck, deposit them into the plan, and then match
the payment. Though it can be daunting
to release control of your paycheck to someone else, this is actually a win-win
type of deal.
Sure, it may not be fun to have some of your money
“disappear” from your monthly paycheck, but remember, it’s not actually
disappearing. Instead, it’s being put aside for the “future you.” That’s an
important distinction to make and something to remind yourself of when you’re
feeling glum about all the money you don’t have right this second.
Having that 401(k) growing steadily is a fairly good
indicator that you are going to be able to have a nice retirement. However,
there’s certainly nothing wrong with putting money in other places as well. An
SEP IRA is a nice addition to a 401(k). You don’t have to contribute to it all
the time, but when you do have a little extra, putting it in the IRA is
definitely a wise idea.
At the end of the day, saving for retirement isn’t always
fun, and it does require some small sacrifices. However, the sacrifices you are
making now will mean that you’ll have to make fewer sacrifices in the future.
So, keep contributing to that 401(k) (and your other retirement funds!)
regularly; in the end, you’ll be glad you did.
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