Wednesday, November 9, 2011

Saving for Retirement

Are you one of the lucky duckies with a guaranteed pension just waiting for you to get old? Probably not. Most likely you’ve been working for years and putting your own money away for retirement. And there is nothing more boring than the 401k and IRA statements that you get in the mail or online periodically. But you really need to become friendly with your retirement accounts. Can you answer these questions about something you’ve probably poured a large percentage of your hard-earned dollars into?

How much money is in my account? Where is the money invested? Is my money working for me, increasing in value over time? Am I receiving any matching contributions from my employer? Are fees being subtracted from my account? How does the money my account earns for me compare to other investments?

This is very basic and important information. You need to get up to speed on this. Don’t let life’s daily grind keep you from spending time with something that’s really important. No time you say? Make time. For example, some things you can farm out to others like fixing your car or remodelling your basement. If you have to, hire a plumber to replace that leaky faucet so you can free up a Saturday or two to learn about your 401k and IRA accounts. This could be life changing and result in decisions that involve large sums of money.

The first step is to gather up the statements that you’ve received either in the mail or electronically. You’ve saved them, right? No? Well the second step is to learn how to access your accounts on the web. Most likely copies of your statements are waiting there for you to print them out or otherwise save them. What’s the third step? Well let’s talk about that if anyone is interested!

Best Regards,

PS I can hear some of you saying “This doesn’t apply to me, I have a guy for this stuff. He or she stays on top of all these details and tells me what to do”. Well you should realize that the number one priority of every financial advisor is to earn a comfortable living off a slice of your money. They are masters at making it look like someone else pays them. But you pay them, and you pay them dearly. And truth be told, perhaps they’re worth every penny because they’re smart and honest and they can manage your money much better than you can. You can find advisors like that; many do exist, but good luck with that. So even if you have no interest in managing your money, learn all you can so you understand this very important aspect of your life.


  1. You should always put enough money in your 401k to receive the full match that your company pays out. For instance at my company, if I pay in 6 percent of my income, they match 3 percent. That's a 50 percent return on your dollars right away.

  2. Absolutely Tman. Why leave that money on the table? Take everything your employer offers. But of course that's the minimum, more would be better.