Pay Your Future Self

Pay Your Future Self

If you’re young and just starting out with your first full-time job, now is the time to begin thinking of retirement. (Unfortunately, too many men start planning for retirement when it’s time to retire. By then, they have lost a LOT of money.)

Many full-time jobs offer retirement benefits through a 401(k) or 403(b) plan. Maximize your job’s retirement plan. Let me say that again a little louder.

MAXIMIZE YOUR JOB’S RETIREMENT PLAN.

That phrase gets thrown around a lot, but for many young men just starting out, let me explain exactly what that means. It’s really a simple three-step process.

STEP 1: Get information about your job’s retirement plan. (Is it a 401(k) or 403(b) plan? Does your company match contributions or not? What investment firm manages your company’s retirement plans?) You can’t really do much without information.

STEP 2: Contribute as much as you are allowed to your retirement plan. Since it’s all taken out before taxes, you may not feel the contribution as much each month. Also, if you work for a company that matches your contribution, then the more you contribute, the more FREE money your company kicks in.

STEP 3: Contact the investment firm that manages your companies plans. Ask the investment firm to adjust your investments so that your plan is heavy on stocks and lower on everything else. The reason is because stocks outperform bonds and mutual funds when you don’t touch the money for ten years or more. (Since this plan is to fund your retirement in the future, you didn’t plan on touching it for several years anyway.)

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