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Retirement Planning Introduction

Excluding a decision to work all your life or a premature death, retirement will come voluntarily or involuntarily. Social Security payments will not be sufficient to cover all income needs in retirement, especially with the ever-increasing costs of healthcare. And, loans are not available for retirement expenses!

The WEALTH for the RIGHTEOUS newsletter will cover retirement planning and current retirement issues such as Employer-sponsored Retirement Plans (401(k), 403(b), 457, Thrift Savings, Pension Plans), Individual Retirement Accounts (IRAs), Small Business Retirement Plans (including sole proprietorships), Social Security, and more.

The Retirement Planning section of our website features articles that emphasize the importance of saving for retirement now — before the paycheck ends.

Guiding Principles

Although it’s important to save for short-term goals remember to save for your long-term goals as well. The earlier you start saving for your retirement the greater the likelihood you will reach your retirement savings goal.

Find the Money and Get Started

Take a look at what you’re earning and how much you’re spending. Put together a budget, and find some money to put into savings.

Take Advantage of Your Employer’s Retirement Savings Plan

Workplace savings plans are the easiest way to save. There are two major types of plans. A defined benefit plan, funded by the employer, promises you a specific monthly benefit at retirement. A defined contribution plan, on the other hand, does not promise you a specific benefit amount at retirement. Instead, you and/or your employer contribute money to your individual account in the plan. The value of your account depends on how much is contributed and how well the investments perform.

Open an Individual Retirement Account (IRA)

Whether or not your employer has a retirement savings plan, you can start saving in an IRA. An IRA is a personal account that you set up with a financial institution, like a bank or a mutual fund company. There are two different types of IRAs, Traditional and Roth IRAs, which offer different tax advantages.

Learn About Some Basic Investment Choices

Whether you sign up for a 401(k) account at work or start saving money in an IRA, you will have to decide where the money will be invested. Many investors focus largely on mutual funds.

Don’t Spend Retirement Savings Before Retirement

When you change jobs or think you need some extra cash – resist the urge to cash out your retirement account and spend the money. Instead, leave the money there or roll it over to another retirement plan so it can continue it grow. (See article, “Can I Rollover My Retirement Account?”)