James here. I’d like to discuss something which many of you probably avoid like the proverbial 800 pound elephant in the room. Most Americans are woefully deficient when it comes to retirement savings. Social security can definitely help, but it is not viable to depend on it as your sole source of income during your retirement years. So what is the best way to start saving for retirement? Those of you who work for a company which offers a 401K plan should definitely fully participate in it. By “fully participate”, I mean that you should have maximum deduction taken out of your check — or at a minimum the maximum amount matched by your company.
I personally made the mistake of failing to participate in 401K programs available to me for many years. A friend who is a financial advisor went over the numbers and showed me that failing to contribute to a 401K for a period of 12 years cost me an eventual $300,000 when I am retired. That number really got to me, and thankfully spurred me to start contributing the maximum to my plan. I’m getting older, but I’m only 42 and when in your 40’s it isn’t too late to catch up for past sins. If you don’t have access to a 401K program, then you can use an IRA or a Roth IRA in much the same way. Make sure you consult a qualified investment adviser to ensure you meet the applicable program’s rules. If you haven’t yet began to plan for your retirement, it is not too late. Take the first step today and you’ll thank yourself when you enter those golden years.