No one has ever said, “You can worry about retirement later! Enjoy life now.” Or perhaps they have, but they probably have an extra influx of cash waiting for them at the end. Generally speaking, it is always time to save for later.
If you are like most, you have some sort of debt, be it student loans, credit card, medical expenses, et cetera. And while it’s good to pay it off in a fair amount of time to avoid those nasty interest rates, sometimes it could be best to reallocate your money.
Millennials, Generation X-ers, Baby Boomers, and the last of the Traditionalists to leave the workforce are not all thinking about their future. They are thinking about now. “What debt can I get rid of now?” “What bills do I have to pay now?” “Where do I want to go on vacation this year?” Yes, it is great to think about now, and being in the present. It is also not a bad idea to think about the future. “How much will I have to spend later?” “What will my kids end up with later?” “Where would we like to go in 5, 10, or even 15 years?”
How do you plan for later? Ironically enough, you start saving now. 401(k)s are your friend. Your company may even match, which is even better. If retirement is in the distant future, Roth IRAs are your best friend. Why is that? You’re paying taxes on it now, rather than the future when you are pulling that money out and inflation has occurred.
You all have savings accounts, correct? Others call it a “rainy day fund,” but the concept is the similar. You need to have a little set aside for when life happens.
Investment strategies. You have probably heard that phrase thrown around before, but what exactly does it mean? It could mean stocks, bonds, mutual funds, possibly even CDs—not the “old-fashioned” way of listening to music.
Now dependent on what your thoughts, tastes, and ideas are for your future, it could mean a slew of different investment plans. Do you want to invest aggressively? Are you looking for a comfortable cushion “just in case?” Are things looking to be a little pricier than you originally entailed? Are your kids really compassionate enough to look out for you? These are all things to consider—and more.
A recent study showed that millennials are very cognizant of their future, yet they aren’t really doing anything about it. And their older counterparts are not leaving much of an example. Do yourself a favor and start planning now. Living on less now could mean a more lavish, or at least more comfortable future.
Seek the services of a legal or tax adviser before implementing any ideas contained in this blog.