A Real Plan For Retirement Funding – Part 1
Have you given much thought to saving money for your future?
This is a trick question, even though a common question. You can’t really save for the future because the future is a day that you’ll never reach. You need to avoid ambiguous thinking like this. You need to give your future a date (i.e. the date of your 65th birthday). You need to be very specific when it comes to planning if you want to have a successful outcome. Don’t cut corners on yourself, your life, your family,…your business. This is your life, your business and it requires planning to get the results you desire.
Even saving using a company provided 401k requires you to know the date of when you plan to use your savings or what you’re going to do with it. Having no date in mind for your 401k investment is like having a life insurance policy, which we’ll talk about later. Your 401k isn’t for others to benefit from your death, it’s for you to benefit at some predetermined date that’s just years away, not some mysterious date that you’ll never see. Since we’re on the subject of 401k benefits or investments, let’s discuss future.
The New Job With New Benefits
So you’ve started a new job and haven’t received your first paycheck. I call this the best time to make some very important financial decisions. Before you receive the first check is the perfect time to start saving or make previsions that can be taken from the funds. You see, you’re not accustomed to using any amount of the check because you’ve not received it. This potential changes once you get it in hands and in your mind what the actual paycheck amount is going to be. So putting provisions in to place before you receive the first check, you’ll never have the opportunity to miss the funds or feel shorted without them.
Company matching profit sharing and 401k savings benefits is like getting free money just for putting your money out of reach for a time period. If you can make $1 dollar become $2 just by waiting, it’s worth it. That’s your money doubling before your eyes. I know people who have never taken advantage of their company’s 401k matching benefits of up to 10% of their annual pay. Let’s just say you make $25 thousand a year, you put 10% (that’s $2500) into your company 401k, and they match it by giving you $2500. You didn’t earn it, you just gained $2500 just for waiting. You used your money to make money.
When you’re starting a new job, you should set the max on all your desired benefits. In this way, you never miss the money coming out of your paychecks as you would if a year later, you had to reduce your pay by the same amount. You’d certainly feel the reduction when done at a later time.
Today is Friday!
I’ve learned this valuable lesson the hard way. Don’t be like most and miss out on what could be yours, a free gift. Did you know that most people miss out on their blessing not because it doesn’t come their way, but rather because they were unable to recognize it when it did show up. Remember, this precursor to starting any new job, set your future plan in motion today.
[…] paycheck. This sounds like a problem with no solution. So your situation is much different than the one we discussed prior when you have a new job or position and haven’t received the 1st payche…. It’s easier to put some things in place using funds you never had in the first place. While […]