2009 Year in Review

Retirement

by Angie VanderVinne

Many people, including myself, are concerned about their retirement savings. Should you keep contributing money? That is a challenging question to answer, given we have little control over the market and we are all in different financial situations.

If you have any consumer debt such as auto loans, credit cards, unsecured loans, or home equity lines, then we need to consider the payoff of the debt and saving for retirement. If you have a company sponsored 401K that offers a matching contribution (i.e. 50% match up to 4%), then you should contribute 4% to the 401K. The reasoning is that you are automatically getting a 50% return on your investment. Until your consumer debt is paid off, you should not contribute above your company match. Our goal is to have intense direction for your money, not a little bit going in a lot of different directions.

If you are consumer debt free, your goal should be to contribute 15-18% of your income towards retirement savings. Retirement savings includes contributions to 401K, IRA, Roth IRA, and possibly a health savings account. Including a variety of before tax and after tax investment vehicles will help you to minimize your taxes now and in the future. We will talk more about the different retirement accounts soon.

by  Editor, theCity1.com
April 6, 2009