Melissa Cappleman is the Dave Ramsey Certified Debt-Free Coach of the Greater Los Angeles Area!

Retirement Savings

 

Retirement planning

Planning for retirement used to be the simplest of all money management strategies. Get married young and buy a house to raise your family. After 30 years, the house is paid for and the kids are grown and gone. Sell the house, buy or rent something smaller and cheaper, and live on the money you made, along with your pension, when you retire. Easy peasy, right?

Retirement planning doesn’t seem to work like that anymore does it?

You need a money savings expert on your side

 

Planning for the future…

Planning for the future is always tough. How much will we need when we retire? Can we maintain our current lifestyle? These questions rarely have simple answers. As your personal money savings expert, we will help you discover,

  • When to begin funding your retirement
  • How to begin funding your retirement
  • The 4 best ways to save
  • Where to put your retirement fund
  • How to grow your retirement fund
  • How to protect your retirement fund

 

Retirement and debt…

Building a retirement fund requires income, whether pre-tax or through direct investment. Carrying debt will only get in the way of funding your retirement. You should begin your retirement fund only after you are debt free. Then, you should invest 15% of your income in your future.

Tips from a money savings expert

If you are in debt, you should stop contributing to your 401k or IRA before you begin saving for retirement. Use those extra funds to become debt free, and then think about funding your retirement. We recommend a four-fold approach to funding your retirement. Place ¼ of your retirement fund into a mutual fund portfolio containing each of these investments: growth, aggressive growth, growth and income, and international mutual funds. Do this using a combination of your employer’s in 401k plan and your own, self-funded Roth IRA.

Here is a simple plan to help you become a money savings expert.

“A Simple Plan That Works”

Your income is your most powerful wealth-building tool so, once you’re debt-free, invest 15% of your take-home income in Roth IRAs and pre-tax retirement accounts. If you receive a 401(k), 403(b) or TSP match from your employer, invest up to the match. Then, fully fund a Roth IRA for you (and your spouse, if married). If that doesn’t add up to 15% of your household income, invest more with your employer plan until you reach 15%.

Here’s an example:

Household take-home income:

$70,000

Husband:

$38,000

Wife:

$32,000

15% of $70,000

$10,500

Husband’s 401(k) matches 3%*

-$1,140 (3% of $38,000)

Wife’s 401(k) matches 4%*

-$1,280 (4% of $32,000)

Remainder into Roth IRA

$8,080

After investing for 25 years averaging 12% per year, the couple in our example above will have nearly $1.6 million saved for retirement! (From “The Truth about Retirement,” at daveramsey.com)

Retirement planning comes first…

Do not sacrifice your retirement for the benefit of others. This is your future we’re talking about, and you cannot afford to mortgage your future for the sake of your children, other family, or friends.

  • Your retirement fund belongs to you – this is not a family asset.
  • Let your children fund their own higher education – do not place your future in the hands of a child who may never finish college.
  • Your kids can buy their own home – do not place your future in the hands of someone who may not be able to afford the home you’ve helped them buy.
  • Do not lose sleep over your investments – if you’re worried about the safety of your retirement fund, make a change which will allow you to sleep at night.

 

To learn more about retirement planning, funding your future, and becoming your own money savings expert, call us for a free get-acquainted call today.

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