My Dad worked all his life for one company from age 17 until retirement, with a 3 year break for sailing around in the Pacific during WWII. In those days, retirement options usually meant working for yourself, or your family business, or starting and staying with the same company, large or small. Retirement income came from your own savings, from selling your business, or from a pension paid by the company you worked for, based on number of years worked, salary and other variables. Social Security, enacted in the 1930’s, was meant to be a supplemental boost to income for retirement years.
That all changed over the last 30 or so years. Pensions are uncommon, and retirement is frequently funded by something called a 401k, which is money taken from your salary on a pre-taxed basis, matched to some degree by the company which employs you, and invested until retirement age. That seemed like a pretty good deal until our recent economic problems. Some people have joked that the recession and concomitant reduction of stocks and mutual funds reduced their 401k to a 201k.
According to MSN Money, approximately half of Americans are currently feeling insecure about retirement. So what is one to do? It’s a given that there are no guarantees, but there are some things you can do to help prepare for the future.
- Start saving for retirement early. Like now, even if you’re in your first full time job right out of school.
- Live within your means. Buy a car and live where you can afford. Avoid the temptation to live for the moment.
- Don’t turn down free money. If you have the option of joining a 401k and don’t, that’s what you’ll be doing – the free money being the corporate match.
- Obtain professional advice. That doesn’t mean you always have to follow it.
- Build up and keep an emergency fund. You never know what life will bring.
A free consultation about retirement is available by calling us at 264-4806.