Ways to Retire Rich, part 1
Written by HERS on June 27, 2008 – 8:33 pm -Today while surfing around the internet I came across an article called Six Simple Ways to Retire Rich.
Since everyone wants: One: To Retire Rich and two: For it to be Simple, I figured it was worth a read. While a few of the “Simple Ways” were no brainers to me I was surprised by a few of the statistics that they quote that show that obviously they aren’t to everyone. I will discuss the first three “Simple Ways” today and the last three tomorrow.
Simple Way #1: Don’t Opt Out
With this they are referring to how many companies these days are automatically enrolling employees in the 401k or retirement savings programs when they are hired in and in order to not participate you have to actually opt out.
I think this is a great idea, especially for young people who are just entering the workplace and may not really understand how the 401k works yet. The article says that 85% of adults surveyed started saving earlier as a result. This is great because as everyone knows the biggest ally that you can have when it comes to retirement savings is time.
Simple Way #2: Get Help from the Pros
Most retirement savings plans have some sort of target- date retirement fund which claims to have the appropriate mix / balance of funds in it for the timeframe you want to retire and usually if you don’t choose other wise your plan may automatically enroll you in this fund. While that may not be a horrible choice for you, it may not be the best either.
I do have a personal financial consultant and for me it has been working out pretty well and I’m happy. That doesn’t mean you need to run out and hire one yourself. If you have a 401k a good resource is to talk to someone at the company that administers it. My company recently changed plan administrators and the representatives came by and spoke to people one on one and they are available by telephone as well at no additional charge. I know a number of people in my office who have taken advantage of this free professional help.
Simple Way #3 Check Your Progress
Keep an eye one the big picture, including your insurance options, retirement savings, emergency savings, etc. It’s easy to get bogged down just looking at the percentage that you are putting into your 401k but don’t’ forget about making sure you have the correct amount of life insurance in place and make sure you have kept the beneficiary up to date as well. You don’t want your ex to be still on there from like ten years ago and your kids to get nothing! Another insurance need to consider is your long and short term disability coverage whether it’s through your employer or a private policy it’s definitely something to consider.
Another investment to consider in the mix is your Roth IRA if you are eligible to contribute and of course don’t forget your emergency savings account. It is probably worthwhile to sit down with a professional to get some solid recommendations to make sure you are covered.
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