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On Retirement Planning and Systematic Investing

Two important topics that you should know about are retirement planning and systematic investing. These two topics are connected to each other as well as all of us, so you want to make sure you know everything there is to know about them in order to build a strong financial future.

In this post we will explore the two topics and look at what you need to know about them in order to build a solid retirement.

What You Need to Know

Before anything else, my suggestion is that you establish an investment account that has what’s called a “systematic withdrawal” option. Think about any bill you pay where the amount owed is automatically taken out every month when the bill is due. This is something like that.

Without setting up a bill that has this kind of option, you will likely have a harder time reaching savings goals. With a systematic withdrawal option, you pay yourself in small increments, which can be a more effective method of saving than trying to put away large, lump sums of money. You’re less likely to notice the impact of those small impacts, like buying a daily coffee versus paying the full price of a subscription upfront.

Beyond that, you want to consider retirement plans like the 401k and the 403b. At some point in your career, you will likely have the chance to contribute to one of these plans. With them, you contribute pre-tax money and have your funds grow tax-deferred until you retire and are ready to begin withdrawing it.

Ideally, you want to do whatever you can to make sure you maximize these plans. My advice to individuals is as follows:

• Contribute at least enough to get the match from your company. Not all companies have this option, but you will want to take advantage of the free money if yours does.

  • Look at how your assets are allocated. Everyone has different levels of risks, as well as different goals, so you will want to consult a professional to help you figure out what yours are.
  • Max out your 401k or 403b before contributing to other investments. Most of the time, it makes sense to do this just because of the tax-deferred nature of these accounts.
  • If you have a 403b plan at your job, ask exactly what type it is. Is it a tax-sheltered annuity or a low-cost fund platform? Your company should be able to provide you with a list of vendors who can operate your plan.
    If you would like to know more about retirement planning and systematic investing, don’t hesitate to get in touch with me. I will be happy to answer any questions you might have.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. Investing involves risk, including the risk of loss. No strategy assures a profit or protects against loss.

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