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Retirement roadmap. Part one: do these three things first.

Diana Bunch, Financial Advisor

July 26, 2017

The Employee Benefits Security Administration (EBSA) of the U.S. Department of Labor states, “In 2014, 30 percent of private industry workers with access to a defined contribution plan (such as a 401(k) plan) did not participate.” If you haven’t begun saving for retirement yet, these three essential strategies can put you on the right road to retirement.

1. Seek professional guidance.

With all of the different products on the market, as well as the different strategies for allocating funds, retirement planning can seem a bit daunting at first. That’s why it’s important to establish a relationship with a financial advisor as early in the process as possible, especially if you’re investing on your own and not through an employer-sponsored plan.*

The trust and comfort level you build with your advisor is key. A good advisor will seek to learn not only the details of your financial situation, but also your personality and lifestyle. Are there grandkids in your future? Do you plan on upsizing or downsizing your home? Is travel important to you? Sit down with someone you’re comfortable with, and you’ll arrive at a more tailored plan specific to your circumstances and goals.

2. Create a budget that includes a consistent monthly contribution.

You can’t start saving if you don’t have a handle on your monthly income and expenses. Scrutinize unnecessary expenditures; for example, either use that gym membership or get rid of it. It’s about freeing up little bits of found money anywhere you can.

Next, create a line item in your budget for your retirement contribution and treat it as you would any other bill. Set it up as an automatic bank draft so you’re not tempted to spend it on anything else. You can start small and modify as you go along, but it’s a good idea to form the habit of saving early. If it turns out to be easier than you thought, increase your amount the next year.

3. Put time on your side.

“The average American spends roughly 20 years in retirement,” and “fewer than half of Americans have calculated how much they need to save for retirement” according to the EBSA. It takes a long and committed effort to save for 20 years of living expenses, so it’s never too early to start a retirement plan. Periodically, you may worry that your savings is losing ground, but consistent contributions beginning early and continuing throughout your career will more than make up for any occasional and temporary dip in value.

If you’ve put off saving for retirement, there are still ways a financial advisor can help you prioritize and make the best use of your remaining income-earning years. But be aware that the older you are, the more aggressively you’ll have to contribute.

No matter your age or circumstances, 4Wealth can help you strategize your retirement goals and optimize your contributions. Contact us today.

* Plan-sponsored financial advisors are often available to participants in workplace contribution plans. Ask your employer about contacting your plan’s advisor.

About Diana: With over 27 years in finance, Diana takes pride in the way clients view the 4Wealth® Financial Group as a place to get answers to all their financial questions including estate planning, taxes, investments, and insurance. She began her career as a branch administrator for a national investment firm and worked her way up, becoming a licensed advisor in 1994 with a Series 65 license. Diana can be found at LinkedIn, Twitter, Facebook, email, and (708) 695‐5850. | A freelance writer assisted in the preparation of this article.

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