Shopping on a Budget

Personal Note from Clyrese

My first full time job was at a warehouse. My Dad was always telling my brother and I to start our

If were not investing in our 401(k) with our employer we might
as well be doing this. It's free money we are throwing away.

retirement planning. Open a 401(k) now so when you retire you will have money saved. My brother and I had the same thought. We have plenty of time to save. Right now I need to make money and do what I
have to do. I didn't start my 401(k) until I started working as a CNA at a retirement community. I was 28 years old. Now 10 years later I have less than $3,000 saved for my retirement.

Two years ago I changed my work status. I wanted to start putting towards my saving plan I am not ineligible. I was thinking about my situation I thought, at 31, I am no where near prepared and will be ready for retirement in 35+ years. Now, the money I have to sitting in my 401 (k) plan I have to figure out what I am going to do it.

My current experience made me do some additional research and thinking. I knew this month's blog will be about retirement planning.

As I continue my research, talk with advisers I will update you on what discover!

Saving in your 20's

If any of you were like me saving when I was fresh out of high school, going to college, and taking care of a baby you may think you have plenty of time to save. You want to use all the money you make for you and your child or children. So you will wait to start investing in a retirement plan once your finances get better. Let me tell you something, before you know it you will be 30 and wondering where in the world did time go. Children are bigger, eating more, your expenses have increased. Now I wish I started saving for my retirement when I was 21. With job matching up to 100% with up to 3% contribution do you know how much money I threw away? Over $1,766 over 4 years, that's not including the interest it would have accumulated over the years and increasing my contribution by 1% every year until I left.

In an article I was reading Most twenty-somethings are actually saving for retirement and it said 67% of young adults are saving for retirement according to Transamerica Center of Retirement studies. The youngest surveyed a median of $16,000 compared to $45,000 for workers in their 30's and are saving more than 10% of their earnings in a 401(k) or similar.

I know you may have heard many negative things in the media about social security and how it may or may not be available when it is time for us to retire. Why wait until it is almost that time to retire when and wonder where your next meal is coming from or how your going to purchase your medicine.

According to Katie Lobosko in her article What I learned about my 401(k): A 20-something's guide she had some very useful tips about saving in your 20's for retirement. Below are some of her tips:

Set up automatic increases until your contribution and the companies contributions add up to 15%. You can start at the lowest and have it set up to increase by 1% every year. This can be done online or over the phone. If at anytime you want to remove the increases just go online.
Put some money in stocks and put some in bonds. In your 20's you should be heavily invested in the stocks. At this time in your life it is ok to be more aggressive than conservative. If you are unsure of what your doing, DON'T WORRY, for a small fee companies like Myrille Lynch will work with you.
Check with your investment company about annual fees. They may charge a certain amount per $1,000 invested.
Before you leave your job. If you leave too soon, before the vesting date, you will loose your matching contribution. Or, like myself, I left my job full time in 2014, after working there for more than 5 years, I was unable to participate in the 401(k) plan. Now I have to figure out what I can do with the money that is just sitting.
PAY ATTENTION THIS IS IMPORTANT Don't take money out before the age of 59 1/2. If you do you will be penalized at 10% plus paying regular income taxes on the entire amount. Instead roll it over to an IRA or 401(k) plan with your new employer.

Saving in your 30's

The same suggestions that are listed above can be applied to any age group. It depends on your situations and what you are comfortable with. But as we get older we find ourselves making many mistakes because of fear. We sometime fear that we still can't afford to save right now because we have to pay this bill and that bill. I felt the same way. But I was talking to someone and we were discussing retirement and saving. You know what she said to me. When you are older and your retired you are on a steady income. The way things are going with social security and the government, you just may not have one. Now your stuck! And your bills are still coming, but you don't have an income. Needless to say that day I went straight to HR and got information about starting a 401(k).

I recently came across this an article that spoke directly to me because everything Nancy Anderson "4 Retirement Mistakes 30-somethings make and how they can avoid it in 2014" is exactly what I was thinking. Here are a list of some of the tips that caught my attention:

When I was in my 20's and Dad was telling me to start my 401(k) plan I was thinking I had plenty of time to save for that. I was in my early 20's. Well Nancy Anderson said it perfectly, the number one mistake people in their 30's think they have plenty of time to save. She suggest that when your younger save the max amount because as you get older your expenses increase. Now that your in your 30's you may have a family and a house.
Before you begin retirement planning run a retirement calculations or meet with a certified financial planner to start planning for your retirement.
Roth IRAs are more flexible and can allow you to invest for retirement and have flexibility from principal without large tax fees. The investment is post tax. When you go to your bank to open a IRA automatically transfer $50, $100 or $200 from your checking account to your IRA account.

Saving for Retirement in your 40's

Now your in your 40's and you may think it's too late to start saving. Well I'm here to tell you it's never to late to save for your future. The younger you are the easier it is yes. However, you can start and you won't have a problem. Here are some helpful tips to help you jump start your savings.

If your job offers a 401(k) plan and they match according your contribution. Take advantage of it. IT'S FREE MONEY!!!! Make sure you contribute the full amount that will allow you to get 100% match. If you company offers a 100% match your contribution up to a certain amount of your contribution up to 3% take it! Investors recommend you save 20% of your earnings into a savings.
If you are unable to take save in a 401(k) plan there are other options like a Roth IRA. Something is better than nothing. Set up an automatic transfer of $50, $100, or $200 from your checking account to your IRA and increase contributions as you get raises.

So whether you are in your 20's 30's or 40's, even your 50's there is no such thing as your too old or too young to save. No time is better than saving like NOW. I hope these tips were helpful to you so you can begin saving for your retirement. If you feel like you can't afford to save let's get together and talk. You will link with one of our coaches at Financial Bondage Broken. Your personal coach will talk to you about a budget program that will teach you how to save.