Why You Need to Start Contributing to Your Work Retirement Account
Make the time to invest in your work retirement account.
If there’s one thing I wish I had utilized more when I was younger it’s the retirement accounts I was offered at work.
Whether it was a 401k or 403b, I never really understood how impactful these accounts could be. Let’s forward to today where I am a huge advocate of utilizing your retirement accounts and investing while you can.
I would like to preface by saying that investing is a privilege. Not all workers are offered retirement plans. There are many part-time folks that are not offered retirement benefits which means they have to take the extra steps to open an account on their own if they want to prepare for the future. Even though we currently have a social security system in place, we’re not sure what that system will look like by the time we retire. Additionally, if you do the math, social security doesn’t begin to scratch the surface of our living expenses. My recommendation, don’t rely on social security. Look at it as a bonus if it’s around by the time you retire.
So let’s dive in. Why is investing in your work retirement accounts so important?
Depending on your lifestyle, you have to understand that retirement is expensive. If you’re not working, what money will you live off? If you anticipate living comfortably off 50k a year now, you may need 50k+ a year in retirement to maintain the same standard of living. Of course many factors play into how much you’ll actually need (where you live, health status, travel, home paid off, etc). You’ve worked so hard all your life; I doubt you want to live in poverty, feel like a burden to others, or push your body to continue working to survive. You deserve better than that.
Your job makes it super easy to contribute to your retirement account. The amount you elect is automatically deducted from your paycheck. In addition, it reduces your taxable income so it’s actually helping you reduce how much you pay in taxes. The IRS is essentially giving you a tax break now, but you will be taxed on the money once you withdraw in retirement (after 59 ½).
Your employer may offer a match, which means they will also contribute to your retirement account. Every employer has a different set-up so check with HR to see what your employer provides. If they do offer a match, contribute AT LEAST up to what they match! You’ve worked hard for it and it’s part of your benefits. Your contribution PLUS your employer’s contribution will help your accounts grow faster!
Overall, take advantage of any retirement accounts you are offered as soon as you are offered one. You’re never too young or too old to start. If you don’t know where to start, reach out to HR to ask for details. 10-15% of your monthly paycheck is a good contribution goal. That amount may be more or less depending on your retirement goals.
Investing in your retirement accounts NOW will provide you with:
Stability in retirement.
Allow you leisure and enjoyment in retirement.
Improve your mental health because you won’t have to worry about your finances.
Allow you access to great healthcare should you need it. Even with Medicare, the cost of healthcare increases the older you get.
Provide you with some sense of peace knowing your family isn’t stressed finding ways to financially take care of you.
Create opportunities for generational wealth, or for you to donate to the communities and causes you care about.
So what are you waiting for? Start today!
