When it comes to financial planning in Madison there are many resources you can use to educate yourself so you can get ahead and reduce stress. When you’re prepared for the future financially or even working towards that goal, you will feel more relaxed. One of those areas to focus on is your retirement plan, because you most likely don’t want to work FOREVER, right?
Financial planning in Madison, it’s not too late
According to CNBC, the median retirement savings for those between 32 and 61 years old is $5,000. They also state that, by the time you hit 35–if you plan to retire by 67–you should have an amount worth twice your annual salary saved up. This means most people aren’t hitting that mark.
But what if you’re 35 and you haven’t started saving for retirement at all? It can be tough to start, especially if you’re nursing a mortgage and have a young child or two in the home. You may even still have debt from college or a new car.
It’s time to start
Whatever your scenario, you’ll want to start as soon as possible, because a little thing called compound interest–or, interest on your interest–will make your fund grow exponentially. The earlier you start, the faster your fund will grow.
Start at work if you can
If your job offers you a 401(k) option, take it. Most employers will match your contributions up to a certain percentage, and you’re going to want to contribute whatever the highest threshold is. The annual contribution limit for a 401(k) in 2019 is $19,000, and you should continue to ramp up your contribution with each following raise from here on out. In fact, if you haven’t in a while, you may want to ask for a raise right now.
Individual Retirement Accounts (IRAs)
In addition to your 401(k), you maybe can–and probably should–also open a Roth IRA. You put after-tax dollars into a Roth, meaning when you withdraw, you won’t have to pay taxes on the money. As of 2019, you can contribute up to $6,000 per year into a Roth.
If you’re 35 and haven’t started saving yet, don’t panic–even if you’ve got a child or two at home and are planning to send them to college. While you should continue to save for their schooling, don’t let it get in the way or your retirement goals; remember, retirement is going to be much, much more expensive than a college education or two.
That being said, there’s still plenty of time to save for your retirement; if you begin contributing now, you’ll soon have more stashed away than most people have in their 30s.
If you are in financial trouble or just want personalized help sorting things out, try our partner GreenPath Financial Wellness.