Saving for Later
Saving for your future is another essential piece to your financial puzzle. There was a time when people did not need to worry about this. Governments and employers provided help through retirement plans, and did all of the work for you. However, those days are gone. You have the responsibility to create financial security for yourself — you cannot count on anybody else to do it for you. As a result, you need to save money for your future.
If you can't find the money to save for your future, go back and look at your spending plan. Are there any “leaks” in your budget that are costing you more than they should? A few dollars a week can really add up, especially if you have a number of years until retirement starts.
The best way to do this is to systematically save a little bit of money each month. Ideally, you would look at this as a fixed expense that must always be covered. By making saving easy, automatic, and a priority, you greatly improve your chances for success. In addition, you manage your risks by investing periodically, if investing in the markets is a part of your retirement plan. If you've heard it once, you've heard it a million times: pay yourself first. By doing so, you will find a way to make your other expenses fall into line.
Where to Start
The right way for you to save for retirement will depend on your individual situation. If your employer has a company-sponsored retirement plan, that's a good place to start. If they match your contributions to the plan, it is probably a good bet. You need a really good reason to avoid contributing when your employer matches your contributions. Above and beyond the match, you might investigate other retirement accounts. There's nothing wrong with contributing more than the minimum required to get your employer's matching dollars, so what you do beyond that is a matter of personal preference. You could investigate individual retirement accounts (IRAs) and Roth IRAs as a next step. These types of retirement accounts may have different features and tax characteristics than your employer's plan.
Where to Find Help
Remember that the responsibility of saving for your retirement is yours. However, you don't have to do it alone. The world is full of resources that can help you get the job done. If you want to do it yourself, you'll need to read up on the basics. Start in the personal finance section of your local bookstore or library. Note that there are a lot of different philosophies and strategies when it comes to saving for your retirement and investing. If you are just getting started, simple and steady is the best way to go: figure out how much risk you can take on (if any), don't put all of your eggs in one basket, and think long term. Avoid trading strategies and any hot stock tips.
If you want to hire a professional, you can do that, too. The world is full of people who can help you manage your finances. You have to be careful if you hire someone, because there is a lot of abuse in this area. Meet with and interview any prospective advisors, and don't be pressured into making any decisions on the spot. If you ever feel uncomfortable about the person you're working with, walk away and find somebody else. The best way to find a good advisor is to ask around. Check with your friends, family, and coworkers to see if they have had good experiences with anybody in particular.