At The WSJ “The Future Of Everything” conference this week in NYC, Ted Benna, the man who invented the 401(k), points to his invention as the savings vehicle that can turn even a modest salary into a sizable retirement portfolio.
How? As soon as you get the opportunity to fund a 401(k) or 403(b) – do so. Process the paperwork ASAP so the first paychecks you get are the paychecks you will learn to live on. In other words, you won’t miss the money being swept into your future investment.
Some companies match – if you make the required deposit into your retirement account. That’s extra money you will not get – unless you save. Don’t leave that money on the table. Done early enough, that money will compound and be a welcome relief when you are living off your savings.
Get some advice from a trusted advisor about what fund to invest your savings in. Target date funds – pegged to your eventual retirement date – would be a good thing to research before you talk with an advisor. In our chapter on “ Investing”, in our book, O.M.G. Official Money Guide For Couples, you will find all the background you need to make this happen. It’s brief and will take you about 10 minutes to read. It always helps to know enough so you can ask questions:
Research the fees on funds you choose to invest in. Many are very low – which is a good thing. More of your money stays working for you.
I am beating the 401(k) drum hard. I had someone in my early work life that steered me to investing hard in my 401(k). I did. It was the best money move I have ever made.
Now, let it be yours – you’ve been told.
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