The beginning
Several years ago, when I began my professional career, I knew we needed to start planning for retirement.
After all, I grew up hearing that the years fly by.
So, we dutifully set up an appointment with a financial planner.
The first meeting should have been my tip off.
We left with an overwhelming packet of stuff which had to be completed, right down to any kind of collections that we owned that might be considered assets.
Let me interject here that many people probably have the ability to slug through that vast amount of information. Typically, I go on overload and simply shut down.
However, to my credit, and to the best of both my ability and memory, I waded through that packet and set up a second appointment.
And that is where things really fell apart.
Was a disaster!
Honestly, I don’t remember much about that meeting except the feeling of sheer panic about all the information that was being conveyed. And, the huge, huge dollar amount that we were told we needed to be contributing in order to be able to someday retire.
At that time, we had four young kids and all the accompanying expenses.
As I listened, I knew one thing. There was NO POSSIBLE WAY we could make the kind of contribution that was being suggested.
After politely suggesting that we needed some time to think, we left the meeting.
And that night we made what was probably the biggest financial mistake of our lives.
We did nothing.
No follow up meeting. No meeting with another planner. Nada.
The feeling of panic was so overwhelming that I simply put retirement out of my mind.
For years.
Finally, finally, I started emerging from the fog and realized that, truly, the years were passing in a blur.
And we made the decision to simply start.
With a small amount. Every pay. Automatically deducted.
Brian is self-employed so we did the same for him. A small amount. Every month. Automatically withdrawn from our checking account.
It is starting to grow.
We will never, ever catch up to where we should /could have been.
But we also have more than if we had never, ever started.
If our mistakes can help one person, it will make me happy.
This is what I wish someone would have told me:
There are two steps to begin preparing for retirement:
Start – even if it is a small amount
Make it automatic – If you can have it withheld from your pay, great. If not, have it automatically deducted from your checking account.
Start
Simply starting is somehow a mental motivator. The first hurtle has been jumped and it will probably be an incentive to do more.
However, if you never do one more thing consider this:
$100.00 per month, compounded annually for 30 years at 3% interest = $57,873.73.
No, it’s probably not enough on which to retire but it is a nice little nest egg.
Want a little more?
Let’s say you have the luxury of a company match and they match the $100.00 per month.
You are now investing $200.00 per month.
$200.00 per month, compounded annually for 30 years at 3% interest = $115,745.03.
Sounding better?
What if you go really wild and reach out to someone who is willing to help you know a little about investing? By working together you are able to invest that monthly $200.00 so that you receive a very reasonable 6% annual percentage rate.
$200.00 per month, compounded annually for 30 years at 6% interest = $194,908.34.
How does that sound right now?
All because you made the decision to start.
Make it automatic
There is a quote that says, “The road to hell is paved with good intentions.”
Intentions are not enough when it comes to saving for retirement.
An automatic deduction ensures that the good intention becomes a reality.
When you are talking about investing, time really does equal money.
Going back to the original example:
$100.00 per month, compounded annually for 30 years at 3% interest = $57,873.73.
What if you wait one year?
$100.00 per month, compounded annually for 29 years at 3% interest = $55,007.11.
A difference of $2,866.62.
Ug!
It can’t be overstated! JUST START!
A note on working with a financial professional:
If you decide to reach out to a professional, I would encourage you to find someone with whom you are comfortable. It may take trial and error but there are people out there who truly can assist you.
At this point I would be negligent if I didn’t offer a word of thanks to Rob Steele at United Security Agency He has been patient and completely understanding. He has answered every crazy question that I have asked of him. He is the one who is very kindly getting us on track.
When it comes to retirement:
You are not too young
It is not too late.
Make the decision to take the first step and simply start and you are on your way.
Disclaimer: I am not a financial professional. This post is not intended to be advice. For good financial advice I would encourage you to seek out a certified financial planner.
I’m with you! So glad my first job, and most of them that followed, had retirement plans! Otherwise, I would have been way overwhelmed and probably have done nothing for a while!!
It is sooo overwhelming, sometimes even when your employer offers a plan. That’s why it is so important to just start!