Are you 30-something? If so, then you have most likely finished college, married, and may have one or two children. You and your spouse are working hard, and you are either saving up for your first home or have just moved in. You are struggling to make ends meet, but you know that better days are ahead.
Valerie RumboughThere are a lot of expenses that face you – doctors’ bills for the kids, daycare, auto expenses, etc. There just doesn’t seem to be any time or motivation to consider saving for retirement right now.
Actually, that way of thinking can end up being a big mistake in the long run. No matter how tight things may be, even a little savings for later can go a long way toward making that nest egg sufficient for retirement. If you haven’t started saving for retirement and your budget is maxed out, how do you start?
Wait until you receive a raise. Then, take half of the raise and save it, and keep the other half. Better yet, place all of it into savings. Retirement contributions are tax deductible, so you can place 100 percent of your salary increase without worrying about holding back some for taxes.
As you begin, mutual funds are probably the way to go with regard to investment choices. You still have time on your side, so begin now so that you have time to watch your portfolio grow, and make changes should the need arise in plenty of time before retirement.
Many couples wonder whether they should save for retirement or their children’s education during this time. If you feel you can do only one or the other, choose retirement.
Your children may have an opportunity to get a scholarship or grant. If not, they can borrow funds and then pay them back after graduation. Although borrowing is not the best way, remember – you can borrow for college but you can’t borrow for retirement.
If you are still renting your home, you may want to look around and see if purchasing at least a “starter” home is within your means. Owning your own home at retirement reduces your living expenses significantly. Interest rates and tax incentives are the best they have ever been. In addition, home prices are much more affordable than they have been in a long time.
Finally, don’t forget your investment in your family and your Lord. Many times, people at this time in their lives are so busy, they forget the importance of a daily walk with God, and spending time with their families. They figure that they can “catch up” later. However, “later” usually never comes, but regrets do. Balancing all of these things can be challenging, but is well worth it later. Remember Proverbs 6:6-8: “The ant prepares in the summer, and enjoys it in the harvest.”