Staying Smart in Times of Crisis

By: Steven Muller

With the economy the way it is today, it is understandable if one is scared of investing and saving for retirement. There are other things to worry about like maintaining a job and making sure there is enough money for necessities more immediate expenses like paying for college. This is all understandable and perfectly acceptable, but what happens when you get to the finish line? What’s left for yourself? You may never be able to retire because you didn’t save money to live off of when you’re unable to work anymore. That’s why it’s important, no matter what the economic situation, to at least have some plan in order to save for retirement.

The typical way most people choose to save for retirement is through their employer’s 401(k) plan. This allows you to defer part of your pay check towards your savings and is then matched by your employer. If this option is offered to you, I firmly believe that everyone should accept it. It’s basically a free way to double your normal savings at no cost to you. Now there are other defined contribution plans like SEPs and SIMPLE plans, but 401(k) still remains the best option.

In this time of economic crisis people have decided against these types of plans in favor of receiving all their paycheck and keeping their money out of investing. I say that little bit of money taken out of the paycheck can go a long way in the future when you’re old and want to retire. It’s important now that people remember this even with the economy the way it is.


Sources
http://www.microsoft.com/smallbusiness/resources/finance/small-business-retirement-planning.aspx#Whyretirementplansremainagooddeal

http://money.cnn.com/2009/01/12/pf/expert/target_date_funds.moneymag/index.htm?postversion=2009011306

http://www.job-employment-guide.com/retirement-plans.html