Hello everyone! Welcome to the Life Lessons on a Sunday podcast! I’m Jaimeson. Today we are discussing our Retirement Goals! Do you even have them? Have you started planning for Retirement? Do you know how much money you need to live comfortably? Do you know how long it will take you? Or, Are you already retired? Do you think you will never be able to retire, so why try? Do you have a big move to where you want to retire? Oh, the uncertainty of it all. Well, today’s the day that we will get some clarity and hopefully point you in the right direction. Let’s get started, shall we? …
Happy Sunday! I am so excited that you are here! Today is week four of our five part series on Money! Has your relationship or thought process about Money changed in any way? I know, I know, I ask questions all the time like you’re going to be able to answer me through the podcast – BUT SERIOUSLY – answer! Even if I can’t hear you personally, it is good to answer questions in our heads or with someone else so that we really think them through. And, I would love to chat person to person too. Oh, maybe I could do a Facebook or Instagram Live so we can meet and chat – what do you think about that?
Okay, getting back to MONEY! So far, we’ve discussed what type of relationship we have with money – making sure we have our $1,000 Emergency Fund – and some Money Travel Tips! This week is all about the glory days ahead – our Retirement! I dream about things I want to do when I retire. Heath and I are always talking about childhoods and things we did with our grandparents and hope that one day we will get the opportunity to be grandparents and the type of grandparents that we dream about … you know the kind … You visit for the whole summer! There is lots of land, lots of playing in fields with animals, lots of work, gardening, cooking, easy, breezy summer days! Awe, now that’s the life!
Then there’s the dreaming of buying an RV and traveling the lower 48 for a year and just go where ever you want, whenever you want.
Then there’s the dreaming of downsizing and moving to a small beach town where the sun is always shining, naps are encouraged and you have dinner and drinks with friends every night.
You know … just livin’ the dream!
Who knows if any of these dreams will happen or in 20 years if they will be the same dream, but one things for sure … we will be prepared for it and we will get to make our own decisions. Because I’m going to start this discussion off with a HUGE LIFE LESSON … and maybe like the Thoughtful Tidbits, I’m going to start pointing these out every episode.
Today’s LIFE LESSON and main take away I want you to remember is …
YOU HAVE TO BE THE ONE TO PROVIDE FOR YOUR OWN RETIREMENT …
No one else, especially the government, i.e. social security is going to do it for you!
Which by the way, as with most things the government does, Social Security was supposed to be a supplemental income and temporary – not a permanent provider.
And how do I know that? Many reasons, but the top three are …
#1 – YOUR LIFE, YOUR RESPONSIBILITY
#2 – Look around … Do you see anyone “livin’ the dream” that is being funded solely by Social Security or other government subsidies? Na da – no one.
#3 – Stats … Whether we like it or not, we are all a statistic … we just have to decide which part of the stat we want to be on. Here’s some humbling and in your face numbers …
Per the Social Security Administration website and their 43 page “Fast Facts and Figures” book published September 2018 with the most recent data from Calendar Year 2017:
Retired workers average $1,460 per month, which is only $17,520 annually to live on! How many of you live on that right now? Of course, this number goes up or down depending on what you contribute, but I have yet to see or hear anyone receiving more than $35,000 in income and health benefits from the Social Security Administration.
Oh, and that average is very different for men and women. Men averaged $1,565 per month or $18,780 annually and women only averaged $1,244 monthly or only a mere $14,928 annually.
And – one last thing … the system was only set up to work for about 75 years, so in 2033 – yep, just 14 short years away and well before I’m at retirement age, these services may not be available to you or I, even though we are putting money in.
Okay, enough of those non-flattering stats, let’s turn this conversation around and get back to the positive …. YOUR RETIREMENT DREAMS AND GOALS!
First things first … we’ve got to know where we stand right now. Here’s what we need to know before we start anything:
#1 – What is your dream? Do you want to travel, do you want to relax, do you want to spend more time with family, do you want to finish all those projects you never had time for? Whatever the dream is – even if it changes, let’s write down what the dream is today!
#2 – What do you already have saved for retirement? Do you have an IRA, a 401K, a savings account, a “collection” of some sort that you want to sell? Where are we today?
And #3 – When do you want to retire? Realistically? 10 years? 20 years? Even 30 years?
Once you know this, I encourage you to go to Chris Hogan’s website. Do you know who Chris Hogan is? He is the man who has spent his career studying and helping people become everyday millionaires and he gets more excited about retirement than I do! He’s part of the Dave Ramsey group, has a very inspiring podcast called The Chris Hogan Show and just an all around very smart guy! The website is ChrisHogan360.com and you will click on the Tools tab. He has a whole section of amazing retirement tools, especially the R:IQ, which will tell you your Retirement IQ. It will physically show you where you’re at and where you need to be!
You know, I’ve heard this saying many times …
“A dream without a plan is just a wish.”
This is so true! I know I dream about retirement and I want to make sure it is a reality, not just a wish! Don’t you?
Okay, now that we know we are going to take action – let’s discuss what options we have!
If you are blessed enough to work for a company that has already set up a 401K account for it’s employees AND that same company has a matching program … Congratulations! I hope you are taking full advantage of this benefit! It is not a guarantee that a company has to provide this, so if yours does, be grateful and make sure you are signed up. Most companies that offer this will match what you put in anywhere from 1 – 4% usually, which that also depends on how long you’ve been with the company. BUT – even at 1%, that’s essentially free money to you on top of your salary, you’d be a fool not to contribute your 1% so that you are essentially getting 2% of your salary saved. And over time it will only continue to grow and grow! Unfortunately, there are limits to what you can invest annually ($19,000 if you are under 50 and $25,000 if you are over 50). They put the over 50 advantage for you to “catch up” or just invest more since you are closer to retirement age.
If you are an entrepreneur, you have an amazing opportunity with your 401K options – since you are the company and the employee! You can invest up to $56,000 annually.
But, if your company does not provide a retirement program, don’t sweat it – or if you want to invest in more than one place, there are other options available.
For instance, you could start an IRA, which is an Individual Retirement Account. Unfortunately, there are limits as to how much you can put into an IRA account annually, but the good news is that it can be another source of income for you when you retire. Currently for 2019, if you are under the age of 50, you can contribute $6,000 a year. If you are over 50, you are allowed to add $1,000.
While 6 or 7 thousand may not sound like a lot for retirement, you have to think about the long game … this money will sit in an account and have interest added every month and continue to grow on your behalf for years, so that $6,000 a year for just 10 years could turn into $115,000! That’s a great return on Investment.
Another item that you will want to think about for both the 401K and the IRA is if you are going to do a Roth account or a Traditional account.
For a Traditional account, you can have the money come out of your paycheck “PRE-TAX”, so you don’t pay any taxes when the money goes in. You will only pay taxes on the money when it comes out. And yes, you will have to pay whatever the current tax rate is for the amount you take out – the more you take out – the higher the taxes.
For a Roth account, you will invest your money AFTER you pay taxes. Luckily, you only have to pay taxes on that money once, so when you take it out, you do not pay taxes again. Did you catch that? For a Roth account, when you take your money out … after it has grown and added interest … you do not pay taxes on the money!!!
I am definitely a fan of the Roth accounts so that your money is taxed at the lower rate and lower amounts and whatever gains you have is yours to keep!
Another type of retirement account that you may not be thinking about, but could come in very handy – especially the older we get is a Health Savings Account. I don’t know about you, but our doctor bills and copays keep going up and up, so having a Health Savings Account has really helped us! Since we are able to put money into the account pre-tax and then pay for doctor bills and medicine without paying taxes – which is 6% for us – is a great savings. Plus, if we don’t use what we put in for the year, it rolls over and starts to create a great nest egg for the future. Again, there are limits to what you can put in. For a single person, under 50, you can put in $3,500 a year and for a married couple, you can put in $7,000. If you are over 50, you can add an extra $1,000 if you would like.
Yes, with all of these there are limits to what you can put in and save … which really irks me because I don’t feel like someone else should dictate what I do with my money, but that is a whole other show in itself. For today, I want you to know options. I highly encourage you take full advantage of all 3 options … the 401K, an IRA and a Health Savings Account. All are available through your place of work or you can sign up on your own! And remember, if you need help navigating through all of these decisions, limits, and just plan ol’ boring regulations – make sure you contact Stephen Boyd with Boyd Wealth Management. He will be happy to hear your retirement dreams, look at where you’re at, and help you make that dream a reality, not just a wish. You can learn more about him and what he can do for you at BoydWM.com, that’s B-O-Y-D-W-M.com.
And if all else fails … there’s always the lottery! Ha Ha
Time for our THOUGHTFUL TIDBIT. Today’s tidbit is from the world renowned business man and author of Rich Dad, Poor Dad, Robert Kiyosaki. He said,
“It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.”
This is so true … we don’t have to have 6 figure salaries to have a wonderful retirement. We just have to be smart with our money and be the boss of it and tell it where to go! By us being in control of our money, we are in control of our futures and we have options, which in turn gives us choices on how we want to live in the future. No one else is going to want you to have the best retirement or give as much thought as to what you think is important for the future glory days. That is why it is up to you and me to make the money changes NOW so we can have our choices in the future.
Shew, I don’t know about you, but I am excited about my future and retirement and know a few adjustments I’m going to be making! What about you? Tell me what you think … Share with us your retirement dreams and plans to get there – you never know who you could help. Simply go to ForALifetime.org and leave a comment or come find me on Facebook and Instagram at For A Lifetime.
Make sure to come back next week, as we wrap up our Money series!
Until Next Sunday …