There is more than one way to plan for your retirement and not all of your options were created equal. Bobbi Rebell Kaufman, CFP and financial wellness advocate explains how to really plan for your future.
Transcription:
Conway Gittens: So what are some of the most powerful financial habits that everyone adopts, other than the one you would recommend?
Related: Three Reasons Why Social Security Is Better Than stocks for Retirement Income
Bobbi Rebell: Well, it's really important. You know, we see so many gyrations in the stock market that it can be very difficult to stay steady when we see the market take a dive one day and we think, “Oh my God, oh my God.”
That's why I want people to keep those automatic contributions in their 401k plan. Make sure you save as much as you can when you are allowed to, if you can afford it. So if you turn 50, you'll be able to contribute more. Make sure you do it right. Be sure to pay attention to things like taxes, applicable fees, etc. So you must pay strict attention to that.
But don't get obsessed with the day to day. Play the long game safely. The other thing I want to remind people is that we were talking about how things have changed. You know, we have improved on savings and retirement vehicles. And in fact, most jobs now, when you sign up, will automatically enroll you in a 401. K, these are good things. But one of the struggles that people have been having and one of the reasons we're seeing a trend where people are actually taking more money out of 401Ks, even if they incur a penalty. And we have some new provisions where you can withdraw money from the 401k without penalty.
The reason is that's where all the money is, right? When people have difficulties. Where is my money? Well, it's all locked up in these retirement accounts. Remember that while you always want to get the benefits, the tax benefits, and you certainly want to get the equivalent money that you can save for retirement anywhere, you can save for retirement, diversified in CDS, which you might want to lock in if I think the rates they are going down; By the way, you might save your retirement only in a brokerage account you invest in.
You don't have to have everything in one account that would have penalties because you do want to have that flexibility. If you have a short-term emergency, you can get the money without penalty. That's why it's important to diversify. In other words, in terms of what you have available in the long term, that is, after you retire versus the medium and short term. Don't put it all into retirement money.
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