Contributing to Employer’s Retirement Plans
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I learned about retirements plan at my first professional job. Prior to that, I didn’t know what it meant to retire or anything that goes along with that notion. This position helped me learn some initial lessons and set me on the path to how I plan for my retirement now.
Having a million dollars at the time of retirement used be my aspirations. Being a millionaire is a big accomplishment and it seemed like a big enough number. All I needed to do was to figure out a way to get there. I’ve learned many life lessons on my own and retirement was one of them. I hear and collect things from various conversations I have with people, internalize it, and output it with my own spin. I quickly understood the basics after many conversations and decided I needed to start thinking about my future money goals. At the time, the only thing I had done for my 67 year old self was being employed and having some social security stocked away. There is now also the possibility of social security washing away before my retirement years came up. That only puts more fire under me to come up with more ways to help myself out in the future.
The company I worked for is a nonprofit and participated in 401a plans for full time employees and 403b plans for part time ones. Most for-profit companies offer 401k plans and IRAs. This was a human resources position, so I was tasked with the on-boarding process of new employees. I had processed a lot of other people’s retirement paperwork before I even started thinking about it myself. I learned in this position that many people do not know and/or understand what saving for retirement means. I was one of these people and it comes from simply not being educated in the subject. We need to start letting more people know of these benefits.
The way I came to understand employer retirement funds was there was someone out there willing to put money away for me, if I made the effort to do the same. It’s almost like having an accountability partner, and I need that in my life. I was approached by my manager and he mentioned how I should get myself enrolled in one of the retirement plans. At the time, I was just learning the benefits of saving money so I agreed to the max contribution. For every $1 I chose to save, the company would add $0.50 to that for up to 6% of my paycheck. To me, it was simple choice to start contributing once it was explained to me. Since I was part time and making just a little bit above the minimum wage, it wasn’t game changer, but savings is savings.
I’ve since been with 2 other companies and opened retirement accounts at each one. I don’t micromanage these accounts either. I set the funds I was interested in at the time and put it all on cruise control. The amount these employers and I have deposited may increase in value based on how the stock market does. When I log on to these accounts, I realize I won’t see a significant change until many years from now. The returns have been minimal so far, at least based on the funds I picked. I’m in it for the long run though, so I haven’t adjusted anything just yet. My current contribution is to a Roth IRA so I can pay taxes now rather then when I start taking distributions. I went with this option because I’m hedging that both interest rates and my income will be higher in the future. I’d rather pay lower taxes now on a low income, so this made more sense for my situation.
Having a million dollars for retirement is cool and all, but with inflation, that’s won’t be enough, and I’d be selling myself too short keeping that as my goal. Many of my mentors have been mentioning $10 million retirement goals so I’m making that mine as well. I understand that’s that’s a big number and hard to reach. The only way I get there through employer retirement fund is to become a CEO somewhere, or climb the corporate ladder while increasing my savings. I’m up for the challenge and just excited to see where I will land.
If someone ever wants to give free money in order to help you out in the future, think about it and make the best decision.