From the day you begin working, a part of you is looking forward to retirement. Whether the attraction is the freedom, the loss of a boss, or the time and money to pursue your real dreams, the lure of retirement is strong at the beginning and somewhat frightening as it approaches. The fear comes from knowing that you have one chance to get this dream right and that chance is centered on managing your investment retirement account correctly.
It’s So Simple
You’ll find many numbered lists of the steps to financial independence. Is it possible to make this life-altering process that simple? No, of course not. The lists are made by people who know everything about investment retirement accounts and nothing at all about you. You know a lot about you and very little about investment retirement accounts. Since the list-makers aren’t going to learn about you any time soon, it’s up to you to learn about those investment retirement accounts.
You have Internet access? You know how to use a search engine? Well, do it. There is a lot of information on the Internet about investment retirement account management. You cant start with the ATO to learn the rules: How much salary qualifies you to open an investment retirement account? What types of accounts are available? What’s the difference between them? How is each managed?
Next, you need to know about your contributions. What is the maximum contribution you can make to your investment retirement account? How much can you afford to contribute? How much will you need for your retirement? This part should be easy because it’s only about you and because you have control over it. The difficulty is that your needs have a way of expanding to fill up your entire budget. Just remember that this isn’t likely to change after retirement. Make those sacrifices now. Be realistic, though. Make the largest contributions that you can but be aware of those penalties for early withdrawal.
The rest is really complicated. This is where you decide about tax deferments, annuities, transfers, annual reviews, stocks versus bonds versus mutual funds and all of that. If you are not one of the chosen few who understand this sort of thing, find a professional to help you. The management of your investment retirement account is too important to leave to Internet advice or guesswork. If you remember when the really cool folk used to say “Today is the first day of the rest of your life” then you’d better take it to heart and start that financial planning.
Filed under Financial Planning.