Do you ever feel that just about everyone has a piece of advice about how to plan and save for the perfect retirement? The fact is, some advice about retirement planning can be beneficial, while others, not so much. If you've been wondering if the retirement advice that's circling around the water cooler at work is something you should take or leave, then read on. We're shedding some light on three of the most common misconceptions that many Americans have about saving for retirement so that you can make the best decisions about planning for life after work.
You need to pay off your debt before you begin saving for retirement
Paying off debt is always a good thing. And with a good budgeting plan, you should be able to pay down your debt and save for retirement. The fact is, while you're working there are many advantages to making regular contributions to your employer sponsored retirement accounts, including reducing your taxable income, tax deferred growth, and employer matching. And with the time advantage of compounded interest, even the smallest contributions can add up!
Unless you have a good job with benefits, you can't start saving
Having an employer that can offer you a 401(k), pension, or other type of retirement savings account is a great way to save for retirement. But if you work for a company that doesn't offer benefits, you can still start saving. Most banks and credit unions offer many different types of traditional retirement savings accounts. You can also meet with a financial planner who can help you establish retirement accounts that are suited to your individual needs.
If you're nearing retirement, it's too late to start saving
If you're behind on building up your nest egg and rounding the retirement corner, don't think for a minute that it's too late to start saving. Many Americans who were unable to save due to economic setbacks just need to work a little smarter at getting to where they need to be. This may include working with a financial advisor who can help you devise a more strategic plan on how to go about maxing out your 401(k) plans and making catchup contributions.
For more information on saving for retirement, be sure to visit the Protective Learning Center.