I can not tell you how many times that my father and my grand father have told me to save today and not to count on having Social Security benefits available to me when I retire. I am trying to take the necessary steps today planning for my future and for the future of my family. Here is what I am currently doing to ensure that we are financially set for the long haul, and not factoring in Social Security benefits into the equation.
- Pay off debt – this will allow for more money to be put in our savings and money market accounts.
- Invest – Even though I have stopped by individual stocks for now, I am investing about 8% of my current salary and my employer puts in an additional 2%. So, about 10% of my current salary is going into my 401 and I am hoping to have that up to about 15% in 2 years. I try with each pay raise to add at least 1 – 2% to my investment. And, to simplify my investment, I went with a target date fund, based on my year of retirement, so the fund managers will automatically adjust the holdings as needed each year. Going from more of an aggressive holding now, to a less aggressive and risky holdings the closer that I get to retirement.
- Save for college tuition – The more that we can save over the next 18 years, the better off that not only my wife and I will be, but more importantly, the boys will need to borrow that much less. I would like to be able to pay for the majority of their college tuition so that the boys can go to college without going into debt.
- Social Security – Though I am not factoring this into my retirement, I did go to Social Security Estimation of Benefits to see that if I wait and work until I am 70, that my monthly take home will be over $2,800. However, if I retire and start drawing Social Security at the age of 67, then my monthly payment will be $2,100.
Planning for the future is important and I am a web developer, not a financial planner. So, if you have questions as it pertains to your financial goals, take the necessary steps to get the best information for you and your family. Here are two local resources:
- The National Association of Personal Financial Advisors (NAPFA)
- Dave Ramsey’s Endorsed Local Providers
Our children will have enough to deal with as they become adults, I would like to try to help them and teach them that it is ok to save and more importantly, how saving today can give them so much more in the future.