Your Retirement Accounts

  • One advantage of spending 35+ years dealing with personal finance is that you get to see some of your beliefs get tested. Some things that you thought were true were proved false by events. There was a time that I thought that we'd never see a 3% mortgage again. Time proved me wrong.


    But there are other things that events proved to be true. One of those things that you've heard me discuss before is the importance of having compound interest work for you (not against you). If you'd like to learn a little more, read The 10 Things You Need to Know About Compound Interest.


    Another thing that I learned is true is that whatever your age, you need to plan for and take control of your retirement. Trusting others to take care of it for you is dangerous. Social Security will only replace a little less than half of your income (if you're average). You can't rely on it to provide everything you need and want. Private pensions can be cut (my friend is losing his Teamsters pension earned over 26 years).


    You're wise to have private savings and retirement accounts (like IRAs and 401Ks) that are under your control. Barring some major shift in tax laws, that money is your's and no one can take it from you.


    But that does carry a responsibility. You need to control those accounts. You're responsible for making investment decisions. Various investment decisions you make today could affect tens of thousands of dollars when you retire. Some politicians say that you're not capable of making those decisions. I disagree. With a little help and effort you can do it.


    We have an excellent article that discusses how your decisions affect your 401K and what you can do about it. Whether you're just starting out or you have a large retirement account, you'll find this article informative and worth your time.


    Keep on Stretching those Dollars!

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