When reviewing the financial pictures of clients who indicate that they don’t have retirement savings, I often ask, “Do you contribute to your company’s retirement plan?” And “Do they match?’” More times than I’d like to admit, I’ve been told “No, I don’t,” followed by “I don’t know (if my company matches).” Needless to say, this isn’t good.
Forbes states that Americans say not saving for retirement early and often enough is their BIGGEST regret!
No matter what our age, it’s vital to build up retirement savings once we’re eligible! I always remark that I don’t expect social security to be around by the time I retire. Whether that’s the case or not, my point is that I’ve decided that saving up enough to live well during retirement is UP TO ME. And this is what I try to communicate to clients. The way to financial security is to put in place a strategy where we take individual responsibility for our financial futures - and not depend on others to do this for us. Whether it’s Uncle Sam, a relative, or hoping to win the lotto…
To that end, I always urge clients to find out their company’s retirement plan details. If they’re a New Hire, I ask them to find out and let me know what the deadline is for enrollment. If it’s no longer possible to enroll in the plan until the next open enrollment period, I offer to review plan details and explain the tax and savings benefits of utilizing a retirement plan.
Since many companies match a percent of the contribution amount made by employees, employees who fail to enroll in the plan literally forfeit hundreds or thousands of dollars! I tell clients, “As hard as you work, don’t you deserve to take advantage of this extra money?” They always agree. The problem is that often they don’t understand how the retirement plan works and its benefits. Confusion and/or lack of knowledge are almost always the reasons for this inaction.
If you don’t understand your company’s retirement plan policy, reach out to your company’s HR department, the plan administrator ( the company that handles the retirement funds), or a financial professional for help.
If you’re still not convinced by my argument, take a few moments to read this Huffington Post piece : What Retirement Without Savings Looks Like. The best time to prepare is now when you have money consistently coming in.
Yolanda Ransom is the CEO of Improve Your Finances, LLC and is a Certified Financial Coach & Consultant. She empowers clients to confidently master new money management skills, resulting in improved finances and financial stability. She’s assisted thousands of clients with understanding and selecting plan and benefit enrollment packages. Learn more about Yolanda here.