BaB

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    Table of Contents

  1. Budget & reduce monthly expenses; set realistic goals
  2. Build an emergency fund
  3. Employer-sponsored matching funds
  4. Focus on paying high/moderate debts off
  5. Save for retirement in an IRA & other higher education expenses
  6. Max out retirement savings where possible
  7. Save for other goals & advanced methods
  8. Glossary
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Maximizing for Retirement

Let's take a minute to check how much you are invested into your retirement. Below we will be mainly using the pre-tax retirement accounts as examples. If you choose a traditional retirement account then contribute 15% of your pre-tax income. If you choose a Roth retirement account then contribute 15% of your post-tax income.

    Prerequisites

  • Optimized budget
  • 1 month emergency fund
  • Bills paid in full
  • Employer-matched retirement account
  • Moderate-interest or higher debt free
  • IRA
  • Savings account for near-future purchases

  1. Are you currently at saving least 15% of your pre-tax income for retirement?

    This value is the total contributions to all retirement accounts. If you are already contributing 15% of your pre-tax income, then feel free to continue to the next chapter. If not, then increase your contributions until it reaches 15% of your pre-tax income **If you are behind on retirement savings, you may want to consider increasing this amount.

  2. Employer Retirement Account

    If you are self-employed, move on to step 3 below. If you do not have an employer retirement account, start one and work up to contributing 15% of your pre-tax income. We previously discussed employer-matched retirement accounts in chapter 3. Your employer may or may not offer a matched contribution account. Either way, you should open one now.

  3. Self-Employed Retirement Acount

    If you are self-employed, then look into an Individual 401(k), SEP-IRA, or SIMPLE IRA. Unfortunately, I have never used any of these accounts, so do your research and select the best one for your situation. You can read more here. Open your preferred account and strive to contribute 15% of your pre-tax income.

Strive to invest atleast 15% of your pre-tax to some sort of retirement account. Remember that these are stock accounts, so invest the money on index funds or your preferred plan. Do not let your money sit!