Having retirement savings is important because it allows people to retire when they want to and when they feel ready to. Retirement is seen as a time to de-stress. A time to do activities that an individual always wanted to do throughout the work years. Building retirement savings can seem daunting, but with Wealth CAPS, the process is easier.
3 common misunderstandings about retirement savings are:
- The employer sets up a 401(k): Not all jobs offer a 401(k), but the employers that do offer a retirement savings plan usually take out a percentage of the employee’s paycheck for their retirement savings before taxes. Taxes are only applied to the money that is taken out of the 401(k) plan. During the job offer negotiations, an applicant can discuss with their employer about setting up a 401(k) retirement savings plan.
- Saving over time: Saving for retirement as early as possible allows for more money to accrue over a larger period of time. Those straight out of high school or college that enter the workforce do not realize that they should start saving for retirement now. The sooner people start saving the larger the sum of money there will be in order to pay for all the expenditures after retiring. The activities, trips, or future plans would not have to be cut because the worker saved early enough in their lifetime for them.
- Reconsider taking money out of a 401(k): Taking out money from the 401(k) retirement savings plan before retirement can result in heavily taxed money. It is always good to reconsider and weigh all options before taking money out of retirement to cover a current expense. Finding a solution in another money venture is better than falling short of a dream retirement.
For all financial inquiries, contact Wealth CAPS. Our professional Raleigh financial advisor can assist in the financial planning process. Making the best financial decisions is vital to a monetarily substantial retirement. Build a retirement plan with Wealth CAPS by contacting us today.