The conversation that set me on the right path to retirement savings
One day I was talking with a co-worker about our upcoming family vacation plans. He boasted that his tax-refund would pay for his. I wondered how, and cornered him into telling me how he managed to do it.
He went on to tell me about the “new” saving for retirement tool he found, the 401K. Not new, but I wanted to know more, so I kept the insult to myself and allowed him to continue.
His tax burden the previous years had been huge so he adjusted his withholding tax to more closely mirror his total payment.
The key to his large refund was the fact that he maximized his contribution to his 401K thus lowering his taxable income. I also contributed to mine but until that day, I contributed just enough to get the company match.
I instantly saw my mistake. All that money went in the trash. Nothing to show for it, not experiences…nothing. Made the necessary corrections.
Many people do not see the advantages a 401K presents both now and in the future. Hopefully you just did. Know someone who can be helped. Get this to them.
I am not a financial advisor. I hold no fancy degree and as such this is not financial advice. This is simply what I have done and recommended my children do when the time comes.