Ask Kim: Rethinking Retirement

Posted on January 17, 2024

Kim,

I recently hit my mid-30s, and it hit me like a ton of bricks – I haven’t really thought about retirement. A rep from my company’s human resources department is coming to talk about our options regarding 401(k). I think I have 401K that I signed up for when I first started working here, and I think my company matches it, but I’m not even confident on that front. I’ve been with my company since I graduated college, and I never fully planned on staying here so I didn’t put too much thought into a retirement plan. Then, I just never left the company. I love where I am now, even if it’s not what I planned for. Is there a way to catch up without changing my way of life? 

What questions should I ask the insurance rep? The retirement options out there are overwhelming, and I could use some guidance.

Sincerely,

Retirement Rethinker

Dear Rethinker,

Time really does sneak up on us… I know it’s happened to me.

The important thing is to start where you find yourself now.

So, go online and look at your account. See how much you are contributing and see what the company match is. Then, look at your budget and see if you can increase the percentage you are having deducted from your pay. Look carefully at your discretionary spending to see if there are any areas you can cut back on or eliminate altogether. Often, there is leakage from our accounts we aren’t even aware of, so begin with that, and increase the amount you are contributing.

Many retirement plans allow you to automatically increase the amount you contribute each year. You might see if your plan offers that and consider sliding the amount up a little each year. You will probably find you don’t notice the increase in your paycheck each month.

Then, work with your company’s representative to choose investments within your retirement account that match your risk tolerance and give you the best asset allocation.

I wish you the best in your newfound commitment to your retirement.

Sincerely,

Kim

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