Make Ends Money: Prepare properly for your golden years

LOUISVILLE, Ky. (WAVE) - Planning for retirement today is much different than plans Americans may have used for their golden years. The workplace is different, the world is different, and so is the opportunity to make ends meet when no longer punching the clock.

Retirement today looks a lot different than it was a few decades ago.

“Pensions are a thing of the past and the most alarming thing, the social security trust fund is expected to be fully depleted by the year 2035,” exclaimed best-selling author and financial guru Rachel Richards.

According to Market Watch, a website that provides financial, business and stock market data, in 1985, retirees relied on social security for 65% of their income. Almost 46% of all private sector jobs also had a pension plan which could be used to cover any gaps left by social security.

In the 80′s, many employers also covered retiree’s health-care cost. That is generally not the case now; many companies do offer a 401k, but it is important that you start saving as soon as you can.

“A normal person can contribute $6000 a year,” emphasized Richards. “If you’re past a certain age and you’re getting really close to retirement, you can actually contribute more than $6000 a year.”

A few 401k helpful hints and tips to help people save:

Start Contributing Early

Increase your contribution when you can

Maximize Employer Matching Contributions if they are offered

Avoid Making Premature Withdrawals which could come with a penalty

Take advantage of the “catch-up” provision if you’re offer 50 and

Don’t forget about that old 401(k) you left at your last job

“As you’re getting close to retirement, you’ll want to transfer some of your stock investments into something more conservative,” stressed Richards.

For those flustered trying to prepare for their financial future, Richards suggests to get help. Make sure to find someone that can be trusted helping you build your funds.

“You want to look for someone who is fee only,” exclaimed Richards. “It’s different than fee-based. It’s different than commissioned-based.”

Fee-Only Financial Advisors never earn commission or sell investment products. Richards also shared her top picks if you want to save and invest on your own. There are apps for that.

“My three favorite apps are Betterment, Wealthfront and Acorns,” exclaimed Richards.

Richards explained Betterment and Wealthfront are two user-friendly robo-advisers. They do have some differences.

Acorns is an investing app that allows users to automatically invest their spare change by rounding up purchases made with a linked credit or debit card.

To get the most out of using these apps, make sure to investigate what each has to offer. An Individual Retirement Account or IRA also allows for the chance to save money for retirement while offering tax advantages. They can set up an IRA to save for retirement with tax-free growth or on a tax-deferred basis.

“With a traditional IRA, when you contribute to it you get a tax deduction when you contribute so you get that tax benefit now,” explained Richards.

Take note, withdrawals are taxed as current income after age 59½.

“The Roth IRA is the opposite though so if you contribute to that today you don’t get any tax benefit now,” stressed Richards.

After age 59½, anyone can generally make tax and penalty-free withdrawals.

Those with a retirement plan through their employer can check to see what seminars, classes, or extra help they may provide to make sure to take full advantage of any opportunity to save. Also, be clear that saving is setting money aside. Investing is a process where the money you put aside is making more money; but remember, with reward comes risk.

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