GRINMOR TECH INC.

It has always been a good idea to plan for a comfortable retirement and save for it as early in one?s career as possible. In today?s rough and tumble economy, early planning and saving is even more essential. The busted housing bubble has robbed 60% of the American family?s equity in their home causing a reduction of over $100,000 for an average family of four. Social Security certainly can?t be depended upon no matter what changes the politicians make to it. It is very apt to crumble due to lack of funding. People?s incomes are either remaining the same or heading south, making saving any amount difficult, if not downright impossible.

Whether you fit the financial circumstances above or not, the economic outlook is not good, with inflationary pressures, possible tax increases and a dollar that is approaching hazardous levels, no one is immune to the broader forces at work in today?s global economy. The little pig who built his house of brick stands alone and may survive until and during retirement because he has built his financial future on a solid foundation. The little pig is wise.

Start Early

Of course, no matter when you start, saving for retirement is a must, but if you start early, you will gain the huge advantage of compounding. Look at your 30-year mortgage and you see how the small principal pay-down early in its life gradually eats away at the massive balance, until down the road, your monthly payment is more principal than interest. Your savings work the same only in reverse.

A return of 8% annually on an investment will double your initial cash outlay around every nine years. After 30 years, a $1,000 investment, then would be worth approximately $10,000. The $1,000 you invested 15 years ago would not be worth half that amount. It?s value would approach only about $3,000. The $1,000 you invested ten years ago would be worth about $2,000 and for five years ago, about $1,400. The late years see the booming magic occur, because of the compounding, yielding bigger and bigger numbers in every one of those final years.

Take Advantage of Tax Deferrals By All Means

So, now you see that if you are compounding $700 or $800 per year instead of $1,000, you would wind up with tens of thousands of dollars less in your retirement nest egg at the sunset of your career. This is what happens to you and your money if you are silly enough to invest only post-tax dollars instead of pre-tax dollars. IRA?s Roth IRAs, 401(k)s, 403(b)s and other investment opportunities the government allows where you can defer taxes must be taken advantage of to the total extent you can manage.

This lowers your taxable income now and every $100 you put into a tax-deferred account today in lieu of gracing the coffers of the IRS could mean another $500 or $1,000 in your pocket when you retire. You must pay taxes on the money as you withdraw it after retirement, but chances are good your income level and tax bracket will be reduced at that time resulting in less taxes paid. Tax deferrals are an all around win for you now and later.

Other Considerations

Balancing your budget today with plans for your future can be a very complex equation indeed, particularly with career changes and the slings and arrows of outrageous fortune that happen to all, like marriage, kids, college, divorce, medical and natural disasters, keeping us constantly on edge with the changing needs of today versus the needs and desires of the future.

It is important to deal properly with employer matching contributions, rollovers, and beneficiaries and to choose the right kinds of funds ? long-term, short-term, treasuries, growth, income, gold, college funds, insurance, mutual funds, monetary funds. It?s a lot to keep up with in an ever-changing and fast-paced market place and fickle economy. You are the expert on your needs, but your financial planner is the expert on matching your needs to the investments that will work best for your financial future.

If you are in the Ann Arbor area please visit Kennard Wealth for help with Ann Arbor business retirement plans, Ann Arbor financial advice, and other related topics.