The Lazy Man’s Retirement Plan

At the end of the day, most people just want to relax and turn off their brains. They don’t want to think about their retirement accounts or investments. However, not keeping these things in mind, and making time for them could be detrimental to the future.

With time, life has become about convenience. People want things done fast, and with the least amount of stress possible. Investing and managing money is neither of those things. To get the “lazy person” to invest and save for retirement, it needs to be made simple.

One way to make things simple is to have a certain amount of money pulled out of each paycheck. This way the investor doesn’t have to think about it, the money is automatically put into their retirement account and begins gathering interest.

Open an account outside of work. Mountain West IRA offers many types of retirement accounts for investors to provide investing freedom. For those who don’t have the time to learn to play the stock market, or don’t want to, Mountain West IRA offers other, simpler investing options. They could invest in real estate, precious metals and more.

Start early and let the money continue to grow with interest over the years. This is probably the easiest and simplest way to get money for retirement. However, it might not always be enough, which is why there are other investment options. It might take a little more time and attention, but investing will help beef up retirement savings.

For those interested in opening an account outside of work, contact Mountain West IRA and talk to them about their retirement account options.

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Borrowing Against Your 401(k)

Many people believe borrowing from their 401(k) account is a smart idea because the interest rate is generally lower than a commercial loan. While that might be true, it doesn’t help with the ultimate goal of long-term investing. Here are some of the reasons why borrowing from a 401(k) isn’t the best choice:

  1. Stop Saving: Many plans won’t let investors make any contributions to the account until the pay off the entire loan. Or the borrower will be unable to make contributions because they will paying off the loan. Either way, there is no money growing in the account.
  1. Financial Red Flag: If someone is having to borrow from their 401(k) after exhausting all other options, it could be a sign that they are living beyond their means. This is a habit that could possibly follow them into their retirement years, making it difficult for them to retire with a decent amount saved.
  1. Career Issues: Often these loans must be paid back immediately if the investor quits their job. That could trap them in their current job, or cause issues if they suddenly lose their job.

Before an investor borrows from their 401(k), they should think it through completely. Use a different way to finance the loan if possible. Or, maybe they need to reevaluate their lifestyle and why they need the money in the first place. Borrowing from a retirement account could have significant long term consequences.

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Saving for Retirement and Paying for College

It can be a tough decision for most people when choosing the most beneficial way to spend or save money. Many people think choosing to invest in their retirement is a better option than paying for their children’s college tuition and here’s why:

  • Teens applying to college, can apply for student aid. Students are often eligible for scholarships, grants, and loans to help them cover the cost of tuition. Many students work part time during college to help pay for the fees as well. They do have some options when paying for college other than having their parents finance it.
  • While students have alternative ways of covering the cost of college, their parents don’t have many alternatives when it comes to financing retirement. What they save over the years is usually what they will have to live off during their retirement years. Some retirees are lucky enough to find part-time work if they don’t quite have enough money saved up, but some can’t because of age or illness.

You can save for both retirement and still help pay for college by starting early and making retirement the first priority. Before the kids come along and while they are still young, save as much as possible in a retirement account before putting anything in a college savings account. Time and compounding will be on your side.

Mountain West IRA offers many different self-directed IRA options when it comes to retirement accounts. They will have one that can help you save for retirement before saving for the college years.

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Maximizing Your 401(k)

401(k) plans, whether company-sponsored or not, can be great vehicles for retirement saving. Maximize this account with a few simple steps.

  • Get Growing – Many people can’t start contributing the maximum amount right away. To get to the maximum contribution, individuals should up their contributions by one percent each year. This is an amount that can be scheduled into the budget, but doesn’t break the bank.
  • Maximize Bonus Checks – Instead of using that annual bonus to buy something fun, live off of it for the month. That way investors can use their regular paychecks to max out their 401(k) accounts. It isn’t as glamorous, but will help out in the future.
  • Remember the 401(k) – When moving over to a new job, investors should make sure they take their 401(k) with them. After years of contributing, it would be a waste to leave that money sit.
  • Plan for Emergencies – Always make sure to have a separate emergency fund. Those who don’t set one up ultimately have to take money out of their retirement funds for emergency situations, cheating themselves out of money later.
  • Minimize Withdrawals – After retiring, investors should be careful not to withdraw a high percentage of their 40(k) a year. That money needs to last quite a few years. However, if investors have other investments such as real estate that bring in an income, they could withdraw more per year.

Being aware of how much money they are putting in and trying to make it last can help investors maximize their 401(k) account. Consider transferring to or opening a self-directed 401(k) with Mountain West IRA.

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