Sometimes it’s hard to make financial sacrifices when the reward might not be seen until several years in the future. Today we’ll talk about some of the situations where you might be inclined to take the immediate benefit, when you should really consider the delayed rewards.
Much of the retirement planning process is about looking out over years and decades with the goal of making decisions today that will set you up later in life. By sacrificing a little today, you could potentially gain a much bigger reward in the future. We’ll explain why waiting is often a better approach in each of these situations, and we’ll break up the conversation into two parts.
Part one will cover company matches, tax-deferred accounts, emergency savings, and 401k withdrawals.
Here’s some of what we discuss in this episode:
- It might not seem like a big deal to miss a 401k contribution and the company match once or twice, but you don’t ever want to leave free money on the table.
- The tax benefits for contributing to a tax-deferred account now might give you a nice tax savings now but it might cost you even more in retirement.
- People will sometimes deplete their emergency savings to cover expenses rather than keeping that money set aside for when they truly need it.
- Don’t cash out part of a 401k or IRA like Mike did when he was young because you miss out on so much growth over time.
If you are interested in any of the topics we discussed, please reach out and we would be happy to help you navigate your financial situation.
