What are you doing to prepare for retirement?

  • Published
  • By Senior Master Sgt. Leslie Bueschen
  • Accessions Branch superintendent
DENVER --  Are you financially ready for when your retirement day comes? What are you doing to prepare for retirement, isn't that the one thing we all work toward? 

I know. I know. It can be really hard to just start saving or investing, let alone continue to save on a weekly or monthly basis. A car breaks down, or kids need new clothes, or the furnace goes out during a blizzard. All of these can be huge setbacks. However, the bottom line is if you don't start saving or investing money for your retirement, no one is going to do it for you. 

One of the biggest hurdles people come across is they just don't believe they have any money to save or invest. Most American's live paycheck to paycheck, and there's nothing left over to save since each pay period we're making just enough to get by. 

If you are in this situation, the first thing you can do is take a look at what David Bach, author of The Automatic Millionaire, calls the "Latte Factor." The Latte Factor is anything you buy during the day which isn't a necessity. 

What does this mean? How many times a day do you go the vending machine or the store on the second fl oor to get a snack instead of bringing in something from home? How many times do you go out for lunch instead of packing it? How often do you stop for a latte and a muffin at the local coffee shop or swing by a fast food restaurant for breakfast instead of taking time in the morning to eat at home? 

If you eliminate these unnecessary trips, it's a great way you can start to save now. Let's say you spend $7 dollars a day on lunch and snacks. Multiply that by five days a week, then by 52 weeks a year and you are looking at roughly $1,820 right there, which you could be investing into an IRA or mutual fund. 

Another investment option all federal emloyees (military and civilian) have available is the Thrift Savings Plan. This is a federal government sponsored plan where you can invest up to $15,500 a year of pretaxable income. An even more enticing option for all Federal Employees Retirement System employees is receiving matching agency contributions up to 5 percent of what they invest. All FERS employees, regardless of whether they contribute or not, automatically receive an amount equal to 1 percent of their basic pay. 

If they contribute a percentage of their pretax dollars, they can receive matching contributions for the fi rst 5 percent of that pay contributed each pay period. That's free money! 

Let's say you invest 5 percent, you will receive the automatic 1 percent contribution then an additional 4 percent agency matching contribution, which equals an actual contribution of 10 percent. 

So ask yourself this, during your golden years would you rather see yourself lying on a beach and spending your days doing exactly what you want, or would you prefer to be asking, "would you like fries with your order?"