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>>Robert K.Dellenbach: When it comes to 401k or IRA contributions,
time is money. More and more employers are not offering company-paid
pension plans, so it’s up to you to make contributions to your IRA
or your employer’s 401k plan. If you have already 401k plan, check
to see if you’re contributing the maximum level. Also be sure you are
contributing to your IRA. Now is the time to take aggressive savings
actions, particularly if you have been financially damaged by failing
investments in the economic downturn.
The secret is to take the leap of faith and start adding to your
biweekly before-tax payroll deductions. Let’s look at an example. Say
you take an additional payroll deduction of $30 from your paycheck
every two weeks and put it into your 401k or IRA. Add a return of 5%
annually for 25 years. That additional payroll deduction would generate
almost $39,000. The initial investment consistently deducted and left to
generate compounded earnings will produce a nest egg of handsome proportions.
It will be more advantageous the longer you can systematically make payroll
deductions, so start today. Once the additional deduction has been put
into effect, you will hardly notice the slight difference in your take-home
pay. Plus, every hour of every day, that additional deduction becomes an
investment in your future financial security.
Take the step now. Add to your biweekly deductions and be prudent in placing
those funds with quality investors. You may be fortunate to have your employer
add a percentage to what you contribute, but the vast majority of you future
retirement income will come from the savvy investment decisions you make today.