How To Plan For The Future

Greetings Everyone,

I came across an article from CNN that advised more people are saving up to $1 million in their retirement accounts through Fidelity. About 157,000 people have saved that amount into their 401(k)s, 148,000 people have saved that same amount in an IRA (Individual Retirement Account), and 2,400 people have saved that amount in both accounts. Most of those who have reached that $1 million mark are baby boomers who’ve been saving for at least 30 years, which is good news for us millennials who are just getting into our careers. And since my parents have always enforced the importance of planning for the future, I wanted to take some time to research those retirement plans.

According to Fidelity, saving for retirement needs to start early. You should aim to save at least 1x your income by age 30, 3x by age 40, 7x by age 55, and 10x by age 67. If you want to retire earlier than 67, your savings rate will likely increase. The assumption is that you start saving a total of 15% of your income every year, invest more than 50% of your savings in stocks, retire at 67, and plan to maintain your preretirement lifestyle afterward. And the employer-sponsored retirement plans that I found the most interesting include 401(k), 403(b), pension, and IRA.

  1. 401(k) is the most common and popular employer-sponsored savings plan that allows workers to save and invest a portion of their paycheck before taxes. Every contribution that an employee makes to the plan entitles an employee to a tax deduction. Contributions that are taken directly from your paycheck are free from income taxes, and taxes are not paid until you take a withdrawal from your account.
  2. 403(b) is very similar to a 401(k). Both are retirement accounts that are tax-deferred, which means that you don’t have to pay taxes on the money that you deposited, but you do have to pay taxes on the money that you withdraw. The difference, however, is that only employees of nonprofits, schools, and other tax-exempt organizations can have one. And it is generally less expensive and difficult to get a 403(b).
  3. Pension is a type of retirement plan that provides monthly income during retirement. Not all employees offer pension; government organizations, as well as large companies, usually offer a pension. The formula a pension uses is based on your years of service with the company, your age, and your compensation. And pension plans must follow specific rules set out by the Department of Labor, which specify how much a company must put away each year into an investment fund.
  4. IRA is an account set up at a financial institution that allows an individual to save for retirement with tax-free growth or on a tax-deferred basis. The 3 main types are Traditional, Roth, and Rollover.
    • Traditional: you make contributions with money you may be able to deduct on your tax return, and any earnings can potentially grow tax-deferred until you withdraw them in retirement.
    • Roth: you make contributions with money you’ve already paid taxes on, and your money may potentially grow tax-free with tax-free withdrawals in retirement, provided that certain conditions are met.
    • Rollover: a traditional IRA intended for money “rolled over” from a qualified retirement plan. Rollovers involve moving eligible assets from an employer-sponsored plan (401(k) or 403(b)) into an IRA.

Investing for the future is imperative, but there’s still some apprehension on my part; mostly due to the fact that the economy in this country is changing and many companies aren’t offering those employer-sponsored plans anymore. A few additional questions that I have going forward are, where else should I invest my money? Are stocks riskier than bonds? And will Social Security still be around by the time I hit 67? I’ll continue to research and share my findings here, but if you’re knowledgeable on this topic, please feel free to comment below.

Until Next Time…






Anspach, D. (2018, March 20). What is a Pension and How Do You Get One? Retrieved June 2, 2018, from

Botkin, K. (n.d.). What Is a 403b Retirement Plan – Contributions, Withdrawals & Taxes. Retrieved June 2, 2018, from

Lobosco, K. (2018, May 29). More people are saving $1 million in their 401(k)s. Here’s how you can too. Retrieved June 2, 2018, from

Riddix, M. (n.d.). What Is An Individual 401k Plan? 401k Limits, Rules, and Benefits Explained. Retrieved June 2, 2018, from

How much do I need to save for retirement? (2017, June 5). Retrieved June 2, 2018, from

What Is an IRA? (n.d.). Retrieved June 2, 2018, from




2 Comments Add yours

  1. Theodore Robbins says:

    I found that when viewing pension plans for companies to take into consideration the chances of that institution to survive the duration of your retirement and what of your retirement pay afterwards. Having observed companies going belly up and pay to retirees are reduced or in some cases eliminated.

    Liked by 2 people

    1. Thanks for the tip, Unc. My mom told me that pensions aren’t being offered by many companies nowadays, but I’ll definitely take that into consideration.

      Liked by 1 person

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