Match & Max
How to prioritize and get the most out of your retirement plan
We had a lot of great money questions come in this week about planning for a healthy financial future:

  • Can I have both a 401K and a Roth IRA?
  • If I qualify for both, which one should I fund first?
  • And what are the income qualifications?

Thanks to all of you for sending those in!

We talk a lot about why a Roth IRA is a good investment – but what about your company’s 401K? Should you focus only on the rate of return? When planning for your financial future, what is a good plan?
THE ANSWER: A good plan is a flexible plan
A flexible plan offers you the greatest value under the widest range of circumstances. I do wish your financial plans and strategies worked out perfectly the way you planned them. But I know firsthand that life happens. The unexpected does occur. Challenges do arrive.
Instead of focusing only on the rate of return,
ask yourself,
“What happens to this investment if I live to be a 100?
What happens to this investment if I get hit by a bus tomorrow?”

The answers will clue you in on how to plan for your financial future in ways that gives you greater peace of mind, and greater flexibility. When choosing from options that can help leverage your RichLife, I advise the following:
PRIORITY #1: Get your match at work first
  • Whether you are just starting a new job, or learning about the benefits provided by your current employer, maximizing employee benefits is one of the most important things you can do when planning for your future.

  • This is free money available to you, with a matching return on your investments that can be as high as 50 – 100%, depending on the plan.

  • Educate yourself about what plans are offered, and get yourself signed up for the tax deferred, matching contributions available to you.

PRIORITY #2: Maximize your Roth IRA
  • A Roth IRA is an investment that allows you to take advantage of “first in, first out,” meaning any withdrawals made on the principal will be tax free. This can be a great help during times of unexpected expenses.

  • Put in the maximum amount allowed for your age and income level.

  • If you are single and filing as head of household, your adjusted gross income must be under $110,000 in order to qualify. If married and filing jointly, your combined adjusted income must be under $173,000.

  • If you are under age 50, you can put in as much as $5,000 a year. If age 50 or over, your maximum contribution goes up to $6,000.
So, to sum up:
When planning for your financial future,
a good rule of thumb to follow is this:
“Get your match, then go for the max!”
I want to see you achieve your RichLife. I want you to be surrounded by loved ones and have a million dollars in the bank. But a RichLife won’t happen on it’s own. Get a plan, and get started! Get your match, then go for the max!
Got any questions about how to plan for your financial future? Has the unexpected happened in your life? What investments were of the most value to you then? Send us your story! When you do, not only does it help others, but it becomes part of our ongoing RichLife conversations. I’d love to hear what you have to say!

About Beau Henderson

Beau Henderson is a financial advisor, author, coach, radio personality, and CEO of RichLife Advisors. He has helped over 3,000 clients to not just improve their relationship with money, but to live the life of their dreams.

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