Making 2013 The Year You Finally Get It Done

I’m fully aware that just a couple weeks ago, I wrote you about my simple “one word resolution”. So this isn’t about making another new year’s resolution.

This is about finally becoming a saver, instead of a spender. It’s about much more than retirement, but let me scare you with this: for every seven years you delay saving and investing for the future, you will likely cut in half the income you would enjoy at the end of your life.

Ouch. So, let’s make this year the year that we get this thing moving, shall we, Glen?

Here are some ways to get off your hind end and get it done…

1) Set goals you’ll actually keep. First, ask the right questions about what you are wanting to do with your resources and stay the course until you’ve found the answers. Then share what you are doing with someone you trust (I’m happy to be this person for you!) — because goals that are shared are ten times more likely to be acted on. Don’t wait until you have everything set up to seek out accountability.

2) Write down your goals, and make them tangible. Set your savings goals as a specific annual percentage of your adjusted gross income (AGI). It’s a great starting point to save at least 10% of your AGI in tax-free retirement accounts and another 5% toward retirement in taxable investments. If you are behind on your savings, you may want to save even more in order to catch up.

3) Come up with an actual financial strategy besides “save more”. Look at retirement vehicles, such as annuities, tax-savings plans, etc. Start by investing just enough to get the entire match from a company’s 401(k) plan (if you have one) and then fund your Roth IRA accounts next. After these two, make certain you have enough non-retirement savings.

4) Set it and forget it. I bold this one, because it’s huge. Automating putting money in an employer-defined contribution plan is easy. Automating a taxable savings plan is just as painless. Most banks or brokers offer an automatic money link between an investment account and a checking account. They should also offer a monthly automatic transfer between the two accounts.

Going into further detail would actually entail sitting down and creating a true, full financial plan–which is impossible over email!

But I will say one last thing: the most critical component of wealth management in the new year will be tax minimization. With the potential for inflation rates to fluctuate even more than the stock market in 2013, and for the many different ways creeping at us by which the government will seek to add “revenue” (some of which are hidden even from avid watchers like myself), it’s never been more important to monitor what “Uncle Sam” is seeking to take from your wallet!

To your family’s financial and emotional peace, Glen…

Hicks Tax Co. Xenia Accountant

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