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Question for the Money Doctors

Question submitted on Mar 17, 2021.


I'm 36 and my fiance is 37 and we have no retirement saved so far. Do u have any advice or what we should do to have a decent retirement or is it too late for us?


Certainly not too late. One of the main cash flows for retirees comes from Social Security.  As you work, you and your fiancé will contribute towards this retirement fund via payroll deductions.  When you retire, Social Security will pay you a "pension" based on your years of work and your earnings and it is indexed annual for the rate of inflation.   The current maximum annual benefit per individual is approx. $37K.

In addition to Social Security, you should also establish a retirement savings account.  Many employers allow you to save with a 401k plan, 403b plan, etc. and they often will match a portion of whatever you save.  These retirement savings plans can be pretax (your contribution is exempt from income tax until you withdraw it) or it can be after tax (eg Roth 401k).  The after tax isn't initially exempt from tax but any earnings your realize and your initial contributions are tax free when you make withdraws.  If your employer doesn't offer these, you can also save for retirement with a traditional IRA or Roth IRA, which work the same way but have a lower contribution rate.  Whatever the case, make sure you take advantage of one of these savings vehicles as it will supplement your Social Security Retirement benefit.  Start small but start, you'd be amazed how quickly your accounts will grow.  

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