Money Doesn’t Grow on Trees, But It Should Grow in Your Retirement Plan

Saving for retirement can be tough. The cost of simply living and paying bills, buying groceries, keeping a roof over our heads—and all that adulting stuff—often prevents many people from being able to save, much less contribute to an IRA. However, that thought is often a misconception: that you don’t have enough left over to invest in your retirement. And, we’re going to tell you why.

Yes, we understand that life is tough. And, we’ve all wished for that non-existent money tree to suddenly begin blooming in our back yards. But, we all know that’s never going to happen. However, there are ways we can grow income in a retirement plan and believe it or not…a few ways are relatively simple.

  1. Contribute to an employer-sponsored plan. Part of the retirement saving problem is that today not as many employers offer retirement benefits as they did in the past. But, many still do. So, if your employer does offer a 401(k) or other plan, take advantage of it immediately. Even if there is no matching contribution by your employer, your contributions are typically made by automatic salary deferrals. You can decide how much you want to contribute each paycheck and budget accordingly. You’d be surprised at how you don’t “miss” the dedicated contribution, which in turn helps to build income in your retirement plan.
  1. Open an individual retirement plan. If an employer-sponsored plan is not available, open your own account. There are several different plans to choose from—including a few designed for the self-employed. Traditional and Roth IRAs are common plans that present a few excellent savings advantages. SEP and SIMPLE IRAs, along with individual 401(k) plans offer great benefits for the self-employed.
  1. Learn about self-directed retirement plans. Never heard of these? Well, check them out here. In short, these accounts give the owners (you) the freedom to invest in many different alternative assets (such as real estate, precious metals, private lending, and much more). You are in total control of your own retirement funds and investing decisions. This means you can acquire assets that you personally know and understand, which we believe is one of the keys to reaching retirement planning goals. You can self-direct a traditional, Roth, SEP or SIMPLE IRA, an individual 401(k) plan—and even health and education savings plans.
  1. Take advantage of compound interest. This is our most important tip and can be critical to growing income in your retirement plan. Did you know that if you begin investing as a young adult, you could be a millionaire by the time you reach retirement age thanks to compound interest? Compound interest is a beautiful thing—and is considered free money that, over time, can significantly contribute to a successful retirement. This is income that is acquired by the interest that is earned and added to the principal deposit amount, which continues to gain interest year after year, for the life of your retirement account. While your chances of greatly profiting from compound interest are best when you begin retirement planning at a young age, you can still reap the benefits in your retirement plan at any age. Read this article by Dave Ramsey for a great illustration of exactly how compound interest works.

Advanta IRA is a self-directed retirement plan custodian that serves clients across the nation who hold over $700 million in assets. We provide impeccable administrative support that ensures our clients’ plans operate in compliance with IRS rules and regulations. We don’t sell investments or give advice. Our goal is to educate individuals in all areas of retirement planning—from plans that are available to the many different alternative investments permissible in self-directed accounts.

We offer free, weekly events designed to empower individuals who want to take control of their retirement funds and investing decisions. These webinars and seminars are interactive and informative, enabling you to confidently begin investing in what you know best.  

About Jack Callahan

Jack proudly earned his bachelor’s degree in finance and multinational business from Florida State University and his law degree from the University of Florida College of Law. He established Advanta IRA in 2003 and has steadily nurtured and grown the company and the team every year since. Prior to founding Advanta IRA, Jack delivered specialized counsel to real estate investors, small business owners, and real estate professionals on tax, legal and financial matters. As an industry expert, Jack is a frequent speaker on self-directed retirement plans. He is an accredited continuing education instructor for the Florida and Georgia Bar Associations, Florida and Georgia Real Estate Commissions, and The American Institute of Certified Public Accountants.