How to Plan and Invest for Retirement Throughout Your Life—Even When It Feels Like You Have Other Financial Priorities
This week’s episode of the Money Confidential podcast explores retirement: saving for it, prioritizing it, and learning to invest with your future in mind.
Each week on Real Simple's Money Confidential podcast, host Stephanie O'Connell Rodriguez works with a listener and a financial expert to address some of life's trickiest money challenges. This week, it's all about saving for retirement—and making your money work for you once it's saved.
This week's caller—we'll call her Claudia, though that's not her real name—is 33 years old and lives in Raleigh, N.C. with her husband. Claudia recently quit her full-time, salaried job to pursue her long-time dream of owning and operating a restaurant. When she and her husband dedicated their time (and their savings) to their business, she agreed that it was a financial risk—but also one she wanted to take. Even with her money tied up in the business, Claudia has retirement on her mind. At her mother's urging, she opened a Roth IRA for herself when she was 17, and while she hasn't been able to contribute to it consistently over the years, she knows it's there and would like to resume saving for her retirement in the future. She'd also like to invest more, to make the most of the money she has managed to save, but isn't sure where to begin.
To help Claudia find ways to continue saving for retirement and learn to invest so she can try to get her hard-earned money to work for her, O'Connell Rodriguez turns to Amanda Holden, an investing expert and founder of Invested Development, a program that seeks to educate women on investing for their futures.
First, Holden notes, it's important that people realize that the process of saving for retirement has shifted drastically for younger generations. While your parents or grandparents might have had a pension to see them through their later years, few employers offer a pension nowadays, choosing instead to offer a 401(k)—a tax-advantaged plan that puts the onus for preparing financially for retirement on the individual.
"A lot of millennials that I work with feel like retirement isn't even a possibility," Holden says. Still, she notes, it's important to try including saving for retirement within your overall savings or debt repayment strategies. "We may not even have the option to work forever," she says, referring to the belief many young people have that they'll just have to (or be able to) work for decades to come. About two-thirds of people don't get to retire on their own terms, Holden says, with things such as aging out of the workplace, not having the skills to stay competitive, health concerns, and more often forcing people to stop working before they're ready financially.
Check out this week's episode of Money Confidential—"The New Rules of Retirement"—for O'Connell Rodriguez and Holden's full conversation about saving and investing for retirement. Money Confidential is available on Apple podcasts, Amazon, Spotify, Stitcher, Player FM, or wherever you listen to your favorite podcasts.