Retirement Savings: 'Just Do It'

I'm a young guy. I've got, let's see ... 30, maybe even 40, years of work left in me. It's a sobering thought. Even more sobering, though, was the recent realization that as an independent business owner, I no longer have access to a cushy 401(k) account. And with social security dying an almost certain death, that means there should be two words sticking to the tip of my tongue: "retirement" and "savings."

Small business owners do a terrible job with their personal finances. As Rich Whittle points out via an Associated Press article at Dane Carlson's Business Opportunities Weblog, they often neglect their own portfolio while they're busy building up their business. Everything's tied up in their company, and if things go south, well, so does their chance for a worry-free retirement.

Not wanting to spend my golden years in a sub-par home eating lunch off the children's menu to save cash, I decided it was time to do some serious financial planning. I therefore rolled over the 401(k) from my last office job into a Rollover IRA. Months later, I'm finally getting around to investing it. So I called up my financial planner today and said, a little more tactfully, "Um, help."

Help he did. He advised me to keep my cash in my Rollover account — a traditional IRA — in order to take advantage of more immediate tax savings. As an independent contractor, I'm terrified of being robbed poor by the IRS. So keeping my retirement savings in a traditional IRA means that I can deduct contributions to it — up to $4,000 a year — from my tax return. I love the "D" word, so I signed off on his suggestion. He then helped me identify some high-yield mutual funds in which to invest, and I feel a million times better today about my future than I did yesterday. Not because my investments are guaranteed — they're not — but because I took 30 minutes to actually invest them.

I suggest you do the same. Just because you're working for yourself doesn't mean you don't deserve the benefits — including a retirement plan — that you'd receive if you were working for somebody else.

Take an hour to research your options — I like the IRA, and there's a great article up this week at The IRA Expert blog about the pros and cons of Traditional IRAs and Roth IRAs — and then commit to setting aside as much as you can every month toward your future. It's hard when you're a cash-strapped entrepreneur to put cash aside, but I figure it will be many times harder when you're a cash-strapped senior.

Take Nike's advice and "Just do it" already.