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Tackling IRAs and other things I know absolutely nothing about (but would like to)
May 13, 2011
When I moved to New York and started a new job with a very small company, I was no longer provided with the fairly extensive benefits package that I had grown accustomed to. This included a 403(b) retirement account that I had been contributing to for about a year and a half. From my understanding, a 403(b) is the non-profit industry’s equivalent of a 401(k). I contributed a percentage of my paychecks and my employer would match up to a certain percentage. You didn’t have to tell me twice that this was free money and I would be silly not to take advantage of it.
I was able to monitor my retirement savings in my Mint.com account and I watched it grow like crazy. However, after I left my higher ed job in order to move to New York, I found myself unable to add more money to that account, and I remained unsure about what to do with it for several months.
I finally decided to open a Roth IRA.
I won’t lie, it’s been a bit of a convoluted process. First, I had to decide what kind of account to open and find a financial institution to use for my retirement account. Then I had to figure out how to move the money over from my old account. I learned that this all takes time (the transfer is still pending as I write this). I also learned that I have to roll over the 403(b) account into a traditional IRA and only then can I convert that account to a Roth IRA (don’t ask me why, because I don’t have a clue).
In a nutshell, here’s some help to get you started (because that really is the hardest part):
- Stop thinking about how you should set up a retirement account and just do it. I promise it’s pretty quick and painless, and once you’ve set it up, you don’t need to think about it again (until you switch jobs, of course).
- If your employer offers a match, max it out. Accept your new paycheck amount as your expendable income and never look back. You won’t miss this money, and you will thank yourself later.
- Ask people who know more than you do for help. When I was setting up my employer-sponsored retirement plan, I found that HR wasn’t able to give me their opinion on a lot of stuff (like which plan to choose). I spoke with a friend who is a financial advisor and some of my other contacts in the higher ed industry to figure out which plan to choose and how to divvy up my money within the account.
I feel like I understand the basics of saving for retirement, but I am far from being an expert. How did you learn about saving for retirement? What steps are you taking to ensure that you can retire comfortably? Let me know in the comments!