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Make retirement a priority

By Jennie L. Phipps ·
Tuesday, March 26, 2013
Posted: 12 pm ET

Financial services company ING has launched a new series of retirement planning ads that emphasize the importance of making retirement savings a high priority.

The ads make a good point. Here are five things about prioritizing that I wish I had known when I was young enough for this kind of knowledge to matter.

Saving more is possible, even if it doesn't seem that way. For most of my life, I never seemed to have enough money. What extra cash I did have went for the little luxuries -- an annual vacation and Friday night dinner out. If I had known then what I know now, I would have compromised -- dinner at home, a few days less at the shore and a few more bucks in savings.

Choosing the right employer is important. A generous retirement plan is an incredibly valuable benefit. I took jobs without ever considering -- or even asking -- about the retirement plan details. In retrospect, that was just plain dumb.

Good advice is worth a lot. For years, I made my 401(k) investment picks by closing my eyes and pointing. If I had been smarter, I would have gotten some expert help -- even if I had to pay for it -- because a few points more in earnings or interest could have made a big difference over time.

Taking money out is usually a bad idea. I have a friend who a few years ago was eager to buy a retirement home on the lake, but he needed thousands more to seal the deal. The easiest way to get it was to take it out of his 401(k). He bought the house, then he had to pay taxes and penalties on the money he pulled out of savings. All of this borrowing ate a big hole in his retirement account. Now he has to work longer at a job he doesn't like much to compensate.

Don't overspend on college. My kids went to public schools and never owned the most stylish sneakers, but when it came time for college, I splurged on the expensive private schools they wanted to attend because I thought I was giving them the best start in life. In retrospect -- 10 years after their graduations -- I think that indulgence was a waste of money. A bachelor's degree from a state university would have been just as good, and I would have had thousands more stashed in my retirement fund.

The bottom line: Make retirement a priority.

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April 12, 2013 at 6:58 am

So how does this advice match up with President Obama's declaration of war on "saving excessive amounts" in retirement accounts?

April 03, 2013 at 5:33 pm

I attended a state university, for my undergraduate and masters degrees. I then attended another state university, which was more renouned in my field, for my second masters degree. My future employers were impressed with the fact that I had these degrees and not where I had studied. My degrees were instrumental in obtaining two jobs as a CEO. So futures planning and what you do with your education are what really count.

March 28, 2013 at 11:21 am

I contributed towards a retirement account since I was 25 years old. I saved as much as possible but not as much as I would have liked to.
We took local vacations and I added another bedroom onto my house so each of my 3 kids could have their own room while they were in college. I thought it was a better investment than spending it on dorm fees since there were plenty of good schools within driving distance. I bought them 2 year old cars when they graduated from high school. They commuted to college and all majored in science and technology courses.As a result they all have good jobs.
I wish I spent more time managing my investment however. I could have done more to maximize my investments if I spent more time doing it.

March 27, 2013 at 11:43 am

Your comment about college costs is commonly held these days, but I do not agree. There can be a valuable reason for choosing a private education over a public one -- which has little to do with private vs. public. It has to do with "particular school" vs. "any old school" attitudes. As a parent, I steered my children toward those particular schools that would help them develop the ethic which those schools imbue. That is, you might want a "Harvard" attitude, or a "Notre Dame" point of view, or even a (public) "Rutgers" rigor. The facts learned may well be the same (depending more on professors than schools themselves), but the way those facts matter, the underlying meaning with which they shape the student's life -- these are the reasons to spend more for a private education. It isn't just the facts; it is how the student will value and apply them.