Entrust Learning Center > 8. Newsletter Archive > Still Planning at 27

Still Planning at 27

Im 27 now, and still actively planning my retirement.

By: Jennifer N Bzik, CISP

IRA & 401(k) Insights

If you have been a regular reader of The Entrust Group’s “IRA & 401(k) Insights” for a while now, you may recall seeing one of my previous articles, “Female, 25, Planning Retirement”.  If you haven’t read it, you can find it in the October 2007 edition.  It’s been a while, and the economy has certainly made the time interesting, so I thought I would give everyone an update.

I’m 27 now, and still actively planning my retirement.  I now have two separate loans that I’ve made from my IRA, both at 12% interest.  I don’t have any grand plans of retiring when I’m 35 and traveling the world (though I do know some clients who are on that track!)  I love what I do, educating people about the benefits of self-directed retirement plans, so I don’t plan to stop for a long time.  But when I do retire, I want to be confident that I can live comfortably, in the way that I want to, and that I won’t run out of money in my old age.  So, I’m planning now.

Many of the people I’ve talked to recently have said that it is difficult for them to think about saving money now, since the economy is not so good, and their expenses continue to rise.  I know that’s true for me.  We have an old house (built in 1898) with high maintenance costs, and various unexpected repairs.  Since cash is tight, I’m letting my Roth IRA serve double duty – as both my retirement savings, and my “last resort” emergency fund.  Let me go on the record as saying that I personally think that using money from a retirement plan for anything other than retirement is a bad idea.  That being said, sometimes bad things do happen, and there may not be many other choices.  I know that if I do have an emergency, I can withdraw the contributions I have made to my Roth IRA (called “basis”), at any time with no tax or penalty.  Since I have worked so hard to get these funds into my Roth IRA, I know that I will think long and hard about all of my other options before taking an early distribution.  This helps me to prioritize, and really carefully judge what I consider an “emergency” worthy of drawing on those tax-advantaged funds.

I also try to make saving for my retirement as “painless” as possible, so that I am prepared for both my retirement, and those surprise expenses.  My current favorite technique for this painless savings is my bank’s online bill payment service.  My paychecks are direct deposited into my checking account on the 1st and 15th of every month.  I have set up a recurring “bill” for automatic payment on the 2nd and 16th of each month to make partial contributions to my Roth IRA.  The funds come out of my checking account before I even really know they are there, so I hardly miss the money.  My regular bank sends the checks twice a month, payable to my Entrust Self-Directed IRA.  I have made sure that the checks indicate my Entrust account number, and say “2009 Roth Contribution”, so that the deposits are recorded correctly into my Entrust account.  When “tax time” rolls around, the majority of my contribution will already have been made, so I won’t have to suddenly scramble to come up with the $5,000 I can put into my Roth IRA for 2009.

I plan to continue using my Self-Directed Roth IRA to make creative investments and save for my future.  Keep reading “IRA & 401(k) Insights” to keep up with my progress!  If you have any questions, or if you want more information about using your own Self-Directed Retirement Plan to enhance your retirement savings, feel free to contact me at 973-857-8058.

Jennifer N. Bzik, CISP, is the Account Manager at Entrust Northeast, LLC.  Jennifer has been awarded the Certified IRA Services Professional designation from the Institute of Certified Bankers, and has been using her educational background in Finance to assist Entrust clients for over four years.  She can be reached at Info@EntrustNortheast.com