Delayed Gratification in Retirement Planning

Today’s Prep:

What financial rewards are worth waiting for? We talk through three sets of options to determine whether delayed or instant gratification is better in retirement.

Equipping Points:

We all like fast and now when it comes to getting what we want. When you’re making financial decisions, are you making the best choices or just whatever gives you instant gratification?

It may be tempting to put off saving in your 401(k) and having more take-home pay. Are you leaving the 401(k) match on the table? A lot of people are woefully unprepared for retirement. Having a scheduled and automatic withdrawal toward retirement is investing in your future.

How do you balance the tax deductions now as opposed to the tax benefits in the future? Should you contribute to a Roth 401(k) if given the option? Tax rates are lower than they have ever been right now. If you pay the tax now, you don’t ever have to pay that again. If needed, you can ease into it. You can’t have too much tax-free money in the future.

Retirees often wonder when they should take out Social Security. Should you do it as soon as possible or delay it in order to get an increase? Believe it or not, delaying it might not always be the right answer. It may come down to your retirement income plan in order to determine which money to pull first. Having a plan really helps understand the risk and the tax issues you may encounter.

Listen to the entire episode or skip ahead using the timestamps below.

1:12 – Relief with the household budget vs. the getting 401(k) match.

3:30 – Tax deduction now vs. better tax planning for the future.

7:41 – Take Social Security at 62 or delay it?

Today’s Takeaway:

You need to count your future self as a debt that you need to pay. 

-Eric Peterson

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The host: Eric Peterson - Contact - Call: (515) 226-1500

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