Gary Begnaud discusses financial mistakes young workers should avoid

Gary Begnaud of New Jersey, Executive Vice President/Wealth Management, Financial Advisor at Begnaud Wealth Management Group of Janney Montgomery Scott, LLC is designated as a Certified Retirement Planning Counselor as well as a Certified Divorce Financial Analyst and is at servicing customers for over 35 years. years. Gary Begnaud finds that many people in their 30s and 40s are often overwhelmed with the idea of ​​saving enough money to retire one day and in this article; Begnaud advises on common pitfalls to avoid at this stage of life.

When people are young and just starting out in the workforce, retirement can seem a long way off. However, this is happening faster than expected – and many are unprepared. According to recent surveys, 48% of adults are not actively saving for retirement, and those who do contribute to an employer-sponsored 401(K) plan or savings account.

On top of that, two-thirds of adults have not sought professional retirement planning advice, although around 54% say they feel they would benefit from such advice.

Preparation is key, and planning for retirement is never too early. Here, New Jersey’s Gary Begnaud outlines some common mistakes young workers can make in their retirement planning — and how to fix them.

Do not be aggressive from the start

Yes, it’s hard to focus on retirement when it’s four or five decades away. But Gary Begnaud explains that starting early literally pays off.

Every dollar invested in a retirement plan or retirement savings when you are in your 30s will benefit from 10 to 20 more years of accrued interest than what is invested in retirement savings when you are 40 or 50 . Start early and save as much as possible each month.

Also, if an employer offers a 403(b) or 401(k) plan, take advantage of it and save at least the minimum amount needed to trigger a match from an employer. With this approach, there are guaranteed returns.

Financial advisors also agree that if one can transfer a 401(k) to a new job, it’s better than cashing it in. Gary Begnaud explains that if an employer doesn’t offer such plans, consider starting an IRA that can be automatically funded by taking a certain amount from a checking account.

Being underinsured

Gary Begnaud reports that young people tend not to prioritize assertiveness. It’s easy to ignore when you feel like it’s not necessary if you’re in good health and there’s no spouse or children to consider. But having insurance isn’t just a bonus, it’s vital.

A small medical emergency can be financially crippling and derail retirement planning. Rental insurance can get you back on your feet quickly after a fire, flood or theft. When there are children and a spouse, term life insurance may be the best way to protect them if the unimaginable happens.

Not thinking strategically about investments

Gary Begnaud of New Jersey explains that a Roth IRA or traditional IRA and a 401(k) aren’t the only investment opportunities to consider. Do your homework and decide which investments are right for you. There are more options for IRA investments with a self-directed IRA, for example.

It may also be helpful to speak with a financial advisor about the possibilities of exchange-traded funds, which have low fees, or index mutual funds. Don’t blindly jump into trendy investments, such as cryptocurrency, or mutual funds that can perform poorly if not actively and properly managed.

A trusted financial advisor should steer a client in the right direction, says Gary Begnaud, which usually means a responsible mix of stocks, bonds and cash, including long and short-term, small-cap securities. , mid-cap, large-cap and international.

Ignore Debt

Gary Begnaud explains that there is a good chance that if you are human and of a certain age, there will be debt, whether it is because of credit card use, student loans or more. Debt is easy to put aside when you’re young. It also accumulates easily and can have a big impact on retirement savings.

Instead, establish an emergency savings fund that can cover any kind of unexpected expenses to avoid getting into debt as much as possible. Also, come up with a plan within a budget to pay off the debt, whether targeting the most expensive debt first and working from there or whether it’s more manageable to start with the smaller totals debt.

Either way, take care of it as soon as possible.

Applying for Social Security Too Soon

An easy rule to follow: the longer the wait for the filing of the social security application, the higher the compensation will be. While people can first choose to file their tax return at age 62, Gary Begnaud explains that full retirement begins around age 66 or 67 – and reporting can occur until age 70.

At age 70, the maximum benefit is reached. If we can wait until then, do it.

Thinking that you will continue to work

Gary Begnaud of New Jersey notes that while many people decide to work at least part-time during retirement, it’s unwise to assume that any type of income stream is vested when they reach retirement age. While it is certainly possible to land a job after retirement, one cannot predict the impact of a potential health problem or family needs, as well as the state of the economy decades later.

A goal can certainly be to work in retirement, but it’s best to plan as if that weren’t an option.

Begnaud Wealth Management Group
by Janney Montgomery Scott, LLC
701 East Gate Drive, Suite 210
Mount Laurel, New Jersey 08054
[email protected]

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