Saving for Retirement with Michelle Curry

I met Michelle[1] at a UC Davis alumni event in April 2015. I immediately loved her energy, and was not surprised to learn she was (and is) extremely involved in various organizations in the LA community.[2]

Michelle is a Retirement Planning Specialist at AXA Advisors where she primarily works with individuals and families in the areas of retirement planning and risk management. She also works with small business owners to execute their retirement plans, executive benefits, and business succession and protection strategies.

It thus was a given that I reach out to Michelle to offer us some basic advice.

I am writing for young professional women in their 20s and 30s. I presume they should be saving for retirement, correct?

Yes, absolutely!  The sooner the better when it comes to saving because the more time you have to invest, the more you can take advantage of the compounding effect. And unfortunately for this younger generation, there are significantly less companies offering pensions, making it more important to save for your retirement.

What are the means of saving for retirement? 

Typically the best way is through tax deferred accounts such as a 401k or some version of an Individual Retirement Account (IRA). You can start with any type of savings account, but designated retirement vehicles offer tax benefits and allow you to invest so your money can grow.

What should a young professional woman do to save for retirement if she does not have a 401k — e.g., she is an attorney at a small firm that does not offer one?

First, she should ask the firm why they do not offer one!  They’re fairly easy to set up these days and are beneficial to all participants.  Sometimes small firms don’t realize this and if you bring the need up to their attention, they will set one up.

But until then, the main option they have if there is no employer-sponsored plan is to open an IRA.  A Traditional IRA allows them to save pre-tax dollars.  And/or if they are under the income limits, they can also contribute to a Roth IRA which is funded with after-tax dollars.

Generally, how should a young professional woman prioritize paying off students loans and saving for retirement? 

Everyone’s individual situation is different and depends on certain factors, but I typically have clients do a bit of both.  Of course you want to pay off your debt, but it’s also important to develop the habit of saving and to see assets growing in your name.

It might take a little longer to pay off the debt, but if you prioritize both, you will already have some built up savings at the end of the pay-off period. If you focus only on the debt first, you will have to start from scratch once your debt is paid, potentially losing years of savings and investment opportunities.

If you could tell a young professional woman to do one thing in regard to saving for retirement, an absolute must in your mind, what would that be? 

Just do it!  I hear excuses of why people can’t save, but there is no excuse – accumulating for your future needs to be a priority. Even if you start with $25 – $50/month, you’re developing a mindset of saving.

Take that first small step, call a financial planner and tell her/him you need to set up an IRA or enroll in your company’s retirement plan. The phrase we’ve all heard, “pay yourself first,” is now more important than ever. Once you start, you’ll be increasing that amount and the 60-year old version of yourself will be thanking you (and wishing you started even sooner)!

 

[1] Michelle A. Curry, CFP®, ChFC, CLU – Financial Professional at AXA Advisors, LLC.

[2] She is the Treasurer of the Louisville High School Alumnae Board, the Secretary of the Ford Theatre Foundation, and the Young Advisors Team Chair of the National Association of Insurance and Financial Advisors (NAIFA).

Securities offered through AXA Advisors, LLC (NY, NY 212-314-4600), member FINRA, SIPC. Annuity and insurance products offered through AXA Network, LLC. AXA Network conducts business in CA as AXA Network Insurance Agency of California, LLC, in UT as AXA Network Insurance Agency of Utah, LLC. AGE-125183(05/17)(Exp.05/19)