Not taking advantage of free money

I came across a 55 year old gentleman who has been working for the same company for the last 30 years, he wants to retire in 5 years. He has roughly $30,000 saved in his pension through work, but he has only contributed to his pension in the last 7 years.

I had bad news for him -- He is not retiring in 5 years.

I asked him why he didn't start contributing to his work pension when he first started his job? He told me

• He didn't mean to stay at his job for so long, he planned on staying there a few years and then moving on to a different company
  
• He figured he would just start saving later in life, he didn't need to save when he was young

This is why it is so important to start young!! If you find that you may be in this situation, here are some ideas you may want to consider:

• If you are employed, start contributing to your pension NOW! If you leave the company, you can always take what is vested to you with you. If you transfer jobs, you can have your financial representative transfer your pension into your control, not your previous employers. Once you leave a company, they don't care about your pension money anymore, so make sure your money is working FOR you!
• Start investing and saving young. If you start young, you don't have to contribute as much because you can take advantage of compound interest. Take a look at this example: http://janeabellay.com/investments-money/
  
• Sarah who starts contributing at age 20 ends up with more money in her retirement fund than John who starts at age 30. Only because of compound interest. Get your money working for you. You work hard for it, so now make it work hard for you.
• The earlier you start the easier it is.
• Take advantage of free money. If your employer offers a profit sharing program, an RRSP sharing program or pension program, MAXIMIZE IT! Its free money. But its up to you to get on it and make sure that you are taking full advantage of everything the employer will offer you. Check your employee handbook or talk to your HR Manager.
  

Besides the fact my gentleman above doesn't have enough in his retirement plan to retire, he really should have taken advantage of all the opportunity that was offered to him.

These opinions are exclusively those of Janea Bellay. You should seek out a licensed financial representative before incorporating any strategy into your financial plan.