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HOW TO SAVE FOR RETIREMENT WITHOUT A 401(K) - YouTube
Channel: Travis Sickle
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today I'm going to talk about how to
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save for retirement without a 401k if
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you don't have a retirement plan at work
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don't worry I'm gonna show you how to do
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it if there's your first time at our
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channel or you haven't subscribed be
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sure to click on the link at the bottom
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my name is Travis Sickle CERTIFIED FINANCIAL PLANNER
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with Sickle Hunter Financial Advisors owner
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First let's talk
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about what a 401k is so we know what
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we're up against
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a 401k is a type of retirement account
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that you save in pre-tax so before your
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income tax has come out of it it goes
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directly into the 401k
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it grows tax-deferred and then comes out
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in retirement as ordinary income so
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that's when it's taxed in retirement so
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something that's comparable to a 401k
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for someone who doesn't have a 401k
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would be a traditional IRA the real big
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differences are the contribution limits
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with a traditional IRA it's fifty five
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hundred or if you're 50 or older you can
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do an additional thousand dollars making
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your total pre-tax contribution $6,500
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the same is true for your Roth IRA but
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those dollars come after tax grow
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tax-deferred and come out tax-free so
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you're only taxed on the money that
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you're contributing into the plan now I
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want to make this really easy to give
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you a baseline of where you can start
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saving and how to do it
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if you're trying to figure out how much
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you should contribute into a retirement
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plan and you want to be on par with what
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most people are doing inside of a 401k
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that's typically gonna be about three
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percent and there's typically a three
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percent match on those dollars so in
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order to compete with the same savers
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you're gonna have to contribute about
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six percent
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now this isn't all of your savings
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there's gonna be a starting point to
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start saving if you don't have a 401k
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you don't have to get overwhelmed when
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you're starting to figure out how much
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to save and thinking that you have to
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contribute all the dollars right upfront
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in fact one of the best ways to save is
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systematically so if we take this big
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goal of retirement and we break it down
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on a paycheck by paycheck basis you can
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save a little bit
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in order to reach your goal so here's
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how the math is done I'm gonna make this
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math really simple so you can figure out
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a baseline of where you want to start
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saving so if you make $40,000 a year and
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you want to save 3% and remember 3% is
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typically what someone's gonna save into
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their 401 K so 40,000 times 3% and if
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you want to do this on a calculator it's
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just 40,000 times point zero three and
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that's going to be $1,200 now since
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we're not getting the match from the
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employer we're also going to want to
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contribute an additional 3% so we could
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take this 1200 and multiply it by 2 and
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that will give us $2,400 but to make
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this systematic and easier to save let's
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break it down on a paycheck by paycheck
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basis so let's say you get paid twice a
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month that would be 24 times a year so
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we'll divide it by 24 that would be $100
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per paycheck a really simple way of
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breaking it down now I'll run through a
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couple of quick scenarios to show you
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what 3 and 6% looks like so any one of
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these income levels we can contribute
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that amount to either a traditional or a
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Roth IRA because the contribution limit
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is up to $5,500 if you're under the age
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of 50 if you're still feeling like you
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can't save or that you're at a
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disadvantage because you don't have a
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401 K I have some great news with the
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tax cuts and Jobs Act for 2018 the tax
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brackets have been lowered for most
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people that means they're gonna have
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more money back in your paycheck you
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start now and take advantage of this
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opportunity you might not even feel it
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as much in your paycheck if you're
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struggling to save into any retirement
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plan here's a couple of other things
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that you can take a look at first tax
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brackets in 2018 have been adjusted and
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for most people that means they're gonna
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have more money back in their pocket
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because the tax brackets in general have
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been lowered you can also take a look at
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your w-4 if you've got a big refund in
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the past or you haven't looked at it
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this year there might be an adjustment
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you can make
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to get more money back in your paycheck
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today so you can actually save it and
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saving into the traditional IRA will
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also help reduce your overall tax
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liability at the end of the year if you
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don't have a retirement plan at work
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don't be discouraged go out there figure
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out which type of account works best for
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you and start to save today and as I
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showed you saving a little is better
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than saving nothing at all if you've
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enjoyed this video be sure to subscribe
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and leave your comments down at the
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