Contemporary artist Jay Wayne Jenkins suggests in one of his pieces of poetry that after saving substantial amounts of money his very next goal is to continue saving more. There is a great amount of wisdom to be taken from this approach when viewed from the frame of retirement planning.
He then refers to transferring as much of it as possible in a location that will not only be out of reach of temptation of impulsive spending but will also be sheltered from the federal government. I am unsure of what his exact intention was in this line of his poetry but it can also be applied to the retirement planning arena. Tax deferred accounts such as 401(k), IRA and Roth IRA’s are great places to save money for that future date when you no longer have to work for a living. The primary reason is that without the drag of annual taxation on capital gains and income earned on the investments inside of those accounts is sheltered from tax, which leaves more money in the account to continue its growth over the long term.
Frequently inspiration to take care of one’s finances comes from traditional sources such as newspaper articles, financial advisors or responsible friends or family. Sometimes it comes from a less traditional source like a contemporary poet such as Mr. Jenkins.
-Konrad Karwowski, CFP®