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April 26, 2017

Born After 1980? Here’s Your 10 Point Guide To Investing

401k advisor annapolis in maryland at SCM

Born after 1980? Here’s your 10 point guide to investing

By David Sizemore, CERTIFIED FINANCIAL PLANNER®, Retirement Advisor,  Scarborough Capital Management   

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If you were born in the 1980s or ‘90s, chances are you are have a pretty busy life with mounting financial responsibilities. Student loans, maybe a mortgage or possibly even young children to care for. And while it may seem decades away, saving for retirement is something that should be getting as much attention today as driving your kids to soccer practice or a trip to the grocery store.

While you may know that putting money away for your future self is important, you can’t help but wonder if you’re doing it correctly, or, how start in the first place. Below we’ll outline 10 points to consider and how you can address each.

  1. You’ll start to have a lot more payments – don’t miss them. It may seem tedious, but the time you spend on the front end here is going to pay for itself multiple times over down the road. With whatever system you use (spreadsheet, financial software, old fashioned paper), make sure you track money going in and out, as well as your bills and loan payments, along with associated due dates. Pay on time and keep the late fees and interest at bay.
  1. A contingency fund is critical. Undoubtedly, you’ve heard and read about having some money set aside in the event of some unforeseen major expenses. This could be the loss of a job, medical expenses or even a larger than expected car repair. Instead of putting these costs on a credit card (which could cost you hundreds or even thousands in interest), think ahead and put at least three to six months expenses into this account.
  1. Pay off a little debt and your confidence can grow. By paying off your smaller debts and loans first, it may help you stay more diligent in paying off the larger sums. The thinking goes this way: if you see progress in getting loans paid, no matter how small, it will give you confidence to get the larger ones paid off sooner. It’s not the only way to pay down debt, but it for some it definitely works.
  1. Look into a Roth 401(k). If you think your tax rate is going to be more in your later years due to increased income and a higher tax bracket, a Roth 401(k) plan taxes your money as it’s going in, not as you withdraw. And unlike a typical 401(k) plan you don’t pay taxes on your investment earnings.
  1. The market is volatile, but stock is ok to invest in. The stock market has shown signs of volatility since November, but that doesn’t mean that it shouldn’t be an option at all. Keep a relatively balanced portfolio and adjust based on your risk tolerance.
  1. Examine your 401(k) options when you change jobs. You may be tempted to take a quick cash out and go on a vacation or make a cosmetic improvement on your home. But beware, if you cash out, taxes and penalties will probably far outweigh the benefit of your purchase. Instead, you may want to leave your 401(k) where it is, roll it into your new employer’s plan, or roll it into an IRA account.
  1. Do your research before purchasing a home. Buying a house can be stressful, so make sure you have as much info on the process as possible to reduce your anxiety. Track interest rates, look at fluctuations in home prices in the areas you’re interested in, and even consider if a new build would make sense. Buying a home is not like ordering something from Amazon. Once you sign it’s much harder to return it.
  1. Your children may be young, but they’ll be off to college before you know it. Meaning, start saving now. A 529 college savings plan is a great way to get started, since it allows you to avoid paying federal taxes on the contributions and withdrawals, as long as that money is used for educational expenses. You may even be eligible for a tax deduction, depending on the state you live in.
  1. Insurance is something you buy before you need it. Make sure you sit down with an insurance professional, as well as a financial professional, to sort out the options that are right for your situation. Term life (low cost, good coverage, but the policy will expire), universal life (lower coverage and more expensive than term, but allows for a cash component), and whole life (most expensive of the three, but provides coverage for your entire life) are three options that you should consider.
  1. Giving back doesn’t have to involve dollars. Just because your paycheck may not allow you to give large donations doesn’t mean you can’t do something for your favorite charitable and social causes. By giving back your time instead money, it can help you stay on budget, while also giving you a greater understanding and sense of contribution to the cause you’re helping.

Your next steps

Now that you have an idea of what to do, the next step is simply doing it. And if you need help, seek it out.

At Scarborough, this is exactly what we do. We can help you get on your way to saving for retirement, no matter where you live, and for as little as a dollar a day.

  • We’re personal – Your individual advisor helps you develop your personalized strategy for saving.
  • We help you earn more – Our clients contribute 4% more, on average, than typical 401(k) savers.
  • We help you keep your money where it is – You can get advice from us without having to move money out of your existing 401(k), and changes can be made using the tools that your employer has already provided.
  • We’re thorough – We don’t just look at your income. We look at your hopes, goals, and risk tolerance, then develop a personalized investment strategy. We consistently review your goals and risk tolerance, contact you to discuss your plan and rebalance your portfolio if needed, and provide unlimited access to your advisor.

If this sounds good to you, visit us as or give us a call to learn more about our 401(k) management program. Your future self will thank you for it – trust us.



Opinions, estimates, forecasts and statements of financial market trends that are based on current market conditions constitute our judgment and are subject to change without notice.

This material is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security.

Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.  Past performance does not guarantee future results.  Diversification and asset allocation do not guarantee positive results.  Loss, including loss of principal may result.

Investors should consider carefully the investment objectives, risks, charges, and expenses of the municipal fund before investing. This, as well as other important information, is contained in the official statement. Please read it carefully before investing or sending money. Withdrawals for non-qualified expenses may be subject to additional penalties and taxes. Consult your tax advisor regarding the state and federal consequences of the investment. Participation in a 529 Plan does not guarantee that the contributions and investment return will be sufficient to cover future higher education expenses. Investment involve risk and you may incur a profit or a loss.

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