Started investing for retirement yet?

Financial experts suggest you will need to replace 70-100 percent of your last year's pay when you retire. This means a person with a $30,000 salary at retirement will need annual income equal to $21,000-$30,000. If you think Social Security will provide this much, think again. Social Security typically replaces only 25-40 percent of your income.

Everyone needs to plan for retirement. Consider these four suggestions as you invest:

1. If your employer sponsors a retirement plan, participate in it. If your plan is a 401(k) or 403(b) tax-deferred plan, you will be able to invest for your future while also lowering the taxes you pay today.

2. Check to see if your plan includes employer-matching contributions. If so, contribute enough to receive them. You wouldn't turn down a raise, don't turn down "free" retirement money if your employer offers it.

3. If you already participate in an employer-sponsored plan, make sure you contribute adequately. Financial planners suggest your contributions should equal at least 10 percent of your pay if you start investing early. Wait until later in your career and you'll need to invest considerably more. Most financial websites have calculators that can determine the specific amount you need to contribute. Employees of Southern Baptist organizations can use a Retirement Analyzer available at www.absbc.org for such a calculation.

4. If you work for yourself or a company that doesn't have a retirement plan, consider an Individual Retirement Account (IRA). With IRA accounts you can make contributions from your own funds -- either as a lump sum or as regular monthly amounts. Some IRA contributions are tax-deductible, others are not. All individual retirement accounts grow tax-deferred until distributed, and with a Roth IRA, you may even be able to receive a tax-free distribution.

In the 14th chapter of the Gospel of Luke, Jesus teaches His followers the importance of good preparation by estimating the cost of future plans. Realize that with today's life expectancy, you could live one-fourth or more of your life in retirement. Be a good steward of the income God has provided by making adequate preparation.


Bob Henry serves as head of the church retirement marketing department for GuideStone Financial Resources of the Southern Baptist Convention.

© 2004 Baptist Press. Used with permission. All rights reserved.